Taiwan: How to evaluate the conflictual dynamics in the Cross-Strait relations?

As the PLA's military deterrence pressure on Taiwan and operations around the near-Taiwan area have been intensifying throughout 2021, the once-quiet Taiwan Strait has again become a flashpoint of international attention and concern. Questions as to whether Beijing will take decisive moves against Taiwan and whether the U.S. would intervene are frequently raised.

This analysis holds that the two most important political factors influencing the risk of further escalation in the Taiwan Strait are the US’ policy on Taiwan, and the dynamics of U.S.-China dialogue on Taiwan.

U.S. policy on Taiwan: The U.S. will not give up its substantive and moral support to Taiwan lightly, but rather continue to steadily provide arms sales to Taiwan, increase the frequency and status of interactions between U.S. officials and Taiwanese authorities, and give priority to cooperating with Taiwan to control the flow of critical technologies and Taiwanese high-tech talents to the mainland.

However, at least during the tenure of the Biden administration, the U.S. will avoid challenging the "One China" policy in international legal terms and it does not intend to treat Taiwan as a "sovereign state”.

As a matter of fact, in the virtual summit of November, U.S. president Joe Biden restated his non-support for Taiwan independence, while emphasizing the U.S. position against any unilateral change to the status quo in the Taiwan Strait, balancing and nuancing its support to Taiwan.

Further, as early as July this year, Kurt Campbell, the U.S. NSC Coordinator of Indo-Pacific Affairs, at an academic seminar stated that the Biden administration "does not support Taiwan's independence" and "fully understands the sensitivity of this issue".

Yet, Biden counterbalances the U.S.’ Taiwan position by following a Trump-era practice of including a US domestic law, the Taiwan Relations Act, as well as the Six Assurances, a previously secret commitment made to Taiwan in 1982, as explicit pillars of its "One China Policy”.

The Six Assurances essentially clarify the U.S. commitments vis-à-vis Taiwan and were meant as reassurance at a time of rapprochement to Beijing. As per these assurances, the U.S. for instance agreed to not set a date certain for ending arms sales to Taiwan, to not enter into negotiations with the mainland, or states that there had been no change in the U.S.’ position regarding sovereignty over Taiwan. By mentioning the Six Assurances, Biden is signaling that he stands by the declassified commitments, by many considered a deliberate U.S. response to hardening mainland moves and claims.

Dynamics of U.S.-China dialogue on Taiwan: Based on the signs that could be observed in the latter half of 2021, it seems China and the Biden administration have found a way to exchange their bottom lines on the Taiwan issue.

At the first virtual summit between Xi Jinping and Biden on November 16 this year, the U.S. clarified that it does not support Taiwan independence - and even though the White House was reluctant to include this in the U.S. version of the readout, the U.S. government made no attempt to deny the emphasis on this point in the Chinese readout.

According to the Chinese press release, Xi Jinping also took the rare step of complaining directly to the U.S. at the top level that “some people on the U.S. side are still trying to play with fire". Xi warned the U.S. side that if Taiwan's “independentists” crossed the "red line", the mainland would be forced to take "decisive actions".

So where does this place us today?

China’s first layer policy is still its rhetoric of striving for “unification by peaceful means with the utmost sincerity”. This ascribes the crucial agency in potentially escalatory dynamics to the U.S.’ bearings on the Taiwan issue. For now, the U.S. does not support actions in favor of a de jure independent Taiwan thus respecting Beijing’s “red line”.

In turn, if China follows-through on its rhetoric of not taking immediate actions of solving the “Taiwan issue” unilaterally and militarily, which is the “red line” for the U.S., it becomes clear that the broad middle ground between the two “red lines” is in fact the main area of contention involving defense stand-offs, diplomatic struggles, as well as frictions around the Taiwan issue in international organizations, multilateral fora and with diplomatic support displayed by other “Western” countries.

In contrast to some Chinese rhetorical self-restraint, the PRC is, however, likely to adopt a more expansive understanding of what pro-independence activities mean, and likely using its leverage in targeted ways to undercut such undesired dynamics.

For instance, with Taiwan-listed companies repatriating close to USD 100bn of profits from the Chinese market in the past decade, recent administrative penalties imposed by the PRC on Taiwanese companies in China for making election contributions to high-ranking independentist-minded Taiwanese politicians are a foreboding example.

Finally, Taiwan's incumbent president Tsai Ing-wen, who leads the pro-independent ruling party DPP, has maintained a cautious conflict management style so far. There is good reason to believe that a scenario of one side transgressing a “red line” will not materialize before the end of 2024 as long as the Biden administration’s Taiwan doctrine stays on current trajectory and China can be satisfied with the extent of the U.S.' restraint on distancing itself from the idea of Taiwan independence. Should president Biden be replaced in the Democratic primaries in 2024 or encounter health issues even prior to that, a new administration will shape its position vis-à-vis Taiwan based on the analysis of the situation. In case this is a Republican president, 2024 could be a watershed moment and instigate renewed instability and vulnerability for the region.