The Effects of China's Escalating Military Exercises Around Taiwan

The relationship between China and Taiwan has always been an unstable one, as both the People’s Republic of China and the Government of Taiwan both claim to be the legitimate Chinese government. The number of people in Taiwan who identify as only Taiwanese, not Chinese, has been steadily rising recently. Furthermore, the Election Study Center reported in June 2022 that only 1.3% of Taiwanese citizens wanted unification with China. Speaker of the House of Representatives Nancy Pelosi’s recent visit to the island nation threw the uneasy coexistence of China and Taiwan into further turmoil. Pelosi, as the second in line to the US presidency, is the highest-ranking U.S. official to visit Taiwan in the past 25 years. Many consider her visit to be unnecessarily provocative.

Rather than obstructing Pelosi’s flight, as many speculated, the People’s Liberation Army focused on conducting military exercises following Pelosi’s visit, and they have stated that the exercises will continue. The PLA have launched missiles, deployed fighters, and naval vessels around Taiwan. For the first time, missiles were fired over the island.  According to the Chinese Foreign Ministry, the exercises are being conducted as a warning to those who wish for and support Taiwanese independence. 

Conducting military exercises is a common practice for all nations. It is a way for countries to show control over certain areas at certain geopolitically strategic times. For example, the United States continually conducts naval exercises with allies around Hawaii and Japan. Not only was the recent RIMPAC exercise a show of America’s military strength, but it was also a show of its ability to cooperate with its allies. This round of military exercises by the PLA is different from previous military exercises near and around Taiwan. Previously, Beijing was deemed militarily incapable of enforcing its claim that Taiwan is part of its own territory. However, this time, these drills were closer than ever before, and the PLA was able to demonstrate that China could cut off Taiwan’s ports, attack its military installations, and effectively seal off Taiwan.

These military exercises have strained commercial naval pathways around Taiwan. Commercial flights and civilian naval vessels have been warned to stay out of the area where the drills are taking place, in order to avoid potential conflict. The Taiwan Strait is of high strategic significance, not only for Beijing and Taiwan. According to data from Bloomberg, nearly half of the world’s container ships passed through the Taiwan Strait. It is, in particular, a key channel by which Japan and Korea are connected to global markets. Disruptions to these routes are expected to exacerbate price surges due to logistical bottlenecks and transport cost hikes precipitated by the pandemic. Even when the exercises are over and travel is resumed, it is likely that companies will be wary for their goods to travel through these routes, potentially forcing flights and ships to either be postponed, canceled, or be diverted through secondary, slower channels. Companies have all had different reactions to the exercises being conducted by China, some are navigating through the Taiwan strait, and others are not going anywhere near it.

Aside from the escalation of supply chain risks, Pelosi’s visit to Taiwan has significantly escalated frictions between China and the US. The ‘Taiwan Relations Act’ states that the United States must provide Taiwan with the capabilities to defend itself. While the State Department has always been vague about whether or not they will defend Taiwan if invaded, this bill ensures that the United States and Taiwan are entangled if conflict arises. China strongly prefers peaceful reunification with Taiwan, and the US doesn’t want a war either. According to retired Senior Colonel Zhou Bo, now a senior fellow of the Centre for International Security and Strategy at Tsinghua University, the US-China relationship over the past few years has been premised on creating a “litany of technical rules aiming to avoid an accident, say, in the South China Sea”. However, if tensions continue to rise and military exercises get closer and closer, if one side makes a small mistake, and improperly reacts to a military move, actual military conflict may occur.

There is a possibility, however slight, that PRC may expand its drills elsewhere, towards South Korea or Japan, if tensions over Taiwan escalate. The PLA has always conducted tests in the East China Sea and Yellow Sea, near South Korea and Japan. After the United States conducted training naval exercises with foreign nations near Taiwan in early 2022, the PLA showcased its own military strength in the East China Sea and Yellow Sea (next to the Korean Peninsula) at the same time. China could conduct more in-depth tests in these areas, slowly moving closer to China’s maritime border and potentially out of it. If drills are expanded elsewhere as a show of force, this combined with North Korea’s missile tests, which have sometimes gone extremely close to neighboring nations, would only make the likelihood of an accident occurring higher. North Korean tests have previously been launched into the Sea of Japan, falling far from Japan and South Korea’s maritime borders. However, some tests have landed just outside of Japan’s exclusive economic zone and some have even fallen in the zone. The likelihood of drills being expanded elsewhere is low, however if these increased and more intense military drills work when putting pressure on Taiwan, the PRC may use the same strategy of deploying more vehicles, live fire exercises, and shutting down shipping routes when it is met with international dissent.