Taiwan could well be the most important country of the 21st century. But according to most conventional definitions, it isn’t even a country.

In Ghost Nation, author and journalist Chris Horton not only unravels the ethnic and cultural diversity of this tiny island in the South China Sea, but also dismantles the Chinese Communist Party’s claim that Taiwan is an inalienable part of the People’s Republic of China.

Horton also explores the nuanced history of the remnants of Chiang Kai-shek’s Republic of China that Taiwan is today. After losing the Chinese Civil War to Mao Zedong’s communists, Chiang retreated with his allies to Formosa. They ruled the island as an authoritarian military dictatorship and refused to drop the idea of unification with the mainland for decades. Despite the oppression of many Taiwanese minorities and the resulting paradoxical government and administrative structures, which treated Taiwan as both a province and the ROC’s sole de facto territory, it was during KMT rule that the foundations for Taiwan’s subsequent flourishing and geopolitical importance were laid.

Beyond drawing our attention to Taiwan’s later transformation into one of the world’s most liberal democracies, Horton also shines a light on its potential undoing. Having scrutinised what is known about Chinese invasion and occupation plans, the author comes to a dire conclusion: Military action by the PRC in the coming years is a real possibility. Drawing on economics and geopolitics, Horton paints a bleak picture of what this would mean for the world economy. In simple terms: A global recession much worse than those caused by the 2008 financial crisis or the Covid-19 pandemic. Supply chains would be disrupted on a scale never seen before. Inflation would spike. Millions of jobs would be destroyed.

Why? Because Taiwanese semiconductors, produced by the country’s poster child company TSMC, are at the core of everything the modern world needs: Cars, electronic devices, industrial goods, household appliances, AI data centers, medical devices and much more besides. Of course, the diversification of supply chains that rely on TSMC’s products is an ongoing Herculean effort. But even if TSMC’s overseas facilities in the US and Europe were operational, their integration with the Taiwan-based headquarters is so tight that production would likely cease if the island were to come under military attack.

This very real and dangerous prospect is what makes Taiwan so important. However, there are many other reasons why we should care about this wonderful island nation’s fate. Its colourful and diverse population, its modern democratic system—from which nearly all other nations could learn—and its rich languages, culture and history all make Taiwan a unique and special place. A world without Taiwan would be a poorer place, regardless of economic, military or geopolitical interests. This is an inevitable conclusion to draw after reading Horton’s book. But, of course, it’s also the conclusion that anyone who ever paid a visit to this “ghost nation” in the real world would come to.