Cross-Strait tensions intensified between May and August 2021, despite the superficial calm that generally prevailed after the dramatic confrontations earlier in the year. China again blocked Taiwan’s participation at the World Health Assembly (WHA), and Xi Jinping reaffirmed the Communist Party’s commitment to the peaceful reunification of Taiwan at the Party’s 100th anniversary. Chinese military flights into Taiwan’s Air Defense Identification Zone were almost routine until China launched 28 sorties in a single day to protest the G7 summit’s endorsement of Taiwan’s participation in the WHA. The Biden administration announced its first arms sales to Taiwan. Several countries, most notably Japan and Australia, made their strongest statements ever in support of Taiwan. Lithuania announced it would permit the opening of an unofficial “Taiwanese” representative office. Beijing withdrew its ambassador from Lithuania and told Lithuania to withdraw its ambassador from Beijing. The US dismissed fears that its withdrawal from Afghanistan might portend abandonment of Taiwan. In coming months, Taiwan faces three potential turning points: Taiwan’s opposition Nationalist Party will elect a new chair; a referendum could overturn the opening of Taiwan’s market to US pork; and the US has signaled it will invite Taiwan to President Biden’s democracy summit despite threats of military retaliation by China.

No Taiwan Observers at the World Health Assembly, Again

In late May, for a fifth consecutive year, Taiwan was denied an invitation to the World Health Assembly, the governing body of the World Health Organization (WHO). Taiwan’s success in tackling the global COVID-19 pandemic made its absence especially striking. G7 foreign ministers, in a communiqué issued after their May 5 meeting in London, urged Taiwan’s “meaningful participation” in the WHA and other WHO meetings. US Secretary of State Antony Blinken issued a statement on May 7, saying there is “no reasonable justification for Taiwan’s continued exclusion” from the WHA. Undaunted, Beijing applied its institutional heft within the WHO and the UN to again deny Taiwan an observer’s seat—continued punishment for the Tsai administration’s unwillingness to accept the one-China principle and the 1992 Consensus. Meanwhile, the US Senate advanced legislation that expressed strong support for Taiwan’s inclusion in the WHA and required the secretary to detail “changes and improvements” in the Department of State’s strategy to secure Taiwan’s observer status.

Xi Promises “China’s Complete Reunification”

On July 1, Xi Jinping gave the keynote speech at the celebration of the 100th anniversary of the Chinese Communist Party. Inevitably, and in familiar terms, he reiterated the party’s commitment to “advance peaceful reunification” with Taiwan as part of its “historic mission” toward “China’s complete reunification.” Xi’s speech did not go beyond the policy parameters of previous statements China has made about Taiwan since Xi’s ascension to party leader in 2012. Although Xi’s announcement of a historic mission appears striking, it is only one of 32 references to “history,” “historic,” or “historical” in the course of the speech.

Taiwan’s Mainland Affairs Council (MAC) responded in equally predictable terms by posting a statement criticizing China’s “historical decision-making errors and persistent harmful actions” and urged Beijing to abandon its military intimidation and talk with Taipei in a spirit of mutual respect.

Military Activities, Chinese and American

China continued to fly repeated, though less than daily, air sorties into Taiwan’s Air Defense Identification Zone (ADIZ), most often Y-8 turboprop planes. Taiwan continued scrambling its air force jets and issuing warnings. This routine was dramatically violated the day after the G7’s June 13 summit statement supporting Taiwan’s participation in the WHA. Twenty-eight Chinese aircraft entered Taiwan’s ADIZ, the largest number in a single day thus far. China’s Taiwan Affairs Office (TAO) said Taiwan’s colluding with foreign governments to seek its formal independence left China no choice but to respond. When US Senators Tammy Duckworth (D-Illinois), Chris Coons (D-Delaware), and Dan Sullivan (R-Alaska) landed in Taiwan aboard a US Air Force transport on June 6, China insisted that foreign planes are not allowed to land in Taiwan without its permission, a claim it repeated in mid-July after a US Air Force transport plane landed again in Taiwan.

Figure 1 A Chinese Y-8 ASW turboprop plane. Photo: MND via Taiwan News

Taiwan media reported that the Taiwan and US Coast Guards held their first joint exercise on Aug. 10. Taiwan’s Coast Guard Administration said that the Coast Guard had merely been training with its newly built vessels. Taiwan noted, however, that the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office in the United States (TECRO) had signed a memorandum of understanding (MOU) on March 26 to establish a Coast Guard Working Group, clearly implying that the event, whether training or exercise, fell within cooperation with the US provided for in the MOU. China’s TAO immediately criticized the move: “We firmly oppose any form of official interaction or agreement with sovereign implications between the Taiwan region [of China] and the United States.”

On July 28, Taiwan announced it had signed a contract with the US to purchase advanced airborne reconnaissance systems for its F-16 combat aircraft. On Aug. 4, the Biden administration announced its first arms sale to Taiwan—including self-propelled howitzers and precision-guidance kits for artillery shells—with an estimated value of $750 million. The particulars of the two sales are less important than their signal that the administration would continue the US arms sales on which Taiwan relies.

China Dials Up Incremental Pressure

Beyond its military activities, China intensified its longstanding efforts to apply other forms of coercive pressure on Taiwan.

China’s tightening political controls on Hong Kong and Macau led to a series of steps effectively ending the presence of unofficial offices in each other’s territory. On May 19, Hong Kong suspended the operation of its office in Taiwan in retaliation for what it claimed was the interference of Taiwan’s Hong Kong office in its internal affairs. Taiwan reduced its presence in Hong Kong to a single official in mid-June and did the same in Macau at the beginning of July as the governments of both special administrative regions refused to extend visas for Taiwan’s staff at their offices. On July 19, Hong Kong’s official broadcaster Radio Television Hong Kong was instructed not to refer to Taiwan as a “country” or to Tsai Ing-wen as its “president.”

Taiwan initiated criminal action against Chinese espionage on two occasions A retired Taiwan military officer, Lt. Gen. Luo Wen-shan, was sentenced to two years in prison for accepting a bribe from Chinese officials, and it was reported that Taiwan prosecutors were investigating former Vice Defense Minister Chang Che-ping for accepting favors from members of a Chinese spy ring while serving as commander of Taiwan Air Force Combatant Command.

China has also stepped up efforts to pressure Taiwanese residing on the mainland to integrate more fully into Chinese society. Effective Sept. 1, China begins issuing new “smart card” IDs to Taiwanese living on the mainland, which will facilitate access to house and school placement. The Beijing city government announced that Taiwanese working there could participate in the city’s pension plan provided they held the new IDs. Taiwan’s MAC responded by calling this a political ploy and “united front through equal treatment.”

On May 26, President Tsai told a meeting of her Democratic Progressive Party (DPP) that China had tried to block Taiwan’s efforts to gain access to Pfizer BioNTech vaccines produced in Germany. China in turn questioned why Taiwan was preventing its citizens from receiving Chinese vaccines, which it noted had been approved by the WHO.

Figure 2 Lee Yang and Wang Chi-lin won the gold medal for Taiwan in the men’s doubles badminton over the favored Chinese competitors. Photo: AFP via SCMP

Other events highlighted that cross-Strait relations are more complex and variegated than they sometimes appear. On July 31, Lee Yang and Wang Chi-lin won the gold medal for Taiwan in the men’s doubles badminton over the favored Chinese competitors. The two accepted their medals as the team from “Chinese Taipei.” Afterward, Lee announced on Facebook that his medal was “dedicated to my country, Taiwan,” and Tsai congratulated the players for “winning our country’s first gold medal in badminton.” Chinese netizens attacked the two Taiwanese competitors, with one even suggesting that the gold medal should be added to China’s tally since Taiwan, is in their view, a part of China.

Taiwan-Hong Kong trade statistics issued in July revealed that China’s ban on pineapple imports from Taiwan imposed in February caused Hong Kong’s imports of Taiwan pineapples to surge 136-fold in March over the previous month, surpassing Japan as the largest importer. China was, despite its ban, the third-largest importer. Unless Hongkongers have suddenly developed an overwhelming appetite for pineapple, one can only surmise that Chinese consumers have once again found a way to circumvent inconvenient regulations.

Finally, a survey by US academics of Taiwanese reactions to Hong Kong residents fleeing China’s sanctions against protesters found a mixed picture. A majority support Hongkongers’ political resistance against Beijing and believe Hong Kong migrants could benefit Taiwan economically. Still, a significant number fear that these migrants will increase competition for jobs and prices for already scarce housing and that some migrants may pose a security threat to the island.

An International Chorus Supports Taiwan

In a series of statements, the US and a number of its allies expressed support for Taiwan in the face of destabilizing PRC behavior. In May, President Biden and South Korean President Moon Jae-in affirmed the importance of peace and stability in the Taiwan Strait—the first mention of Taiwan in a US-ROK leaders’ statement. In June, both the G7 communiqué and the US-EU Summit joint statement called for the “peaceful resolution of cross-Strait issues.” A joint statement by the foreign and defense ministers of Japan and Australia also called for the peaceful resolution of cross-Strait issues, underscoring the level of concern in the region even without Washington playing a role. Beijing criticized each of these statements, noting that Taiwan constitutes China’s “internal affairs.”

Within Asia, cross-Strait tensions impinge on Japan’s security more than any other country. Still, the direct and pointed language used in Japan’s 2021 defense white paper caught the attention of both Beijing and Taipei: “stabilizing the situation surrounding Taiwan is important for Japan’s security and the stability of the international community. Therefore, it is necessary that we pay close attention to the situation with a sense of crisis more than ever before.” In July, Deputy Prime Minister Aso Taro caused a stir when he told a private gathering that an invasion of Taiwan would affect Japan’s “survival” and that Tokyo would have to defend Taiwan alongside the United States. In August, Japan’s ruling Liberal Democratic Party held the inaugural security dialogue with the DPP.

Taiwan announced in late July that it would open a representative office in Lithuania. Beijing immediately protested, viewing the name—the “Taiwanese Representative Office”—as a mark of official relations. Taiwan’s overseas offices use “Taipei” in their title instead of “Taiwan” or “Taiwanese” to avoid signaling recognition of Taiwan sovereignty. Last year, the PRC intimidated Guyana into reversing its plans to host a “Taiwan” office within 24 hours of the public announcement.

Figure 3 China’s embassy building in Vilnius, Lithuania. On Aug. 10, Beijing recalled its ambassador from Vilnius and demanded that Lithuania recall its ambassador in Beijing. Photo: EPA-EFE via SCMP

Unsuccessful in persuading Lithuania to reverse its decision through diplomatic channels, Beijing on Aug. 10 recalled its ambassador from Vilnius and demanded that Lithuania recall its ambassador in Beijing. Xinhua further threatened “stronger countermeasures.” Lithuanian President Gitanas Nausėda remained defiant, telling the Financial Times on Aug. 15 that his nation is “free to choose which countries or territories it develops economic and cultural relations with.” Beijing reportedly then cut off rail freight to Lithuania, and Global Times called for China-Russia cooperation to punish Vilnius. US Deputy Secretary of State Wendy Sherman spoke with Lithuanian Foreign Minister Gabrielius Landsbergis on Aug. 21, pledging US solidarity with Lithuania against the PRC’s “coercive behavior.”

Beijing could fear Lithuania’s move sets a dangerous precedent, and this may explain its heavy-handedness. Taiwan has offices in only 72 nations; other nations could follow Lithuania in hosting a “Taiwan” office. Most importantly, “Taipei” could be replaced with “Taiwan” in the name of its office in Washington, DC as some US House members call for in the draft Taiwan Diplomatic Review Act.

Taiwan Maintains Its Low-key Response

In response to China’s escalating pressure, President Tsai announced on May 4 that Taiwan would establish a new department to oversee cybersecurity, and on Aug. 7, it was revealed that Taiwan would ban the use of all Chinese IT products by government agencies. Tsai has continued to insist that Taiwan will adhere to the status quo and not act rashly as she told the Japanese monthly magazine Literature and Art Spring and Autumn in an Aug. 10 interview.

Figure 4 Taiwan Legislative Yuan You Si-kun. During a radio interview, You made it clear that he favored a rapid movement toward independence. Photo: CNA via Taiwan News

Even as Tsai continued her efforts to portray Taiwan as reasoned and responsible, a senior member of Tsai’s DPP, Speaker of Taiwan’s Legislative Yuan You Si-kun, made it clear that he favored more rapid movement toward independence. In a radio interview hosted by former Taiwan President Chen Shui-bian, You said that he had told outgoing AIT Director Brent Christensen that the US should recognize Taiwan as a country if China sends military planes into Taiwan’s airspace. DPP elder Chiou I-jen, in a separate radio interview with former President Chen, countered that Taiwan independence is not something the Taiwanese people can decide themselves because the reactions of the US and China have to be taken into account.

Taiwan’s Economy Thrives as TIFA Resumes

Taiwan’s economy, heavily dependent on exports, continued growing at its fastest clip since 2010 thanks to surging global demand for semiconductor chips and IT products manufactured on the island. Taiwan’s exports have grown on average by 30% this year over 2020—itself a banner year. The Taiwan economy remained resilient even as consumer spending slumped in the second quarter—the result of the island’s worst, though relatively quite small, COVID outbreak.

In mid-June, US Trade Representative Katherine Tai agreed with Taiwanese counterpart John Deng to re-open Trade and Investment Framework (TIFA) talks, stalled since 2016. Three weeks later, the two sides convened the eleventh TIFA Council meeting, covering a range of market access issues in seven hours of virtual discussions. The expedited timeline appeared designed to take some wind out of the sails of the pork referendum, then scheduled for late August but subsequently postponed to December. Without much time to prepare, the two sides did not make great progress, but a handful of new TIFA working groups were created to facilitate ongoing and regular communication on a range of functional and sectoral issues. President Tsai already took a dramatic trade action when opening Taiwan’s market more widely to US pork on Jan. 1.

The TIFA breakthrough fills, partially, a noticeable gap in Washington’s otherwise robust and multifaceted relations with Taiwan. President Trump’s Trade Representative Robert Lighthizer had been the chief obstacle to TIFA talks, concerned it could jeopardize the US-China Phase One trade agreement. The Biden administration, on the other hand, has been reluctant to engage in dialogue with the PRC on trade and economic issues during its first seven months in office, focused foremost on bringing the COVID pandemic under control and repairing relations with US allies. Reopening TIFA talks offers another avenue for the US to demonstrate its commitment to Taiwan security and stability.

For Taipei, the resumption of TIFA is a welcome development and better than nothing, but Taiwan wants a comprehensive bilateral trade agreement (BTA) that knits the two economies closer together—an outcome ad hoc TIFA discussions cannot achieve. A BTA would also offer strategic value and would encourage other nations to sign FTAs with Taiwan. However, a BTA faces two major challenges. First, President Biden has indicated he does not want to engage in trade negotiations in the foreseeable future, however. As Secretary Blinken said in an address at the University of Maryland in August that “our domestic renewal comes first.

Second, in Taipei, President Tsai faces a December referendum that could reverse her decision to reopen the Taiwan market to US pork and could derail the next round of TIFA talks and momentum for BTA discussions. The referendum question, as approved by the Central Election Commission, will ask voters whether they support or oppose the government’s decision on Aug. 28, 2020 to allow the import of US pork products containing ractopamine. In a May poll  by the Taiwan Public Opinion Foundation (TPOF), 64% of respondents said they would vote to oppose these imports, up from 61% the previous month. Lacking any polling since the July 1 TIFA talks, it is unclear whether the talks have increased support for the market opening.

US Statements on Taiwan Thread the Needle

Statements by US officials over the past several months have struck two consistent themes. First, the US is committed to supporting Taiwan’s ability to resist Chinese threats, and the US military is capable of deterring and if necessary responding to Chinese military threats in the Western Pacific. Kurt Campbell, coordinator for Indo-Pacific affairs at the National Security Council, called this “a comprehensive set of measures to seek to enhance deterrence, maintain peace and stability across the Taiwan Strait, and enable Taiwan to live in peace.” At the same time, officials have made clear that the US continues to adhere to its one-China Policy and will not move away from “strategic ambiguity” about its response to conflict in the Taiwan Strait, with Campbell insisting that there were significant downsides to “strategic clarity.”

As Congress crafted legislative packages to address long-term US competition with China, Taiwan became a more prominent part of its proposals than ever before. In June, the Senate passed the US Innovation and Competition Act (USICA) that would further embed Taiwan in the US Indo-Pacific strategy. The House is considering its own China competitiveness and deterrence bill, the EAGLE Act. Like USICA, the EAGLE Act subsumes individual pieces of Taiwan-friendly legislation that would, inter alia, appropriate funding for a US-Taiwan civil servant exchange program and require Senate confirmation of the AIT director. These two bills, which will likely be reconciled into one package and voted on this autumn or in early 2022, will likely include an appropriation that is not altogether to Taiwan’s benefit, namely billions of dollars in subsidies for domestic production of semiconductor chips. The Biden administration’s 100-day review of semiconductors, issued in June by the Commerce Department, repeatedly expresses concern over US dependence on Taiwan for advanced chips.

Is Taiwan Another Afghanistan?

The abrupt collapse of the Afghan government, followed by President Ashraf Ghani’s flight from Kabul, and the chaotic scenes of Americans and Afghans desperately struggling for seats on US military evacuation flights from Kabul, has transfixed audiences around the world. For Taiwan and China, these scenes recall the US rapprochement with Beijing as it sought to exit Vietnam in the 1970s, a series of moves that led to US “de-recognition” of the Republic of China on Taiwan in 1979.

While Chinese officials were generally circumspect in public statements, Beijing’s hyper-nationalistic Global Times editorialized that “Some people on the island of Taiwan hype [sic] that the island is different from Afghanistan … Such a war would mean unthinkable costs for the US … the so-called special importance of Taiwan is nothing but [the] wishful thinking of the DPP authorities and secessionist forces on the island.”

The US has rejected any parallel between Afghanistan and Taiwan, with a variety of US experts insisting that the US withdrawal from Afghanistan says nothing about how it will respond to Chinese coercion against Taiwan. National Security Advisor Jake Sullivan said that that the US commitment to Taiwan “remains as strong as it’s ever been” and called Taiwan “a fundamentally different question [from Afghanistan].” President Biden in a nationally televised interview dismissed Chinese claims that the withdrawal from Afghanistan proves the US is unreliable and insisted that the US has a sacred commitment to Taiwan comparable to our commitments to NATO, South Korea, and Japan.

Tsai on her Facebook page said that “Taiwan’s only option is to make itself stronger, more united, and more determined to protect itself … It is not our option to do nothing and rely only on the protection of others.” Taiwan values US assistance but recognizes it must take the responsibility to strengthen its defense capabilities.”

Looking Ahead: Three Events Promise Challenges

Two of the three events ahead were originally scheduled for this summer and postponed because of COVID-19. All three will challenge domestic unity and cross-Strait stability.

The opposition Nationalist Party, or Kuomintang (KMT) has rescheduled its Congress, originally scheduled for July, until Sept. 25. The party will elect a new party chairman. The two leading candidates appear to be the incumbent Johnny Chiang, who became chair after the KMT’s defeat in the 2020 presidential election, and Eric Chu, former KMT chair, who oversaw the KMT election campaign in 2016. Both candidates bring considerable positives and negatives to their candidacies. Chiang has successfully initiated four referendum ballots to embarrass President Tsai, but he failed to win party members’ support for his effort to update the KMT’s position on China. Chu, while widely liked, is held responsible for the party’s 2016 electoral defeat, which saw its original candidate collapse so totally that Chu reluctantly ran in her place, only to be defeated by Tsai. Whoever becomes chairman will need to prepare immediately for the referendum campaign and then shift focus to local elections scheduled for the fall of 2022, which will in turn set the stage for presidential elections in 2024. More fundamentally, the KMT will face the difficult challenge of recasting its approach to cross-Strait relations from support for the “1992 Consensus,” widely seen as too pro-China, to a more Taiwan-centric posture without losing its reputation as the party which can reduce cross-Strait tensions.

The second major postponed challenge will come on Dec. 18 when voters will vote in a referendum, originally scheduled for Aug. 28, to decide four issues tabled by the KMT. Although all four will be hotly contested, only one poses an immediate threat to Tsai’s broader agenda: the vote whether to overturn her decision to reopen Taiwan’s market to US pork. The KMT hopes to score political points by advancing an issue more popular with Taiwan’s electorate than its cross-Strait policy. If Tsai’s decision is overturned, which is possible, her effort to seek a bilateral trade agreement and enhance economic cooperation with the US could suffer a major blow.

Finally, on Aug. 11 the White House announced it would host the Summit for Democracy on Dec. 9-10, immediately raising speculation over Tsai’s attendance. During Congressional testimony in March, Secretary of State Blinken implied that Taiwan would be invited but did not give specifics. Soon after the White House’s announcement, the Global Times issued a breathless commentary warning that an invitation to Tsai would cross a “red line” and would justify PLA fighter planes flying over the island. Whether the Biden administration limits Taiwan’s participation to nongovernment representatives, or whether Taiwan political figures and even Tsai herself participate virtually is a critical watchpoint. The Biden administration will have to square its desire to shore up global democracies in the face of authoritarianism—with Taiwan as a shining example—with the requirements of its one-China policy and the imperative of cross-Strait stability.