in terms of democratization.

You've got a relatively liberal society.

One way that people have seen that globally

is that it's the first place

in Asia to legalize same-sex marriage.

It's an island of less than 24 million people,

and yet its economy is close

to one of the top 20 in the world today.

But this wealthy, democratic island

is not considered an independent country by Beijing.

China has long viewed Taiwan as its lost territory

and threatened to unify with it by force.

Under Beijing's pressure,

only 15 states in the world recognize Taiwan today,

down from 23 in 2016.

And one key country is not on that list:

the United States.

The U.S. is Taiwan's biggest ally.

Although there are no formal diplomatic relations

between the two.

The U.S. is Taiwan's biggest arms supplier,

has close economic ties with the island

and is likely to defend it.

We are going to hold China accountable

to follow the rules.

So how has Taiwan become

the most volatile issue between

the world's two greatest powers?

Up to the late 19th century,

Taiwan, then known as Formosa,

passed through the rule of Dutch and Spanish colonizers,

its aboriginal peoples and Chinese dynasties.

In 1895, the Qing dynasty of China lost Taiwan

to Japan after a humiliating military defeat.

Taiwan was then ruled by the Japanese

for the following 50 years.

Japan wanted to make Taiwan into a model colony,

using it as an example to persuade other Asian nations

to join the Japanese empire.

They raised living standards,

they improved education,

they improved health and built a lot of infrastructure.

So that 50 years later,

Taiwan was actually one

of the more developed parts of the region.

After World War II,

Taiwan was returned to the control

of the Chinese government,

at that point, the Republic of China.

The Republic of China rapidly lost the Chinese Civil War

to the Communist Party of China,

and as a result ended up on Taiwan as a regime in exile

with very few resources, a lot of refugees,

a very poor population struggling to survive.

Taiwan relied heavily on U.S. economic aid,

but by the middle of the 1960s,

most of that aid was phased out as the U.S. wanted Taiwan

to develop its own economy.

So Taiwan changed its strategy,

moving from an import substitution policy,

which replaced foreign imports with homemade goods,

to an export-oriented economy.

And Taiwan moved very, very quickly

towards exporting very cheap,

mostly consumer goods to the United States.

And as a consequence, over the next 20 to 30 years,

Taiwan's economy boomed.

So beginning of the 1980s,

the government in Taiwan started to think

how do we take the next step in our economic development?

And they identified among many areas semiconductors

as a critical technology.

So that really took off in the 1990s with the growth

of Taiwan Semiconductor Manufacturing Company

that eventually, you know,

now today is an absolutely crucial company

for any company that's making technology.

You know, their chips are in smartphones,

they're in tablets, they're in computers,

they're in games consoles and they're in cars as well.

Anything that you need chips for,

largely you're having to come to TSMC.

And so this by extension puts Taiwan

in a fairly strong position that it is a key node

in the tech supply chain globally.

And so it is a really, really valuable partner

for every single country in the world.

Alongside this economic shift,

Taiwan's political landscape also changed dramatically.

Under the rule of the Chinese Nationalist Party, or KMT,

for four decades Taiwan was an authoritarian regime

until the end of martial law in the late 1980s.

Then Taiwan gradually transitioned to democracy.

The first direct presidential elections took place in 1996,

followed by several peaceful transfers of power.

So the Democratic Progressive Party

is the current party that governs Taiwan.

They were a party that came out of this movement

of activists pushing for more democracy

in Taiwan in the 1970s.

And their fundamental stance

is that Taiwan is already an independent country.

But this isn't

the same stance held by Beijing.

So from the People's Republic of China,

the PRC's perspective,

Taiwan remains the last piece of an unfinished civil war.

It's an illegitimate regime.

It's a breakaway territory that needs

to be unified with the motherland.

The Chiang Kai-shek regime

won a reprieve in June 1950 when the Korean War broke out.

The United States then stepped in to prevent

a final Chinese Communist Party,

a CCP-led invasion of the island of Taiwan.

The United States has been there ever since

as the guarantor of Taiwan's security.

Despite this guarantee of security,

in 1979, the U.S. broke ties

with the Republic of China on Taiwan,

and established them with

the People's Republic of China in Beijing.

Here things get complicated.

The United States, in one of our communiques

with the People's Republic of China,

acknowledged the PRC position that Taiwan was part of China.

But the United States also did not accept

the PRC claim to Taiwan.

That has been our position ever since.

And so, in effect,

the U.S. views Taiwan's status as undetermined.

But even after 1979,

they've maintained informal relations with Taiwan

and continue to invest here,

continue to support the economy

and most importantly, continued to sell arms to Taiwan.

With the U.S. in the middle,

China and Taiwan have avoided war for over seven decades,

but tensions between the two sides

have risen in recent years.

Emerging as a superpower on the world stage,

China has become more assertive

in its claims of sovereignty over Taiwan.

While most of the Taiwanese prefer maintaining

the status quo for now,

many young people favor overt independence for Taiwan.

The young people have really been at the heart

of this political transformation we're seeing in Taiwan

over the past eight, nine years,

when they started pushing back against

this economic integration between China and Taiwan

that started under former President Ma Ying-jeou.

One of the best examples was the

Sunflower Movement that broke out in March of 2014.

This movement was led mostly by college students

opposed to negotiations with Beijing

over a free-trade agreement.

The movement occupied the Legislative Yuan,

Taiwan's parliament,

for more than three weeks in order to block that parliament

from considering this trade agreement and voting on it.

So in effect,

the Sunflower Movement protesters blocked

further economic integration with mainland China.

Taiwanese podcasters Kylie Wang

and Ken Young joined some of the rallies and marches,

and started their popular news show during the movement.

We have mixed feelings towards China.

Yeah. Because on one hand,

I know that a lot of young people want to explore

the big market in China.

Because China has just much more opportunity,

and sometimes even better salaries nowadays.

Yeah,

especially for those who just graduated from college.

On the other hand,

China just keeps on bullying us.

We just don't like what they're doing.

We want to have economic growth,

but we do not want to sacrifice our economic growth

with our freedom of speech, with our independence,

with our democracy.

Since the Sunflower Movement,

the China-friendly KMT party has seen

its polling numbers decline steeply

while the DPP leader, Tsai Ing-wen,

won the presidential elections in 2016

and was re-elected in 2020.

So she has,

as her bottom line effectively

that Taiwan is an independent sovereign nation.

Her stance is that we're willing to talk

but only as equals.

And that is obviously a position that Beijing

is unwilling to accept.

China cut official communications

with Taiwan in 2016

and stopped individual travel permits

to the island in 2019.

It's also upped the rhetoric on taking control of Taiwan

and increased military maneuvers,

all of which is a concern for the U.S.

Taiwan is by far the most likely issue to draw

the United States and China into a direct military conflict.

I should say I don't think the likelihood of that

is particularly high still,

but it overshadows all other potential points

of friction in the U.S.-China relationship.

If China and Taiwan did eventually go to war,

there could be a devastating cost

to human life and industry.

Even if China manages,

they could spend years rebuilding Taiwan

and struggle to integrate a hostile population.

So it would be an incredibly dangerous,

messy affair.

The attempt to invade a fortified island

is always going to be an incredibly difficult one.

So there's a very good reason they have not attempted

to take Taiwan by military force.

It's because they're not sure they can do so.

And so it would be a really disastrous event

for everybody involved.

And there's a very good chance that other democracies

in this region, certainly Japan, maybe Australia,

would get drawn in as well.

Put quite simply,

it's in everybody's best interest right now

not to force the issue and to push it off

for another few years or maybe even a few decades.

But the unification would signal to the world

that it's China, not the U.S.,

that's the new dominant power in the region.

Being able to bring Taiwan into the PRC fold

would obviously be a huge achievement

for any Chinese leader.

And it's largely seen as being as one of his ambitions

to achieve before he steps down, whenever that may be.

Taiwan's future really depends on

if our allies would take China seriously.

No, I would say it depends on the attitude

of the western countries towards China.

Yeah.

Because if the Western countries, for example,

the U.S. starts to see Taiwan

as an important geopolitical ally,

then Taiwan could become a beacon of democracy

in the Chinese-speaking world.

If not, the western countries would like

to see China growing over the influence over the world,

then...

They can just let China be.

Yeah,

and we will be in real risk.

Yeah, Taiwan might be in real risk.

The Trump administration showed strong support

for Taiwan by providing more weapons,

sending high-level officials to visit

and changing the law to make interactions

between the two sides much easier.

In June, a U.S. delegation visited Taipei