The Potential Impact on Taiwan of a Second Korean War

The Potential Impact on Taiwan of a Second Korean War

The Potential Impact on Taiwan of a Second Korean War

Tensions on the Korean Peninsula over the past year have reached a level not seen since 1994 when, as former Secretary of Defense William Perry has publicly noted, a newly installed Clinton Administration contemplated a surgical strike on a nuclearizing North Korea. The new Trump Administration, following a series of missile and nuclear tests by Pyongyang, has similarly found North Korea to be its greatest foreign policy challenge. President Trump’s threat to “totally destroy North Korea” in his first-ever speech to the UN General Assembly late last month, and other disparaging presidential comments about North Korea’s leader, drew the following public response from Pyongyang’s UN Ambassador:  this is “a declaration of war.”

The North Korean invasion of South Korea in the early hours of Sunday on June 25, 1950, led to a rapid and complete reversal of American foreign policy priorities in Asia. President Harry S. Truman surprised Pyongyang, Beijing, and Moscow with an immediate and vigorous response. The President hurriedly returned to Washington from a vacation in his hometown of Independence, Missouri after being informed of the invasion in a telephone call from Secretary of State Dean Acheson. On June 27th, he announced the official US response to the American people.

The measures undertaken by the President profoundly impacted the future of all of Asia and Taiwan, as well as the situation on the Korean peninsula. Truman announced first that he had “ordered United States air and sea forces to give the Korean Government troops cover and support.” He noted further that “the attack upon Korea makes it plain beyond all doubt that communism has passed beyond the use of subversion to conquer independent nations and will now use armed invasion and war.”

The President then turned his attention to the situation in the Taiwan Strait, stating:

In these circumstances the occupation of Formosa by Communist forces would be a direct threat to the security of the Pacific area and to United States forces performing their lawful and necessary functions in that area. Accordingly I have ordered the 7th Fleet to prevent any attack on Formosa. As a corollary of this action I am calling upon the Chinese Government on Formosa to cease all air and sea operations against the mainland. The 7th Fleet will see that this is done. The determination of the future status of Formosa must await the restoration of security in the Pacific, a peace settlement with Japan, or consideration by the United Nations.

The June 27th remarks represented a complete reversal of post-War US China policy following Mao’s victory and the withdrawal of Nationalist (KMT) forces to Taiwan. Following Chairman Mao Zedong’s proclamation of the founding of the People’s Republic of China (PRC) from Tiananmen Square in Beijing on October 1, 1949, Truman made it clear he was adopting a hands-off policy with regards to cross-Strait relations.

In public remarks from the White House on January 5, 1950, the President stated that:

The United States has no predatory designs on Formosa, or on any other Chinese territory. The United States has no desire to obtain special rights or privileges, or to establish military bases on Formosa at this time. Nor does it have any intention of utilizing its Armed Forces to interfere in the present situation. The United States Government will not pursue a course which will lead to involvement in the civil conflict in China. Similarly, the United States Government will not provide military aid or advice to Chinese forces on Formosa. In the view of the United States Government, the resources on Formosa are adequate to enable them to obtain the items which they might consider necessary for the defense of the island.

One week later Secretary of State Dean Acheson gave his famous speech at Washington’s National Press Club where he defined the United States “defense perimeter of the Pacific” encompassing countries like Japan and the Philippines, which the United States would be compelled to defend, but excluding Taiwan and South Korea. A former missionary to China, Walter Judd, and other Congressional critics of Truman Administration policy in the ongoing “Who lost China?” debate, were “very disappointed at the administration’s indifferent stance toward the Republic of China (ROC).”

But then the Korean War broke out and cross-Strait dynamics were completely altered. Mao, who had been preparing his forces in southern China for a cross-Strait invasion, had to refocus the PLA’s attention to the northeast border with Korea.  Mao soon realized that his window of opportunity was fast closing and that the signal of a perceived green light from Truman to bring the Chinese Civil War to a successful conclusion was now flashing red. The presence of the US 7th Fleet, which Premier Zhou Enlai referred to as “armed aggression on Chinese territory,” proved an insurmountable obstacle. As a result, “on August 4, 1950, Mao decided to abort his plan to invade Taiwan.”

After a three-year bloody, stalemated war and a return to the status quo ante along the 38th parallel on the Korean peninsula, a new paradigm emerged for the Taiwan Strait. The administration of Truman’s successor Dwight Eisenhower signed a mutual defense treaty with the Republic of China on Taiwan on December 2, 1954. Mao’s dream of a Taiwan united with the People’s Republic of China quickly slipped away. As Mao later would fatalistically tell Henry Kissinger, “we can wait for one hundred years” for Taiwan. Thus, the economically vibrant and democratically governed Taiwan of today grew directly out of the ashes of the Korean War.

So, if the first Korean War had such a dramatic effect on the destiny of Taiwan, what would be the unintended consequences of a second Korean War, especially given the “August Korea crisis” of threats, missile launches and presidential tweets in response?

First, Taiwan, the world’s 18th largest economy, could not, at a minimum, escape the widespread adverse impact that the outbreak of armed hostilities on the Korean peninsula would have on all of the East Asian economies. For unlike 1950, when the first Korean War broke out, it is the Pacific Ocean not the Atlantic that is the major highway for international trade. It is Taiwan and her sister economies along the Pacific Rim that serve as the economic engine for the global economy. Cargo vessels would likely hesitate to sail from the port of Kaohsiung and other Asian ports if missiles, especially nuclear armed, were flying overhead across the Pacific.

An even greater danger to Taiwan and the economic prosperity of its 23 million people would be if its major trading partners, the PRC and the United States, were drawn again into a Korean conflict as happened in 1950. This August, the Beijing-sponsored Global Times ran an opinion piece titled, “Reckless game over the Korean Peninsula runs risk of real war,” which raised the specter of a potential Great Power conflict over Korea. “The US and North Korea have both ramped up their threatening rhetoric,” the paper warned.

The hawkish Global Times went on to note that “China should also make clear that if North Korea launches missiles that threaten US soil first and the US retaliates, China will stay neutral. If the US and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so.” The newspaper gave every indication that, given certain circumstances, China would intervene on the Korean peninsula for a military showdown with the United States. History would then repeat itself.

The effect for Taiwanese investors in China, including such financial giants as Foxconn that maintain physical assets there, such as factories, could be devastating if aerial bombardment of industrial facilities in an escalating conflict took place. The Taiwan Stock Exchange, along with stock markets around Asia and even globally, would see its financial assets swiftly tank.

The greatest potential threat to Taiwan, however, could be a strategic rather than an economic one. If a conflict on the Korean peninsula drew Beijing into a military conflict with Washington, and if an increasingly reckless North Korean regime decided to throw nuclear weapons into the mix, the results for Taiwan could be devastating. Fallout from radiation could create a nuclear winter across much of East Asia.

An even greater potential risk to Taiwan could come from Chinese leader Xi Jinping if he saw his “China Dream” going largely up in smoke due to a Great Power conflict in Korea. Xi has already been far more assertive on the Taiwan question than other recent Communist Chinese leaders. According to a Reuters report, during a 2013 Asia-Pacific Economic Cooperation (APEC) meeting in Bali, Xi told Vincent Siew that, “a political solution to a standoff over sovereignty (for Taiwan) lasting more than six decades cannot be postponed forever.” If Xi Jinping came to the conclusion that his “new type of Great Power Relations” with the United States was no longer plausible because of a crisis in Korea, he could then decide to go for broke over Taiwan. A full-scale attempted cross-Strait invasion could become an unintended consequence of a second Korean conflict.

There is an old Korean adage that “when whales fight, shrimp get broken.” In any Great Power showdown over Korea, not only South Korea but Taiwan could end up being inadvertently caught in the crossfire.

The main point: The political destiny of Taiwan was greatly impacted by the 1950 conflict in Korea following the withdrawal of Chinese Nationalist forces to Taiwan the year before. President Truman sent the US 7th Fleet to the Taiwan Strait immediately after the outbreak of the Korean War, effectively blocking Mao’s plans for a cross-Strait invasion. With the specter of a possible second Korean conflict, history could repeat itself with severe economic and even potential security consequences for Taiwan and its people.