China Warns of Conflict Over Taiwan’s Push for Independence in Upcoming Elections

Summary

  • Presidential and parliamentary elections in Taiwan on Jan. 13 are seen by China as a choice between war and peace, with warnings of conflict if Taiwan strives for formal independence.
  • In the lead-up to the election, China’s wrath is focused on Lai Ching-te, the ruling Democratic Progressive Party’s (DPP) presidential candidate, whom they view as a separatist.
  • Both DPP and the main opposition party, Kuomintang (KMT), are pledging to protect peace and strengthen Taiwan’s defences.
  • Despite soaring military activities in the Taiwan Strait by China, both Chinese and U.S. leaders have downplayed the likelihood of an invasion.
  • Taiwan’s defence initiatives, along with increased orders for U.S. weapons in the coming years, could affect the balance of power in the region.

The upcoming Jan. 13 presidential and parliamentary elections in Taiwan are perceived by China as a crossroads between conflict and tranquility. China cautions that a drive for Taiwan’s official independence could lead to strife.

China’s ire in advance of the voting has been aimed at Lai Ching-te, the ruling Democratic Progressive Party’s (DPP) presidential candidate. China has rebuffed his appeal for discussions as it sees him as advocating separation.

Both DPP and Kuomintang (KMT), Taiwan’s largest opposition party, assert they are the guardians of peace. Both parties are committed to strengthening Taiwan’s military and claim only the island’s residents can decide their destiny.

Bridging close relations with China has traditionally been a KMT stance, though it refutes being biased towards Beijing. As for the DPP, Wang Zaixi, a former deputy head of China’s Taiwan Affairs Office and a retired Chinese army major general, has labeled Lai as an ‘extremist’ champion of independence, according to reports.

New developments are expected in the Taiwan Strait geopolitics. As China and the United States compete for military supremacy, an upheaval could put a dent in the global economy and obstruct crucial supply chains. Western security circles are trying to assess the potential severity of China’s military reaction to the election outcome and its long-term implications.

This geopolitical dynamism involving two of the world’s top military powers comes with implications for the forex landscape and potential market volatility. Certain key market indices and commodities could be especially sensitive to these developments.

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