A Chinese Economic Blockade of Taiwan Would Fail or Launch a War


Last month, China launched one of the largest military exercises in recent memory, nearly completely encircling Taiwan with dozens of warships and fighter jets. This exercise, Joint Sword 2024A, was in response to the inauguration of Taiwanese President Lai Ching-te. Its name suggests it could be merely the first of many such threatening exercises this year, prompting renewed concerns about the threat of a Chinese blockade to Taiwan’s de facto sovereignty. In recent months, multiple analysts have argued that the main threat facing Taiwan is not the possibility of an overwhelming seaborne invasion of the island, but that of gray zone coercion campaigns or a blockade forcing Taiwan to capitulate to Chinese aggression.

There are indications that this line of thinking reflects the views of Taiwanese officials themselves, such as when Taiwan’s Deputy Foreign Minister Roy Chun Lee suggested last year that China is more likely to execute an economic blockade of Taiwan than it is to proceed with a direct military attack on the island nation. In his telling, Taiwan is operating under the assumption that a blockade follows more directly from China’s desire to “[win] the war without an actual fight,” prompting Taipei to work with its allies to prepare for an economic blockade. On my recent trip to Taiwan, I found that this was the leading view in Taipei’s national security community.

However, having spent years conducting extensive wargames with senior U.S. and allied government officials on the various cross-strait threat scenarios, I am confident, as I write in my recently released book World on the Brink, that an economic blockade in lieu of a full-scale military invasion has a low probability of success and, therefore, Beijing is unlikely to pursue such an operation and, indeed, hasn’t attempted it yet even though it has had the capability to do so for decades. In fact, an attempted economic blockade would almost inevitably lead to war or a humiliating defeat by China. Therefore, if Taipei is pinning its hopes for survival on Beijing seeking options short of war, it is making a grave error.



China’s Options to Force Unification without War

If China could force Taiwan to surrender through some combination of gray zone warfare, a coordinated propaganda campaign, and a far-reaching “re-education” plan, it would no doubt take that path. But such an approach is unlikely to succeed. Despite China’s extensive influence operations in Taiwan, its recruitment of agents, and the economic and military pressure it has so far placed on the island, the Taiwanese people overwhelmingly reject unification, with just 1.2 percent of Taiwanese citizens desiring unification as soon as possible and only 7 percent wanting it at all. That country’s sense of national pride, history, and desire for self-determination have grown dramatically on the island as it transitioned to a democratic system of government in the 1990s. Chinese officials themselves seem to recognize this reality, as Defense Minister Dong Jun bitterly complained at the Shangri-La Dialogue this month that the prospect of “peaceful reunification …  is increasingly being eroded by separatists for Taiwan independence and foreign forces.”

An economic blockade designed to strangle Taiwan’s domestic economy would seem to present China with a viable alternative, avoiding the costs, contingency, and risks of all-out war. A potential Chinese blockade of the island could take many forms. Beijing could simply declare a prohibition to navigation in a defined maritime zone around Taiwan and announce that any vessel in the area will be targeted, much as Russia did in 2022 in the Black Sea along the Ukrainian coast. In such circumstances, international commercial insurers and carriers would largely cease operations to and from Taiwan. China could also take a more flexible and selective approach and use its navy to establish a partial or full maritime quarantine of the island, demanding inspections of any vessel entering or leaving Taiwan’s ports. Either way, Taipei understandably fears that such actions would cripple its economy and present a mortal threat to the de facto independence of the island. But an economic blockade would run into unavoidable stumbling blocks, which I discuss below.

A Self-Defeating Blockade

There are key reasons a Chinese economic blockade would fail: It would rebound on China’s own economy, most likely escalate into a full-scale war, and entail serious geopolitical risk. Let me address each in turn.

An economic blockade of Taiwan would have a deleterious effect on China’s own economy, which relies on Taiwan for imports of critical technologies like advanced semiconductors. China is further away than ever from being able to develop these technologies itself, thanks in part to new export control measures put in place by the United States last year. In 2022, Taiwan manufactured over 60 percent of the world’s semiconductors and over 70 percent of advanced chips. These are essential for building all modern electronics — from weapons platforms to cars and home appliances to power management for computers and phones. Those chips, due to their small size, leave Taiwan largely on civilian airplanes, not via maritime shipping.

The first response from Taiwan to any sort of quarantine or partial blockade of the island would likely be to stop shipment of such chips to China, while continuing to supply the rest of the world. Recent economic modeling published by Bloomberg Economics suggests that China’s gross domestic product would drop by as much as 9 percent in year one of the blockade. If China institutes a full blockade — including threatening to shoot down civilian airliners transporting semiconductors in their cargo holds and risking an MH17-style condemnation from the rest of the world — the world’s gross domestic product would contract by 5 percent.

Of course, that does not consider a potential Taiwanese counter-blockade of China. The top five busiest ports in China — Shanghai, Ningbo-Zhoushan, Shenzhen, Qingdao, and Guangzhou — are all within a thousand miles of Taiwan and within the range of the Taiwanese indigenously developed Ching Tien supersonic cruise missile. In the last six months, we have witnessed how the Houthis in Yemen, using a relatively small missile arsenal supplied by Iran, have been able to virtually shut down commercial maritime traffic in the Red Sea despite the best efforts of the United States and European allies to counter it. Even without direct U.S. military support, Taiwan would have much greater capabilities to threaten vessels leaving Chinese ports, the mere warning of which could cause international insurers and shippers to seize operations in the area.

Thus, any attempted blockade of Taiwan could have devastating economic effects on China and, depending on how completely it’s implemented, the rest of the world. Both domestic and international pressure on the Chinese leadership to abandon it will be immense and will only grow with time and will get worse the longer the disruption in the supply chains goes on.

Second, an economic blockade is likely to escalate into a full-scale military engagement, if not an all-out war, due to the risk of Taiwanese retaliation and a potential for U.S. and Japanese military involvement to thwart the blockade or even impose further costs on China backed by military force. In the event of such a challenge, China could end up fighting a potentially costly naval and air war without any prospect of actually achieving its primary objective of conquering the island. As such, if China is not ready to launch a full-scale invasion with a blockade being merely a prelude to such an attack, it could suffer a devastating and humiliating defeat.

Third, a blockade would entail serious geopolitical risks. At a minimum, a blockade would likely force a reevaluation of the international status quo regarding Taiwan’s political status, opening the door for Taiwan and its supporters to take more dramatic steps to challenge it — even as dramatic a step as formally declaring independence. Indeed, one of the options that the United States and allies might consider undertaking is threatening a recognition of Taiwan’s independence and the abandonment of their long-standing One China Policy if China does not terminate its blockade of the island. After all, the key to Washington’s 50-year policy has been insistence on preservation of the status quo, which means no unification by force or coercion from China and no declaration of independence by Taipei. The United States, along with strong allies, would have a strong argument that a Chinese blockade of Taiwan is overturning this long-standing state of affairs and would no longer obligate it to oppose Taiwanese independence. Indeed, in order to further enhance deterrence, it might be prudent for the United States to make such a threat explicit and tell Beijing now that any attempt to blockade or invade Taiwan would immediately result in an abandonment of the One China Policy and recognition of Taiwan’s independence.

Can Taiwan Survive a Blockade?

Taiwan’s economy and its people would certainly suffer enormously as a consequence of a Chinese blockade, but many underappreciate the resources that the island has to survive it.

Taiwan imports approximately $21 billion of foodstuffs every year, particularly meat products from the United States. But it also has a robust agricultural sector and produces vast quantities of rice, vegetables, and fruit, and it has an abundance of fish in its rivers and seas. Thus, even if China were to institute an illegal and immoral blockade of food imports to the island, the Taiwanese people would be able to sustain themselves.

Taiwan is heavily reliant on energy imports, with up to 98 percent of its energy mix consisting of coal, crude oil, and liquified natural gas imports. While the energy situation would surely be dire in case of a blockade, Taiwan, unlike Ukraine, benefits from a tropical and agreeable climate in which energy shortages will not result in people dying of cold weather. Taiwan also has native energy production resources, including a rapidly growing solar power industry, offshore wind farms, and hydro power. It also has two currently operational nuclear reactors (although the ruling party has expressed a desire to phase them out next year) and four other reactors that are in the process of being decommissioned but that could potentially be brought back online if the energy situation gets too dire. With limited energy, the Taiwanese people, not to mention their economy, will undoubtedly suffer greatly, but it will not become an existential matter and some, albeit far from perfect, mitigating options would remain available to them.

Exports account for over 60 percent of Taiwan’s gross domestic product, and a partial or full blockade of them would no doubt be devastating for the Taiwanese economy, made even worse by energy shortages. However, there is no modern historical precedent of countries or even cities surrendering to coercion purely due to economic devastation. Whether one looks at Russia’s systematic attempts to destroy the Ukrainian economy in its latest invasion of that country or American sanctions on Iraq, Iran, and North Korea, none of that pressure caused those countries to overturn their policies, much less surrender. In fact, when one looks at the modern history of blockades, there is little indication that they result in capitulation by the population under siege. Nazi Germany famously spent two and a half years executing a horrifically barbaric blockade of Leningrad in World War II, which resulted in the deaths and starvation of over a million civilians, and yet the city did not surrender. More recently, the Bosnian Serb nationalists placed the city of Sarajevo under a nearly four-year siege in the 1990s, resulting in over 65,000 casualties, but ultimately withdrew without achieving their objectives. China simply does not have any historic examples to look for in recent memory that could convince it that an economic blockade of Taiwan might result in capitulation of that government.

Some analysts, such as Isaac Kardon and Jennifer Kavanagh, argue that while a “gray-zone influence campaign will not itself force Taiwan’s formal unification with the mainland,” it could prevent “the island from achieving formal independence.” This, however, not only contradicts Chinese General Secretary Xi Jinping’s and the Chinese Communist Party’s stated goal of formal unification; it also doesn’t reflect the reality of the United States and its allies being opposed to Taiwan’s formal independence in favor of preserving the status quo and of Taipei’s own position that it doesn’t need to declare formal independence, as the country is already independent. Thus, it’s not clear how gray zone influence and other coercion campaigns would either achieve China’s goals or thwart those of America and Taiwan.

In another exercise, American Enterprise Institute researchers analyzed a course of action that would include an influence campaign to reshape the “Taiwanese political environment such that resistance to the [People’s Republic of China’s] aims is insignificant” and to further isolate Taiwan by “degrading its ties with the outside world and neutralizing foreign efforts to deter [Chinese] aggression toward Taiwan” and “establishing a new cross-Strait legal framework [that] involves securing [Taipei’s] agreement to an arrangement by which the [People’s Republic of China] can eventually annex Taiwan.” The main challenge with this scenario is that the trend lines for China are going exactly the opposite way on all of these fronts. The Taiwanese population has grown considerably more opposed to unification with no prospect of that changing in the near future, as even the Chinese leadership is now acknowledging. The analysts also write about the need for China to “deter U.S. engagement with Taiwanese leaders.” Yet the official U.S. engagement with Taiwan is at the highest level it has been since the withdrawal of recognition of Taiwan in 1979, with a near-constant stream of U.S. congressional delegations to Taipei and deeper engagements between the U.S. and Taiwanese militaries. And that trajectory seems to be only heading one way — more engagement, not less. Finally, the scenario contends that China “must see through the signing of a concessionary peace agreement and the ratification of a binding cross-Strait decision-making body by elements of the [Republic of China] government viewed as legitimate by the Taiwanese people.” Once again, it is nearly impossible to see a scenario in which this can plausibly take place in the foreseeable future given the independence and status quo preference of the Taiwanese people and the historical precedent of even a proposed services trade agreement between China and Taiwan, which triggered a massive backlash and launched the Sunflower student movement in 2014 that helped to bring the hawkish Democratic Progressive Party into power two years later. It is hard to see given today’s political realities how a “peace agreement” that results in the complete capitulation of Taiwan to China could ever pass the Taiwanese legislature, much less be accepted as legitimate by the Taiwanese people.

Philip Zelikow proposes a scenario of “indirect control” where “China implements air and sea border controls to make Taiwan a self-governing administrative region of China.” He deems it the “most likely” option and one that “is doable now, with little warning.” Zelikow suggests that this option is different from a blockade, due to the selective restrictions being applied through customs and immigration controls. However, this scenario suffers from the same problems as the ones above. If this is such an easy alternative to war to achieve all of Xi’s dreams and desires with regard to unification with Taiwan, why hasn’t China yet attempted to do so? It also ignores the fact that Taiwan, along with the United States, has numerous economic, diplomatic, and military options for retaliation and that such coercion, even if at its most extreme — the full-on economic blockade — is not likely to result in Taiwan’s capitulation for all the reasons I outlined above.

The Costs of Failure

It’s quite likely that a Chinese economic blockade ultimately fails, either because it is broken by Taiwan and its partners or because China is unable to sustain it either politically or economically. That likelihood only grows if the United States and its allies were to intervene to break the blockade, either by running the blockade with submarines and surface ships or by airlifting supplies and perhaps even military assets to the island. In the latter case, China would face a choice between combat with U.S. forces, which could escalate into a global war, or backing down and accepting a humiliating political and military defeat.

The dim prospects of a “blockade only” strategy — one that is not a rolling start to an invasion — become even clearer when you compare the risks of this situation to the dangers to Taiwan associated with its most likely alternative — namely, a full mobilization of China’s naval, air, and ground forces against Taiwan over the course of several months.

If China were to mobilize its invasion forces and only then launch a blockade coinciding with an ultimatum of surrender to Taiwan, it could then realistically threaten a full-scale invasion if the blockade were to be challenged. That mobilization step would also give China time to determine whether the United States, Japan, or other allies were planning to intervene on Taiwan’s behalf by affording Beijing the opportunity to observe any public statements, preparations, and deployments that those countries were undertaking to determine their capability and intent.

In sum, there is a scenario in which Taiwan could face an economic blockade by China, but such a blockade would only make strategic sense if China had already mobilized its military for a full-scale invasion in anticipation of the need to escalate or at least have the blockade buttressed by the threat of force. In either case, Taiwan arrives at practically the same place: staring down the full military might of the People’s Republic of China. China could, of course, miscalculate and launch a blockade without the backup of a threat of invasion — although it’s puzzling why it hasn’t done so yet if it truly believed it was likely to result in a victory without a fight — but doing so would very likely result in a strategic defeat. Even if an economic blockade is theoretically on the table, it is not the most likely or the direst outcome that Taiwan currently faces. That ultimate risk belongs to the threat of military invasion — a threat that, unfortunately, Taiwan still has a long way to go to prepare for. If Taiwan proceeds to believe that a blockade is more likely than a military assault, or that a blockade would be the end of the matter, it is making a dangerous miscalculation.



Dmitri Alperovitch is an author of World on the Brink: How America Can Beat China in the Race for the Twenty-First Century, a national bestseller. He is the co-founder and chairman of Silverado Policy Accelerator, a geopolitics and national security think tank, and the host of Silverado’s Geopolitics Decanted podcast.

Image: NASA via Wikimedia Commons