Beijing braces for conflict if Trump wins 2024 election

Beijing expects a more confrontational trade policy from the U.S. in the event of Donald Trump's victory in the presidential election. One of the bargaining chips in this skirmish could be Taiwan, about which the Republican candidate speaks controversially.

In a Tuesday interview with Bloomberg, Donald Trump addressed many issues, including Taiwan. His words can be considered controversial as the U.S. presidential candidate touched on two extremely sensitive issues.

“I think Taiwan should pay us for defense. We are no different from an insurance policy. And Taiwan gives us nothing in return,” said Donald Trump. In the next part of the conversation, he stated that China is big enough to "simply bomb Taiwan". He used distance to argue: “Taiwan is far from here,” he said.

The words of the Republican Party leader sparked a new wave of discussion about the role Taiwan plays in the region and the world. It is the 21st largest economy in the world, with a GDP of about $750 billion. However, it is not just the size of the economy but its key role in the global technology supply chain. The island is a world leader in semiconductor production, with Taiwan Semiconductor Manufacturing Company (TSMC) providing 90% of advanced chips and 65% of all semiconductors worldwide.

Besides the semiconductor industry, Taiwan is also a powerhouse in electronics manufacturing. It is home to Foxconn, the main supplier for Apple. Other industries also benefit from the advanced technological park, including bicycle manufacturers such as Giant and Merida, which are responsible for 10% of global supplies.

Taiwan's dominance in key technological sectors gives it enormous geopolitical significance, especially in the context of the U.S.-China rivalry. Potential disruptions in Taiwan's economy could have serious consequences for the global economy.

For these reasons, Chinese strategists are analyzing possible scenarios regarding Taiwan, reports "The Wall Street Journal." They believe that Trump has expressed ambiguous views on this issue. Some fear that Trump could use the Taiwan issue as a bargaining chip in trade negotiations, which Beijing sees as a potentially dangerous approach.

China views Taiwan as a renegade province and seeks its reunification with the mainland. Beijing's motivations are both political and economic. Taking control of Taiwan's semiconductor industry would give China a huge technological and economic advantage, reducing its reliance on foreign suppliers. This is also relevant in the ongoing economic war with the U.S.

Control over Taiwan would also strengthen China's strategic position in the Asia-Pacific region, increasing its influence on global supply chains.

Chinese officials are intensively preparing for Donald Trump's potential return to power in the United States. Remembering his first term, they fear an escalation of economic and geopolitical tensions. Beijing expects a much more aggressive trade policy from the U.S. in the event of Trump's victory in the November presidential election. These preparations reflect China's deep concern over the potential consequences of a change in the administration in Washington.

According to reports from "The Wall Street Journal," Chinese ministries responsible for foreign affairs, trade, investment, and technology have appointed special officials to monitor the U.S. election campaign, with a particular focus on the Trump camp. Beijing fears the possibility of another trade war between the U.S. and China, which could have serious consequences for the Chinese economy.

Chinese officials are particularly concerned about Donald Trump's declarations regarding the possibility of imposing tariffs up to 60% on imports from China. Although it is unclear how such a move could be realized, it poses a serious threat to the Chinese economy, which largely relies on exports. In response to these threats, China is already taking steps to diversify its export markets and sources of technology.

According to a report by the McKinsey Global Institute, in recent years, China has already started shifting its trade towards developing economies, including Russia. In 2023, developing countries accounted for over half of China's trade in goods, compared to 42% in 2017. This trend could intensify if the U.S. tightens its trade policy toward China. Beijing is also accelerating efforts to diversify its supply chains and export markets. Chinese companies are increasing investments in developing countries, particularly in Africa and Southeast Asia, to reduce their dependence on the American market.

Chinese leaders are also worried about potential changes in the geopolitical power balance. One of President Xi Jinping's main concerns is the possibility of disrupting his relationship with Vladimir Putin. Xi has cultivated a personal bond with the Russian leader and fears that if Trump draws closer to Putin, it could weaken Beijing's relations with Moscow, which are crucial in the confrontation with the West.

At the same time, Chinese officials see some potential benefits from a possible Trump victory. In their view, he could accelerate what Xi sees as the decline of the U.S. as the sole world power, worry America, and discourage the allies that Biden has gained, potentially helping Beijing rebuild relationships with Europe.

Due to the above, China is intensifying efforts in the technological sector to develop its advanced technologies, including semiconductors and artificial intelligence. The goal is to become independent of American supplies and technologies, which could be cut off in the event of an escalation of tensions between the two countries.

China's preparations for Donald Trump's potential return to the White House reflect Beijing's deep concern about the possibility of a sudden shift in U.S.-China relations. Although the Biden administration has maintained many of Trump's tough policies toward China, Beijing sees the current U.S. president as more predictable and less prone to radical actions.