Taiwan Strait

Richard Foord Excerpts

Monday 25th March 2024 Commons Chamber

[Stewart Malcolm McDonald]

The hon. Gentleman pre-empts much of my speech. I agree with every word he said.

China continues its aggressive sabre-rattling in the Taiwan strait by sending warships and planes across the median line of the Taiwan strait and air defence identification zone. It continues its enormous campaign of cyber-aggression against Taiwan’s public and private institutions, including its critical infrastructure. Earlier this month a report by Taiwan’s Defence Ministry described Beijing as having launched “multi-front saturated grey-zone” tactics to harass Taiwan. The previous report in September 2023 noted that China had

“increased the scale, frequency and intensity of drills and exercises against Taiwan”

in order to strengthen its operational preparation for a future invasion.

China is also deploying civilian assets to press its claims, dispatching civil aircraft, unmanned aerial vehicles and weather balloons to fly close to and over Taiwan. It is using marine survey vessels and hydrographic survey ships as a cover for its military. It is also deploying a maritime militia, the largest fleet ever put to sea, to advance geopolitical objectives. Those moves are exactly what I mean by trying to establish a new normal, unilaterally changing the status quo across the Taiwan strait and escalating tensions in a region where China’s expansionist behaviour has seen it employ nearly 80 grey zone tactics against neighbouring states. Our inability to deter that kind of aggression is what is emboldening Beijing and its strategic partners Russia and Iran, undermining our security and international security further.

At this point, it is important to consider what the people of Taiwan think. What does Taiwanese public opinion tell us? It is important to stress the value that people in Taiwan clearly place on having an open and democratic way of life. Some 67% of people identify primarily as Taiwanese. Only 3% identify as Chinese. Nearly half support formal independence. That rises to two-thirds if maintaining the status quo were not possible. Only one in 10 want unification with China, but that should not be misread as wanting unification under Communist party rule. That all stands in stark contrast to the view in mainland China, where more than half the population back a full-scale war to take control of Taiwan. It is also important to stress that China has never—never—ruled Taiwan, which is a democracy of 24 million people. When the Minister responds, will she state that the Government are committed to the principle of self-determination, which applies to the people of Taiwan?

Although the UK position continues to be defined by the one-China policy and the maintenance of the status quo, the one-China policy does not equate to, and has never equated to, an acceptance of Beijing’s one-China principle that Taiwan is an inalienable part of China, despite what Beijing might say. It is merely a recognition that Beijing makes such a claim. By its actions, China has unilaterally and consciously changed the status quo, and is seeking to create the new normal I have outlined. It has consistently done so along its border, over the Senkaku islands and in the South China sea. My question to the Minister is: why do the Government keep repeating that it is the UK position to maintain the status quo, as the status quo itself is being unilaterally changed and eroded by China?

Part of the reason I wanted to bring the debate forward is the importance of Taiwan to the global economy, as well as our own economy. In a recent report earlier this year, Bloomberg Economics estimated that the first-year price tag of a war in the Taiwan strait would sit at around $10 trillion, equal to about 10% of global GDP, while a blockade would equate to about 5% of the global economy. One company, the Taiwan Semiconductor Manufacturing Company, makes two in three semiconductors and 90% of the world’s most advanced chips.

[Richard Foord (Tiverton and Honiton) (LD)]

The TSMC makes a massive proportion of silicon chips. While the UK has niche strengths in semiconductor design and compound conductors, does the hon. Gentleman share the view that Britain will remain dependent on Taiwan for silicon chips for a long time to come?

[Stewart Malcolm McDonald]

Yes, the hon. Gentleman is absolutely right. And this is not just a uniquely British issue; this is an issue for the entire western and democratic world. Chips are just one area of a great number where that overreliance is a threat to our economic and security interests. The total market cap of TSMC’s 20 customers is worth around $7.4 trillion. To put that in context, that is over twice the size of the British economy.

Taiwan sits at the nexus of shipping lanes that connects the world to China, South Korea and Japan. Together, they account for 40% of global manufacturing output. Half the global container fleet passes through the straits each year, dwarfing the traffic that passes through the Suez canal. With all that in mind, and given that it is the stated objective of the CCP to unify Taiwan with the mainland—either by force or by some other form of coercion—may I ask the Minister what modelling the Government have done of the impact of a war, or a blockade of Taiwan, on the UK economy? May I also ask her what industries and sectors would be most at risk? Is there a strategy for de-risking, and what engagement has there been with industry on a potential shock in the Taiwan strait?

--- Later in debate ---

[The Minister of State, Foreign, Commonwealth and Development Office (Anne-Marie Trevelyan)]

I am grateful to the hon. Member for Glasgow South (Stewart Malcolm McDonald) for securing the debate, and I thank him and other hon. Members for their thoughtful contributions. I will do my best to respond to all the points that have been raised.

Taiwan is a thriving economy of over 23 million people, with whom the UK shares both values and deep ties, and Members of this House will be familiar with the unique nature of our relationship. Although we have no diplomatic relations, we have strong unofficial links built on many shared interests, including security and prosperity in the Indo-Pacific, trade, innovation, climate action and global health. Our engagement on these important issues is supported by the British Office Taipei and the Taipei Representative Office in London.

The UK and Taiwan share a thriving £8 billion trade and investment relationship, which encompasses a wide range of goods and services, not least the UK’s export of over £340 million-worth of Scotch whisky to Taiwan last year alone—always a good statistic. Our enhanced trade partnership, which we announced last year, will further strengthen this trade relationship. Meanwhile, as the hon. Gentleman highlighted, Taiwan produces most of the high-performance semiconductors that drive our global digital economy. It therefore has a critical role in the technology supply chains that underpin global markets, and it invests heavily in research innovation.

[Richard Foord]

The European Union currently has a 9% market share in semiconductors globally, and has set an ambition for 20% by the year 2030. Will the Minister enlighten us on the UK’s ambition for semiconductor manufacture?

[Anne-Marie Trevelyan]

I do not have the figures to hand, but we want to see our flourishing science and technology co-operation continue to grow. That was set out in the Government’s national semiconductor strategy that we published last year, to which I would point the hon. Gentleman.

We hold regular expert-level talks with Taiwan on a range of important issues, especially energy and health. We are close partners on climate action, and are increasingly sharing our expertise on offshore wind and multi-use port development. Our enhanced trade partnership, which is a really important developing area, will further deepen our mutual co-operation on net zero technologies, which are vital to both energy security and our shared imperative to keep global temperatures from rising even more perilously.

The hon. Member for Glasgow South eloquently stated that the UK’s long-standing position is that we believe the Taiwan issue should be settled peacefully by people on both sides of the strait, without the threat or use of force or coercion. The UK and the wider world have a clear interest in enduring peace and stability in the strait and throughout the Indo-Pacific, because a conflict across the strait would have a tragic human cost, but it would also be a tragedy for livelihoods across the region and have a wider global impact. Taiwan and the Taiwan strait are vital links in the global economy, driving prosperity and innovation. As the hon. Gentleman highlighted, a conflict could destroy world trade by up to 10% of the global economy, according to Bloomberg analysis. No country, whether high, middle or low income, could possibly shield itself from the economic repercussions of such a crisis, including China. That is why this Government are clear that we do not support any unilateral attempts to alter the status quo of the Taiwan strait.

I would like to assure Members that we are continually working to strengthen the UK’s contingency planning across a range of international challenges, including threats to global supply chains. I hope that Members will be aware of the recently launched critical imports and supply chain strategy, published by the Department for Business and Trade, which tackles some of these issues in greater depth than I will set out this evening.