This is what Beijing wants to show the world.

With each military drill, China is drawing ever closer circles around Taiwan.

China has a clear goal to gain control over the island.

China will surely be reunified.

Are you willing to get involved militarily to defend Taiwan if it comes to that?

Yes.

It's a commitment we made.

The United States is building up its military presence in the region, and is practicing how to sink Chinese ships.

We're not going to come to an agreement over Taiwan.

Wait for the unification to be achieved, peacefully I hope, non-peacefully I dread.

But why are these two superpowers so fixated on Taiwan?

What's in it for China and the U.S.?

And how do people in Taiwan feel about it?

It's Taiwan's location that makes it a geopolitical flashpoint.

Taiwan has 23 million inhabitants, and its main island lies only 130 kilometers away from China's mainland.

These tiny islands right off the coast are also under Taiwanese control.

And Chinese military drills around the whole of Taiwan are getting bigger and more frequent.

In recent videos released by China's People's Liberation Army, Beijing has threatened to encircle the island.

It sees Taiwan as part of its territory, and says it's ready to use force if necessary to get it back.

We'll talk more about the history and Taiwan's status later.

For now, you need to know that in the late 1940s, there was a civil war in China between communists and nationalists.

The communists won and took control of mainland China.

And the nationalists fled to Taiwan.

That laid the groundwork for today's tensions.

The U.S. has an ambiguous policy towards Taiwan.

Since the late 1970s, it's recognized communist Beijing as the only legitimate government of China.

But it has informal ties with Taiwan, and is seen as the island's protector.

OK, let's go back to the map to understand why the U.S. and China can't quit Taiwan.

In some ways, Taiwan's strategic importance is about three choke points around the island.

To the west, there's the Taiwan Strait.

It's a key trade route for both Beijing and Taiwan, and also for everybody else.

Almost all the world's biggest container ships pass through here.

To the north, the Miyako Strait.

It runs between Taiwan and these Japanese islands.

And in the south, the Bashi Strait.

It runs between Taiwan and the Philippines.

For China, these two straits on either side of Taiwan are key strategic gateways to the

Pacific Ocean.

Taiwan is in the middle of the Chinese coastline, which is very important.

This is Victor Gao.

He's a former Chinese diplomat and vice president of the Center for China and Globalization, a Beijing think tank some say is close to the Chinese Communist Party.

Taiwan Island faces the Pacific directly.

And if Taiwan is occupied by a foreign country, for example, it interrupts the continuity of the Chinese coastline and also prevents the Chinese access directly to the Pacific

Ocean.

The U.S. says it has no troops permanently stationed in Taiwan, but the island plays an important role in U.S. strategy.

To understand why, let's look at the military bases in the region.

Here are some of China's main naval bases close to its coast.

And the U.S. has some of its key bases in South Korea, Japan and the Philippines.

If you connect the dots, you'll see the U.S. bases form a chain.

Taiwan sits at the heart of what we call in the United States, the first island chain.

David Sax is an expert at the Council on Foreign Relations, a think tank in New York City.

In the past, he worked at the American Institute in Taiwan, which serves as the de facto U.S.

embassy on the island.

If you look at the first island chain, these are all formal treaty allies of the United

States or close partners in the case of Taiwan.

And with that the way it is, the United States can project power close to China's shores, protect its allies and its interests.

Conversely, it's very difficult for the Chinese military to project power outside of the first island chain and threaten the United States physically or our interests in the Indo-Pacific.

To strengthen this island chain, the U.S. is expanding military cooperation with Japan and the Philippines, which are also wary of what they see as China's expansionist goals.

For example, just last year the U.S. gained access to military bases in the north of the

Philippines, right next to the Bashi Strait, one of those Chinese gateways to the Pacific

Ocean we mentioned.

Here you can see American and Philippine troops conducting exercises in the waters nearby earlier this year.

They even sank an old Chinese-built ship that the Philippine Navy used in the past, a clear message to Beijing.

And obviously China is not happy about the U.S. island chain strategy.

Come on, we are not living in the 19th century.

We are not living in the imperialist country century.

Using this outmoded way of thinking, as if you can set up a chain to block, for example,

China from accessing the Pacific Ocean, it's ludicrous.

Beijing is rapidly modernizing its navy, in part to be able to break through the chain of U.S. allies.

For example, with the Fujian aircraft carrier.

Here it is on sea trials earlier this year.

It's China's third aircraft carrier and the biggest ship in the Chinese navy.

The number one objective here is to keep the United States out of the region during a conflict.

So what we call anti-access area denial.

Prevent the United States from being able to defend our treaty allies and partners.

So to sum up, Taiwan's location makes it essential to both sides as they try to gain the upper hand in the region.

But the rivalry is also about money.

Big money.

Economically, the small island has an outsize importance for both China and the U.S., even though neither officially recognize Taiwan as a country.

Both China and the U.S. have significant trade links with Taiwan.

And much of that business comes from just one company.

TSMC.

Taiwan Semiconductor Manufacturing Company.

It produces microchips.

Taiwan makes 90 percent of the most advanced ones in the world.

Both the U.S. and China are dependent on them.

And so is everybody else.

There's a good chance TSMC's semiconductors are in the device that you're using to watch this video right now.

They're in new cars, fridges, and fighter jets.

Everywhere.

They're needed to develop new AI models.

And U.S. leaders worry that losing Taiwan to China could permanently shift economic tides against them.

We don't assume that a region under Chinese hegemony would be open to U.S. trade and investment.

I think that China would reorder the region.

They want the United States to basically supply them with raw materials that are turned into manufactured goods in China and then sold all over the world.

There isn't really a role for the United States or other industrialized countries in that.

The Chinese economy is already larger than that of the United States if you use purchasing power parity.

China produced more than 30 million cars in 2030.

The Americans probably produced less than half of that.

So why should anyone believe they can have some benefit of picking a fight with China?

No, there is no benefit.

China does not look at Taiwan from an economic or commercial perspective.

So why is Taiwan so important to Beijing then?

To understand, let's dive back into history.

China lost control over Taiwan during what it calls the century of humiliation.

These caricatures of China being carved up by various foreign powers might explain why.

From the mid-19th until the mid-20th century, China was plagued by invasions and internal disputes.

This is important because that notion of humiliation still plays a big role in Chinese state ideology even today.

In 1895, Japan took Taiwan from China and made it a colony.

After World War II, the Allies forced Japan to give it back.

But at the time, China was in the middle of a civil war.

The government of the Republic of China, or ROC, was led by nationalists under Chiang

Kai-shek.

Mao Zedong led communist forces against them.

In 1949, the victorious communists marched into Beijing and established the People's

Republic of China on the mainland.

The defeated government of the Republic of China fled to Taiwan.

That's why there are two governments that call themselves China.

One on the mainland, the People's Republic of China, or PRC, and on Taiwan, the Republic of China, or ROC.

The PRC government in Beijing sees Taiwan as a breakaway province and says there's only one China, even though they've never actually been in charge in Taiwan.

Most of the world accepts this one-China policy, including the U.S.

They don't recognize Taiwan as an independent country.

Wait, so why is the U.S. supporting Taiwan then?

There's also a history to that.

After the civil war, the U.S. initially saw the nationalist government in Taiwan as the only real China, rejecting the communist government on the mainland.

U.S. soldiers were even stationed in Taiwan under a common defense pact.

The change came in the 1970s.

The U.S. sought closer relations with Beijing.

That meant closing the U.S. embassy in Taiwan and pulling out U.S. troops.

Still, informal ties persisted, like that de facto embassy.

And the U.S. still guarantees to sell Taiwan weapons.

But they have a deliberately ambiguous policy on whether they would defend Taiwan.

It's meant to prevent China from invading, and Taiwan from declaring independence.

But that strange limbo has been the status quo in Taiwan for decades.

And it's created realities on the ground.

Taiwan developed from a nationalist authoritarian regime into one of the strongest democracies in the region.

There are elections, a free press, and civil liberties.

Taiwan was first in Asia to legalize same-sex marriage.

This year, a progressive party was re-elected for a third term, vowing to maintain that tense status quo.

DW's Taiwan correspondent Yu-Chen Li can give us a sense of things on the ground.

Here in Taiwan, the atmosphere is very different from you might read in the headlines.

The tension has become part of daily life.

One key reason is that people in Taiwan have been living under the threat of the Chinese

Communist Party for many decades.

The majority of the Taiwanese prefer to maintain their status quo with China.

But how to do so is a rather polarized debate.

If China wants to bully us, at least we still have the U.S. and Japan.

They're our friends.

I've always been skeptical of America.

But we have no choice.

If we can't get stronger, have enough forces.

It's tricky.

We should have a friendly relationship with both of them.

It's always been like this.

Ever since the founding of the country, we've been caught up in this drama.

But one thing is clear for many Taiwanese, Taiwan's voice is usually drowned out.

Amid a U.S.-China rivalry, many feel that Taiwan is only a pawn in the game.

And no matter what comes next, the island should have the right and autonomy to decide its own fate.

But there's one more factor that stands in the way of that.

Taiwan represents something for both superpowers.

Taiwan has embraced the U.S. worldview, which promotes democracy and capitalism.

China is a one-party system and a socialist market economy.