The Taiwan factor: Elections, supply chains, and US-China relations

Ben Bland

Hello, everyone, I’m Ben Bland, the Director of the Asia-Pacific Programme here at Chatham House in London. Thanks so much for joining us today for this panel about Taiwan. We’ve got much to discuss from recent cross-strait relations, to Taiwan’s elections in January, upcoming, via the US-China relationship and the Chip Wars.

I think the overarching question for today that we really want to get into is can the US and China avoid an escalatory spiral while Taiwan maintains its de facto independence and continues to thrive as a democracy? We’re lucky to be joined by three top experts on these questions. Amanda Hsiao joining us from Taipei, is Senior China Analyst at the International Crisis Group. We also have Bonnie Glaser, the Managing Director of the Indo-Pacific Program at The German Marshall Fund and Bonnie is joining us from Washington D.C. And last, but by no means least, we have Zhao Tong, a Senior Fellow in the Nuclear Policy Program at the Carnegie Endowment for International Peace, who’s joining us today from New York. So, across three continents and many cities.

Just a reminder of the house rules for today. This is a Chatham House organised event, but we are on record and the event is being recorded. I’m going to ask questions to the panellists for about 35 or 40 minutes and then, we’ll have time for Q&A from all the participants. If you have a question, please put it in the Q&A box and let us know if you want to ask the question yourself or you’d rather I do so for you. If you want to ask yourself, we’ll unmute you later on and you can ask your question to any of the particular panellists or all of them.

So, without further ado, let’s get to the heart of the matter, and I’m going to start with you, Amanda. And maybe you can paint a picture for us of where cross-straits relations have got to over the last year. The last time many people in Europe would’ve heard a lot of attention on Taiwan was after the visit by Nancy Pelosi and the Chinese live fire exercises and drills that followed that. What’s been the trajectory of cross-strait relations since then?

Amanda Hsiao

Sure. Thank you, Ben. It’s a real pleasure and it’s an honour to be on this panel with everyone else. In terms of the overall trajectory since the Pelosi visit, I’d say that the situation, of course, remains tense because the fundamental reasons for why tensions are high, remain. So, that, I would say, is largely due to the loss of confidence in political understandings, particularly between the US and China, that have really held together a fragile piece since the normalisation of relations between the US and China.

The core of those understandings is simply that – or rather what is happening right now is that Beijing is starting to lose confidence in Washington’s commitment to not pursuing the permanent separation of Taiwan from China. And, on Washington’s part, Washington is starting to lose confidence in Beijing’s preference for peaceful unification. So, the loss of that confidence, that’s after, holds, and that is the fundamental, sort of, driving reason for why tensions remain high.

Nevertheless, I would just say that it is clear that following the Pelosi visit, it does seem that the three parties all see a bit more clearly the risks of the situation spiralling out of control. And I say this because we, I think, saw in the McCarthy visit, or Tsai’s transit through the US, in which she met with current Speaker of the House, McCarthy, that in that event, it seemed that the three parties were trying to be less overtly provocative. Washington and Taipei appeared to work together to move that visit, Tsai, to convince McCarthy to not visit Taiwan and to, instead, have the meeting occur when Tsai Ing-wen transited through the US.

The visit appeared to be carefully orchestrated, so that it was relatively low profile, and Beijing’s military exercises in response, were significant, of course, but they weren’t as brazenly provocative as what they exercised in response to Pelosi. Namely, we didn’t see the firing of ballistic missiles over Taiwan.

So, you know, I think – I mean, of course, nevertheless, that event pushed the three sides further down this escalatory spiral. As you mentioned, it was used by Beijing as an opportunity to rehearse a tax on Taiwan, to showcase the additional ways and tools that they have in which they could use to wear down Taiwan’s defences. And, of course, Tsai’s visit to the US did break with precedent. It was the highest-level reception a Taiwanese President has been given on US soil since transits began.

So, I think where we are, essentially, is that the fundamental reasons for tensions being high remain, but it does seem that the parties have shown some capacity to moderate.

Ben Bland

Thanks, Amanda, and Bonnie, maybe you can expand a bit here, sort of, from the American perspective, what do you think’s changed in terms of US policy to Taiwan in recent years?

Bonnie S Glaser

Well, thanks for having me on, Ben. Before I answer that question, I find it fascinating, although I agree with everything that Amanda has said, but I find it fascinating that she’s focused entirely on the US-China relationship. Because I think anybody that you would ask from the PRC, “What is the fundamental cause of the tension and cross-strait relations?” they would say it is what is going on in Taipei, where Amanda sits. It is about the fact that there is a DPP President who came to power in 2016 and did not accept the 1992 Consensus and as a result, there have been, essentially, frozen communication channels ever since then.

And I know you will get into the upcoming elections, but there’s no doubt this is coming up both in official channels, as well in – as in Track II dialogues, that the Chinese are concerned about the elections and their outcome and particularly the DPP candidate, who they see as more pro-independence than Tsai Ing-wen. So, I’ll let you get to that later, but I think when you’re talking about cross-strait tensions, I believe that’s what the Chinese worry about most.

As to how US-Taiwan relations have changed, they are certainly stronger than they have ever been and that is a function of the growing Chinese military, diplomatic, economic pressure on Taiwan, the fact that President Tsai herself has put a lot of her eggs in the US basket. Clearly, she has wanted to strengthen the relationship with Washington and also, of course, with many other countries and has, I believe, been quite successful at doing so.

But the US-Taiwan is – relationship is strengthened in recent years economically. Where, you know, the economic colour of the relationship was very weak for quite some time, and we saw some headway in the last six months, in the 21st Century Initiative on US-Taiwan Trade, and there’s about, I think, five baskets of issues, chapters that have yet to be done. Probably won’t be finished this year, although that’s the objective, but next year, perhaps. I think that’s likely before the end of the Biden administration and that’s crucial, and there could be a avoidance of double taxation trading. This is something that’s very high on Taiwan’s agenda.

So, the progress in the economic piece is important, but the main focus is on defence. There are more arms sales, there is more training underway, there is more joint, sort of, discussions about scenarios and more assistance to Taiwan to help Taiwan to be more resilient and to deter and resist an attack from the PRC. And that focus on defence has been growing over the last few years and is clearly front and centre and I think will likely remain there, though we will see whether the elections in Taiwan change that in any way.

Ben Bland

Thanks. Thanks, Bonnie. I think everything you’ve highlighted underlines the – this problem with the status quo, right? Because when we talk about Taiwan, everyone says, sort of, “Keep the status quo,” but there is no status quo in Taiwan or anywhere else in the world. Politics and economics and societies are always changing, and obviously, we all have different views of the status quo and it’s, kind of, weaponised from time-to-time. But it’s – yeah, and I don’t think there is an agreed version of what that is.

Just – I might come back to you, Amanda, on this point about, sort of, how Taiwan has changed. I mean, Bonnie, sort of, framed it as a question about the current ruling party, the Democratic Progressive Party and Beijing’s, sort of, lack of comfort with the DPP. How much, I wonder, is there a greater question here that Taiwan’s democracy has just become consolidated and there seems to be a stronger sense of a separate Taiwanese identity? And it’s not just a DPP issue, but it’s almost a Taiwan issue that Taiwanese – it’s clear for Taiwanese people and maybe increasingly clear for Beijing, that Taiwanese people just don’t want to be part of the People’s Republic of China? It – how much do you think it’s a politics problem and how much, in a sense, is it just the natural changes that have taken place in Taiwan?

Amanda Hsiao

Yeah, thanks, Ben. I think it’s largely the latter. So, I do think that the attitudes in Taiwan, the political market in Taiwan, has changed to the point where the prospects of peaceful unification looks slimmer from Beijing’s point of view. And you pointed to one source of data on that, which is that, you know, in identity polls, there is an increasing number of people who say that they identify purely as Taiwanese, as compared to the two other options, which are Chinese and Taiwanese, or just purely Chinese.

You know, in terms of the Taiwanese population’s response to One China framings, which Beijing has made a, sort of, precondition for a cross-strait dialogue. So, you know, Beijing has insisted that, you know, there is up – you know, affirmation of the 92 Consensus before it will engage in dialogue with the Tsai administration and, you know, that has not occurred in the last eight years.

And so, you know, I think the political market for those framings has also – has tightened and a lot of it has to do with what Beijing, itself, has done, right? So, part of it is that the political market has shrunk in Taiwan, but part of it is a hardening on the part of China, as we’ve seen in the way that China has cracked down in Hong Kong. That has certainly done it no favours in terms of the one country, two systems model that it’s offering to Taiwan. But it’s also tied to the way that Xi Jinping has talked about Taiwan, since he has been in power, which leaves, I think, for both of the major parties, both DPP and the KMT, in response to his 2019 New Year speech, was a shared sense of a hardening of China’s position.

So, yeah, so, I think it’s not really specifically – you know, it’s not specific to the DPP. It’s very much a shift in attitude in Taiwan.

Ben Bland

Thanks, Amanda, and I want to get a perspective of how the Chinese, kind of, elite and the Chinese political class sees the Taiwan situation, given everything that both Amanda and Bonnie have said. So, I’ll come to you next, Tong. You wrote a really interesting piece for Foreign Affairs recently on this. I mean, what’s your sense of what’s driving China’s policy towards Taiwan, this tightening of pressure? How much is it about the changes in Taiwan, how much is it about US-Taiwan relations, and how much is it about other things going on in Chinese politics?

Dr Tong Zhao

Oh, thank you so much, again, for having me. I just want to make a quick comment about the previous question, because from the Chinese perspective, there is no natural change of public opinion in Taiwan. It’s all a result of the Taiwanese Government’s policy. So, China blames the change in public opinion on the DPP Government for promoting so-called pro-independence policy, for adopting education doctrines and textbooks, that doctrinate the Taiwanese people and gradually remove their Chinese identity and introduce deliberately a new and separate Taiwanese identity. And related to – I mean, I think this relates to China’s general thinking or belief that, you know, public opinion is what the government makes it to be. This perhaps relates to China’s own domestic practice, including its policy, in, you know, Xinjiang and other places.

But I also think at least partly, many Chinese Strategists think the reason the DPP Government, the Tsai administration, dares to take such measures to change or to shape and influence Taiwanese public opinion towards independence is because of the support from the United States. The United States has Taiwan’s back. So, they eventually attributes all the probable – the fundamental challenge to the United States, and all US efforts to help Taiwan develop deterrent capability, to develop economic resiliency and others, are seen as efforts to deliberately embolden the DPP Government. So, you still hear a lot of direct criticism against United States as an alternate source of the problem.

I think a major uncertainty here, and major change within China, is the sense of urgency, this newly gained sense of urgency to make some progress on the Taiwan issue in recent years. And that clearly, you know, from my perspective, came from the Chinese top leadership. The paramount leader appears to be driven by a journey in sense of historical mission, and he wants to leave a historical legacy on the Taiwan issue for the Chinese people to achieve the Chinese dream of national rejuvenation.

And the thing is China doesn’t have – doesn’t appear to have a real strategy to actually achieve peaceful, or to be more precise, a voluntary or non-coercive unification. China understands that the evolving Taiwanese public opinion, but on the other side, because of the top leadership’s vision, and the increasing trend that the regime’s security and a political security, is more and more depending on progress towards national unification. So, that presents a major gap, which in the reality of a much difficult prospect for unification and a stronger political will to make progress.

I think faced by this gap, many Chinese Strategists, they increasingly become disillusioned about voluntary un – or a non-coercive unification and they increasingly assume that unification would ultimately have to be achieved through coercive means, either militarily or, you know, through military and political and economic coercion. And when the top leadership demonstrates this political will to make progress, and this happens at the same time, when the paramount leader has been concentrating national decision-making authority under himself and has been very successful in building a highly centralised decision-making system, that system creates such a strong and systematic incentive for the bureaucracy, to cater to his personal vision and the will and to actually amplify that vision.

To extend that, you hear experts from almost every sectors: military, defence, industry, economy, technology, etc., you know, propaganda. They all are making preparations to prepare for this, you know, extreme scenario of coercive unification. What are the necessary military means? How can China build strong economic resiliency to, you know, resist and survive under international sanctions? How China can further and multifactorially influence international public opinion, so that even if in the Taiwan Crisis, China wouldn’t be internationally affiliated as Russia is today.

So, there’s – I think the risk is when the society is actually already on a de facto war mobilisation footing, even though there is no – I don’t think there is no decision made yet. There is certainly no deadline to take military action, and military action is not even the preferred option, but still, this, you know, idiosyncrasy of a highly centralised, closed decision-making system, it creates this de facto incentive. And I think that’s why it is risky, and we haven’t – international community hasn’t paid enough attention to address this internal dynamic.

Ben Bland

Yeah, and if I can push you a bit on that question, and it relates to what you were saying about Chinese understandings of Taiwanese public opinion. I mean, given the centralisation and concentration of power, do you think Xi Jinping even gets accurate information about what’s happening in Taiwan, or do you think he’s just being fed propaganda? Because it seems to me to say, “Oh, Taiwanese people are just being manipulated by the DPP.” That’s not really factual, right? I mean, that is a propaganda line and if that’s the sort of information that’s moving up the chain, you have to – you’d have to worry about someone’s ability to take a decision without a full picture of what’s happening.

Dr Tong Zhao

Well, we can only speculate based on anecdotal evidence. For example, when comes to the Chinese understanding of American intention on the Taiwan issue, or American intention in general towards China, you know, we often talk about the ‘October surprise’. You know, in 2020, in the run-up to the American Presidential election, Chinese leaders genuinely believed that the US military was considering a deliberate military provocation of some sort near China, for domestic, you know, political reasons. To the extent that the – you know, General Miller had to call his Chinese counterpart twice to reassure China.

And I think that, you know, that reflects a genuine misunderstanding of American intention and I think similar misunderstanding still exists, if not have further increased. You’ve often heard this argument by very serious and prominent Chinese experts, saying that “The US actually is interested in deliberately provoking a conflict across the Taiwan Strait, because that’s a good opportunity for the US to use a war of attrition to weaken China and eventually eliminate China as a long-term strategic rival.”

So, given how widespread those thinkings are in Beijing, I question, you know, whether Mr Xi really have a good understanding about American intention on this issue and whether he has a good understanding of Taiwan’s intention on this issue is also unclear. I think, within the international scholarly community, it is, you know, it’s up for debate whether the Tsai administration has been particularly provocative and aggressive in promoting independence, right? Some – I think many would argue, actually, her policy has been rather modest, you know, he has – she has been taking care, not – being careful in not to provoke China. But the reading in Beijing is very different, right? So, again, within China’s own information ecosystem, the interpretation of Taiwan’s intention could be very different from the international community.

And I think, lastly, another element is that Xi has a good understanding or accurate information of China’s public opinion on this issue. Again, that’s very hard to answer. I don’t think there is, you know, there is a good way to do comprehensive public opinion polls in China. Maybe the government has its own tools, but based on my personal interactions with friends and experts, family members, etc., I tend to question. Because I, you know, I – it’s so hard to accurately hear people’s journey in thinking, you know, on this issue when they face so much pressure, they have so much concern about political sensitivity, and at the surface, everyone, you know, again, faces strong incentive to appear genuinely enthusiastic about this accelerated agenda to achieve national unification and national rejuvenation.

You know, when all that positive feedback is sent to Mr Xi, you know, when he receives such strong applause, when he delivered the speech at the 20th Party Congress, when he promised, you know, he would – you know, China would never give up the military option to unify Taiwan, he received such strong applause from the floor. I wonder that type of very positive feedback might actually have the risk of misleading his view about real Chinese public opinion, which I don’t think anyone really knows.

Ben Bland

And Bonnie, sort of, looking at the mirror of that, I mean, do you think the political debate in the US on Taiwan has been helpful in terms of, sort of, esc – managing tensions and sending signals, sort of, to Beijing? And sort of, how do you think the US should go about, sort of, supporting Taiwan, helping Taiwan to defend itself, without needlessly antagonising or confusing Beijing?

Bonnie S Glaser

Well, there’s, I think, an intense debate in Washington about this whole issue, but US policy has been driven by the, sort of, sudden realisation that China developed very significant capabilities that could be used against Taiwan and, of course, against the United States. So, this really began with the development of anti-access, area denial capabilities, that would impose very heavy cost on intervening US military assets in a crisis. And the fact that the United States really used to have significant advantages in the theatre, but no longer does, and of course, the military balance is very much turned in China’s favour when it comes to the China-Taiwan military balance. So, Taiwan, long ago, lost, for example, air superiority.

And so that, I think, was a real wakeup call for the United States, that we had to do something to fix this. But military balance cannot be really fixed in a short period of time. So, you have ongoing dispersal of our force posture in the region, development of new technologies, new weapon systems. Most people call this the ‘Dangerous Decade’ or the decade of vulnerability for the United States and potential opportunity for China.

And so, while the United States works on strengthening the military aspect of deterrence, it is able to do in the short-run, other things, and that’s what it’s focusing on. Internationalising the cross-strait issue, so encouraging many countries around the world to signal that they have a stake in the preservation of peace and stability in the Taiwan Strait. And, as I said earlier, there’s been, I think, some significant progress. That doesn’t mean that many other countries would get involved if there was a military conflict, but the real focus is on the economic consequences that might be imposed on China if it were to use force against Taiwan. That’s a conversation, really, with – but that the US is having with all of its allies. And so, that’s – that has really, I think, driven US strategy and then, of course, they – in addition to the diplomatic efforts, there’s been, as I said, more economic efforts. But, essentially, attempt to signal to Xi Jinping that the costs would be very, very high, so, he should not move against Taiwan.

And as I’ve written about, deterrence is composed of both effective and credible threats, but also credible assurances, and it’s my view that there has been somewhat of an absence of credible assurances, really on all three sides. But if we’re focusing our discussion here on US policy, it is on making credible the messaging to Beijing that if it doesn’t attack Taiwan, that the United States won’t support an independent Taiwan. Will not restore, essentially, the US-ROC Mutual Defense Treaty that, oh, it aggregated in 1979 as a condition of normalisation.

And so, I think, you – the Chinese use the term, you know, ‘salami slicing’ or hollowing out of the One China policy. You know, there’s no doubt that the One China policy has evolved and that has been done in a very sometimes deliberate way, and other times in a haphazard way. And so, it has left many, even our allies, concerned. And you mentioned earlier the visit by Former Speaker of the House, Nancy Pelosi, to Taiwan. I think most of our allies thought at the time that was somewhat irresponsible and ended up, I think, harming Taiwan’s security. It was a short-lived boost to show that the United States supports Taiwan, but in its aftermath, has left even more military pressure on Taiwan and more economic coercion, as well, from Beijing.

So, my view is that the US needs to be more consistent and that we need to be clear about what our own redlines are. And I think that the United States does not have the intention to recognise Taiwan as an independent sovereign state, but I think there are many people in China who believe that that’s possible. Though, I should mention that there is a bill in Congress that has been put forward, that has been signed by a growing number of Congressmen, to support exactly that. So, of course, not everything that Congress or members of Congress want to do is actually implemented, but lots of people sitting in China worry a lot about the US Congress. They attribute the fact that Nancy Pelosi went to the Taiwan Travel Act that was passed so many years ago, when in fact, it’s completely unrelated. So, I sympathise with people who try to understand the role of US Congress and its impact on US policy. It’s not easy.

Ben Bland

Yeah, it’s not easy, but it’s a really important factor and I – there is often a lot of confusion in the outside world about what is government policy and what is Congress? And obviously, the two are very clearly related, right? Because, you know, the wind – Overton window of acceptable policy from The White House operates within the constraints of where Congress is going and that’s particularly the case in the US. Obviously, it’s the case in other systems, but a really important issue.

I mean, one problem we often have with Tai – with talking about Taiwan, and I was there recently myself, is that we spend a lot of time talking about the US and China and not much talking about Taiwan or the Taiwanese people. Which, to me, in the end, should be at the heart of this question, ‘cause ultimately, what we want is to preserve their ability, 24 million people to live as a free democratic society. We’ve got elections coming up in Taiwan, Presidential and Legislative in January. President Tsai Ing-wen is stepping down, ‘cause she’s reached the two term limit. I know local Taiwanese elections are often about domestic issues, but actually, cross-straits issues do tend to be quite important in the national elections.

Amanda, maybe you can just, sort of, set the scene for us about, sort of, what to expect in the elections in terms of the main candidates and the, kind of, likely impact of cross-strait relations on the Taiwanese elections.

Amanda Hsiao

Sure. So, in terms of the elections, where we are right now. So, just to say that, you know, we – it’s been a couple of months, but it’s still early days. We can still see a lot of changes by the time January rolls around. And I say this because some of the recent polling shows that in the lead is the DPP candidate, Vice President, Lai Ching-te. But what’s surprising, I think, for many right now who are watching the elections, is that in second place is the third party candidate, the Taiwan People’s Party candidate, Ko Wen-je. And then, falling behind in the polls is actually the other major party, the Koumintang, KMT’s Hou Yu-ih.

So, this is causing a little bit of hand wringing right now, I would say, in Taiwanese domestic politics. There is a lot of discussion as to what this means. Let me perhaps set that aside for now, though we can, sort of, get back into that if you’re interested and if the audience is interested. Just a bit on the role of cross-strait relations in elections. So, obviously, the candidates’ goals are to win. In order to do so, it’s simple math. They need to attract as many, sort of, median voters as possible, while also bringing along their respective bases.

And so, the question is, what do median voters want in Taiwan? And, you know, survey-after-survey show that the majority of Taiwanese want to “maintain the status quo.” Now, we just alluded to the fact that the status quo is the, sort of, evermoving target, amorphous and, sort of, undefined. But, you know, fundamentally, that does mean that the Taiwanese neither want de jure independence, nor unification.

And so, as a candidate, what you’re really trying to do here is to signal that you are trying to maintain the status quo, but how you signal that might change in a given moment and might lean in different ways, given the party that you’re from. And just a, you know, sort of, last bit on that. In national elections – like you said, in local elections this is maybe not as big of an issue, but in national elections, it certainly is. It’s the big question, you know, what should Taiwan’s relationship with China look like? How should Taiwan manage that relationship? And with that, sort of, embedded underneath, is this question of, you know, what is Taiwan’s identity, you know, vis-à-vis China, like what we just discussed previously?

Ben Bland

Thanks, Amanda, and Bonnie, sort of, looking at the elections, I mean, one person I spoke to in Taipei had put it to me that, you know, “The pressure on Taiwan is going to increase whoever wins.” So, if it’s the DPP, it’s likely to be more, sort of, hard pressure and more military exercises and live fire drills. If it’s the KMT or even Ko Wen-je, the third party candidate, maybe it’s going to be, sort of, political pressure, trying to wedge them into entering some sort of unbalanced political negotiations. But what’s your sense on, sort of, the broader, yeah, trajectory for how China’s going to react to the elections in Taiwan?

Bonnie S Glaser

So, you know, I think that the way that you described it, in some sense, is correct, but the reality is, we really don’t know. You could develop so many scenarios about how things would go. Right now, I think a candidate, if he’s elected, is going to have to accept the 1992 Consensus in order to have the communication channels restored with Beijing. But there could be some alternative that could be developed, that might be acceptable to China. I think that’s unlikely, but I wouldn’t rule it out. And that could happen under Ko Wen-je or Hou Yu-ih, but neither one has explicitly right now, at least so far, endorsed the 1992 Consensus. I think Beijing is nervous about that.

So, it seems to me you could have a period under a KMT or Taiwan People’s Party, which is where Ko Wen-je is from, as President, where maybe you have resumed channels of communication. You might have a resumption of the implementation of the agreements that were signed when Ma Ying-Jeou was President. But over time, I think China would put more pressure on that President to open up political dialogue with Beijing. I don’t believe that that would happen right out of the box, but I think that that would happen over time.

But you could have a period of greater stability. You could have a President in Taiwan that would tell Beijing, “You really need to ease off some of this military economic, diplomatic pressure on Taiwan.” But under Ma Ying-Jeou there was the diplomatic truce. You know, we’re not going back to Ma Ying-Jeou, I think we’d all probably agree with that, but, you know, you could have a period of improved relations. And if – under Lai Ching-te, it remains to be seen how the Chinese want to deal with a new DPP leader.

You know, is there any questioning inside the PRC about the effectiveness of how they have dealt with Tsai Ing-wen? I don’t really know the answer to that. I think they’ve made a lot of mistakes, as I agree with Tong Zhao that, you know, she is not the radical pro-independence President that China says that she is. But they do fear that Lai Ching-te will be in, so therefore, I think immediately, if he were elected, they probably would take a very strong stance against him and they’d want to be very clear so that he would not miscalculate. And they will be very clear toward the United States, as well.

But there are different scenarios as to how things would develop, and I would just maybe make a quick comment about something that Tong Zhao said earlier. I think he used the term ‘national mobilisation’. I would really distinguish between what is taking place in China today and what is really national mobilisation for war, which means production of huge stocks of munitions. It means going beyond insulating the economy from sanctions and trying to achieve technological self-sufficiency, to real – take – things like stronger cross-border capital controls, a freeze on foreign financial assets with China, a surge in stockpiling of emergency plies – supplies, medicine, things like that. And a preparation psychologically throughout the country for the costs of the war. The need for austerity, preparing people that there could be even tens of thousands of deaths.

So, I just want to flag, national mobilisation like that has not taken place in China.

Ben Bland

Thanks, Bonnie, and Tong, just to come back to you on this question of, you know, whether China has a creative different approach. We know that Wang Huning, who’s, you know, a Senior Communist Party official, very close to Xi Jinping, has been, sort of, tasked to look into a new formula. It seems that, you know, the CCP has dropped the one country, two systems model, which was originally intended for Taiwan and obviously, deployed to not great success in Hong Kong. Yeah, can we hope for some sort of more positive, creative framing to come out of these discussions in Beijing, that might reassure Taiwan and reassure the US as they, hopefully, also look to reassure Beijing?

Dr Tong Zhao

Well, we actually don’t know much new about China’s new Taiwan strategy. And the – and what we can tell, from publicly available information, is the new strategy emphasises the need for Beijing to take the initiative, you know, to be in control of the situation and its future development. But it has very little substantive indicators about how exactly China plans to do so, because at the practical level, again, there is, I think, a very serious lack of a realistic, peaceful, unification strategy that is coherent and looks promising. There’s no such strategy.

You know, in the best scenario, if KMT or, you know, the KMT – if, you know, if KMT and the, you know, Ko Wen-je, the People’s Party candidate, should somehow join forces and win the election and, you know, adopt a more – a modest policy, on the Chinese side, the Chinese option still appears very limited. You know, on the – you know, China, you know, at the rhetorical level, has been emphasising providing inducements to Taiwan. But when it comes to political inducements, the Chin – the room for flexibility has become smaller, right? China has actually reduced its offer to Taiwan, right? It prev – you know, before China actually allowed Taiwan – promised to allow Taiwan to maintain its own military and that offer was no longer on the table. And under China’s current domestic political environment, it’s very hard to imagine that China can allow Taiwan greater political freedom.

And on the economic side, I don’t see how much more positive economic inducements China is willing to offer. In previous, you know, periods, I think China tried economic inducements, but I think China concluded that it failed. So, I – it doesn’t look promising either. And, yeah, indeed, you hear a lot of Chinese experts making the case that perhaps we should seriously consider the uplift strategy of, you know, impoverishing Taiwan to create coercive leverage for China, and I think there is certainly growing internal struggle within Chinese expert community about it. But in either world, I don’t think there is realistic strategy and I – even, you know, in a bad scenario of KMT Presidents, I think China will continue developing military, political and economic coercive leverage. And that means we’re only kicking the can down the road.

Ben Bland

Thanks, Tong. I’m going to read out a question from Shuang Chen and maybe direct it initially to you, Amanda, but if either of the other two want to come in. So, Shuang Chen says, “Are we facing a situation that China, the US and Taiwan are unknowingly moving closer to war due to the absence of military-to-military dialogue?”

Amanda Hsiao

Thanks. So, this is actually quite relevant, given Blinken’s recent visit to China. So, what we know out of that visit was – so the visit itself was a positive first step. It was a visit that was postponed for a couple of months because of the balloon incident. But we also know, at least from the US readout, that the Chinese turned down the offer to resume military-to-military dialogue. We don’t know at what levels. It doesn’t seem like it was discussed in-depth at that level and, yeah, this, I mean, this is an issue.

I think that there – that through high level dialogue, in the form of Blinken’s visit, in the form of leader-to-leader communications, we see that Yellen is going to Beijing as well. This sort of level of dialogue is useful for clarifying intentions. Obviously, having military-to-military dialogue resumed would be even better. So, I wouldn’t, sort of, you know, paint a, sort of, we are on this step of war assessment; we’re not. There are dialogue channels, but the risks remain and if we resume, particularly the working level communication channel that used to work and, you know, allowed the operators to speak to each other on a regular basis, I think those really need to be brought back online.

Of course, a major issue here that the Chinese have pointed out is that their Defence Minister remain under US sanctions and so, this will remain an obstacle going forward.

Ben Bland

Thanks, Amanda. Bonnie?

Bonnie S Glaser

I think that mil-mil channels between the US and China are important. They may resume, they may not, but those kinds of dialogues are not going to be the main factor in deciding that we go to war or don’t go to war. This is, in my view, ultimately China’s decision, it would be deliberate. So, we’re only talking about the possibility of an accident and then, we can debate what the odds are of an accident spiralling out of control and escalating.

The United States has, essentially, said, that they want to have discussions with the Chinese about reducing risk and this is, basically, operational safety between our aircraft and our Navy ships. And I believe it’s in Chinese interests to not have an accident, as our military platforms operate in close proximity to one another, but the Chinese don’t agree. I think that the Chinese really believe that by introducing more risk, that they will induce greater caution on the part of the United States and therefore, the United States will operate maybe less frequently and more importantly, farther away from China’s periphery, and it will interfere less in issues like Taiwan.

So, we have a fundamental disagreement about the role of risk, and when I was at the Shangri-La Dialogue and had the opportunity to pose a question to General Li Shangfu about his – about the, I think it was June 3rd, if I’m not mistaken, a close call between the ships from China and the United States. The Canadian vessel that was conducting that Taiwan Strait transit with the US was not involved in the incident, but it was close by, and the Chinese ship got within 150 yards and cut off the US ship, which was a violation of the Collision Regulations, the convention to which China’s a signatory. And that’s the kind of thing you want mil-mil dialogue for.

We have a Military Maritime Consultative Agreement, MMCA, that goes back to 1998. It hasn’t met for 18 months. And so, those are the things we should be talking about, that we’re not talking about.

But I think that the risk of war is not so much related to military dialogue. I think that that is going to be a result of Xi Jinping’s calculus, how he examines the costs and the benefits of using force against Taiwan. But having very direct dialogue, particularly between our Presidents, but I think also at other levels, is necessary, I think, for the United States to make clear its intentions, but also its interest, and to eliminate misperceptions where they exist, because sometimes there are real misperceptions.

You might remember in October of 2020 we had what we called the October surprise. The Chinese thought the United States was looking for a fight in the South China Sea and our Chairman at the Joint Chiefs got on the phone and told the Chinese that that was not our intention. So, mil-mil dialogue can play a role in that regard, as well.

Ben Bland

But – so, you don’t think there’s, sort of, significant risk of accidental path to conflict, given these different risk appetites? ‘Cause if – just if we look in history of conflict, there are many conflicts started, sort of, by mistake. If you imagine something like the EP-3 incident happening again today, like, it would be quite hard to imagine, sort of, easy ways to de-escalate that sort of thing in the current climate.

Bonnie S Glaser

I think it would absolutely end up in a political crisis. It would be much harder to manage today if we had an EP-3 type incident, and whether or not that escalated would depend on the circumstances, but it’s not certain. My view is that’s one possibility, but I believe that the – neither the United States nor China want to have a war. Neither side is looking for, at this moment, a military conflict. China knows it is not ready to take on the United States, so there’s no certainty. Better to avoid an accident, but I wouldn’t assume that if an accident takes place, that both sides are going to have all-out war. That’s not my view.

Ben Bland

Thanks, Bonnie. It was somewhat reassuring. I’ve got a question from Cho Kong about the “lessons learnt by the Chinese leadership from Russia’s invasion of Ukraine,” which is – yeah, there are a lot of discussions about these analogies. I might come to you on it – Tong, on it first, but I might make it a bit more specific, knowing that you work on nuclear policy. I mean, it seems that Putin’s, kind of, nuclear threats have been quite effective at deterring, sort of, NATO responses to Russia’s invasion of Ukraine. So, do you think on that nuclear question and nuclear threat, do you think the Chinese leadership will have learned any lessons relevant for Taiwan?

Dr Tong Zhao

Well, firstly, I think the Ukraine War is actually Russia’s poor performance. Certainly, made it less likely for China to deliberately take military action in the foreseeable future. The recent Prigozhin mutiny, I think, further increased Beijing’s concern about, you know, any military action leading to internal instability. So, I think that, you know, in general, helps reduce the risk. But, you know, eventually, the Chinese concern is they – you know, I – China doesn’t see itself as promote – provoking a conflict. It attributes the increasing source of risk to the United States and Taiwan. So, that the real military risk exists when Tai – China thinks, faced with more aggressive or hostile US and Taiwan policies, China has to stunt up for its own interests. And I think we see signs of Beijing recently wanting to take the risk of leaving something to chances and so, I – that’s why I think some incidents will increasingly having the potential of escalation, especially in later years, when China becomes more militarily ready.

But when a military conflict breaks out, I don’t think China sees itself as wanting to quickly resort to esc – a threat of nuclear escalation, right? China, at least for now, is still narrowing the gap between US and China on conventional military capabilities. And China has a confidence that these trends will continue, and it will be the United States that would become – would lose its conventional superiority and would feel the pressure to use the nu – threat of nuclear escalation if the conventional war doesn’t go well for the United States.

So, I think the Chinese concern is China needs to prepare for a US that is more willing to threaten nuclear escalation and that leads to Chinese effort to develop tactical or – not tactical, but regional, or steer to arrange the nuclear policies, we see increasingly accurate DF-21, DF-26 missiles. Those, from the Chinese perspective, are for the purpose of deterring the United States from threatening nuclear escalation. I wouldn’t rule out that in extreme scenario, if China is losing badly on the conventional level in a conflict, China might take lessons from the Russian nuclear sabre-rattling during Ukraine War to try to leverage nuclear threats to achieve security and the foreign policy benefits below the nuclear threshold. But I – for now, I think China is mostly driven by the concern of US deliberate nuclear threat.

Ben Bland

And just for the last question, I might come to you, Amanda, quickly. We’ve just got two minutes left, on a question about, sort of, Taiwan’s preparations in societal terms. So, what’s Taiwan doing to, kind of, boost its own resilience?

Amanda Hsiao

Yeah, actually, it segues nicely from the last question. So, you know, I think the War in Ukraine has also had its effect on Taiwan in that it has – I think we’ve done – we’ve begun to see small steps in society, but amongst the elite, as well, of Taiwan taking its defence more seriously. The war has really, I think, I mean, underscored for many in the world, really, just the unpredictability of, we’re not supposed to use the word ‘dictator’ right now, so autocrats, but – and also, just, I think, the feasibility of war in this day and age. I think that played a big role.

So, what we’ve seen, really, is, at the grassroots level we’ve seen, sort of, civilian-led efforts to try to educate the population more about what an invasion would look like, about the sorts of, you know, first aid skills that you might need should something happen. But at the government level, we’ve seen that the Tsai administration last year pushed through the extension of mandatory conscription from four months to one year. Now, there’s debate about, you know, sort of, how valuable that is. You know, many argue that the extension of time won’t do much because of other issues, namely manpower, curriculum problems, the lack of equipment, etc., but it is a first step.

And the last thing I’ll just say on that, as a sort of, indicator of where society is on defence issues, you know, we’ve seen from all three candidates actually openly saying that they are, you know, in favour of defence reform, of increasing the military budget. So, you know, I think what used to be an issue that was seen as potentially provocative for the average Taiwanese voter, I think has begun to move towards the, sort of, middle – is starting to be seen as, sort of, normal and a more moderate position in Taiwanese society.

Ben Bland

Thanks. Thanks, Amanda and thanks to Bonnie and Tong, as well, and thanks to everyone who’s joined us today. We’re out of time, but really appreciate you joining this conversation, and if you want to know about future Asia-Pacific Programme events or other things going on at Chatham House, please look at our website. And you can follow all our experts on their websites and social media, to know more about the really fascinating things that they’re working on. So, thanks again, everyone, and see you all soon.