The so-called rivalry between the US and China keeps making headlines, with analysts debating whether this is another Thucydides Trap—or just part of the US’s ongoing struggle to maintain global dominance. Some argue that Washington is simply trying to suppress an emerging challenger like China, while others believe Beijing’s own ambitions are pushing it toward confrontation. Either way, Taiwan has become central to this power play, especially with its billion-dollar semiconductor industry supplying 90% of the world’s microchips.
China portrays itself as a rising powerhouse, but its actual strength doesn’t always match its image. Its actions in the South China Sea tell a different story, openly clashing with its commitment to UNCLOS. The growing military presence, territorial claims, and artificial island-building signal something deeper. Is this just about securing energy resources? Or is it a bid for regional hegemony?
The 1996 Taiwan Strait Crisis is arguably the event that altered the trajectory of the US-Taiwan-China ties. Taiwan had just held its first democratic presidential election after decades of martial law. Beijing wasn’t pleased. It fired missiles near Taiwan to send a message. But instead of submission, China got a reality check. The US responded by sending two aircraft carriers—USS Independence and USS Nimitz—showing that Washington wasn’t backing down. China’s deterrence turned into a security dilemma as the crisis exposed its military weaknesses and triggered a shift for a long-term quest for regional dominance.
Over the next few years, China increased its military spending and developed its navy. And using a historical narrative to justify its territorial claim in the disputed islands, even refusing to accept the 2016 ruling by the Permanent Court of Arbitration. Meanwhile, their diplomatic influence expanded too, through the Belt and Road Initiative.
There’s an argument that China is rearranging the international system from anarchical to hierarchical, or simply as restoring the ancient tribute system of “tianxia” (under the heavens). Perhaps the aggression is not about restoring the ancient system but rather coming from the internal need to maintain the perceived dignity. China tried to deter and show its strength, yet it backfired, exposing its own vulnerabilities. The Taiwan Strait Crisis is a moment of humiliation, losing a “face,” the mainzie. Despite China’s legal commitment to UNCLOS, it refused to acknowledge the 2016 arbitration ruling because accepting the defeat would be another public humiliation. China chose to reject the international norms to assert dominance rather than to appear weak. It is quite surprising that there is no retaliation or hostility from China on Vietnam’s
expansion on the disputed islands. Historically, Vietnam has proven many times over that it can and will push back aggression from the Chinese. China simply refrains from retaliation to avoid losing face.
If Washington wavers on Taiwan, it risks losing credibility, and that could push regional allies to rethink their security strategies. But for how long can the US sustain this commitment? The US withdrew from the Trans-Pacific Partnership in 2017, raising concerns about its long-term commitment in the region. And if the allies lose their confidence with the US, their response will not mirror Europe’s rearmament for one fundamental reason: geography. Unlike Europe, where military buildups are logistically easier, countries like Indonesia and Australia have prioritized diplomacy over large-scale military expansion. Defense realignments in the Indo-Pacific require far more than just political will—they demand serious strategic and economic investment.
The key takeaway? China’s aggression tends to follow when it perceives disrespect, but when there’s a real risk of public humiliation, diplomacy takes center stage. Beijing’s choices in the region aren’t just about power—they’re about maintaining face.
