A Post-Election Risk Assessment for the Taiwan Strait
On Jan. 13, Taiwan will elect a new government whose decision-making will play an important role in shaping cross-strait dynamics for the next four years. Final polls in early January show the Democratic Progressive Party candidate Lai Ching-te as the favorite, marginally ahead of the Kuomintang candidate Hou You-yi, followed by the Taiwan People’s Party’s Ko Wen-je.
A Lai win will produce the most tensions in the near term because China sees this scenario as most threatening to its interests. In response, Beijing will likely increase its pressures on Taiwan even further, through a variety of coercive military and economic tools. A second milestone will come on May 20, 2024, when Taiwan’s new leader will give his inauguration speech. If Lai wins, he will not say that China and Taiwan belong to one political entity or “one China” as Beijing demands. In response, Beijing may react with a show of military strength. The level of escalation will depend on Beijing’s calculations, which will in part reflect the interactions and signals sent between Washington, Beijing, and Taipei from election day to inauguration.
Cross-strait tensions may also emerge following a Hou victory, even though this is Beijing’s preferred scenario. In this case, tensions may only appear post-2024, when Beijing may seek more political accommodation or economic integration than the Taiwanese population is willing to accept.
A military conflict in the Taiwan Strait remains unlikely in the near term but careful management is required from all sides to mitigate the destabilizing potential of this transitional period. Beijing should move away from its coercive approach, recognizing that this puts its goal of unification further out of reach. However if, as is all too likely, Beijing instead escalates military pressures, possibly through a large exercise, it should at the very least communicate this ahead of time. Washington, in turn, should continue to signal to Beijing that it does not support Taiwan’s formal independence. Taipei should signal that it seeks to maintain the status quo. For Lai, this means indicating a desire to restart cross-strait dialogue and repeating current president Tsai Ing-wen’s 2016 middle-ground characterization of the cross-strait relationship.
Setting the Scene
The next president of Taiwan will be charged with navigating a precarious moment in the island’s relationship with Beijing. Preserving the status quo, in which Taiwan enjoys de facto autonomy while the two sides of the strait work to resolve Taiwan’s status peacefully, has become more difficult. The Chinese government has grown more intent on showing progress toward unification and is no longer content with merely deterring Taiwan’s formal independence (which remains impossible for the foreseeable future). To this end, Beijing has embraced a suite of coercive means to try to steer Taiwan in the direction that it prefers, even as the Taiwanese people remain steadfastly uninterested in unification. Washington and Taipei have pushed back by deepening their political relationship, accelerating Taiwan’s defense reforms, and seeking increased international backing.
This action-reaction spiral has triggered anxieties on all sides. For Beijing, it further deepens fears about permanently losing Taiwan. For Washington and Taipei, it deepens fears about a potential Chinese invasion.
All three parties nevertheless remain mutually interested in avoiding a direct military conflict in the near term. The shared desire to lower the temperature was evident in the choreography around the November 2023 summit between Xi Jinping and Joe Biden. In the days leading up to and following the meeting, the chairman of the U.S. Joint Chiefs of Staff, Taiwan’s National Security Council head, and Taiwan’s current president Tsai all expressed doubts over the prospect of a Chinese military assault on Taiwan in the near term. During the meeting itself, Xi reportedly said that there are no plans to take military action in 2027 or 2035, which American officials felt were possible years when China could launch an attack. A U.S. official said discussions had “matured a little bit.”
Importantly, the summit has led to the resumption of dialogue between the two militaries, which will be useful for communicating intentions in the year to come. Beyond Taiwan, the decision to hold the Xi-Biden summit was itself an indication of the other pressing priorities that the two major powers are dealing with. Beijing faces myriad economic challenges at home. Youth unemployment reached a 21.3 percent high in June 2023 while consumer confidence remains at historic lows. The property sector has yet to revive and foreign investment is leaving the country. The Biden administration faces not only its own elections but also the Russia-Ukraine and Israel-Hamas conflicts. These other priorities likely reduce the appetite for uncurbed escalation in the U.S.-Chinese relationship, even as Taiwan remains a key point of contention and focus for both.
The campaign platforms of Taiwan’s presidential candidates reveal their views on cross-strait relations, but uncertainties over how they will govern remain. Two key measures of an effective cross-strait strategy will be the next president’s ability to keep a lid on tensions with Beijing while taking much-needed steps to continue strengthening Taiwan’s defense.
Lai pledges to continue the policies of Tsai, proposing to secure Taiwan by deepening its ties with a wide range of international actors and by shoring up the island’s defense. But in December Lai said that relying on Taiwan’s constitution to protect the island in cross-strait relations would court “disaster.” This diverges from Tsai’s formulation — that cross-strait affairs should be conducted in accordance with the constitution and other relevant laws. Because Taiwan’s constitution contains references to the idea that the two sides belong to “one China,” this formulation has served as a conveniently ambiguous framework to partially meet Beijing’s demands without being explicit. To manage the fallout Tsai subsequently repeated her formulation and said that Lai concurs. Nevertheless, questions remain over Lai’s cross-strait views and discipline when speaking publicly on the matter.
Hou’s policy is centered on engaging Beijing while also pushing Taiwan’s defense reform forward. But Hou says that the defense budget and the length of compulsory military service under his administration would be conditional on the level of threat China poses, raising questions over how that would be defined and balanced with his party’s more conciliatory approach to Beijing.
Regardless of presidential campaign promises, no one party is likely to win a majority in Taiwan’s 113-seat legislature. Whoever wins the presidency, parts of their agenda will have to undergo negotiation with the other two parties before becoming policy. For example, under a Lai administration, the Kuomintang and Taiwan People’s Party would likely have a voice in shaping Taipei’s posture on defense spending and on agreements with China or the United States.
Uncertainties also surround the November U.S. presidential elections. Aside from the question of who will win, the campaign season will limit the options that the Biden administration has in response to cross-strait developments. The political cost of appearing weak in response to any moves that Beijing may adopt will rise, incentivizing shows of American resolve. Gestures that are meant to reassure Beijing that Washington is not fanning the flames of Taiwan independence will be harder to offer, as they could be painted as kowtowing to the Chinese Communist Party. Anti-China/pro-Taiwan posturing by Congress is likely to continue, for instance in the form of additional draft bills and resolutions whose content may contradict longstanding U.S. cross-strait policies. Few of these bills actually become law, but they contribute to Beijing’s distrust of American intentions.
Beijing’s Unyielding Position and Approach
China’s overall strategy and approach to Taiwan will stay consistent but tactics will vary according to what happens in Taipei. Beijing’s long-term strategy will continue to rest on the conviction that its growing economic and military power relative to Taiwan will eventually draw the island toward unification and deter independence, what Chinese scholar Xin Qiang calls a “self-reliant” approach. This understanding has led Beijing to adopt heavy-handed tactics despite the anti-China sentiment this stirs in Taiwan. It has also led Beijing to discount political changes on the island, in its belief that unification is inevitable. As China’s 2022 Taiwan white paper put it, “China’s development and progress are a key factor determining the course of cross-strait relations … No matter which political party or group is in power in Taiwan it cannot alter … the trend towards national reunification.”
If Hou wins, Beijing is guaranteed a variant of the formulation it prefers — the 1992 consensus, which facilitated cross-strait cooperation under the last Kuomintang administration. This is an ambiguous verbal understanding reached in 1992 between the then Kuomintang government and Beijing that only “one China” exists in the world. With a Hou government, China may temporarily ease some military and economic pressures to emphasize the point that adherence to the mainland’s line will produce benefits. However, Beijing is unlikely to revert to a carrots-only approach — it will likely maintain some pressures. Since 2014, when popular backlash in Taiwan emerged in response to efforts by the 2008–2016 Ma Ying-jeou administration to push forward economic integration with the mainland, Beijing’s expectations of what a Kuomintang government can deliver on cross-strait ties have been lowered. After an initial honeymoon phase, Beijing may seek more progress in the relationship — in the form of economic or other agreements — that a Hou administration will have difficulty selling to Taiwanese voters, renewing tensions once again.
On the other hand, Beijing will almost surely increase pressures in response to a Lai win and will engage in a “struggle” with what it believes are Lai’s pro-independence leanings and the inclination of external powers to support Taiwan’s pro-independence forces. In the lead up to and following Tsai’s election in January 2016, Beijing made clear its expectation that she uphold the 1992 consensus as the foundation for cross-strait relations. In March 2016, it restored diplomatic relations with Gambia, thereby marking the end of China’s diplomatic truce with Taipei under the Ma administration when Beijing stopped poaching Taiwan’s few diplomatic allies. When Tsai offered a formulation that fell short of Beijing’s demands in her inauguration speech, Beijing cut off dialogue in favor of economic punishments.
In line with his party’s position, Lai has said that accepting the 1992 consensus would be tantamount to giving up on Taiwanese sovereignty. For its part, China has already condemned Lai’s cross-strait position and labeled him a “golden grandchild of independence.” Lai’s statement in 2017 that he is a “political worker who advocates Taiwan’s independence” contributes to Beijing’s suspicions, as does the fact that his base in the party is inclined to emphasize Taiwan’s sovereignty.
A Lai win would be the first time that a Taiwanese political party has stayed in power for three consecutive terms. This may create impetus for Beijing to make a statement of strength, to try to undercut what it sees as political momentum for Taiwan moving further away from the mainland. In intensifying pressure, Beijing’s first goal would be to push Lai to move as close as possible to Beijing’s preferred characterization of the cross-strait relationship in his inauguration speech. Another goal would be to heighten the sense of risk for the Taiwanese population and for Washington. Importantly, Beijing hopes to compel Washington’s help in reining a Lai administration in. China believes that shows of military force can be effective in getting Washington to take Beijing’s concerns over Taiwan more seriously, a lesson learned during the 1995–1996 Taiwan Strait Crisis. Finally, Beijing would want to show its domestic audience that it is retaining the initiative on the cross-strait situation.
The tools of coercion that Beijing has at its disposal are numerous and varied. At the escalatory end of the spectrum, Beijing could choose to conduct a large-scale military exercise. Following then Speaker of the House Nancy Pelosi’s visit to Taiwan in August 2022, China’s military activities around Taiwan have steadily increased in frequency, variety, and proximity to the island. Beijing could further increase the number of aerial crossings of the median line — a tacitly agreed divide separating the two militaries in the Taiwan Strait for decades. More discreet tactics could include crossings that involve more time spent on Taiwan’s side of the line or that take place more frequently in narrower parts of the strait where Taiwan would have less time to respond. Circumnavigation of the island by Chinese military drones and pressures at the border of Taiwan’s contiguous zone — 24 nautical miles off its coast — could become more frequent. The Chinese military approached this sensitive area at least four times in November 2023, as did its marine research ships.
China could also challenge Taiwan’s sovereignty through non-military means. A Chinese commercial tugboat entered Taiwan’s territorial waters in November 2023 and in January 2024 Chinese balloons began to fly over the island proper. In April 2023 China conducted a “special patrol and inspection operation” during which Chinese law enforcement vessels patrolled the Taiwan Strait but did not board any vessels. A serious but less likely challenge to Taiwan’s sovereignty would be if Chinese law enforcement vessels began to board and inspect vessels on Taiwan’s side of the median line, claiming that they fall under China’s jurisdiction. The cost of such a move — renewed attention to the global implications of instability in the Taiwan Strait — likely outweigh the benefits.
Economically, China has already threatened to impose punitive measures. In December 2023 China announced it would resume tariffs on 12 imports from Taiwan designated to be tariff-free under the bilateral Economic Cooperation Framework Agreement. Beijing could resume tariffs on additional items going forward. As it has in the past, Beijing could ban imports of individual agricultural and fishery products from regions that tend to be Democratic Progressive Party strongholds. It could also implement more sweeping bans, such as when it stopped the import of more than 2,000 of 3,200 food products from Taiwan after Pelosi’s visit.
An increase in Beijing’s coercive measures does not portend an invasion. Rather, the goal would be to put pressure on Taipei by creating new headaches for the government and the military. Beijing would also aim to deepen divisions and undermine confidence in the U.S. and Taiwanese governments within Taiwanese society. That said, an increase in military activities would inevitably increase the risk of an accident or unintended collision.
What Washington and Taipei Say and Do Matter
Even if a military assault is not around the corner, careful management of this transition period is important for ensuring that tensions do not spiral out of control. In the case of a Lai victory, how China calibrates its pressures on Taiwan will depend in part on what Taipei and Washington say and do. In contrast to the military exercises it conducted following Pelosi’s visit to Taiwan, for example, Beijing’s exercise after Tsai’s meeting with Kevin McCarthy — while significant — was more limited in duration and intensity. This was likely in response to Washington and Taipei’s efforts to de-escalate.
The assurances already conveyed during the November Xi-Biden summit should mitigate some of Beijing’s worst fears about a potential Lai presidency. Biden took the opportunity to directly tell Xi that America’s “one China” policy will not change, meaning that Washington will not support Taiwan independence. The check that a divided Taiwanese government would likely impose on a new Democratic Progressive Party executive should also reassure Beijing.
If Lai wins, an excessive response immediately after the election could work against Beijing’s interests. This would make it less likely for a Lai administration to adopt a moderate position on inauguration day and ruin the recently improved tone in U.S.-Chinese relations. As a result, it is possible China will initially increase pressures in relatively discreet ways and save a more forceful and overt response for the May 20 inauguration. Beijing’s response will depend partly on what Lai says that day, as well as U.S.-Chinese-Taiwanese interactions between Jan. 13 and May 20. This four-month period will be critical for all three parties to communicate intentions, concerns, and expectations.
Ideally, Beijing would shift to a cross-strait approach that is more responsive to Taiwanese sentiment, taking into account the way in which its coercion undercuts its goal of unification. But such a shift is unlikely, placing much of the onus of maintaining stability and discipline on Taipei and Washington. At a minimum, Beijing should communicate its intentions ahead of time — including around a potential military exercise — to inject a degree of predictability into events, as it did before Pelosi’s visit.
A potential President Lai has every interest in beginning his term with the moderation that he campaigned on. For one, he will need to reassure the significant part of the population that did not vote for him that he will be a steady hand at the wheel. Second, for his administration’s cross-strait and foreign policy approach to succeed, he will need to win Washington’s trust by dispelling questions over whether he will pursue a more radical cross-strait approach. To this end, Lai, if elected, should make clear through backchannels with Beijing that he is interested in finding a path to resuming cross-strait dialogue and cooperation that has been frozen since 2016. While he cannot politically endorse the 1992 consensus, he should, like Tsai, call in his inauguration speech for cross-strait affairs to be conducted in accordance with Taiwan’s constitution. As the constitution has “one China” elements, this would meet Beijing’s political conditions part way without abandoning Lai’s party’s position.
Washington for its part should make explicit its continued adherence to its “one China” policy and lack of support Taiwan’s independence. The Biden administration should seek to maintain open lines of communication with Beijing on Taiwan. Even if an election year makes public statements on the issue too risky for Biden, private assurances can still be conveyed. The administration should also do what it can to coordinate with members of Congress — Republicans will be difficult to influence but working with the Democrats remains important — to minimize the risk that the legislative branch undercuts efforts to signal continuity on cross-strait policies. This is a tall ask in a politically charged year, but it is important that Washington’s stance remain steady amidst the post-election political changes in Taipei.
Amanda Hsiao is International Crisis Group’s senior analyst on China, based out of Taipei.