China’s Economic Diplomacy: Where do Taiwan and Kosovo fit in?

The attempt to unite Taiwan with the mainland since 1979 when Deng Xiaoping instituted the principle of “one country, two systems” has been ineffective to date. In fact, China is struggling with so-called “own provinces,” such as Taiwan, Hong Kong, and Tibet, to name just a few. Internal conflicts are usually a cause of imbalance power which leads to small provinces claiming independence, as witnessed with Kosovo’s secession from the former Yugoslavia (FYR). In the case of secessionist movements, the state typically retaliates with repression, ultimately leading to human rights abuse and a lack of freedom, much like in China.   As such, the purpose of this commentary piece is to examine China’s economic diplomacy toward the new Least Developed Countries (LDC) and the increasing tensions with Taiwan.  In recent decades, China’s economy has become vital for many countries because of its ability to produce cheap products of reasonable quality,  therefore its competitive position with other countries has been enhanced as an economic powerhouse. However, its developing era started with the introduction of four economic reforms mainly to encourage foreign investment, which skyrocketed its exports and imports. By 1820 China had the world’s largest economy accounting for 84% of the global average (GDP). The International Monetary Fund estimates that by 2030 China will surpass the US as the world’s largest economy.   However, the former is facing fundamental issues that both the domestic and international communities are grappling at, namely the totalitarian rule over the provinces vying for self-determination.  Located in East Asia, Taiwan is officially known as the Republic of China (ROC). To the northwest, it shares a maritime border with the People’s Republic of China, while to the south it shares a border with the Philippines. Although Taiwan is governed independently since 1949, Beijing claims Taipei as part of its territory and keeps pledging to “unification” even at cost of force. The recent opinion poll conducted by the Taiwan New Constitution Foundation revealed that 50.1 % of the public support ”status quo”, where 38.9% favor independence and 4.7% support unification with the mainland. 

At the time when Vice President Chen was elected in 2004, China had passed the so-called ‘anti-secession law’, a domestic law aimed at unifying Taiwan with the mainland. Beijing has recently stepped up its political and military pressures on Taipei more intensively by exercising military flights near the capital. President Tsai Ing-wen, whose party platform calls for Taiwan’s independence, in her speech condemned China’s intensified military operations being conducted over Taiwan’s sovereignty. Many analysts are concerned that China might provoke a war over Taiwan; however, this scenario is far more complex. As the closest ally and home to the largest US military base in the Pacific, some experts emphasize that Japan is most likely to be at the center of the upcoming conflict. A major factor in China’s militaristic activities on Taiwan is the US’ continuous military support for Taiwan that could play against China. More than $18 billion in arms were sold to Taiwan during President Trump’s presidency.  Despite this Taiwan is still undersized to defend itself against China without US assistance.  Keeping Taiwan stable and secure has been a priority for the US since the Taiwan Relations Act was enforced in 1979. The act was designed to maintain peace, security, and stability in the Western Pacific and between Taiwan and the US. In particular, the US pledges to provide Taiwan with defensive weapons to counter any recourse to force or other forms of coercion that could harm the latter’s economic and social well-being. 

In light of China’s recent military actions, President Biden delivered an alarming message to Beijing warning that the US would defend Taiwan if confronted with an attack. In parallel to this, Japan’s defense minister Yasuhide Nakayame stated on July 26, 2021, that we need to defend democratic values so we must stand with Taiwan. The Biden administration appears to place more emphasis on Taiwan’s security. The recent summit held in Washington, in which 111 democratic nations were invited along with Taiwan, except China and other ”non-democratic countries”, is another indicator of US commitment in the Indo-Pacific.  Despite the act’s apparent failure to go unnoticed, Le Yucheng, the former vice minister of foreign affairs of China, strongly condemned it and stressed that the US would be held accountable. While the US continues to press Taiwan to play a more significant role in international affairs, the permanent membership of China in the UN Security Council has enabled Taiwan to do so. In addition to the Asian Development Bank and the World Trade Organization, Taiwan is a member of over forty organizations. Unlike Kosovo, Taiwan maintains only fifteen diplomatic ties with the US, France, Germany, Japan, Russia, and the United Kingdom being among the countries that have diplomatic relations. Taiwan’s recognition of Kosovo’s independence in 2008 shocked Chinese officials since it strongly opposes the notion that small provinces can’t leave the ‘mainland.’ Kosovo views China as slightly aligned with Serbia and Russian foreign policy. Moreover, China was the only country that abstained from NATO’s intervention in the Kosovo case in 1999. So far, China remains committed to the concept of unification, which requires Taiwan to prepare for a countermeasure against any aggression should the latter attack. Despite its strategic location, Taiwan shares common values with big powers such as the US, Japan, and it plays an important role in ensuring democracy and regional stability. The quest for freedom in Kosovo and Taiwan is different, however, they share similar values. New emerging countries will inevitably arise, and so are the prospects for Taiwan’s secession if US remains committed to tackling China. Unlike its relationship with Kosovo, the US maintains a strong unofficial relationship with Taiwan and continues to provide military supplies meantime.

In a nutshell, the US embodies the power of Taiwan in the Indo-Pacific region; therefore, its role in Kosovo can be viewed as an example of what to anticipate in the event of an attack. Over the past few years, Chinese economic diplomacy has been very successful. Recent years have seen a major shift in its focus towards Africa and the Western Balkans. In consequence, the latter has invested relatively little in Kosovo since it doesn’t recognize as an independent country. The Western Balkans have not been immune to Beijing’s efforts to build infrastructure that could facilitate the transportation of stocks from Greece.  It is imperative to establish a presence in new emerging markets where economies are at the forefront of development. While it is hard to tell whether China is competing with the US in the economic aspect, the US has the capability of reversing the course at any time.  As part of its Belt and Road Initiative (带- 路) China has invested and signed contracts worth $14.6 billion in Bosnia and Herzegovina, Montenegro, North Macedonia, and Serbia between 2005 and 2019.  This has helped in improving regional integration, increasing trade, and promoting economic growth by connecting Europe with Asia and Africa via land and maritime networks. Nevertheless, a paradigm shift is imminent with recent challenges in China being attributed to several factors, including aging demographics, threat of recession, COVID recovery, and power shortages. Even so, this shouldn’t lessen countries’ worry since it’s still difficult to assess China’s decision on its hostile stance towards Taiwan. Therefore, democratic countries should unite against the latter’s policy of aggression.

Arbenita Sopaj
Arbenita Sopaj
Arbenita Sopaj is a Ph.D. candidate at Kobe University, Japan, and Teaching Assistant. Her experience involves projects focused on UN and EU work and decision-making process, diplomatic intern, teaching assistant, lecturer. She has completed a double Bachelor and a Masters focused on International Relations and UN- work on peacekeeping and peacebuilding. Currently she is an External Liaison Officer at GPAJ, KPC, ACUNS. Researcher at Research Institute for Indo-Pacific Affairs (RIIPA).