China risks losing Taiwan ‘forever’ over Hong Kong actions, strategist says

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China may never “reunite” with Taiwan now that Beijing’s central government has tightened its control over Hong Kong, a strategist said on Monday.“In a sense, the big price China is paying for Hong Kong is actually Taiwan,” David Roche, chairman and global strategist at consultancy firm Independent Strategy, told CNBC’s “Squawk Box Asia”.

China claims Taiwan as part of its territory and sees the democratic and autonomous island as a province on the run.

The Chinese Communist Party never ruled the island, but sought to push Taiwan to accept Beijing’s rule as a “one country, two systems.”

Hong Kong is a former British colony now ruled by China on the “one country, two systems” principle, which grants Chinese territory a largely separate economic and legal system and allows those who live there limited electoral rights.

A supporter waves a Taiwanese flag during a campaign rally for Han Kuo-yu, the presidential candidate of the Kuomintang party, ahead of the presidential election on January 9, 2020 in Taipei, Taiwan.Click on Images | Getty Images

American-Chinese rivalry

Even though China has never given up on the use of the military force to bring Taiwan back under his rule, Roche said he doubted Beijing would take this route. That’s because China risks worsening relations with the United States if it takes Taiwan by force, said Roche, who compared the current relationship between the world’s two largest economies to a cold war.

Relations between the United States and China have deteriorated in recent months, with the two sides clashing over a wide range of issues, including the origin of the coronavirus, Hong Kong autonomy and national security concerns regarding Chinese technology companies.

Taiwan has also remained a contentious issue in the bilateral relations between the two countries. Washington has no formal diplomatic relations with Taipei but is required by law to provide the island with the means to defend itself.

“Despite the lack of a formal treaty between the United States and Taiwan for mutual defense – or America’s defense of Taiwan – in reality, if there was such a move by China militarily against Taiwan, the United States would most certainly act, ”Roche said.

It would take US-China relations “from cold war to hot war,” he said.

– CNBC’s Huileng Tan contributed to this report.

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