Last week, the military of the People's Republic of China (PRC) performed a large military drill surrounding Taiwan simulating blockade and invasion of the island. The war games were performed three days after the inauguration of the new president of Taiwan, Lai Ching-te. In his speech, the President of Taiwan called on Beijing to cease its intimidation of the Republic of China (ROC), the official name of Taiwan. China considers Lai as a “dangerous separatist” and describes the drills as a punishment for the island's "separatist acts".

The tension between PRC and ROC dates back to the 1911 Revolution that ended Chinese monarchy, and led to the establishment of the Republic of China. The modernization efforts in China had begun during the last imperial dynasty - the Qing dynasty - but the defeat in the First Sino-Japanese War in 1895 strengthened the idea that the modernization could be only achieved with an institutional change.

The Republic of China (ROC) was based on mainland China from 1912 to 1949 as a single party state ruled by the Kuomintang (KMT). KMT was defeated by the Chinese Communist Party (CCP) in the Chinese Civil War and fled to Taiwan. Both republics consider themselves the legitimate successors to the 1911 Revolution and its ideals including nationalism, republicanism, modernization of China and national unity.

National unity idea which is also called One China principle evolved in time. Currently ROC no longer considers itself as the sole legitimate government of China. PRC interprets it as only one geographical region of China exists, which was split between two Chinese governments during the Chinese Civil War and believes that "one China" should eventually unite under a single government.

In 1971 the UN recognized the PRC as the representative of China as a member of the United Nations. In 1979 the United States established diplomatic relations with the People's Republic of China (PRC)  and recognized Beijing as the only legal government of China. The recognition severed US relations with ROC and cancelled the Sino-American Mutual Defense Treaty (SAMDT). However, the US congress interfered with this development and enacted the Taiwan Relations Act (TRA) in the same year.

The Act does not recognize the terminology of "Republic of China '', but uses instead the terminology of "governing authorities on Taiwan '' describing the similar geographical content in the SAMDT. The act authorises unofficial and informal diplomatic relations through American Institute in Taiwan (AIT) as the de facto embassy of the United States of America in Taiwan. The TRA neither guarantees nor relinquishes the U.S. military intervention if ROC attacked but ensures that the Taiwan policy is subjected to the consent of the US Congress.

The ambiguous nature of TRA aims to discourage Taiwan from a unilateral declaration of independence, and to deter the PRC from unilaterally unifying Taiwan with the PRC. Moreover, the TRA allows the United States to provide Taiwan arms and interfere if Taiwan's security is jeopardised.

In 1976, Taiwan made an important decision to create leverage against China and convinced the American RCA corporation to transfer semiconductor technology. Today, the Taiwan Semiconductor Manufacturing Company (TSMC) produces more than 90% of the world’s most advanced microchips and 60% of semiconductors. As the semiconductors and chips are the backbone in every technological product, they are as vital as oil and other natural resources for the world economy. The intended leverage named Silicon Shield protects Taiwan. In addition to a possible US intervention, China weighs the consequences of an invasion on the strategic products output and the rest of the world is willing to stand up Taiwan’s sovereignty for the sake of their stable supply.

Meanwhile Russian aggression on Ukraine showed the world that their dependence on strategic resources like oil and natural gas is the biggest threat to their economic and civilian systems. To secure reliable output on semiconductors, US pressured TSMC to build a $40 billion production facility in Arizona. Germany convinced TSMC to build a factory investing $3.8 billion in Dresden. In addition Germany signed an agreement with Intel. Moreover the EU has approved a €43 billion subsidy plan to double its chipmaking capacity by 2030.

In a reasonable world, the story would end here but autocratic countries are seldom governed by reasonable leaders. The Chinese President Xi Jinping is evaluated as a dominant, conscientious, and ambitious person. His positive characteristic together may be with his only negative aspect that is to avenge historical wrongdoings makes him very dangerous.

At the moment China benefits cheap oil and gas supply from Russia. Moreover everyday Russia becomes more and more dependent on China for the strategic supplies to roll its war economy. Meanwhile, President Xi observes development surrounding the Russian-Ukrainian war like a laboratory experiment to develop an effective strategy for Chinese intervention on Taiwan. If they controlled Taiwan, they would arm Taiwanese semiconductor production against the West and together with Russian energy production they could bend down the West.

However, the West initiated measures to secure dependable semiconductor supply and the window to act for China narrows. Still President Xi probes the West as in his latest visit to the EU. If he decides that the conditions to take over Taiwan by force are ripe, China could join their lot with Russia nailing the coffin of Ukraine or the world as we know it.

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