The Council on Geostrategy’s online magazine

About | Contributors | Submissions

Taiwan under Lai: The CCP’s prospects for ‘unification’

Following William Lai’s recent inauguration as President of Taiwan, the People’s Republic of China (PRC) conducted large-scale military drills around the island nation, claiming these as ‘punishment’ for Taiwan’s ‘separatist acts.’ During the two-day drills, a Chinese diplomat vowed that ‘independence forces’ would be left ‘with their heads broken and blood flowing.’ Xi Jinping, General Secretary of the Chinese Communist Party (CCP), has stated that the (re)unification of Taiwan with the mainland cannot be postponed indefinitely. This prompts a number of questions. Might he order a blockade or invasion if pressure and persuasion do not work, and if so, when? If force is not a feasible option in the next decade or longer, what measures will the CCP take in order to attain its aims?

For the People’s Liberation Army (PLA) – the armed wing of the CCP – ‘reclaiming’ Taiwan demands speed and success in a matter of days or weeks. This would present the United States (US) with a fait accompli, pre-empt intervention, minimise casualties and possibly avoid a global economic collapse. The need for swift and decisive victory rules out a blockade, which the PLA is capable of imposing as long as the US does not get involved. But whether Washington intervenes or not, a blockade would have serious global economic consequences, which would also affect the PRC.

An invasion would be an enormous gamble. Sea and airborne assaults are difficult operations. Weather and sea conditions in the Taiwan Strait are often harsh, making an amphibious assault challenging for most months of the year. Taiwan has 14 beaches for landings. The topography makes getting ashore and then establishing beachheads difficult, especially when confronted with Taiwan’s ‘porcupine’ defences. Mobilisation of a force and support of well over a million personnel and supplies would be spotted, allowing the defenders and their American allies time to prepare.

Success only becomes possible when the PLA believes that it is overwhelmingly stronger than any opposition. Given its unfinished build up and modernisation, combined with its lack of operational experience, that belief is likely to be in the far future. Were Xi to launch an invasion and fail, he, and probably the CCP also, would fall.

If overwhelming PLA superiority is one condition of invasion, another is that Taiwan ceases to be economically important to the world and to the PRC. For that, Taiwan Semiconductor Manufacturing Company (TSMC) would have to be replaced as the key manufacturer of the world’s semiconductors (90% of advanced chips and 50% of the rest). It will not be easy for a PRC faced with restrictions to match Taiwan. Even the US may struggle to do so in significant quantities. Moreover, the Chinese import large quantities of components from Taiwan. Although exports have fallen, at their height, in 2021 they were US$189 billion. Their loss through blockade or invasion would have a greatly magnified effect on the PRC’s own exports, exacerbating already high unemployment

Thus far, the CCP has aimed to coerce Taiwan without significantly disrupting its own economy, strategically avoiding embargoing Taiwan’s semiconductors and other high-value imports and focusing instead on agricultural products such as fruit. These selective embargoes on low-value sectors aim to apply pressure on the Taiwanese leadership while maintaining the critical flow of components essential for the PRC’s technology and manufacturing sectors. If the CCP’s current tactics continue to bear no fruit, and the PRC makes significant progress in achieving self-sufficiency in ‘high value technologies’ manufacturing, it would be increasingly likely to adopt more aggressive forms of economic retaliation, such as embargoes on Taiwan’s high-value sectors, including integrated circuits –- or completely scrapping its existing trade agreement with Taiwan.

Irrespective of semiconductors, ships would cease to steam through the Taiwan Strait in the event of conflict or blockade, as insurance became unavailable. The PRC’s trade dependencies rely on unfettered access to the Taiwan Strait and South China Sea. 30% of global shipping would be affected. Trade and investment in the PRC would be severely disrupted, if not dry up. The US and many other countries would impose sanctions, constrict food supplies and possibly block the Malacca and Sunda straits to strangle the supply to the PRC of energy and resources.

The result would be a crash of the world and Chinese economies. With no meaningful social security net, the CCP would face a hungry, unemployed, and angry populace. Unrest on a massive scale would be directed against the CCP, in what could be an existential crisis. It is not a difficult calculus for Xi.

Even so, history is littered with leaders who have behaved irrationally, who have sought to distract their people from domestic woes by foreign military ventures. But Xi would have to be unbalanced to take such a gamble, which would simply speed up any economic mess and truly threaten the CCP’s grip on power. And despite his significant personal power, the party itself retains cohesion and checks and balances to limit unilateral decision making. It is unlikely that other leaders would sanction Xi’s leading them to perdition.

Nor is Russia’s war against Ukraine a potential parallel, for three reasons:

  1. Land invasions are considerably easier than seaborne assaults, and the Kremlin had reason to believe it could win quickly;
  2. Russia was confident that the Euro-Atlantic democracies would stand aside, as they had over Russian incursions into Georgia and its seizure of Crimea; and,
  3. Sanctions on Russia cannot be compared to sanctions on the PRC. The Russian economy was not reliant on exports, except of oil and gas, and these have continued, to the PRC, India and others. The PRC is the world’s largest exporter and a major importer: trade, investment, and globalisation are crucial to it. Whereas Russia could rely on the PRC to fill gaps left by the Europeans, the PRC’s economy is highly diversified and deeply intermeshed with the US and Europe. And size matters. 

What are we likely to see over the next decade?

A 2022 poll showed a declining percentage of Taiwanese who wanted unification, only 6.5%. Another poll last year recorded 67% as considering themselves Taiwanese, 28% as Taiwanese and Chinese, and only 3% as Chinese. For all Xi’s rhetoric that the people of the mainland and Taiwan are one, the flow of history is against him.

Given the improbability of forceful unification in the near term, the CCP has little choice but to apply increased pressure, salved by some trade and other measures of encouragement, as it seeks to convince all that ‘reunification’ is irresistible and inevitable.

For the Taiwanese people that means a likely spectrum of:

  • Undermining the Lai and his Democratic Progressive Party (DPP) through disinformation campaigns, economic pressure and political subversion aimed at eroding their domestic support base;

  • More greyzone warfare, including cyber attacks on Taiwan’s infrastructure and the government; United Front Work Department interference and actions to sow discord and foment dissatisfaction;

  • Bans on certain Taiwanese goods entering the PRC and other economic measures, primarily focused on agricultural imports and avoiding high-value imports to maintain critical component flows to Chinese industry;

  • Increased pressure on Taiwanese companies in the PRC through a ‘carrots and sticks’ strategy. Carrots involve incentives such as tax breaks and streamlined regulations to entice investment and deepen economic integration. Sticks are applied during times of political tension and include the application of regulatory pressures such as increased inspections and targeted economic sanctions. Taiwanese businesses are left in no doubt that they must align with Beijing’s political expectations to maintain their market presence in the PRC;

  • Increasing Taiwan’s global isolation through continued exclusion from multilateral organisations such as the World Health Organisation and reducing the number of countries with which it has diplomatic relations (currently down to 13);

  • Persuading countries not to recognise Taiwanese passports;

  • Revamping the 2005 Anti-Secession Law to include more stringent provisions, potentially allowing more prosecutions of Taiwanese living in the PRC, and of individuals living in third countries, similar to the extraterritorial application seen in Hong Kong’s National Security Law;

  • More frequent and threatening military activity, including blockades for live fire; exercises and PLA air and naval manoeuvres which approach ever closer to Taiwan. Such actions serve to signal the PRC’s willingness for military escalation, degrade Taiwan’s military resources and exert psychological pressure on the Taiwanese populace;

  • ‘Persuading’ Jinmen, Mazu, and Taiwan’s other outlying islands near the Chinese mainland to accept ‘reunification’. Jinmen, for example, relies significantly on water imports from mainland China, and restricting supplies could be one measure of coercion deployed against local authorities; 

  • Occupation of the Pratas Islands (Dong Sha), where currently Taiwan has a military outpost.

How should foreign countries prepare and act?

Possible measures that the CCP may take against foreign countries which oppose the PRC’s (historically inaccurate) claims over Taiwan include punitive economic measures, coercion and threats. Sanctions may be levied against nations that cross the CCP’s ‘red lines’, as was seen with Lithuania in 2022 when Vilnius allowed the construction of a ‘Taiwan Representative Office.’ More foreign companies may be forced to choose between access to the PRC’s market, or that of Taiwan. The CCP will likely attempt to further dwindle down Taiwan’s remaining diplomatic allies. Military overflights and the passage of warships through the Taiwan Straits (particularly by non-US countries) should expect to be met with harsh condemnation by PRC diplomats and its propaganda machinery. Increasingly provocative behaviour from PLA forces may heighten the risk of military escalation.

The first requirement is for legislators and officials to appreciate the differences between the ‘One China Policy’ and the CCP’s ‘One China Principle’. These are important distinctions which Beijing deliberately blurs. Politicians should also explain to their populations why Taiwan matters to their countries. Aside from the wellbeing and agency of 24 million people, Taiwan’s democratic values, the global economic importance of its semiconductor fabrication plants and the security of the wider Indo-Pacific region necessitate opposition to the CCP’s bullying, and therefore the incursion of its wrath. Free and open countries should also further Taiwan’s integration in the international community and continue to push for its inclusion in international organisations relating to global goods and the world economy.

Ensuring the stability of Taiwan and its nearby maritime trade routes is vital for global economic health: deterrence should be bolstered through assisting Taiwan in building up its ‘porcupine’ defences. Crucially for deterrence, countries need to remind the CCP of the disaster for the global and Chinese economies that an attempted invasion would bring and to stress that they would impose sanctions. And finally, democratic countries ought to consult Taiwan on its wishes, in order not to exacerbate tensions between Beijing and Taipei; for example, foreign politicians who call for Taiwan’s independence do Taiwan no favours.

Elizabeth Lindley is a Policy Fellow at the Council on Geostrategy.
Charles Parton is a James Cook Associate Fellow in Indo-Pacific Geopolitics at the Council on Geostrategy.

Join our mailing list!

Stay informed about the latest articles from Britain’s World

Leave a Reply

Your email address will not be published. Required fields are marked *