Analysis by Keith Rankin, 30 April 2026.
There is a narrative going around that the war in the Persian Gulf and Gulf of Oman – Israel/USA versus Iran – is a training exercise for the big one, a war between the United States and China centred on the Taiwan Strait.
In Hormuz Today, Taiwan Tomorrow (Project Syndicate, 20 April 2026), Todd G Buchholz argues “By closing the Strait of Hormuz, Iran has handed the Trump administration a practice test. To pass – and preserve deterrence against a Chinese invasion or blockade of Taiwan – the United States must reopen the Strait decisively and visibly with escorts, minesweepers, and strikes on launch sites.”
Also, from Project Syndicate (27 April 2026), we have The Hidden Chokepoints Threatening the Global Economy, by Diane Coyle. She says: “Most notably, Taiwan dominates advanced semiconductor production through TSMC, which accounts for more than 90% of the global supply.” Should military means be used to protect the Taiwanese monopoly of a strategic commodity? That’s not how capitalism is supposed to work.
What would be a geopolitical solution to the presumed – albeit poorly researched – allegation that China plans to exploit the Taiwan Strait chokepoint to bring down The West?
The Asian political territory called China – a mix of continent and islands – is claimed by two rival regimes; one in Beijing, one in Taipei. There is an obvious solution; that the territory presently controlled by Beijing becomes the Sovereign State of China and the territory presently controlled by Taipei becomes the Sovereign State of Taiwan.
Obvious to most people, because most people believe that the boundary between the two territories is the Taiwan Strait. A big miscomprehension, which the geopolitical agitators seem very keen to never discuss; because those agitators – for their own reasons – want to present the Taiwan Strait as the world’s most consequential and unresolved geopolitical boundary.
The principal boundary between the two territories is Xiamen Harbour. There is a second boundary off the coast of Fuzhou. Xiamen is a Chinese city of just over five million people, the population of New Zealand. Fuzhou is a Chinese city of over eight million people, the population of London. Both cities are in the Chinese province of Fujian. The Taiwanese counties of Kinmen and Lienchiang sit on the western (Chinese) side of the Taiwan Strait. Taiwan proper sits on the eastern side of the Taiwan Strait.
Solution
Taiwan could cede the two counties of Kinmen and Lienchiang to China; not necessarily as counties of China’s Fujian province, but as economic zones comparable to Macau and Hong Kong.
In return, China could drop its claim to Taiwan proper. China would drop its claim to the vast majority of Taiwan, which is on the eastern side of the Taiwan Strait.
The result would be two clearly distinct countries – China and Taiwan – internationally recognisable as such, separated by the wide-enough Taiwan Strait; much wider than the Strait of Hormuz.
Yes, both China and Taiwan would be making concessions. But each would be making gains in excess of those concessions; a win-win solution based on reciprocity. China already has substantial pragmatic trade relations with Taiwan; there need be no barriers to the continuance of those relations. Indeed, Taiwan’s relations with all nations could improve, with international recognition of Taiwan as a sovereign nation state.
The world could then heave a sigh of relief; the normalisation of a piece of geography deeply politicised by three small but powerful groups of people – cliques in Washington DC, Beijing, Taipei – cliques with narrow and potentially destructive nationalist and mercantilist agendas.
The people – and other species – of this world should never be held hostage to egos; to bigheads, some of whose natural inclinations are to resort to massive externalised violence if they cannot prevail upon their rivals by ‘peaceful’ means.
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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.