Playing with fire? The Taiwan Issue as a game-theoretical interaction between USA and China

Abstract

As a focal point of diametrically opposed interests of the USA and the People's Republic of China, the Taiwan Issue has long been at the core of security discourse. The declared goal of integrating Taiwan into the Chinese motherland comes, in addition to a strong ideological charge, with a multi-complex geostrategic significance. Given its geographic situation and its irreplaceable economic resources, the status of Taiwan has a critical influence on basic national interest of the PCR and the USA. A takeover of the control of the de facto state by China implies a supra-regional shift of power in favour of Beijing, that unlikely will be accepted by the USA. Considering the strategic importance of the island, an escalation of the great power rivalry seems most likely in the scenario of a war over Taiwan. The consequences of a regional war on the Taiwan Issue are hard to predict but contain great risk of escalating to an international war. In this paper, an escalation of Taiwan's status question has been analysed within the framework of the Security Dilemma in an adapted game-theoretical model. The work is limited to the strategies of the USA and the PRC, which are treated as unitary state actors. It has been assumed that by the year 2030, the players will potentially face a decisive situation regarding whether to engage in a conflict over Taiwan. According to the game-theoretical understanding of rationality, the decisions are made on the basis of expected utility maximisation. Therefore, the focus of this model lies upon those variables that are regarded as central for the decision to escalate the Security Dilemma, because they either increase the relative subjective payoff of a non-cooperative strategy or the assessment of the probability that the other player defects. Within this paper the contextual offense-defence balance, the offense-defence-differentiation and the subjective security demands of the states are examined and their implications for the decision-making of the USA and China's are discussed. The assessment of these key variables in the game-theoretical framework implies that the decision situation incorporates characteristics of an advanced Security Dilemma. A mutual defection leading e.g., to a Sino-American war over Taiwan, hence seems more likely.