There has been a lot of news on Taiwan recently, between Xi’s speeches and semiconductor shortages.
Taiwan is an important issue for several reasons, involving three different sides, and it seems the right time to dive into it.
Decoding Politics is going to lay out the thesis that there is a decided risk of a Chinese military action against Taiwan in coming years, likely the next three years. The smartest route would be for China to use its navy to surround Taiwan in a blockade or embargo and then reacquire the island by treaty. A land invasion or attack may come along side or soon after the start of the blockade, but should not be the base case. Conventional wisdom almost rejects this idea out of hand. However, they have failed to notice five recent developments:
- The collapse of the possibility of a diplomatic reunification
- Very hawkish actions by the CCP in Hong Kong, and extremely hawkish recent rhetoric
- China’s military strength, size, and sophistication is rapidly rising, and its navy could
soon rival the US Navy
- The concentration of Chinese forces, would make it easy for them to implement this
strategy, and difficult to for others to fight them initially
- The political decision to send in a large US or international military presence to fight
them off is very unlikely. No country is obliged to defend Taiwan, the cost and casualties
would be enormous, and political appetite low
Just as the US and allies did nothing while China cracked down in Hong Kong in 2019, they would do nothing about Taiwan in 2022-25. The costs do not match the benefits.
We have to start with the history of Taiwan. It is complex, but it’s impossible to describe the current
situation without explaining ‘how we got here’.
Brief History of the Island and the Nation of Taiwan
The island of Taiwan was mostly uninhabited until the 16 th century, when it was used as a trading post by European powers like Portugal. In 1683, the island was occupied by the Chinese and became a province of China called ‘Formosa’. In 1895, it became occupied by the Japanese, which they held until surrendered in 1945, at the end of World War 2. Then Formosa was returned to Chinese rule and renamed Taiwan.
After a disastrous 19 th and early 20 th century of wars, rebellions and loss of territory, China became a republic in 1911. In opposition to this republic, and with support from the newly formed Soviet Union, the Chinese Communist Party (CCP) was founded in 1921 and led by Chairman Mao Tse-tung (sometimes written Zedong). The communists and the Nationalist Party which led the Republic of China (known as the Kuomintang) worked together briefly in the 1920’s to reunify China and defeat warlords in the North.
The hero of this was campaign “Generalissimo” was Chiang Kai Shek, and quickly became leader of the Republic of China and the head of the Nationalist Party. The alliance with the CCP fell apart and the two groups began to fight. With the invasion by Japan and the outbreak of World War 2, the two again put aside their differences to work together. After the end of World War 2, conflict between the government and the CCP became stronger and the country again entered a civil war. The communists had largely won by the end of 1948. Sensing the end, Chang Kai Shek moved his army, the Nationalist Party’s leadership and official finances of the government to the island of Taiwan. The CCP took control of the rest of the country and renamed it “The People’s Republic of China” (PRC). Many Chinese fled to then British controlled Hong Kong, across to Taiwan, or abroad.
US Relations with China and Taiwan
At this point, an odd situation emerged with regards to Taiwan and China’s international position. The United States and its allies now recognized Taiwan, the last remaining province of the former Republic of China, as the official government of China. By it contrast, it saw the PRC as illegitimate and refused to recognize it. International pressure continued to increase, and many allies in the region like South Korea and Japan followed suit. The US signed a Defense Treaty with the Republic of China (which we will call Taiwan from now on), vowing to defend it from any foreign invasion or attack and that it would not recognize the communist government. 1 The 1950’s and 1960’s saw several ‘incidents’ between the Taiwan and the PRC, but no major conflicts emerged.
Fast forward to 1972, when President Nixon of the USA first visits China and begins the process to speak to the CCP. This culminated with full diplomatic relations between the countries in 1979. After negotiating a deal with the PRC, the USA had to rework its deal with the Taiwanese government. It now does not officially recognize the country nor its government nor have an embassy. But it also does not accept it as part of the PRC.
However, it does ‘recognize the interests’ of the island, and has several groups it recognizes as
intermediaries between the two. In addition, the USA has very strong commercial relations. And finally, it reworked its defense guarantee with Taiwan- this is subtle, but we wanted to place here the full Wikipedia section on it.
The Taiwan Relations Act does not guarantee the U.S. will intervene militarily if the PRC
attacks or invades Taiwan nor does it relinquish it, as its primary purpose is to ensure the
US’s Taiwan policy will not be changed unilaterally by the president and ensure any decision
to defend Taiwan will be made with the consent of Congress. The act states that “the United
States will make available to Taiwan such defense articles and defense services in such
quantity as may be necessary to enable Taiwan to maintain a sufficient self-defense
capabilities”. However, the decision about the nature and quantity of defense services that
America will provide to Taiwan is to be determined by the President and Congress.
America’s policy has been called “strategic ambiguity”, and it is designed to dissuade Taiwan
from a unilateral declaration of independence, and to dissuade the PRC from unilaterally
unifying Taiwan with the PRC.
The act further stipulates that the United States will “consider any effort to determine the
future of Taiwan by other than peaceful means, including by boycotts or embargoes, a threat
to the peace and security of the Western Pacific area and of grave concern to the United
The act requires the United States to have a policy “to provide Taiwan with arms of a defensive character”, and “to maintain the capacity of the United States to resist any resort to force or other forms of coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan.”
Basically, this deal is a compromise between the full defense of Taiwan (which could become very
expensive or unpopular in the US) and also a full acknowledgement of the PRC’s claim that it is a
breakaway province to be returned to China. But strictly speaking, there is no guarantee anywhere in this treaty to protect Taiwan from any invasion, blockade, embargo or other provocation and the CCP knows it.
In 1989, hundreds of pro-democracy protestors in China’s Tiananmen Square were killed when the
government rolled in the military to clear them out. This event was greeted with outrage in Taiwan and globally.
And in 1997, China reclaimed control of Hong Kong from Britain, and Macao from Portugal. It allowed the existing systems to be maintained, claiming that they would be run under a “One Country, Two Systems” approach. It has continued to claim that Taiwan could rejoin the PRC under a similar model.
The CCP’s Policy and Objectives
It is apparent that CCP policy took a sharply different direction when Xi Jinping became the leader in Xi led the development of a stronger military and central government, with strict restrictions on free speech remaining in place. He had a strict crackdown on corruption. He led the sacking of many political opponents and has now effectively become Premier for life. The central government has flexed its power in the economy quite explicitly in several sectors, cracking down on tech giants and foreign banks at the same time.
This hard swing also appeared in its approach to Hong Kong. When it was returned to China in 1997, the CCP guaranteed another 50 years of independence. While China started by being largely hands off in governing Hong Kong, this took a dramatic turn with the protests in 2019. The PRC removed the CEO’s of many companies it thought were supporting protestors, cracked down hard on the media. The CCP effectively banned mainland tourists for a time from visiting Hong Kong as a further punishment to the ‘renegade’ Hong Kong government. To prevent future outbreaks of political dissent, the CCP imposed a sweeping new National Security Law. This effectively ends free press in Hong Kong and gives the PRC enormous power to enforce mainland laws in Hong Kong. While foreign governments complained, they were largely powerless to stop the CCP and took no major action.
The hard edge that showed up in Hong Kong has now come into Taiwan relations. The CCP has always had the same view of Taiwan- that it is a breakaway province that belongs to China, ruled by an illegitimate government.. Up until now, that has been a general principle, but without any teeth to it. In 2017, Xi issued a timeline to reunification by 2049 using a “One Country, Two Systems” approach.
But citing the Hong Kong precedent, President Tsai of Taiwan vowed they would never accept “One Country, Two Systems” and won re-election by a landslide in 2020. 2 Independence remains very popular in Taiwan. The chance of a merger with the PRC along the lines of Hong Kong, and diplomatic solution, is effectively dead at this point.
As a result, Xi has gotten far more aggressive in his rhetoric and rumors swirling in China suggest that they want to reunify it by 2025 at the latest– this is Xi’s legacy and he will not give up. Xi currently feels emboldened because of the lack of real foreign pushback over Hong Kong, and the belief the Biden administration will be less confrontational than the Trump administration. And, Taiwan’s strategic location means that foreign powers could use it as essentailly a large aircraft carrier to threaten mainland China. That is an unacceptable risk to the military hard-liners running China now.
On July 1, Xi gave a speech for the 100 th anniversary of the founding of the CCP. Here are two excerpts from Xi’s speech at the 100th anniversary of the CCP that show that new hard line:
We will elevate our people’s armed forces to world-class standards so
that we are equipped with greater capacity and more reliable means for
safeguarding our national sovereignty, security, and development
Resolving the Taiwan question and realizing China’s complete
reunification is a historic mission and an unshakable commitment of the
Communist Party of China. It is also a shared aspiration of all the sons
and daughters of the Chinese nation. We will uphold the one-China
principle and the 1992 Consensus, and advance peaceful national
reunification. All of us, compatriots on both sides of the Taiwan Strait,
must come together and move forward in unison. We must take resolute
action to utterly defeat any attempt toward “Taiwan independence,” and
work together to create a bright future for national rejuvenation. No one
should underestimate the resolve, the will, and the ability of the Chinese
people to defend their national sovereignty and territorial integrity. (3)
The Military Scenario
Thus it should be clear that there is now a military scenario on the table. What form(s) would that take?
International consensus seems centered on a D-Day like scenario – that we wake up one day and 200,000 Chinese troops have been put on landing craft and are hitting the beaches of Taiwan. As a mountainous island, there are relatively few landing spots in Taiwan and they would be difficult to take as an invader. The Diplomat says that there are only fourteen invasion sites on the entire island, all of them ringed by mountains. (4) The Taiwanese have anticipated such a scenario for decades and heavily garrisoned and fortified all of these sites and the surrounding mountains. Missile batteries line all of the small outlying islands around Taiwan, which would impede any invading force. Forming a beachhead and taking major locations would present a formidable challenge for China, even with excellent naval and air support. With an overwhelming show of force to knock out key assets at once, Desert Storm style, it may work. But given the Chinese military’s lack of combat experience and the difficult odds, it is a risky first move.
To the contrary, we will put forth the likeliest scenario under which the PRC could regain control of the Taiwan Strait and the island. It wouldn’t be a large scale land invasion and occupation, which would cause a huge international outcry and thousands of casualties. No, the simple solution is a naval blockade and then force Taiwan to sign a new treaty with China, which by the way, is how China lost several parts of the country in the 19 th century. (5)
This article in the National Interest gives a great protracted summary of our central thesis, which we encourage you to read for more detail.
In order to do this, first, the PLA would need a plan. As of now, China has five different (and not mutually exclusive) plans to attack Taiwan, detailed in Project 2049’s document. 7 Of these five, we think that they will focus on a naval blockade with support from the others. This is where China has the most leverage, the easiest to implement and fewest casualties.
Secondly, in order to accomplish this, China would need a large and modern navy to challenge both Taiwan’s military and also potential US Navy involvement. What a coincidence, China has been doing this for the past several years. China’s navy is being modernized, expanded and will within a few years reach parity with the US Navy. Observers expect the process to be complete by…..2025.
Let’s look at a 2019 article from National Defense which had several excellent data points: (8)
But it’s clear to experts that the nation’s maritime capabilities are improving.
China is rapidly retiring older, single-mission warships in favor of larger,
multi-mission vessels equipped with advanced anti-ship, anti-air and anti-
submarine systems, sensors and command-and-control networks, according to a
2019 Defense Intelligence Agency report titled, “China Military Power:
Modernizing a Force to Fight and Win.”
In his CRS report, Naval Specialist Ronald O’Rourke said Chinese ships,
aircraft and weapons are now comparable in many respects to those of Western
Meanwhile, China’s submarine force, most of which are diesel-electric
powered, could threaten U.S. carriers or other ships. The Defense Intelligence
Agency has estimated that by this year Beijing’s fleet would increase to about
70 boats. [roughly the same as the US Navy]
“U.S. and other observers generally assess that while the United States today
has more naval capability overall, China’s naval modernization effort … has
substantially reduced the U.S. advantage, and that if current U.S. and Chinese
naval capability trend lines do not change, China might eventually draw even
with or surpass the United States,”
O’Rourke said. “In the South China Sea, some observers are concerned that
China has already drawn even with or even surpassed the United States.”
Since then, China has continued at its same pace. A sampling of recent headlines:
The Chinese Navy’s Destroyer Fleet Will Double by 2025. Then
So rapid is the Chinese navy’s expansion, it is running out of big cities
to name the warships after (10)
Third, the PLA would need a strong military that could defeat Taiwanese and allied forces of all kinds if a ground war flared up, and be able to quell any potential opposition in occupying Taiwan. As of now, Taiwan’s military is not up to the task of defending the country. It would need a lot of help from allies.
Taiwan has a population of 23m and 165k active service members. (11) Its navy is tiny, with 4 subs and 4 destroyers. It has 300 fighters and 300 helicopters. By comparison, the People’s Liberation Army of China has over 2m active service, with 650,000 paramilitary. The air force maintains 1200 helicopters and 1200 fighters, along with two aircraft carriers. The navy has almost 70 submarines and 50 destroyers, numbers which we saw are rapidly rising. A conflict between the two where the PLA maintains a 5 to 15x advantage in every category is going to be either incredibly costly for Taiwan or a quick rout. They would have no means of reinforcement by sea and the island would quickly begin to starve. As China’s military power expands, Taiwan would be foolish to try and fight a protracted battle.
The US Naval Institute itself recognized the game China is playing in 2018 – build up its navy and military to such an extent that the US would be unwilling to swallow the pill and fight a long, drawn out conflict:
If China can dishearten its adversaries or drive the price of entry into the Western
Pacific so high Washington is unwilling to pay it, then China can win without crushing
them in a major fleet engagement. Such an engagement would hold at risk the PLA
Navy surface fleet in which Beijing has invested lavishly over the past two decades
and that it needs for open-seas protection missions in distant seas. Instead the PLA
leadership can dare U.S. political leaders to hazard the Pacific Fleet in action and
risk incurring heavy damage that imperils the U.S. Navy’s capacity to uphold U.S.
interests, not just in Asia but elsewhere around the Eurasian periphery. (12)
Another important thing to keep in mind is that while the US Navy is still very powerful, the US Navy is very spread out and would take time to bring to bear. It would have limited ability to quickly respond to a Chinese blockade- it would have to wait two weeks until reinforcements arrived from Hawaii or elsewhere. Let’s go into this topic in more detail.
Current US military personnel in the Pacific:
The US Navy is organized into seven fleets worldwide, and the Seventh Fleet, based in Japan and operating in the Western Pacific is the one responsible for Taiwan. The Third and Fifth Fleets would be the closest to Taiwan to reinforce.
In addition, the big advantage that the United States has is its eleven aircraft carriers, typically two or three of which are deployed in the Western Pacific and any one time. Each can sail for months at a time without refueling or maintenance (they are nuclear based) and have a group of other ships around them.
With all that being said, where is the Chinese Navy concentrated? All on the Pacific Coast of China, about one third for the North, one third for the South, and one third for the Central area.
With all these facts laid out, here is the central conclusion: China can quickly deploy a range of assets to encircle Taiwan and block entrances. The US military would have limited ability to respond initially, making an embargo highly likely to succeed at first. It is unlikely that after that, the US government would take the time, effort and money to send reinforcements and engage in the lengthy conflict that would be required to stop it.
The Seventh Fleet maintains about a third of its units at any one time in the Japan/Korea/Guam based locations:
Of the 50–60 ships typically assigned to Seventh Fleet, 18 operate from U.S. facilities in Japan
and Guam. These forward-deployed units represent the heart of Seventh Fleet, and the
centerpieces of American forward presence in Asia. They are 17 steaming days closer to
locations in Asia than their counterparts based in the continental United States. It would take
three to five times the number of rotationally-based ships in the U.S. to equal the same presence
and crisis response capability as these 18 forward deployed ships. On any given day, about 50%
of Seventh Fleet forces are deployed at sea throughout the area of responsibility. [Wikipedia] (14)
There you have it- the US has around 18 ships and 2 or 3 aircraft carriers deployed in the Pacific, and anything additional would require ten to seventeen days to send. By contrast, the China naval bases are only 400-550 miles from Taiwan, about two days sailing. Given how close Taiwan is to China itself, China could use a range of shore based missiles as reinforcements or deterrents to any foreign power that tries to intervene [map later in this piece]. We highly doubt that other nations in the region would have the military ability or the willingness to attack.
A huge problem for any foreign navy that wants to help is that over the past ten years China has militarized the South China and the Spratly islands. They have built up dozens of bases with fighters, missile posts, and naval assets. These bases themselves can now, according to CSIS, effectively cover the entire South China Sea up to mainland China. 15 Thus, one route to have the US Navy enter the battlefield could effectively be blocked. That would leave only two narrow areas to approach Taiwan- via the East China Sea (the area between the Philippines and southern Japan) or the narrow inlet between Korea and Japan, both of which China could easily block.
The last problem is that the US’ most effective weapon to counter a Chinese blockade is its aircraft carriers and the 90 planes deployed on each. As China has only two carriers, which carry 40-60 planes each, the US could enforce air domination. However, there is a threat – China’s upgraded missile systems are now very good. In fact, what have they been working on the last ten years? An aircraft carrier killer. From the SCMP: (16)
And the US Military, in Air Force Mag, had to admit recently that the Chinese missile technology has become formidable: (17)
China Now Tops US in Shipbuilding, Missiles, and Air Defense, DOD Says
The air defense system around China is also one of the best, if not the best,
in the world, the Pentagon said, as China now fields Russian-built S-300 and
S-400 systems, as well as its own indigenous copies, soon to have capability
for intercepting ballistic missiles. The Pentagon described the system as
“robust and redundant.”
Finally, the Chinese missile systems both anti aircraft and ballistic- are well within range of hitting Taiwan from the mainland of China:
US and Global Political Response
After having laid out the decided superiority of China in the area, the question inevitably arises: “If China does move on Taiwan, with a land invasion or a naval blockade, how will Taiwan’s allies respond?”
Japan and Australia have announced their increased cooperation with Taiwan. But the main ally remains the United States, and how would they react to any provocation? Any involvement in defending Taiwan would involve prolonged conflict with an adversary whose navy and missile systems would overpower them in the Pacific. This would be politically unpopular. For smaller countries like Japan and Australia, a long conflict could turn into a disaster, with the destruction of two thirds of their navy if they persist. This is like the ANZACs helping Britain in WW1 or the Italian navy working with Germany in WW2. Eventually they will encounter the opponent with far more firepower and suffer massive losses.
In talks with people in Washington, Decoding has also learned there is a huge divide between the Administration and the military itself. The executive branch is terrified of getting involved in any way militarily. They are scared that any small skirmish related to Taiwan could quickly turn into a kinetic war between Chinese and American interests globally. After 20 years of failure in Iraq, Afghanistan, and Libya, the President wants nothing less than a long, ugly, multi-part foreign war.
The military on the other hand is far more willing to intervene. They see the policy of quick but powerful attacks, timed properly, could contain the Chinese and bring them to a diplomatic solution. But the lack of cooperation between the two groups is a real risk for any Taiwan strategy.
Then there is the major issue of semiconductors. Taiwan, depending on how you measure it, supplies 60-90% of global semiconductors. It’s a key component in so many industries’ supply chains. The risk of losing the industry globally to disruptions stemming from Chinese actions gives enormous leverage to China if they effectively move on Taiwan. A proper first move, and then holding the risk of cutting off semiconductor supplies to nations that don’t recognize the new order, would create powerful momentum for China. Holding the world economy hostage over the supply of semiconductors is incredibly cynical, but we would not put it past the CCP. They would lose this leverage by the end of the decade, as Taiwan Semiconductor and others have raced to set up plants in the USA and move their operations there.
Timing something like this is the hard part. We are raising the specter of this in the next three years, but narrowing down a more specific time frame is difficult. It will likely come under Biden’s term as president, when the world is distracted by other issues. It could be rising tensions in the Middle East or another part of the world, or US internal divisions like 2020. China will choose the opportune time to act. The Party Congress of November 2022 may serve as a good marker. Perhaps Xi would want to accomplish something ahead of that to take a victory lap.
Though we won’t go into details here, the huge amount of money coming out of China and into the pockets of many American political leaders will surely lessen the enthusiasm to react by the two major parties. (19)
Taiwan is clearly vulnerable, as the jewel in the eyes of the Chinese government. It is a small island facing a formidable opponent with a strong new military. Its allies are far away, politically divided, and tired of wars in exotic places. We think that the US and allies would be forced to let Taiwan go and accept whatever diplomatic compromise is worked out. After two decades of drawn out, unsuccessful wars in Iraq, Afghanistan, and Libya, the desire for a high intensity naval and land battle in Taiwan against a well armed opponent is very low.
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1 More on that here: https://en.wikipedia.org/wiki/Sino-American_Mutual_Defense_Treaty
3 Transcript: https://asia.nikkei.com/Politics/Full-text-of-Xi-Jinping-s-speech-on-the-CCP-s-100th-anniversary
5 The USA and the UK often used the strategy in dealing with the Asia in the 19 th century- it even has a name,
gunboat diplomacy. https://diplomacy.state.gov/exhibits/diplomacy-is-our-mission/gunboat-diplomacy/
stack-up and also https://media.defense.gov/2020/Sep/01/2002488689/-1/-1/1/2020-DOD-CHINA-MILITARY-
19 This has been going on since the 1996 re-election of President Clinton, where dozens of State Dept and campaign
staffers went to jail and a lot of people connected to Chinese Intelligence. Google it and subsequent stories to
knock yourself out. The numbers are staggering. Peter Schweitzer’s book “