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Editor's Note: Below is a complimentary research note written by National Security analyst LTG Dan Christman. To access our Macro Policy research please email sales@hedgeye.com.

Taiwan Is The Most Dangerous Flashpoint For US-China Relations  - 10 27 2020 10 32 45 AM

With a week to go until our Presidential election, media and pundit attention had naturally shifted almost exclusively to US domestic politics.

But a slowly building, volcanic international crisis awaits whoever wins on November 3rd: the future of Taiwan. 

A very brief history: 40 years ago, Congress, with strong bipartisan support, passed the Taiwan Relations Act. The point of the Act was to clarify our relations with Taiwan, consistent with the “One China” policy that had been negotiated with Beijing seven years before. No longer for example would Taiwan be referred to as the “Republic of China,” while official relations with Taipei became sharply constrained.

One key area however remained “strategically ambiguous:” how the U.S. would respond to the use of force by China against Taiwan. The Act for example states that the U.S. would consider any effort by China to determine the future of Taiwan by other than peaceful means to be of “grave concern” to Washington.

Until recently, this ambiguity might have acted as a deterrent against military moves by the PRC. But given the aggressiveness with which China of late has behaved in their neighborhood and beyond, with an intensified all-of-government “Wolf Warrior” mentality, that assumption is being increasingly questioned. The worries about conflict go beyond an inadvertent act or a miscalculation.

In the case of Taiwan, the danger is a conscious decision by China to launch a cross-straights invasion; that danger grows by the month.

Why? 

President Xi Jing Ping has made it clear that this is China’s moment; unification with Taiwan is the goal, and force is an option, as Xi publicly stressed in a major speech 18 months ago. Long term, the goal is to include Taiwan unification in the “Great Rejuvenation” of the Chinese nation by 2049, the 100th anniversary of the founding of the People’s Republic.

But 2021 is also a worry, given the convening a year later of the PRC’s National Party Congress and the decision by that body on whether to extend Xi’s presidential mandate another five years.

Solidifying his nationalist bona fides has been a motivation for Xi’s infusion of the Wolf Warrior ethos throughout China’s diplomatic corps - to increase his “re-election” chances; unification with Taiwan would represent the ultimate nationalist credential. 

This is the stark 2020 China reality: despite growing repression in Tibet, Xinjiang, and Hong Kong, there’s very little the west can do to seriously challenge China’s behavior in any of these areas.

And in the South China Sea, the chances now of reversing Chinese militarization are virtually zero. The dangers in each of these areas stem more from a miscalculation by one of the parties than from a conscious decision to use force. 

Taiwan is very different – as are the political dynamics in the U.S. Multiple Congressional reports over the last two weeks have highlighted the bipartisan nature of the growing China push-back. And in many cases the Congressional language goes well beyond understandings reached in the Taiwan Relations Act – like urging a free trade pact with Taiwan and the dispatching of official U.S. governmental delegations to Taipei. 

So, as the danger escalates, what ARE the options? There are several: 

First, in the wake of the international outcry over China’s Hong Kong crack-down, there might be hope that China would soften the terms of their “One China, Two Systems” policy, to mollify pro-democracy Taiwanese. But candidly, there is little chance of China “softening” in any area involving what they view as internal politics.

Or the U.S. could maintain the “deliberate ambiguity” of the current policy, with the attendant and increasing downside risks outlined above.

Thirdly, the U.S. might consciously change our “One China” policy and formally recognize the independence of Taiwan; this move would clearly cross multiple Chinese red-lines, and yet it’s been seriously suggested by Arkansas Senator Tom Cotton. 

Or, finally, we might terminate the “strategic ambiguity” but not depart from the One China policy. In an intriguing article by Council on Foreign Relations president Richard Haass two months ago - and echoed last week by former Bush43 Deputy Secretary of Defense Paul Wolfowitz – the two former diplomats said it was time to embrace a policy of “strategic clarity,” i.e., the US should make explicit that we would respond to any use of force against Taiwan!

Given the deepening risks and ephemeral hopes of other options, the Haass/Wolfowitz suggestion may be the safest course to chart with China over the years ahead. As both stressed, Washington needs to affirm that under this approach, we do not favor Taiwanese independence, and that we still support the eventual reunification of China - but peacefully.

Should the U.S. move in this direction, we should also make it clear that we have the credible military capability to back up the policy. Further, broad diplomatic support would be essential; the practical effect of cohesion amongst U.S. friends and allies can be as important as surface ship and ground force combatant moves in the region. 

BOTTOM LINE: Tibet, Xinjiang and the Uighurs, the South China Sea, even Hong Kong are now yesterday’s news; Taiwan is today’s and tomorrow’s.

Ever more clearly, China is this century’s most critical security challenge. And of all the points of friction that define that challenge, Taiwan is now, and will remain, THE most dangerous flash point.

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ABOUT LIEUTENANT GENERAL DAN CHRISTMAN

LTG Dan Christman, USA, Ret. serves as Hedgeye Potomac Research’s Senior National Security Analyst, providing deep insight into international affairs and national security. Most recently, Dan provided strategic leadership on international issues affecting the business community for organizations such as the US Chamber of Commerce. Dan’s long history of leadership includes his service as a United States Army lieutenant general and former Superintendent of the United States Military Academy. He served in highly visible and strategically important positions and four times was awarded the Defense Distinguished Service Medal, the nation's highest peacetime service award.

He also served for two years as assistant to the chairman of the Joint Chiefs of Staff, during which time he traveled with and advised Secretary of State Warren Christopher. He was centrally involved during this period with negotiations between Israel and Syria as a member of the Secretary's Middle East Peace Team. Further, Christman represented the United States as a member of NATO's Military Committee in Brussels, Belgium.

Graduating first in his class from West Point, Christman also received MPA and MSE degrees in public affairs and civil engineering from Princeton University and graduated with honors from The George Washington University Law School. He is a decorated combat veteran of Southeast Asia, where he commanded a company in the 101st Airborne Division in 1969.