SAN JOSE, Calif. Tensions are running high again between Beijing and Taipei a series of events that could rattle the worldwide electronics supply chain.
Taiwan President Chen Shui-bian generated some sparks by recently abolishing the island’s National Unification Council and guidelines for working towards eventual reunification with China, according to reports.
In response, Chinese President Hu Jintao on Tuesday (Feb. 28) warned Taiwan that it was taking a "dangerous step" by scrapping the council, according to reports.
Chen, according to Hu, is taking steps towards a disastrous plan of declaring independence for Taiwan. Even Taiwan’s business leaders have been critical of Chen’s policies, which are perceived as creating some instability in the region.
Any conflict in the region would be disastrous for China, Taiwan and the United States. In total, Taiwan has poured up to $100 billion into China since the late 1980s. Acer, Hon Hai, TSMC and other major electronics companies in Taiwan have set up plants in China.
In 1949, China and Taiwan split after the Nationalists lost a civil war to the communists. At the time, the Nationalists fled to Taiwan. Since then, China has viewed Taiwan as a renegade province.
China has also vowed to attack Taiwan if the island declares independence. China has at least 700 ballistic missiles targeting the island.
The United States has also vowed to protect Taiwan in the event of an attack. On March 29, 1979, Congress also passed the Taiwan Relations Act, establishing a new relationship with Taiwan following U.S. recognition of the People's Republic of China.