China’s Options and Goals in a New Taiwan Strait Crisis

After weeks of speculation, US House of Representatives Speaker Nancy Pelosi has landed in Taiwan. In response, China’s People’s Liberation Army (PLA) has conducted live fire exercises off Pingtan island in Fujian province, and has declared its intention to conduct a series of exercises around Taiwan in August. Notably, some of the areas that the PLA has notified civilian aircraft and vessels to avoid overlap with Taiwan’s territorial waters – an escalation from previous provocations such as incursions into Taiwan’s air defence identification zone (ADIZ). Though troubling, these activities are likely not a prelude to further escalation. However, if similar Chinese activity is repeated in the future and becomes routine, it could significantly undermine Taiwan’s conventional deterrent.

No Immediate Military Clash

There are many reasons the Chinese leadership might wish to avoid a direct clash at the present moment. The Chinese military, which is still untested, would struggle to conduct a contested amphibious assault against a Taiwan well equipped with anti-ship cruise missiles and backed by the US.

Moreover, with the Chinese economy reeling from the effects of President Xi Jinping’s ‘Zero Covid’ policy, China remains largely preoccupied with domestic concerns. Nor is it likely that domestic troubles could incentivise China to launch a diversionary war to deflect public discontent. Firstly, despite the attention it receives, diversionary war is a relative rarity in international politics, and few leaders opt to launch a war primarily to deflect domestic discontent. The risk of losing a war can easily compound a leader’s domestic troubles, as General Galtieri discovered in the Falklands in 1982, and relatively few leaders choose to take this risk when other means of deflating or suppressing domestic discontent usually exist. Secondly, diversionary war, when prosecuted, tends to occur against targets perceived as easy pickings – the idea being to give a flailing leader a quick and certain win to restore their legitimacy. A clash which might evolve into a superpower conflict that China could well lose is precisely the opposite of what a leader seeking a diversionary war would opt for.

A more limited assault – such as one on Taiwan’s outlying islands – might mitigate the risk of a Sino-US conflagration, but only partially, given that the US Taiwan Relations Act defines these outlying smaller islands as part of Taiwan and thus governed by the same commitments that apply to Taiwan, meaning that Washington’s failure to defend them could undermine the credibility of the US. Overall, a decision which could bring an untested PLA into contact with the US military is one that would be taken after long deliberation and only if Chinese leaders perceived the balance of power as having shifted decisively in their favour. It would not occur as a reflexive response to a crisis like the one brewing now.

Echoes of the Third Taiwan Strait Crisis

The approach that the Xi administration is opting for has echoes of the Taiwan Strait Crisis of 1995–1996, which erupted after the then-Taiwanese president was allowed to visit the US while in office. Indeed, President Xi’s recent alleged admonition of US President Joe Biden, which included the warning that the US leader is ‘playing with fire’, is a direct repetition of a warning uttered by Yang Shangkun, one of China’s most prominent communist leaders, before the previous Taiwan crisis erupted in the 1990s. Much like China’s current leadership frets that the US is pursuing a ‘fake One China Policy’, the Jiang Zemin administration of the 1990s saw Taiwanese President Lee Teng Hui’s visit to the US as the latest in a series of actions designed to hollow out US respect for the One China Policy. Lee’s visit came on the heels of the Bush administration’s decision to sell 150 F-16s to Taiwan, as well as the Clinton administration’s revisions regarding the protocols for engaging Taiwanese diplomats, according them a more formal state-like status. That said, emerging from a period of instability after the crushing of the Tiananmen Square movement, and operating from a position of absolute military weakness, China had no appetite for a conflict.

Its chosen solution at the time was a series of exercises conducted off Taiwan that were meant to serve the purpose of coercive diplomacy. The exercises began with missile tests that saw six DF-15 short-range ballistic missiles launched 90 miles off Taiwan’s northern coast, and encompassed a series of live fire exercises off Fujian province. In 1996, the scope of the exercises expanded to include amphibious landing exercises and mock air raids in which 40 vessels, 260 aircraft and 150,000 troops participated. The 1996 exercises also included DF-15 tests some 50 miles from Taiwan’s busiest ports. Chinese leaders tried to limit the possibility of escalation (albeit unsuccessfully) by dispatching Vice Foreign Minister Liu Huaqiu to Washington to communicate China’s limited intentions.

Chinese leaders apparently have mixed views of the crisis, which precipitated the dispatch of two US carrier battlegroups to the vicinity of Taiwan. On the one hand, the US response underscored the relative military impotence of the PLA, which would have had few good options in a war. Recognition of this is part of what sparked China’s decades-long effort at military reform. On the other hand, analysts have suggested that China’s leaders subsequently believed that Taiwanese officials substantially moderated their rhetoric after 1996, something which they took as evidence that brinkmanship delivered political results, even if it underscored military weaknesses. For a Chinese leadership operating under similar circumstances – albeit from a position of far greater military strength than Jiang Zemin’s administration – this provides a playbook for action.

What Has Changed?

There are both similarities and notable differences between the exercises currently announced by China’s leadership and those pursued in 1996. As in 1996, it appears that the planned conduct of live fire exercises and the positioning of amphibious assets in Fujian will coincide with missile tests. However, the announced Chinese exercises will occur far closer to Taiwan’s coast than those that occurred in 1996, with the edges of some exclusion zones for civilian vessels as little as 9 nautical miles from Taiwan’s coast.

It would also appear that China has coordinated its exercises with denial of service attacks against Taiwanese government webpages. Non-kinetic cyber attacks were not a tool at China’s disposal during the previous crisis. Nonetheless, the formula being employed by the current Chinese leadership – combining coercive diplomacy with senior leadership-level communication with the US – broadly mirrors what the Jiang Zemin administration tried to achieve in 1995–1996.

If China does wish to emulate its previous approach, we might expect the exercises announced to be the beginning of a series of drills conducted near Taiwan in the coming months, rather than being isolated.

Though unlikely to be a prelude to war, this is not a risk-free strategy. The exercises of 1996 provoked a panic in the Taiwanese stock market, as well as a brief period of capital flight. If combined with other forms of coercion such as cyber attacks on financial institutions, the actions announced now could have a similar effect. Furthermore, Taiwan’s forces will struggle to match the tempo of PLA activity if exercises continue over months. For example, the cost to the Taiwanese air force of meeting Chinese ADIZ incursions thus far has equated to roughly 10% of the country’s defence budget. If a precedent is set for PLA activity in close proximity to Taiwan, it could force the country’s defenders to choose between wearing out their readiness by responding to exercises, or leaving themselves at risk should a direct assault eventually occur. Given the fact that PLA thinking on ‘active defence’ contains a significant emphasis on pre-emption, dulling the response mechanisms of a defending force through sustained high-tempo activity over years could enable this.

Finally, there is the question of how Taiwanese political leaders should respond. In the build-up to the Ukrainian conflict, one factor that slowed the Ukrainian leadership’s decision-making on the question of declaring a state of emergency and mobilisation was the fear that Russia was using the prospect of war to drive capital flight and an economic collapse, but had no intention of actually invading. Taiwan’s leaders could find themselves placed on the horns of a similar dilemma regarding whether to sound the alarm or not.

Where to From Here?

Though precedent and China’s current military circumstances do not suggest that this is a ‘war in sight crisis’, it does merit a response. On the one hand, an immediate US response comparable to that of 1996 is both militarily riskier than it was at the time and strategically inapposite against an opponent that perceives itself as being backed into a corner and which is trying to restore its own credibility. On the other hand, the precedent set by the exercises announced by China is worrisome if such activity becomes routine.

A response might proceed on two tracks. Diplomatically, it might be privately communicated to Beijing that while China’s crossing of a pre-existing red line in response to Pelosi’s visit (which Beijing itself claims crosses China’s own red lines) will be tolerated on a one-off basis, any attempt to expand the scope and duration of the exercises beyond the already announced dates will not. It could be intimated, for example, that failure to operate within this ruleset could be met by offsetting US deployments to East Asia, or an expansion of military sales to Taiwan.

Militarily, efforts should be made to equip Taiwan with capabilities that are distinct from those it needs to contest in the grey zone. Taiwan’s overall defence concept envisions a bifurcated force structure. The first component of this force would be made up of cheap asymmetrical tools such as truck-mounted missiles, UAVs and mines, and would be used to defeat an actual invasion. The second part of the force would be a smaller number of more expensive multipurpose assets like fighter jets, which may be suppressed early in a conflict with China but can be postured to provide a visible response to peacetime grey zone aggression. The logic of this is that wearing down one’s ‘grey zone’ force does not undermine warfighting readiness. Encouraging the active adoption of such a force structure and supporting Taiwan in realising this concept might be a longer-term solution to the challenge Taiwan faces.

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

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