Normalized Tensions in the Cross-Strait Relations 1
--- Structural Changes in Taiwanese Society and the Xi Jinping Administration's Strategic Shift ---

Yasuhiro Matsuda
Professor, The University of Tokyo


Adm. Philip Davidson, commander of the US Indo-Pacific Command told a Senate Armed Services Committee hearing in March 2021, "I worry that they're accelerating their ambitions to supplant the United States and our leadership role in the rules-based international order, which they've long said that they want to do that by 2050. I'm worried about them moving that target closer," he continued. "Taiwan is clearly one of their ambitions before then. And I think the threat is manifest during this decade, in fact in the next six years." 2 The media reported this statement as insinuating that China's use of force against Taiwan might occur by 2027.

China's policy toward Taiwan is one of "peaceful unification; one country, two systems." The first half of the phrase refers to the process of unification, and the second half to the institutional arrangements after unification. China agreed to pursue peaceful unification through talks with the Taiwanese authorities on the premise of "One China." However, in 2019-20, structural changes took place on both sides of the Taiwan Strait --- changes that may overturn that premise. Will China actually resort to use of force? Or, will, once again, the status quo in the Taiwan Strait remain intact this time because China uses military tensions merely as a psychological maneuver? How should Japan behave in this situation? This paper is intended to answer these questions.

1. The Overwhelming Re-election Victory of Tsai Ing-wen

Until 2018, the Taiwan Strait had enjoyed the afterglow of stable Cross-Strait relations during the Ma Ying-jeou administration (2008-16) under the Kuomintang (KMT), which promoted conciliatory relations with the mainland China. The Tsai Ing-wen administration, which came to power in 2016 with the support of the pro-independence faction in the ruling Democratic Progressive Party (DPP), took the position of dismissing the 1992 Consensus with the mainland on the "One China" principle. For this reason, Taiwan's relations with the mainland China, which regards Taiwan as part of China, were expected to instantaneously deteriorate. However, Tsai insisted on maintaining the "status quo" of the Taiwan Strait and continued to avoid "provoking" mainland China. China exerted pressure on Taiwan by closing quasi-official channels and by establishing diplomatic relations with countries that diplomatically recognized Taiwan but was precautious not to criticize Tsai by name. 3

China's attitude changed drastically when the ruling DPP suffered a historic defeat in the Taiwanese local elections in November 2018. On January 2, 2019, around which time the possibility of Tsai's re-election seemed slim, Xi Jinping delivered a speech at a gathering marking the 40th anniversary of "Message to Compatriots in Taiwan," calling on Taiwan to discuss a "‘two systems' solution to the Taiwan question" following reunification, while articulating that he would "not renounce the use of force and reserve the option of taking all necessary measures" against Taiwan. This is a blatantly hardline statement, close to a "surrender recommendation" to Taiwan. In anticipation of the DPP's loss of power, Xi launched an offensive for reunification. 4

Ironically, however, it was her rejection and criticism of Xi's hardline statement that helped Tsai to get back on her feet. 5 Meanwhile, Hong Kong people's opposition movement against the proposed amendments to the Fugitive Offenders Ordinance expanded, and in June, the Hong Kong police began to crack down on the movement with violence. Some anti-government demonstrators responded with violence, and the situation in Hong Kong became a quagmire. The great majority of Taiwanese people expressed their support and sympathy for the opposition movement in Hong Kong. Tsai criticized China and demonstrated solidarity with the Hong Kong opposition movement. Tsai's approval rating rebounded. She eventually won the presidential election with a record 8.17 million votes over the KMT candidate, Han Kuo-yu, by an overwhelming 2.65 million votes margin, and the DPP also won a majority in the Legislative Yuan.

2. Structural Changes in Taiwanese Society due to the Hong Kong Situation and the COVID-19 Crisis

At that time, the COVID-19 crisis occurred. The fact that this infectious disease spread from China to the rest of the world is generally undeniable. To make matters worse, the Chinese authorities initially attempted to conceal the infections and Chinese tourists overseas bought up face masks and other disinfection materials. Such behavior worsened the impression of China in the world. 6 Videos of hellish scenes in Wuhan where citizens struggled under the lockdown, together with shrill postings, were widely shared among the Taiwanese who understood the Chinese language.

Amid such confusion, the Chinese authorities delayed the chartered flights to carry Taiwanese residents home from Wuhan. Among other determinants that rapidly and structurally worsened Taiwan's impression of China are: China's self-righteous propaganda such as "It might be US army who brought the epidemic to Wuhan" or "the world should thank China"; the failure of China's mask diplomacy; China's ostracism of Taiwan from the World Health Assembly (WHA); China's military pressure on Taiwan under the COVID-19 pandemic; China's hardline attitude toward neighboring states over territorial issues; and China's swift passage of the Hong Kong national security law and a mass arrest of anti-government Honkongers. 7

According to various opinion polls, Taiwanese people's impressions of China have worsened by about 15% in the past one to two years. Taiwanese citizens entertaining bad feelings about China have reached 70 to 80% of all respondents; the ratio of Taiwanese people who think that the Chinese government is not a friend of Taiwan jumped from 58% to 73% between 2019 and 2020. 8 According to a survey on whether to settle on the mainland for "job" or "study", respondents who answered affirmative dropped by 17% and 16%, respectively, between 2018 and 2020. 9

Furthermore, amid the COVID-19 crisis, China exerted military pressure on Taiwan; sank Vietnamese fishing boats in the South China Sea; increased its activities near the Senkaku Islands; and went so far as to cause casualties through a skirmish on the Sino-Indian border. 10 Until then, there was a certain amount of support in Taiwan for the discourse that the Tsai administration was responsible for the deterioration of Cross-Strait relations by dismissing the "1992 Consensus." However, after a series of situations that emerged during the COVID-19 crisis, many Taiwanese came to believe that the troublemaker was not the DPP but China because these situations were created not by the DPP but by the Xi Jinping administration.

In the meantime, the Tsai administration's countermeasures against COVID-19 were almost perfect. After noticing the anomaly in Wuhan on December 31, 2019, the Taiwanese government launched responses in rapid succession to stop the influx of the novel coronavirus, while the presidential election campaigns were underway. As of May 10, 2021, the accumulated infections in Taiwan are just 1,119 cases; zero infection continues since April 26, 2020, with only a few temporary exceptions; and the total number of deaths is only 12. 11 Economic and social activities are on par with the pre-corona period, registering a 2.9% growth for 2020. The approval rating for the current administration's handling of COVID-19 once reached 97.2%, and the approval rating of the Tsai administration exceeded 60%, the highest level since its inauguration. 12

Above all, the contrasting differences between China and Taiwan have strengthened Taiwanese citizens' identity with Taiwan, with the percentage of those who believe that "I am Taiwanese, not Chinese" rising by 9.8% from 2019 to 2020 to reach 64.3%. 13 The number of Taiwanese citizens who are proud to be Taiwanese and dislike China has increased.

Problematic was the position of the opposition KMT maintaining good relations with China. KMT politicians like former President Ma Ying-jeou, whose track record is based on stable relations with China, continued to criticize the DPP government's countermeasures amid the COVID-19 crisis --- restrictions on entry into Taiwan from the mainland and the provisional suspension of mask exports. As a result, the KMT's approval rating sank by 7.1% to 17.0% in 2019-20 (the DPP rose to 34.0 %). 14 In other words, there is a nearly direct proportion between the increased support for the DPP government and the rising Taiwanese identity and the decreased support for the KMT and the reduced sense of affinity with China. The Hong Kong issue and the COVID-19 crisis have caused earthshaking changes with a 10-15% fluctuation in the public sentiment of Taiwanese society. This means that there is a high possibility that the DPP government encompassing pro-independent factions will be long lived and, as a result, Cross-Strait relations will become unstable and tense.

Meanwhile, China has lost one means after another to exert pressure on Taiwan. Reducing the number of mainlander tourists, which at one time reached about 4 million a year, was an effective way for China to jolt the Tsai administration. Before the COVID-19 crisis, China could send operatives to Taiwan to conduct infiltration operations and provide illicit profits to local agents in Taiwan. 15 But the COVID-19 crisis has halted human traffic, making it almost impossible to do either. It rendered China's economic leverage nearly powerless, and at the same time, the Tsai administration's approval rating reached an apex. In other words, the only way for China to mount pressure on Taiwan has become through the use of military power.

3. Xi Jinping's Dismissal of Deng Xiaoping's Strategy Package

In 2019-2020, China rejected the "strategic package" created by Deng Xiaoping, and the Xi Jinping administration turned to a forceful "non-strategic response."

Deng's "peaceful reunification" policy toward Taiwan finally led to the normalization of diplomatic relations with the United States in 1979. Deng pursued low-key, omnidirectional diplomacy to improve relations with neighboring states. Since President Chiang Ching-kuo in Taiwan rejected the "one country, two systems," Deng first applied it to Hong Kong following its repatriation, aiming to make it a successful model for Taiwanese people. 16 Deng aimed to promote political reform in China to achieve the rejuvenation of the leadership, the fixation of the term of office of the leadership, a collective leadership, the separation of party and government, and a shift to a more liberal political system.

Deng's strategic package, however, was left stranded by the Tiananmen Square massacre of 1989. Domestically, Deng's China confronted a backlash against reform and the opening-up, and the political reform was de facto abandoned. China fell into international isolation. The subsequent administrations of Jiang Zemin and Hu Jintao chose the "rich country and strong army, without democratization" line. The Xi Jinping administration stands on the extension of this line. China joined the World Trade Organization (WTO) and transformed itself into the world's factory. Its GDP surpassed that of Japan in 2010. Its defense budget has increased 44-fold in 30 years and is now about four times that of Japan.

The problem is that Xi belongs to the Cultural Revolution generation, and in his political philosophy and methods, he found a model to emulate but not in Deng but rather in Mao Zedong. 17 In many areas, the Xi administration has reversed Deng's strategic package, mobilized the people's superpower consciousness, and abandoned low-key diplomacy. It does not hesitate to confront the United States and other major developed countries. Besides, Xi has effectively nullified Hong Kong's one-country, two-systems policy and has unilaterally increased military pressure on Taiwan. He promoted dictatorship and the centralization of power, and tightened control over speech. The Xi administration utilizes digital technology to keep the whole nation under surveillance.

Consequently, there is no political force in the country that can halt the strategic reversal by the Xi administration. Some tactical adjustment of the pace of reversal would be the utmost that can be anticipated. It is pointed out that Xi, who is allegedly seeking multiple elections after 2022 to become the de facto supreme leader for life, aims to bequeath reunification with Taiwan as a legacy of his administration. 18

4. China's Military Pressure on Taiwan

Nonetheless, the Xi Jinping administration's hardline policy toward Taiwan does not immediately imply that China will seek reunification with Taiwan by use of force. This is because it would be a Herculean task for China to attack and completely occupy heavily armed Taiwan, braving the imminent risk of US military intervention; it would also be a challenge to initiate and sustain new governance of Taiwan, which is located more than 100km away across the sea. 19

In April 2020, the media began to report that China would try to seize the Pratas Islands (Dongsha Islands) under the effective control of Taiwan. However, an armed invasion and occupation of the remote islands located in the northern part of the South China Sea would inevitably lead to the decisive deterioration of relations with neighboring states in Southeast Asia, Japan, and India, with which China has "territorial" or "sovereignty" issues, and to further US intervention.

Since that operation is bound to cause massive casualties among the Chinese troops deployed in the islands, it would worsen Taiwanese sentiment toward China and help advance US-Taiwan military cooperation. As a result, unification with Taiwan would become more difficult. In sum, the limited use of force to seize the isolated islands, practical as it may be, would be a reckless operation with no clear vision of what would follow.

Rather, the Chinese authorities, including the People's Liberation Army, have repeatedly mentioned the "peaceful reunification policy" toward Taiwan. 20 What China currently exerts is military pressure bordering on harassment. Since around 2017, an increasing number of Chinese warships and military aircraft circumnavigate Taiwan Chinese aircraft carriers and other large warships frequently pass the Taiwan Strait. 21 Since 2020 the number and frequency of Chinese military aircraft entering the Taiwanese air defense identification zone (ADIZ) are on the increase. In 2020 alone, the number of incursions by Chinese military aircraft into the Taiwanese ADIZ totaled 380. 22 Most of these incursions took place to the southwest of Taiwan and in the direction of the Pratas Islands; Taiwanese Air Force aircraft were repeatedly forced to scramble. Some speculations as described above gain currency about the possibility of China's limited use of force. On March 26, 2021, the day that the AIT-TECRO MOU on Coast Guard Cooperation (US-Taiwan MOU on Coast Guard Cooperation) was concluded, 20 Chinese aircraft entered the Taiwanese ADIZ. After April 3, similar actions took place on ten consecutive days, and on April 13, 25 Chinese aircraft entered the Taiwanese ADIZ. 23

The increasing occurrence of such actions will invite reactions from Taiwan and the United States and eventually result in the increased military activities between the United States, China, and Taiwan in the adjacent airspace and sea areas. This, in turn, will increase the possibility of an accidental collision, which, however, is generally controllable.

5. US-China Strategic Competition Under the Biden Administration

Deng's strategic package provided the basis for US engagement with China; the "peaceful resolution of the Taiwan issue" was a prerequisite to normalize US-China diplomatic relations. The United States provided assistance to China against the backdrop of the "New Cold War" with the Soviet Union. Americans expected that China would in due course democratize thanks to the introduction of a market economy through reforms and the opening-up, thereby achieving prosperity. This expectation appeared in document form during the Clinton administration and was named "comprehensive engagement." However, Xi trampled such US expectation, which was the premise of the US engagement policy, by promoting the "rich country and strong army with the strengthened dictatorship."

Moreover, the COVID-19 crisis triggered by the outbreak in China made the reelection of President Trump precarious and prompted him to engage in China-bashing. Shortly after that, in June, China enacted the Hong Kong National Security Law, eliminating the "one country, two systems" in Hong Kong. All this while, US policy toward China became increasingly hardline. The exchange of sanctions that erupted in 2020 threw US-China relations, which had deteriorated since the start of the bilateral trade war in 2018, into an unprecedented low after the normalization of bilateral diplomatic relations.

The US Congress enacted a flurry of laws in support of Taiwan and Hong Kong. The Trump administration's arms sales to Taiwan surpassed those of previous administrations in both quantity and quality. More than in the past, US officials visited Taiwan in August and October 2020, including Health and Human Services Secretary Alex Azar and Undersecretary of State Keith Krach.

In addition, the Trump administration took steps to check China's industrial policy through sanctions against Huawei Technologies and Chinese semiconductor manufacturers and through financial sanctions against other specific Chinese corporations and individuals. Taiwan Semiconductor Manufacturing Company, Ltd. (TSMC), the world's largest semiconductor foundry, cooperated with the United States, stopped semiconductor supplies to Chinese corporations, and built a plant in Arizona. Taiwan is attempting to reduce its dependence on China, especially in key industrial areas, in tune with the US decoupling policy toward China. Taiwan also stands at the forefront of the US-China confrontation over high-tech supremacy.

Since its inauguration, the Joe Biden administration has pursued a foreign policy focusing on strategic competition with China. Immediately after taking office, President Biden overturned many of the policies of the previous administration but did not change the ongoing sanctions against China. Furthermore, unlike the Trump administration, the Biden administration emphasizes cooperation with allies to deal with China. At the US-Japan Security Consultative Committee (SCC, the so-called "two plus two") meeting in March 2021, the US-Japan summit in April, and the Group of Seven (G-7) foreign affairs and development ministers meeting in May, the importance of "peace and stability in the Taiwan Strait" was unexceptionally emphasized, 24 and China responded strongly.

A bipartisan consensus has formed in the US Congress on a hardline stance against China and in support for Taiwan. Xi's multiple elections from 2022 and beyond will make it even harder for China to find an opportunity to review its foreign strategy. Therefore, the current US-China strategic competition is highly likely to continue intermittently over the medium to long term with temporary respites.

Conclusion: The Need for Greater Deterrence Against China

Will China's use of force or threat of force jeopardize Cross-Strait relations? Given the structural changes in Taiwanese society and the strategic shift of the Xi administration, the probability of a crisis is increasing. But it might be better to distinguish short-term and medium to long-term prospects.

First, the possibility that Xi will decide to use military force against Taiwan is low in the short term. Xi's primary concern is to maintain his power and to win a third consecutive term as CPC general-secretary in 2022. If there is no other choice other than use of force against Taiwan to realize his third election, it will become an option for Xi. If, on the contrary, the use of force against Taiwan makes his third election precarious, or if he can secure his third election without seizing Taiwan, it may be better not to use force.

For Xi, the priority of "resolving the Taiwan issue" is not high enough to be essential for his third election. The challenges currently facing China include the confrontation with the United States, the domestic economy, and the Hong Kong conundrum. On top of these, the COVID-19 pandemic has emerged as an addition to the list of urgent and vital problems. Given the high risks and costs involved, it is likely that an extreme hardline policy toward Taiwan will be postponed in the short term.

Second, in the medium to long term, there will be more of a probability that China will pressure Taiwan to change the status quo through the use or threat of force. As China perceives that the prolongation of the DPP administration due to structural changes in Taiwanese society has made it impossible to achieve "peaceful unification" through negotiations and the political influence of the KMT, her incentives to use "coercive force" will increase.

However, if Xi's third election becomes a reality in 2022, the "resolution of the Taiwan issue" can be carried over as an even longer-term goal. The status quo in the Taiwan Strait has remained intact in this way due to the short-term postponement of China's hardline measures. This situation may continue into the future. Once Deng raised the "reunification of the motherland" as a national goal to achieve in the 1980s but was later obliged to set it as a national goal for the 1990s. Jiang Zemin also set the reunification of the motherland as a goal toward the 21st century but eventually raised it as a goal for the 21st century. Xi is so agile to position the reunification of the motherland as an "inevitable demand" for the "great rejuvenation of the Chinese nation."

Third, Xi will not automatically postpone reunification with Taiwan because the costs and risks involved are enormous. In the medium to long term, China will accelerate the development of capabilities to prevent US intervention and annex Taiwan by military force. As in the case of Russia's annexation of Crimea, nobody can guarantee that China will not resort to military action to the surprise of the international community. The international community must continue its efforts to raise the costs and risks to discourage China from choosing military force at any point in the future. To this end, Japan must support and maintain US commitment to the Taiwan Strait, not to mention its own defense force development.

The significance of peace and stability in the Taiwan Strait is not limited to the above. If China achieves the annexation of Taiwan by use of force, the logic of force will prevail, the international order in the region will collapse, and opportunities for economic development will vanish. Japan should promote the strengthening of security relations in the Indo-Pacific and Europe with all like-minded countries and regions with which cooperation is necessary and possible. Adopting a rational security policy is difficult for Japan due to its strong pacifism. But Japan should remove taboos and firmly improve its deterrence against China while maintaining stable Japan-China relations to the utmost.

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