The Future of Taiwan: Peace or War
In 2022, Nancy Pelosi's visit to Taiwan and the PRC's subsequent live-fire drills around the island aroused international worries of a heightened possibility of war in the Taiwan Strait. Now, a new event threatens to destabilise the region further: the January 13th 2024 Taiwanese presidential election. How will the election influence relations between Taiwan and the PRC, and how could the policies of Taiwan's new presidential administration and the PRC either increase or weaken the prospects of a war across the Straits?
The January 2024 Election
The upcoming 2024 presidential elections will play a significant role in determining Taiwan's relationship with the mainland. While the DPP maintains its pro-independence stance, the main opposition Kuomintang party (KMT) is accentuating the need for peace and security through a more delicate approach to China. The KMT holds a more nuanced approach, in favour of de facto independence, while maintaining the status quo approach that there is only one China, with different parties allowed their own interpretations. But the ambiguities of this policy, devised in the 1992 Consensus between Beijing and Taipei, are now under pressure as political ties in the region sour. On November 15th, 2023, The KMT had managed to secure a Beijing-friendly coalition with another opposition party, the Taiwan People Party (TPP), which sparked predictions of a KMT-led coalition victory. However, by the end of the month, the coalition collapsed over irreconcilable political differences and disputes surrounding candidate nomination, with polls thereafter showing the DPP in the lead.
Polls since the Beijing-friendly coalition collapse in late November have placed the DPP candidate Lai Ching-te, known for his harsher pro-independence stance ahead in the presidential race. Yet, any military event in the Cross-Straits in the upcoming days could shift voting preferences: last March, a survey by Brookings Institute revealed that the majority of Taiwanese respondents believe that Pelosi’s visit negatively impacted the island’s security, and were worried about potential consequences associated with a closer relationship with the US. Hence, voters appeared to be more inclined to elect a party that would preserve the status quo, such as the KMT. Given Lai’s popularity in later months, the People’s Liberation Army (PLA) has been increasing its air and naval presence in the Taiwan strait, often perceived as Beijing’s method of communicating its disapproval. While we do not know what polls are currently predicting, since Taiwan does not allow the publication of new opinion polls 10 days before an election, an escalation in such developments or election interference in the upcoming days could push voters back to a more moderate, less escalatory, stance.
If the KMT is elected, it is highly likely that tensions with China will decrease in the short to medium term. The former KMT president, Ma Ying-jeou, visited the mainland in late March 2023 and emphasised the importance of revitalising his “1992 Consensus” policy, which had been a pivotal aspect during his presidency of Taiwan from 2008 to 2016. Ma’s presidency saw a rapprochement between Taiwan and the PRC, with numerous agreements between both parties reached during this period increasing Cross-Strait cooperation. While there are several factions within the KMT, Ma’s stance remains the most popular, hinting that a victorious KMT would likely pursue Ma’s “1992 Consensus policy” and reign in Cross-Strait tensions.
Relations between Taiwan and the Mainland will likely continue down a tense trajectory if the DPP wins. Under Tsai Ing Wen, the DPP has been cautious when discussing the de-jure and de-facto independence of the island. Tsai has consistently applied a strategic rhetoric that Taiwan is already independent, signalling to the PRC that since it has already achieved de-facto sovereignty, it does not intend to provoke the PRC with any further efforts to pursue Taiwanese independence. While DPP candidate Lai Ching-te has increasingly begun to align with Tsai’s strategic rhetoric in recent months, he has a strong track record as a pro-de-jure independence campaigner. The PRC continues to see him as a separatist and, consequently, a threat to national reunification.
Could a DPP victory lead to conflict in the Cross-Straits?
In recent months, the PRC has stepped up its aggressive rhetoric in the Cross-Straits. Xi has made it clear that the CCP is closely monitoring the Taiwan elections. In a meeting with US President Joe Biden last November, Xi was quoted by officials present telling the American president that Taiwan electing the DPP will make “peaceful unification [...] more difficult to achieve” and that “military, economic, and diplomatic deterrence against Taiwan will be strengthened by Beijing.”
While the last year has witnessed military escalation in the Straits, and the PLA steadily grows, the PRC’s engagement in offensive armed conflict remains relatively low for a global power. In addition, consequences from the Russian invasion of Ukraine have not gone unnoticed. In mid-September 2022, Xi expressed concern at a Shanghai Cooperation Organisation summit around Putin’s actions and the resulting isolation of Russia from the international community. The current reluctance of Chinese firms to violate export controls on behalf of Russia or to provide lethal weapons to the latter suggests that the PRC recognises the risks of possible western sanctions against its own economy, which remains highly dependent on international trade. Therefore, while a DPP election would likely heighten a risk for military confrontation in the Cross-Straits, it is unclear whether such confrontation would lead to war.
Economic Coercion instead of Military Coercion?
Considering reunification still remains a priority for President Xi, China could instead opt for a form of coercion, through increasing Taiwan’s economic dependency on the mainland. Taiwan’s New Southbound Policy (NSP) for increasing economic and social partnerships with South Asian and ASEAN countries could be a target for President Xi. Currently, trade with ASEAN states and the PRC are the only relations in which Taiwan holds a positive trade balance. Since NSP partners involve states such as Vietnam, Indonesia and Malaysia who would likely seek to avoid tensions with the PRC, it is possible the PRC could move to make NSP trade difficult via obstacles for those seeking partnerships with Taiwan.
Taiwan is also seeking economic and political diversification with major global players, many of whom are geopolitical rivals with the PRC. Taiwan could potentially resist PRC meddling into NSP developments if trade and diplomatic relations continue to grow with India, with recent signs that New Dehli is seeking to deepen its relations with Taipei. The US’s technological reliance on Taiwan’s production of semiconductor chips is high, as American tech firms like Google, Apple and Amazon currently rely on Taiwan to produce up to 90% of their chips. While the US is looking for ways to reroute its semiconductor supply chains by incentivising investment into domestic semiconductor production through its new CHIPS and Science Act, decreasing semiconductor reliance on Taiwan is likely to take time. Economic ties between Taiwan and the EU are also strengthening, with the EU currently being Taiwan’s 4th largest trading partner. Bilateral trade between both amounted to USD 75.3 bn in 2022, marking a year-on-year increase of nearly 10 percent. Continuing economic strength here could offset any diminished NSP trade options in the short term, but such a position will be challenged if the US and the EU progressively reduce trade with the island to reduce the impact of a possible PRC retaliation on their supply chains.
What could spark a war between Taiwan and the PRC?
Whilst the immediate likelihood of conflict is low, growing tensions between Beijing and Washington, exacerbated by Taiwan’s independence rhetoric, could still increase making war more likely in the medium term. If Beijing is unable to curb NSP efforts, or fails to maintain Taiwan’s economic dependency on China, the prospect of an invasion becomes increasingly likely. Economic independence from the mainland, while unrelated to the island’s political independence, represents a loss for Beijing's influence over Taiwan.
Conflict could also arise over Taiwan if the PRC deems US-Taiwan relations to be too dangerous for PRC national unification goals. Historically, military escalations in the Taiwan Strait have often been linked to US-Taiwan relations strengthening in some way. The 1995-1996 Taiwan crisis began following former Taiwanese president Lee Teng Hui’s visit to the US, where he met with many US congressmen and spoke at Cornell University. The most recent spike in tension, senior US politician Nancy Pelosi’s visit to Taiwan, is yet another iteration of this cycle.
Growing antagonism between the US and China would also contribute to a possible invasion. In 2020, China began its “dual circulation” strategy, pulling back from global markets and refocusing on developing its domestic market. In parallel, many US companies are diversifying their supply chains and seeking alternatives away from Chinese manufacturing, although this is proving more difficult given China’s trade ties with the US’ alternative economic partners. Sino-US efforts to decouple their markets are underway, making economic interdependence less effective in mitigating conflict. Meanwhile, military capacity on both sides continues to grow, and the US’ capability expansion in the region through Indo-Pacific economic and security partnerships, including AUKUS and its trilateral security partnerships with Japan and South Korea, will continue to threaten China’s regional hegemony.
In sum, even if Taiwan elects the DPP’s Lai Ching-te on January 13th, China is likely to prioritise non-militaristic coercive methods first, such as economic coercion. Yet, if China’s economic coercion methods fail and current trends in Cross-Strait affairs continue – including China’s agenda for reunification with Taiwan, Taiwan’s appetite for independence, US-China market decoupling and the US’s military guarantees to Taiwan, the possibility of an escalation into conflict between China, Taiwan and the US will continue to loom.