China reacted to House Speaker Nancy Pelosi’s visit to Taiwan with the largest military exercise by Beijing toward the island in history. It included the first missiles fired over the island and the largest air incursions beyond the median line of the Taiwan Strait. In the aftermath, Taipei warned that China could use such military drills around the island to establish control over the entire straits and blockade the island.
It is clear China is seeking to use this manufactured crisis to change the status quo around Taiwan: a fraught challenge for U.S. leadership.
The One China Policy
Taiwan, an island of 23 million people 80 miles off the coast of China, has long been a source of tension between Washington and Beijing. China claims the democratically governed island as its territory. Its stated policy is to pursue peaceful reunification but has vowed to use force if necessary. In past, Chinese leaders hoped that, like the USSR, the U.S, would eventually collapse and Taipei would then be forced to renegotiate its independence. This has allowed them to postpone their efforts.
In an intentionally ambiguous diplomatic arrangement adopted in 1979, the United States adopted a “One China” policy that acknowledges but does not endorse, Beijing’s claim over Taiwan. American leaders have continued to provide Taiwan “defensive weaponry” and remained vague about how they would respond if China attacked — although President Joe Biden has pledged to defend the island.
From the U.S. perspective, the “One China” policy was based on a flawed assumption that as the Asian nation integrated into the world community economically its territorial aspirations would decrease. This has not happened, and the world has changed dramatically over the intervening 40 years. In the meantime, Taiwan is not only a democracy now, but it is also one of the world’s primary producers of microchips that China and the West depend upon.
The ”Visit”
From the onset, there was an apparent lack of coordination between Pelosi and the Biden Administration. When asked about the trip the president just said that military officials thought “it was not a good idea.” But once the plans were leaked, the Speaker had two bad options: cave into Chinese demands or risk a confrontation.
Her visit also placed President Xi Jinping in a challenging position. Xi plans to be elected for an unprecedented third term as president at the party congress in November. He also is focused on numerous challenges at home and, as a consequence, has to appear strong. The government’s strict quarantine policy to combat COVID is very unpopular. China faces a slowing economy, an ongoing drought, and the potential crash of the real estate market not unlike what occurred in the U.S. in 2008.
Since coming to power in 2012, Xi’s approach to foreign and domestic dangers was thru the prism of an ideological rivalry with the West and its influence. He described to President Barack Obama during a dinner that he had great concerns about domestic security and the threat of “color revolutions” such as those that had furthered democratic principles in Ukraine or Georgia.
These fears have driven him to pursue steady efforts to prevent any domestic challenge. This has included the suppression of the Uyghur population in Western China, abolishing political freedom in Hong Kong and seizing further control of the South China Sea.
In 2019 China celebrated the 70th anniversary of the People’s Republic of China. During this celebration, three Chinese leaders were extolled - Mao for Chinese unity; Deng Xiaoping for economic prosperity, and Xi for national strength! Consequently, Xi has linked Taiwan’s reunification with the mainland directly to his stated goal of “national rejuvenation” by 2049, the centenary of the Communist takeover of China. As China’s most powerful leader in generations, he has made it clearer than any of his predecessors that he sees unifying Taiwan with China to be a primary goal of his rule and for a China that is a modern, united superpower — and a key to what he calls China’s “national rejuvenation” as a modern, united superpower.
The Chinese leadership has long used social media to generate nationalist sentiment among the population. But this may have backfired during the recent crisis. The volume of comments about the Pelosi visit was initially so heavy it partially crashed Weibo, China’s main social media platform. Most online comments, even before censorship kicked into high gear, were aggressive in their support of harsh measures and even war with Taiwan. One particularly common message was “When do we start bombing?”
There was a strong streak of mockery and skepticism in responses, too, resulting in a stream of soon-removed jokes at the government’s expense for promising an even stronger response. (“I accept that we’re not going to attack, but can’t we at least make her take the mandatory COVID test at the airport?”)
Ultimately, Pelosi’s visit was a crisis of choice by the Chinese as they could have ignored the visit or simply belittled the trip as the final gasp of a House speaker who will likely soon depart her position via election or retirement. Instead, it appears Xi may have seen this as a pretext to set a new baseline or norm for military operations around Taiwan.
The Result
None of this is without a future cost to Beijing’s reputation and economy. Beijing instituted economic sanctions against Taiwan in the aftermath of its military exercises. This isn’t new, but Taiwan has created a modern diversified economy. Though it represents only a small portion of Chinese exports, much of China’s high-tech industry is dependent on sourcing chips, machine tools, and other items from Taiwan. All of this would likely be destroyed in an invasion.
Attempts to coerce Taiwan’s public into submission have backfired. Support for independence is at record highs, and Taiwanese self-identification as “Chinese” is at record lows. All of which are driven mostly by Beijing’s behavior. Many experts believe Beijing’s actions will accelerate Taiwan’s defense spending and further ward off a Chinese invasion. Still, one outcome of the Pelosi visit is that the possibility of peaceful reunification is even more distant and conflict is more likely.
The most recent edition of the Pentagon’s annual report on China’s military concluded that Beijing “appears willing to defer the use of military force as long as it considers that unification with Taiwan could be negotiated over the long-term and the costs of conflict outweigh the benefits.”
The Chinese reaction will encourage a significant expansion in American defense spending. Shortly before the trip, the House had authorized over $850 billion for 2023. Helping Taiwan fund its defense concept and acquire asymmetric defense capabilities is also the focus of the Taiwan Deterrence Act, which is currently making its way through Congress. It is also likely that the U.S. Navy will conduct future “Freedom of Navigation” operations in the Taiwan Straits to demonstrate Washington’s view that this remains international waters. Throughout the recent Chinese exercises, the USS Ronald Reagan carrier battle group remained on station nearby.
It does not appear China’s “exercise” was truly a preparation for an invasion. It was more likely a trial run at sealing the island off from any support should an invasion occur. The Chinese were able to move forces into position quickly and potentially implement a blockade. This ability will affect future crisis decision-making. American military leaders must now recognize that once a threat to Taiwan begins to materialize that they will have only a brief period of time to reinforce the island prior to it being isolated.
This crisis also had an impact regionally. The G7, as well as ASEAN countries, denounced the Chinese response as provocative, which had not occurred in previous crises. China also fired five missiles into waters that Japan believes are part of its exclusive maritime economic zone. This has spurred politicians in Tokyo to urge significant increases in Japanese defense spending and even changes in the Constitution that have historically restricted Tokyo’s military efforts.
Where does this go?
Supporters of Ms. Pelosi’s trip argue that the trip demonstrated U.S. strength, resolve, and leadership. The United States was not going to be “bullied” by Beijing. She had also described her interests not only for the U.S. but the international community prior to departing. Finally, though no Republican members joined her, the trip exhibited bipartisan unity as it was endorsed by the Republican leadership.
Her critics acknowledge this but believe it was badly timed and reckless. They would argue the Speaker violated one of the essential rules of strategy - Keep the first thing…the first thing. The U.S. needs to work with China on a range of current and future crises. It is imperative for the United States to focus at this moment on ensuring Russian aggression in Ukraine is thwarted. Beijing has so far been publicly supportive of the Russian Federation but has not provided significant military assistance. That must continue.
Furthermore, the U.S. needs to work with Beijing on a host of issues, from environmental concerns, the ongoing negotiations with Iran over a nuclear agreement, and North Korea's apparent desire to conduct a nuclear test in the near future.
The Chinese imposed additional countermeasures canceling military talks and cooperation on drug interdiction, illegal immigration, and climate change. Beijing also announced that it will conduct more military exercises around the island. But in a surprise announcement, it was reported that President Biden will meet Xi during the Group of 20 meeting in Indonesia in November. This will be Xi’s first foreign trip in three years.
This will be a critical opportunity for the two presidents to reduce tensions and avoid “The Thucydides Trap." Harvard Professor Graham Allison described this phenomenon as one of history’s deadliest patterns whereby a rising power threatens to displace a ruling one. The likely outcome throughout history has been war.
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GEOPOLITICAL PANEL REPLAY:
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With many experts arguing in the days immediately prior to Moscow’s invasion of Ukraine that a war would not occur, we are now at the six-month mark of the conflict with fall and winter rapidly approaching. As the U.S. and our allies brace for an extended war - with the largest U.S. aid package to date on the horizon - geopolitical and economic ramifications loom large. Join J.T. Taylor along with our geopolitical advisor Col. Jeff McCausland, Hedgeye President Michael Blum and Director of Research Daryl Jones, as we continue our assessment and outlook for the ongoing crisis, the Taiwan/China minefield, the Middle East/Iran and the JCPOA and more. CLICK HERE for the event replay. About Dr. Jeffrey McCausland Dr. McCausland is a retired U.S. Army Colonel who formally served as the Dean of Academics at the U.S. Army War College. During his time in the military, he commanded a battalion in combat during the Gulf War in 1990 and 1991. He also served on the National Security Council staff in the White House during the Kosovo crisis. He currently serves as a national security consultant for CBS radio and television. He routinely does analysis for CBS on issues such as Iraq, European security, arms control, or related questions of national security policy. He is currently involved in a project for the National Nuclear Security Administration focused on nuclear weapons in South Asia and the proliferation of weapons of mass destruction. Dr. McCausland is also the founder and CEO of Diamond6 Leadership and Strategy, LLC. Diamond6 conducts executive leadership workshops for corporate, public, and non-profit leadership teams across the United States. He recently published a new book, Battle Tested! Gettysburg Leadership Lessons for 21st Century Leaders. |
