TDI is launching China Watch to help clients better understand the complex geopolitical and business landscapes in China, as well as Chinese activities overseas. We aim to provide context for current events, identify larger trends, and flag new business opportunities or challenges as policies and regulations evolve.  China Watch draws on the insights of TDI’s China team and Chinese and English language open-source research. If you have any questions or comments, please email us at info@tdinternational.com.

Ukraine War Prompting China To Recalibrate Taiwan Policy

Russia’s poor performance in Ukraine and the unity of the US-Europe alliance are likely pushing Beijing to reassess the feasibility of military actions against Taiwan in the next several years.  Official Chinese media has warned against comparing Ukraine and Taiwan in part to dampen domestic expectations that China would resolve the Taiwan issue by force when the West is distracted with Russia.   

  • Prior to the Ukraine war, Chinese media was replete with former military officers and government-affiliated experts claiming that China could easily overwhelm Taiwan militarily.  Such rhetoric has been largely absent since the Ukraine war. 
  • Pro-regime commentators have instead suggested that the US is trying to bait China into a military conflict with Taiwan so that they can punish China the same way that the US and Europe have collaborated to weaken Russia.  They also expressed dismay that Europe has followed the US lead in confronting Russia.  
  • Although Chinese officials have not commented on the specifics of Russian military operations, Chinese netizens have been surprised by the Russian military’s poor performance and have pointed out that China relies on Russian military hardware.   
     

China is looking to Taiwan’s presidential election in 2024 to provide an opening to reengage Taiwanese leaders.  China has refused to communicate with Taiwan’s current president, Tsai Ing-wen, and her administration, who belong to the pro-independence Democratic Progressive Party (DDP).  The opposition Kuomintang (KMT) Party is more pro-China. 

  • In 2015, Xi Jinping and then-Taiwan president Ma Ying-jeou from the KMT held the first ever summit between the leaders of China and Taiwan.  Trade and investment thrived under Ma’s tenure (2008-2016), but his policies also led to popular protests against a perceived hollowing out of Taiwan’s economy. 
  • If the KMT were to recapture the presidency, Beijing will likely reestablish channels of communication, increase economic cooperation and people-to-people contacts, and start paving the way for another cross-Strait leadership summit.  

China appears to be willing to tolerate the status quo of Taiwan as a de facto independent country, as long as it does not formally declare independence.  China’s 2005 Anti-Secession Law stipulates that it will use force if Taiwan declares or plans to declare independence or if all possible avenues for achieving peaceful unification have been exhausted.   

  • Although some Chinese officials have interpreted the latter condition as putting off unification indefinitely, they have not specified a timeline for unification.   
  • About 85% of Taiwanese support some form of status quo, and this trend has been consistent for the past 10 years, according to a well-respected opinion poll (see chart below).  The latest poll, conducted in 2020, showed that only 6.6% desired immediate independence and 25.5% desired the status quo but were leaning toward independence.  
  • Although the DDP was founded on the principle of independence, its leaders now say that there is no need to declare formal independence because Taiwan is already an independent country.  President Tsai has stuck to this line, while not recognizing the One China principle.   

Source: Taiwan Chengchi University, Election Study Center 

Beijing is pressing Washington to prevent Taiwan from declaring independence or joining a US-led security alliance or forum.  As we mentioned in the last issue of China Watch, Beijing is somewhat relieved that Washington has restated its opposition to Taiwan independence and walked back Biden’s comments on defending Taiwan militarily in a war scenario.   

  • If Taiwan formally declares independence, China will almost certainly use force because the regime has painted itself into a corner by telling its own population for decades that it will not tolerate Taiwan independence.  Not taking military action would undermine the legitimacy of the Communist Party.   
  • The Ukraine war has heightened China’s sensitivity toward US-led security pacts such as AUKUS or the Quad, as China parrots Russia’s narrative that NATO expansion is the root cause of the war.  Beijing strongly opposes Taiwan’s request to join the Quad, which includes the US, Australia, Japan, and India.   
  • The US does not have formal military ties with Taiwan and does not have a Defense Attaché in Taiwan.  However, Beijing is concerned that informal US-Taiwan military cooperation has increased in the last several years.  For example, a small contingent of US special forces and marines has been dispatched to Taiwan as trainers. 
  • China has argued that even incremental steps to boost US-Taiwan defense cooperation might encourage Taiwan to declare independence and resist closer ties to China. 

Beijing will continue to rely on its economic leverage, threats, and military provocations to pressure the US and other countries to fall in line with its Taiwan policy.  This month, Chinese Defense Minister Wei Fenghe met with US Secretary of Defense Lloyd Austin in Singapore and reiterated China’s will to “fight to the end” to prevent Taiwan independence.  

  • In December 2021, a Chinese vice foreign minister called on US businesses in China to lobby against US policies that are unfavorable to China, including US support for Taiwan. 
  • During President Biden’s trip to Asia last month, Beijing and Russia conducted joint military drills, with bombers flying over the Sea of Japan.  It was the first joint exercise since the start of the Ukraine war.
  • Around the same time, the Chinese military announced that it also conducted exercises off the coast of Taiwan as a “solemn warning against collusion” between the US and Taiwan.  

Past articles:

Implications of Biden’s China Policy

Choosing Zero COVID Over Economic Growth