The Dutch was able to drive the Spanish out from Northern Taiwan in 1642 mostly due to the incompetence of governor-general of the Philippines Sebastián Hurtado de Corcuera. He insisted on stripping down the defenses in Northern Taiwan since 1637, giving up important strategic positions, tearing down parts of Ciudad de San Salvador, removing the canons and troops.
After learning that the Spanish destroyed Fuerte de Santo Domingo by their own volition, Dutch Governor of Taiwan Paulus Traudenius attacked Ciudad de San Salvador de Quelung in two consecutive years. The first Battle of San Salvador ended with the Dutch occupying Tamsui as their forward base in 1641, and the second battle in 1642 forced the Spanish to surrender, with Sebastián Hurtado de Corcuera only willing to send two small ships with 30 people to relieve San Salvador the previous year. Sebastián Hurtado de Corcuera got locked up for 5 years for losing Taiwan.
We all know what happened next. The Dutch was driven out by Koxinga due to an equally incompetent governor in Batavia. Then it was the Qing dynasty, Japan, the Allied Powers, and illegally occupied by the ROC government in exile until now.
What if Sebastián Hurtado de Corcuera wasn’t such an idiot, and instead allowed Spanish defenders to actually defend Taiwan, and keep the Dutch at bay until Spanish economy improved, and then leveraged the closer proximity of Manila to drive out the Dutch instead? What would happen next?
This is my guess:
First, Koxinga would be unable to drive out Spanish forces, which by then would have occupied both Northern and Southern Taiwan. Due to Manila being so close, it would have been a lot easier for Spanish reinforcement to arrive. Spanish economy was still in the toilet due to the silver drain and inflation, but it would have had no problem of supplying food and defenders to their forts in Southern Taiwan, and letting disease and starvation force Koxinga to retreat to Kimmen.
Koxinga would die in Kimmen due to illness soon after losing his men and ships without establishing a secure base in Taiwan, and his entire organization would fracture and become irrelevant.
That would mean the Qing government would have no reason to force evacuate coastal Fujian, since there is no threat of trade funding the Dongning army. So the Spanish would not be starved out of Taiwan like the Dutch had in the real timeline, after they returned to Northern Taiwan following the surrender of Zeelandia to Koxinga.
Spanish Taiwan would be increasingly more profitable, especially after they start mining for gold and coal in Keelung, and without Koxinga there, the Qing would have had no reason to invade Taiwan. Like in Manila and the rest of South East Asia, Chinese labor and Chinese traders would be imported to Taiwan, but regularly suppressed.
The 1800s is where things get interesting. In the real timeline, the Rover Incident happened in 1867; the Mudan incident happened in 1874; the permanent annexation of Taiwan to Japan happened in 1895; and finally the Spanish American War happened in 1898. What would happened if the Qing government didn’t control Taiwan, but Spain did.
Obviously Japan would still want Taiwan, but now they don’t have a good way to get their hands on Taiwan. Japan wouldn’t be able to get Taiwan by defeating the Qing navy during the first Sino-Japanese war and it certainly wasn’t ready to start a war with Spain. Then the Spanish American War happens, and since Taiwan was governed as a part of the Philippines, now Taiwan is suddenly a territory of the US. This is when the US would have control to Taiwan’s tea, camphor, and sugar production.
The next big event would be WW2. The question is would Japan still be strong enough to start WW2 the way it did if Japan never controlled Taiwan? Or would that just make Japan more hungry for expansion?
If it’s the later case, the Empire of Japan still has its work cut out for it. Without controlling Taiwan, it would be near impossible to blockade China for the first part of WW2. I suppose they still could take over all port cities along China’s coast, if the US, now with a huge base right across the strait, would sit back and let them.
I imagine the US being right next to China would probably make Pearl Harbor even more likely. After Pearl Harbor, Japan would have to invade Taiwan first, before getting to the Philippines. Would that have given General Douglas MacArthur more time to organize for the defense of the Philippines? This is the part where alternate history could go in any direction.
Regardless of how the war plays out, the US would still come out victorious. So Taiwan would be back under US control. What now?
Would Taiwan become a part of the newly independent Philippines? or would it become its own country? A country with long Spanish and American influence, and nearly no Japanese or Chinese influence. What would be the national language, in addition to English? Would it be Tagalog?