China This Week | Not tariffs or West Asia war, why Taiwan is ‘most important issue’ for China in ties with US

The May 2026 Beijing summit between the US and Chinese heads of government has brought the Taiwan question back to the centre of global strategic discourse, ...

What Happened

The May 2026 Beijing summit between the US and Chinese heads of government has brought the Taiwan question back to the centre of global strategic discourse, with analysts and governments reassessing the durability of the decades-old framework governing cross-strait relations.
China's leadership reiterated at the summit that Taiwan is its foremost core interest and warned that mishandling it could put the entire bilateral relationship at risk.
The US administration's description of a $14 billion approved arms package as a "negotiating chip" has prompted a sharp response from Taiwan's government, US legislators, and regional allies.
The episode has exposed the fundamental tension at the heart of US-China relations: the US maintains unofficial ties with Taiwan, sells it weapons, and opposes any forcible change in its status — all while formally recognising Beijing as China's sole legitimate government.
Analysts note that both the Thucydides Trap dynamic (structural rivalry) and the Taiwan issue have become analytically inseparable: Taiwan is simultaneously the most likely flashpoint and the clearest test of whether the two powers can manage their competition peacefully.

Static Topic Bridges

Why Taiwan Matters to China: Historical and Ideological Stakes

Taiwan's significance to China is rooted in history, ideology, and national identity — not merely strategic geography.

Taiwan has been governed separately from mainland China since 1949, when the Republic of China government retreated to the island after losing the civil war to the Communist Party.
The PRC considers this separation a humiliation tied to China's "century of humiliation" at the hands of foreign powers, and "reunification" is framed as completing national rejuvenation.
The Chinese Communist Party's domestic legitimacy is partly premised on its promise to eventually reunify Taiwan with the mainland.
Xi Jinping has stated that the Taiwan question "cannot be passed from generation to generation" — signalling a timeline for resolution during his leadership.
China's constitution includes Taiwan as part of its territory; the 2005 Anti-Secession Law authorises the use of "non-peaceful means" if Taiwan declares independence or if reunification becomes impossible.

Connection to this news: China's insistence at every major diplomatic forum that Taiwan is its "core interest" — and its intense sensitivity to US arms sales — reflects this domestic political imperative, not merely military strategy.

Why Taiwan Matters to the United States: Strategic and Economic Stakes

The US interest in Taiwan is simultaneously strategic, economic, legal, and values-based.

Legal obligation: The Taiwan Relations Act (1979) mandates arms sales to enable Taiwan's self-defence.
Semiconductor supply chain: Taiwan Semiconductor Manufacturing Company (TSMC) produces over 60% of the world's advanced logic chips. A disruption — through conflict or coercion — would devastate global tech supply chains, including US defence electronics.
Alliance credibility: A US failure to support Taiwan would signal to Japan, South Korea, the Philippines, and Australia that US security commitments are conditional — potentially triggering dangerous regional recalibrations.
Freedom of navigation: Taiwan Strait shipping lanes carry approximately $5 trillion in global trade annually.
Democratic norms: Taiwan is a functioning liberal democracy of 23 million people — its absorption by an authoritarian government through force would represent a significant norm violation.

Connection to this news: The "negotiating chip" framing — whatever its intent — simultaneously damages all five US interests, which is why the bipartisan congressional reaction has been sharp.

Taiwan's Three Military Crises: A Historical Pattern

The current tension is the latest in a series of cross-strait crises, each of which drew in the United States and shaped the evolving framework of triangular relations.

First Taiwan Strait Crisis (1954–55): PRC shelled Quemoy and Matsu islands; the US signed a mutual defence treaty with Taiwan and Congress passed the Formosa Resolution authorising military force.
Second Taiwan Strait Crisis (1958): PRC resumed shelling; US supplied Taiwan with advanced missiles; crisis resolved through back-channel diplomacy.
Third Taiwan Strait Crisis (1995–96): PRC conducted missile tests near Taiwan ahead of its first direct presidential election; US deployed two aircraft carrier groups to the region — the most visible US military commitment to Taiwan in the post-recognition era.
Fourth Taiwan Strait Crisis (2022 onwards): PLA exercises surrounding Taiwan became routine following US Congressional visits to Taipei; exercises have grown in scale and proximity each year.

Connection to this news: Each crisis has reset the parameters of triangular relations. The current episode — where arms sales are framed as negotiable — represents a potential fifth inflection point in this historical pattern.

The 1992 Consensus and Its Contested Status

The "1992 Consensus" refers to an understanding reached between representatives of the PRC and the ROC (Taiwan) in 1992, acknowledged as agreeing that there is "one China" — with each side reserving the right to interpret what that means.

The PRC uses the 1992 Consensus as the basis for all cross-strait dialogue, insisting it means Taiwan accepts being part of China.
Taiwan's ruling Democratic Progressive Party (DPP) does not recognise the 1992 Consensus; the Kuomintang (KMT) party does.
Taiwan's current government (under President Lai) has not endorsed the consensus, which Beijing views as provocation.
Most of Taiwan's electorate consistently polls in favour of maintaining the status quo — neither formal independence nor unification.

Connection to this news: The Beijing summit occurred against this backdrop: China entered talks having defined its bottom line (One China Principle, 1992 Consensus) while the US has not endorsed those terms — making any perceived weakening of arms commitments a unilateral concession.

Indo-Pacific Security Architecture and India's Position

India occupies a significant position in the broader Indo-Pacific security framework, even as it avoids direct statements on Taiwan.

India is a member of the Quad (Quadrilateral Security Dialogue) along with the US, Australia, and Japan — a grouping explicitly oriented toward a "free and open Indo-Pacific."
India maintains a formal "One China Policy" but has not explicitly endorsed the One China Principle.
India's growing trade and technology ties with Taiwan (semiconductor supply chains, IT sector) create a de facto interest in Taiwan's stability.
Chinese military pressure on Taiwan is directly linked to broader PLA assertiveness in the Indo-Pacific, including the South China Sea and the Himalayas.

Connection to this news: Any shift in US posture toward Taiwan has downstream implications for the credibility of the entire Indo-Pacific security architecture that India is embedded in, even without India taking an explicit position on the Taiwan question itself.

Key Facts & Data

Taiwan's population: approximately 23 million.
TSMC market share in advanced logic chips (below 7nm): over 60% globally.
Taiwan Strait width: approximately 180 km; annual shipping throughput: estimated $5 trillion in global trade.
Anti-Secession Law (China, 2005): authorises "non-peaceful means" for reunification under defined conditions.
PLA conducted 5,317 sorties around Taiwan in 2025; Justice Mission-2025 exercise (December 2025) featured the largest-ever designated operation zones.
1992 Consensus: an agreement whose very existence and meaning is disputed between the two sides.
Third Taiwan Strait Crisis (1995–96) saw the US deploy two carrier strike groups — its most visible military signal of commitment to Taiwan since 1979.