The visit to Taiwan by Nancy Pelosi, the Speaker of the US House of Representatives - and the ballistic response by China - were reminders of the strategic interests of great powers.

They require the most careful of handling. And they shift and reset over time.

Here in Washington the Biden administration let it be known it was not keen on the Pelosi visit. The speaker was personally briefed by America's top soldier, the Chairman of the Joint Chiefs of Staff General Mark Milley, who counselled against the trip, as did the Secretary of State.

But ultimately, the White House stressed, the decision to go was for the Speaker to make.

President Biden himself is no stranger to controversy over Taiwan. In May, on his first presidential trip to Asia, he stated the US would come to Taiwan's aid if it was attacked by China – remarks that were later walked back by White House aides.

The Russian invasion of Ukraine sent shockwaves around the world, particularly in Asia.

But they provoked outrage in Beijing, which saw them as encouraging Taiwanese independence. They also drew a mixed response from political opponents in Washington, with many Capitol Hill Republicans thinking the remarks unwise, but also praising Joe Biden for standing up to China.

US policy towards Taiwan is one of "strategic ambiguity" - it aims to deter a Chinese attack on the island by keeping open the prospect of US military intervention in the event of a Chinese invasion, but also to deter Taiwan from moving towards formal independence.

This has traditionally meant not stating if the US would intervene militarily, along with other measures like not having formal diplomatic relations with Taiwan, nor sending high-profile political visitors.

US speaker Nancy Pelosi with Taiwan's President Tsai Ing-wen

Now, in the space of a couple of months, we have a statement by President Biden that the US would side with Taiwan in the event of a war, and a visit by the third highest political figure in the US. Is this a sign of a shift or a reset in strategy? Is this the cause or an effect of an evolving situation?

For sure there are a lot of moving parts in the background, but two big events have shifted the strategic outlook. Chief among them is the war in Ukraine.

The Russian invasion sent shockwaves around the world, particularly in Asia. If a big, but not dominant power, like Russia could mount a war of conquest in Europe, what could stop a superpower like China from using military force in Asia?

Asia/Pacific states like Japan, South Korea, India, the Philippines, Indonesia, Taiwan, and Australia have all watched with alarm as China's growing wealth and power as an economy have been accompanied by a rapidly growing military strength.

China's unrelenting rise as a military power means sooner or later it will have the means to seize Taiwan by unstoppable force.

And in President Xi Jinping, a leader more comfortable with nationalist rhetoric. What if China decided to assert itself militarily while the West was concentrating on Ukraine?

A key priority for US policy has been to keep China out of the war in Ukraine, in particular by not supplying Russia with replacements for the weapons systems it is deploying in its invasion, particularly the higher technology weapons.

This is a tricky enough ask when the US and its allies are supplying weapons to Ukraine.

But the second big impact in changing the strategic outlook is the Covid pandemic and its ongoing fallout.

In particular, the supply chain disruption – and the inflation associated with it - has made very apparent the dependence on Chinese manufacturing that has been a growing cause of concern in both the US and Europe for more than a decade.

Soldiers from China's People's Liberation Army marching in Beijing (file image)

In this case, a disease (and the way it is being handled in China, through continuing lockdowns) has interrupted the economies of the West.

From clothes to furniture to high tech products - and the sea transport systems that carry them - everything has been disrupted. This has highlighted a strategic vulnerability of the West - over reliance on external suppliers, notably China.

Both these disruptive issues come together in Taiwan. For China, assuming full sovereignty over the island is the final, unfinished business of the Chinese civil war.

The Communists won the war, but the defeated party, the nationalists, held out on Taiwan. A tense region ever since, an uneasy peace has been maintained through ambiguity.

Intel - a company fundamental to Ireland's economic resurgence - has just embarked on a multi-billion dollar investment spree.

But China's unrelenting rise as a military power means sooner or later it will have the means to seize Taiwan by unstoppable force. Until the invasion of Ukraine, most politicians were prepared to believe that China would not risk war, and all the costs that would entail. That is no longer the case.

Meanwhile, the supply chain disruption has led to both the US and the EU moving to protect strategic industries and supply lines.

There is now a very deliberate effort under way on both sides of the Atlantic to "re-shore" industrial production back to Europe and the US, to ensure supplies - particularly of high tech products - but even of simple products, like paper surgical masks.

This spring, for example, a French PC maker announced it was selling a model made in France with all components coming from the EU. It was €25 more expensive than the same model with an Asian chipset.

Next week, US President Joe Biden will sign the US Chips Act, which will allow government subsidies to greatly expand the manufacturing of microprocessors in the US.

An employee works at a chip manufacturing company in Suqian, China

The European Union has its own Chips Act since June, with a similar aim: to produce in the home market much more of the microchips that modern industry needs. Right now, 60% of the world's microchips are made in Taiwan.

Just 9% are made in the Europe - down from the 44% share it held at the end of the Cold War. This is an extreme vulnerability which neither Europe nor the US can live with. The EU Chips Act aims to raise output to 30% by the end of this decade.

Intel - a company fundamental to Ireland’s economic resurgence - has just embarked on a multi-billion dollar investment spree in Germany, Italy and France, as well as a huge new chip foundry in the US. All of this brings the Taiwan situation closer to Ireland - indeed right into Leixlip, Co Kildare.

Even if the Taiwanese chip foundries can continue to produce, getting them to market is difficult – as we have all seen over the past two years. The Taiwan straits – where the missiles are falling this weekend – is one of the world's main shipping lanes.

Rising incomes among the billion plus Chinese population has created another vast consumer market to be satisfied.

If it is not open for business - then nor are very many businesses in the West. And the supply shortages already apparent from Covid are fueling price inflation not seen for decades. The effect of a massive naval war in this regions would be even more destabilising.

Although America is the chief protector of Taiwan (even if it does not officially say so), the EU is the biggest foreign investor on the island, outstripping both the US and China.

Now that flow may be about to turn in the other direction. The big Taiwan microchip producers, like TSMC, are looking at opening fabrication plants in Europe and the US. The Chips Acts on both sides of the Atlantic will help to facilitate this diversity strategy.

The EU has also been stepping up political engagement with Taiwan over the past year. This includes a visit by the deputy speaker of the European parliament to Taipei two weeks ago.

German Liberal Nicola Beer is in the same parliamentary group as Fianna Fáil. It follows the first ever delegation visit by Members of the European Parliament to Taiwan last November, and MEPs urging the EU to open a diplomatic office on the island.

TSMC (Taiwan Semiconductor Manufacturing Company) is a big microchip producer

None of this provoked the kind of reaction resulting from Nancy Pelosi’s visit.

China can afford to be a little relaxed about losing some exports to the West - its economic strategy ever since the economic bust of 2008/9 has been to move away from an export led development model, towards one based on internal demand.

Rising incomes among the billion plus Chinese population has created another vast consumer market to be satisfied, helping drive average incomes into the middle of the middle class range, a phenomenal achievement – if it all passes off smoothly.

The West has become accustomed to low cost Chinese products over the past three decades. Their availability has kept inflation down at a time of huge economic expansion and improvement in living conditions worldwide.

But China has become more expensive as a manufacturing centre as its population – rightly – seeks higher incomes and living standards for itself.

Military analysts have been concerned for some years about the sheer volume of military hardware deployed in the south China sea region.

Therein lies a much bigger danger than the visit of Speaker Pelosi to Taiwan. The economic course alteration under way in the US, EU, Asia Pacific and China itself needs time to bed down.

Covid has disrupted the timelines – as well as the supply lines. China’s government is facing a more restless population, chafing at its restrictive anti-Covid lockdown strategy.

There is also a huge property bubble (partly a result of China picking up the slack when the West’s own property/banking bubble burst in 2008/9), that threatens economic and social stability.

And President Xi is running for an unprecedented third term in office – and possibly a job for life – at the 20th party congress in November. He cannot afford to look weak in the face of what is seen at home as Western provocation. Nor can the US President – at any time, but especially in an election year

And only US military power is strong enough – for the moment – to deter military action by China in support of its long stated policy goals.

China's President Xi Jinping is running for a third term in office

But Chinese power is growing - it’s the key reason Australia reneged on its submarine contract with France and opted for American-made nuclear powered craft, and the "AUKUS" defence pact that came with them.

All of these wheels in motion right now make a long running strategic picture in east Asia look exceptionally dangerous.

There is no compelling reason for anyone to start a war over Taiwan – the strategy of ambiguity has plenty of life in it. But it requires extremely careful management.

And not just at the very top of politics and the military, but right down the line. An accident, rather than a design, could be the spark for conflict.

Covid has exposed the vulnerabilities of the global trading system on which our prosperity rests.

Military analysts have been concerned for some years about the sheer volume of military hardware deployed in the south China sea region: The intensity of operations makes an accident – a crash between warships or warplanes – very likely.

The more missiles fired in "exercises", the more likely it becomes that one will malfunction and hit a city. What then?

Even if a war was physically confined to the Taiwan straits, its impact would be felt everywhere. Just look around your own home and workplace, and see how much stuff has a "Made in China" sticker on it.

Covid has exposed the vulnerabilities of the global trading system on which our prosperity rests. The Ukraine war has done the same for our energy supplies. An Asian war would be much worse.