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This article is republished with permission from Stratfor Worldview.

  • Although China's official policy is still one of peaceful reunification with Taiwan, the island's political evolution and shifting international relations are pushing Beijing down a more coercive path. 
  • China has a variety of toolkits to draw from as it seeks to shape the political and social dynamics in and around Taiwan, but events over recent years are shifting China away from conciliatory tools and toward an expansion of coercive measures. 
  • Taiwanese President Tsai Ing-Wen's continued refusal to recognize the so-called 1992 Consensus, and more overt U.S. backing for Taiwan, are testing Beijing's perception that it has time on its side.
  • Should there be stronger political moves in Taiwan toward independence, or if U.S. military capability and political will appear significantly weak, Beijing may weigh the cost of inaction as exceeding the cost of unification by force. 

For China's leadership, the unification of Taiwan is more than a symbol of the final success of the Chinese Communist Party or an emotional appeal to some historic image of a greater China. It is a strategic imperative driven both by Taiwan's strategic location, and by the rising antagonism between the United States and China. Taiwan is the “unsinkable aircraft carrier” off the Chinese coastline, splitting China's near seas, and bridging the arc of islands stretching southwest from Japan with those from the Philippines south through Indonesia. Taiwan is crucial for both any foreign containment strategy, and for China's confidence and security in the East and South China seas — areas critical to China's national defense, food security and international trade. 

China's Management of Taiwan

For decades, China has seen Taiwan reunification as an issue that can be delayed so long as Beijing could constrain the emergence of strong pro-independence forces. To achieve this, China has relied on a combination of tools, from conciliatory political and economic policies to more coercive military activities and international diplomatic isolation. For several years, particularly during the 2008-2016 administration of Taiwanese President Ma Ying-jeou, China eased off its more overt coercive measures, and instead sought greater economic and social interactions with Taiwan. This was intended to tie the islands' economic status so tightly to the mainland that it would tamp down political sentiment that bucked the cooperative trend, and perhaps ultimately lead to a peaceful unification under a “one country, two systems” model. 

But the election, and then re-election, of President Tsai Ing-Wen — combined with the resurgent power of her Democratic Progressive Party (DPP), which leans more pro-Taiwan than pro-unification, and the island's changing demographics — have effectively erased any lingering expectation of Taiwan giving up its sovereignty and willingly joining with the mainland. Tsai and the DPP reject the 1992 Consensus, an arrangement between Taiwan and China that they would agree there is only one China (though each was able to have their own interpretation of whether that was the current communist People's Republic of China or the past Nationalist Republic of China), thus forming the framework for cross-strait interactions. More recently, Beijing has stepped up its link between the 1992 Consensus and the “one country, two systems” concept, thus asserting that any consensus is a recognition that mainland Communist China is the only China. In this context, even the island's Kuomintang party has backed away from the 1992 Consensus amid increasing political pressure inside Taiwan. 

With President Tsai calling for a committee to review Taiwan's constitution, and pursuing a more assertive policy to sign trade deals with Western powers and expand relations with Southeast Asian states, Beijing is concerned that Taiwan may be laying the groundwork to move from de facto to de jure independence, even if not immediately. Taiwan's apparent success in battling the COVID-19 pandemic, and the unfolding events in Hong Kong, are raising international sympathies for Taiwan at a time when Beijing is trying to tighten the island's political isolation. The United States' public recognition of Tsai's re-election and request for new arms sales, as well as its increased patrols in the South China Sea and through the Taiwan Strait, all point to a potential change in Taiwan's security and international status — and one that Beijing sees as a clear violation of its claimed sovereignty and a threat to its strategic security. 

China's Taiwan Toolkits

China has five main toolkits it draws from for its Taiwanese policy: incentivize, disrupt, isolate, constrain and force. The first three (incentivize, disrupt and isolate) are largely a combination of economic and political tools, while the latter two (constrain and force) move more heavily into the military space. During Taiwan's previous administration under President Ma, China relied largely on the first tool (incentivize) while selectively drawing from the second two (disrupt and isolate). 

But given the changes inside Taiwan, and in Taiwan's international ties, Beijing no longer sees the first as having much relevance, and is now shifting heavily toward the second two. At no time is China not using the fourth tool (constrain), shaping the future battlespace to limit Taiwan's options and ability to rely on external powers. The fifth, direct military action, is one Beijing wishes to avoid but sees as potentially necessary over the next decade due to the pace of change in Taiwan and shifting U.S. regional interactions.

1) Incentivize: Using primarily economic, social/cultural and political tools to encourage greater integration with the mainland to highlight the benefits of cooperation and eventual reunification. Examples include: 

  • Offering economic benefits for Taiwanese companies operating in China.
  • Opening sectors of the Chinese economy to Taiwan, such as agricultural products.
  • Suspending “dollar diplomacy” competition between the Mainland and Taiwan.
  • Loosening opposition to Taiwanese presence in select international forums.
  • Encouraging tourism between Taiwan and the mainland.
  • Emphasizing Chinese cultural ties, and the strength of the Chinese market and economy.

2) Disrupt: Using economic, political and informational tools to disrupt social and political unity in Taiwan, and thus prevent the formation of a strong pro-independence bloc. Examples include: 

  • Selectively applying regulations to Taiwanese business operations on the mainland.
  • Engaging in disinformation campaigns in Taiwan and countries sympathetic to Taiwan.
  • Carrying out cyber espionage and cyber attacks.
  • Adding complications to trade and tourism to create uncertainty, delays and economic loss.
  • Using military statements or exercises to create a sense of a less stable Taiwan.

3) Isolate: Reducing the “international space” for Taiwan to operate by influencing global organizations and foreign nations in ways that limit their interaction with Taiwan, or keep such interaction within tightly prescribed boundaries. Examples include: 

  • Blocking Taiwanese participation in international forums, as it did in the recent World Health Assembly meeting.
  • Threatening or carrying out economic action against businesses from third-party countries that do not adhere to Chinese convention labeling Taiwan a province of the People's Republic, or that assist in Taiwan's defense.
  • Threatening or carrying out economic action against countries that either recognize Taiwan, or conduct political, economic or military actions that appear to support Taiwanese autonomy or independence.
  • Accelerate dollar diplomacy efforts to strip away Taiwan's remaining formal diplomatic ties.

4) Constrain: Shaping the physical environment around Taiwan and in China's near seas to increase Beijing's strategic posture vis-a-vis Taiwan, and increase the cost of intervention by foreign powers if China should shift to military action to coerce or conquer Taiwan. Examples include:

  • Increasing China's air, surface and subsurface maritime capabilities and reach. 
  • Increasing missile range and deployments to raise the cost of foreign intervention in China's near seas. 
  • Dominating key features in the South and East China seas and along strategic routes. 
  • Weakening regional U.S. alliance structures through economic, political and military coercion and concessions.
  • Enhancing China's Marine Corps and military amphibious capabilities.
  • Increasing and regularizing Chinese naval operations in the waters around Taiwan.

5) Force: Using military force to isolate Taiwan from international economic and security connections, eroding Taiwan's governed space, disrupting or damaging critical Taiwanese infrastructure, degrading Taiwanese military capabilities, and/or (in the extreme) invading and occupying Taiwan. Examples include:

  • Disrupting key supply lines to Taiwan, including raw materials, machinery.
  • Conducting cyber attacks on Taiwanese government and critical infrastructure.
  • Naval blockade of Taiwanese ports.
  • Closing the Taiwan Strait and/or airspace around Taiwan.
  • Seizing outlying Taiwanese-controlled islands.
  • Selective missile/drone strikes.
  • Amphibious assault and occupation.

The Military Option

Although Beijing would prefer to avoid a military confrontation over Taiwan, it has never taken the military card off the table. The pace of China's military developments have far exceeded Taiwan's, and the balance has clearly tilted in favor of China, including even in several scenarios where the United States intervenes in a cross-strait conflict. But for Beijing, a potential victory in a military action to take Taiwan does not necessarily outbalance the numerous costs. An invasion risks not only jeopardizing Chinese soldiers and equipment, but prompting a global economic and political backlash. 

Even If the United States was deterred from intervening in a Chinese invasion of Taiwan, Beijing would encounter a significant international economic and political response. And it is not clear a successful invasion would translate into a successful occupation, or the ability to capitalize on Taiwan's own economic capacity. So long as China retains some negative influence in Taiwan sufficient to deter active moves toward formal independence or foreign military occupation, it will likely delay direct military action. 

That does not mean, however, that China is not actively preparing the battleground, both in the political realm to demonstrate the futility of Taiwanese independence, and as a concrete way to increase the likelihood of victory if there is a shift to open hostilities. This shaping takes several forms. First, China uses its economic heft to dissuade any significant foreign support for Taiwanese international space. Second, it similarly uses its political pressure to shape foreign companies and countries in their interaction with Taiwan. By isolating Taiwan diplomatically, China limits the strength of Taiwan, and reduces the potential for foreign intervention as Beijing shapes the physical environment. 

It is the third component, the physical military space, that has been most notable in recent years. Beijing's construction and militarization of artificial islands in the South China Sea create a Chinese defensive ring around Taiwan, allowing China to interfere with key maritime routes foreign powers would take to intervene in cross-strait tensions. Expanding the Marine Corps, increasing the supply of amphibious ships, and stepping up the training cycle provides the conceptual force for occupying outlying Taiwanese islands and for an invasion force of the main island. China's developments of anti-ship missiles, including work on hypersonics, further increases the cost of intervention by foreign powers. At the same time the United States is sailing ships and flying aircraft to assert freedom of navigation around Taiwan, China is also honing its capacity to deny the water and airspace to foreign powers. China will match these efforts to shape the future battlespace with continued activities to spread disunity within Taiwan through economic, political and informational means.

A More Contentious Region

For now, it is unlikely that Taiwan will seek formal independence, despite the ruling DPP. Taiwan is, however, seeking a larger international environment and is reaching out to Europe, Southeast Asia and India for improved economic ties. Taiwan is also seeking the weapons systems necessary to increase its own ability to counter-strike should China invade, including the ability to strike into the mainland to increase the cost of any Chinese military action. While reunification is largely off the table in Taiwan, the island's strongest propensity is for a continuation of the status quo of de facto, rather than de jure, independence. 

We can anticipate, then, that China will pursue a policy to disrupt, isolate and constrain Taiwan over the next few years, offering very few conciliatory incentives unless there are clear opportunities provided by political or economic dynamics in Taiwan. This will include shoring up the current artificial islands in the South China Sea that serve as forward basing and interdiction of key maritime routes (there are rumors of Beijing even considering the use of floating nuclear reactors to both reduce resupply problems and disincentivize foreign military action against these military outposts); deploying more anti-ship and anti-air missiles in and around China's near seas, including hypersonic missiles; increasing training for its carrier battle groups and marine corps amphibious operations; and using its civil maritime and aviation organizations to maintain a consistent presence in its claimed areas to demonstrate effective control. We may, at times, even see China experiment with various forms of loose blockades to disrupt foreign economic and security connections to Taiwan.