• STRATFOR ANALYSIS

    China puts squeeze on Taiwan

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    Sino-Taiwanese tensions are rising and the effects have begun to spread, so much so that they have started to complicate China’s relationship with the United States. Over the past month, China has redoubled its efforts to weaken Taiwan’s ties with diplomatic allies and defense partners while also tempering its own economic and diplomatic involvement with the newly elected Democratic Progressive Party in Taipei. Beijing’s push to isolate Taiwan suggests that China thinks its approach toward Taipei over the past decade is becoming less effective, particularly in light of a potential shift in US policy as Washington prepares to inaugurate a new president. This has moved Taiwan to the center of Beijing’s foreign policy agenda, a shift that the Dec. 2 phone call between US President-elect Donald Trump and Taiwanese President Tsai Ing-wen has given added weight.

    Analysis
    On Nov. 23, Hong Kong authorities, apparently acting at Beijing’s behest, interdicted a shipment of armored personnel carriers heading from Taiwan to Singapore — a city-state that has long maintained military ties with Taipei. A week later, reports surfaced that Beijing has been seeking to establish official ties with the Dominican Republic, a move that would invalidate the island’s existing relationship with Taiwan. (Mainland China and Taiwan both adhere to the idea that there is only one China, so if a country forges ties with either Beijing or Taipei, it must sever ties with the other.) On Dec. 2, a Chinese business delegation arrived in Panama — another of the few countries that still recognizes Taiwan — scouting investment opportunities, particularly in energy and port infrastructure.

    These moves are not motivated solely by China’s concerns about Taiwan. Over the past few months, for example, China and Singapore have gotten into several diplomatic spats over how to manage territorial disputes in the South China Sea and over the city-state’s increased defense cooperation with the United States. China’s protests have been intended, in part, to discourage Singapore from undermining Beijing’s attempts to adopt a more conciliatory approach toward South China Sea claimant states and to sow doubts about Washington’s commitment to the region.

    Meanwhile, Beijing has been building up its presence in Central American and Caribbean states for years as part of its outreach to Latin America. The region has significant markets, natural resources and investment opportunities. It also provides a space for China to expand its soft power on the United States’ doorstep. Consequently, Chinese trade jumped to more than 12 percent of Latin America’s total trade portfolio in 2014, up from 2 percent a decade ago. Its investment presence rose substantially as well, even in countries with which it has no diplomatic relations.

    Isolating Taiwan
    Nonetheless, the issue of Taiwan is becoming increasingly interwoven in Beijing’s strategy across the globe, suggesting that China believes the island’s status quo is growing less sustainable. The roots of Beijing’s spat with Singapore, for example, date back to the normalization of Sino-Singaporean relations in the 1990s, when Beijing reluctantly agreed to allow Singaporean troops to train overseas in Taiwan. For the past two decades, Beijing has opted to tacitly accept the status quo while boosting its own military cooperation with Singapore. The interdiction of the Taiwanese armored personnel carriers calls this strategy into question.

    Beijing has grown more assertive in Taiwanese affairs elsewhere as well. In 2008, following the election of the comparatively China-friendly Kuomintang government in Taipei, Beijing reached a deal with Taipei to refrain from poaching its few diplomatic allies. The agreement came in spite of a change in the economic, diplomatic and political clout of the mainland and Taiwan, which drew some of Taipei’s allies — including Gambia, Panama and El Salvador — closer to China. But as cross-strait relations progressively deteriorated under Taiwan’s recently elected Democratic Progressive Party, so did the truce.

    For the most part, the Tsai administration does not seem interested in a radical departure from the previous administration’s cross-strait policies, nor in the pursuit of independence. But even an ostensibly pragmatic position is not enough to satisfy Beijing. Taiwan has openly sought economic independence and has reached out diplomatically to China’s rival, Japan, on sensitive maritime matters. Beijing views such acts as an attempt to jettison the status quo. In response, it has largely suspended its official exchanges with Taipei and has attempted to block the island’s inclusion in international organizations and events. China has also imposed indirect economic punishments, including limiting the flow of tourists from the mainland and perhaps even trade in areas with the strongest support for Tsai’s Democratic Progressive Party.

    By going after Singapore and courting Taipei’s Central American allies, Beijing aims to diplomatically squeeze Taipei. Most of Taiwan’s allies in Central America, Africa and Oceania are important simply because they legitimize Taiwan’s “one China” claim. They are not a critical economic or political priority to Taiwan, nor are they powerful enough to give Taipei the strategic influence it so desires. Still, Beijing’s overwhelming economic advantage and international heft could begin forcing some of Taipei’s allies to rethink their strategies.

    Looming turbulence
    Beijing’s attempts to isolate Taipei are unlikely to hamper Taiwan’s pursuit of political and economic autonomy. But the call from Trump — a significant breach of US protocol and tradition — could trigger a reassessment by Beijing of the new US administration’s strategy toward China, as well as its own options regarding cross-strait relations.

    Though many perceive the call from Trump to be a diplomatic victory for Taipei, uncertainty over US military obligations in the region persists at a time when any miscalculation between Washington and Beijing could considerably degrade cross-strait relations, leaving Taiwan vulnerable. The United States’ withdrawal from the Trans-Pacific Partnership also stifles Taipei’s hopes for inclusion and protection from Beijing by diverting trade from the mainland market. Washington’s commitment to the Taiwan Relations Act — an act that could require the United States to intervene if China attacks or invades Taiwan — has not been tested for many years, and a hawkish cross-strait policy could put Taipei squarely in Beijing’s crosshairs.

    But just as Taipei will struggle to manage the fallout of these strained relationships, Beijing will also suffer some consequences. Over the past decade, China has relied on its economic interdependence and cultural links with Taiwan to advocate their eventual reunification. This strategy is becoming less and less feasible, however, in large part because of a political shift in Taiwan: The island’s younger generation is more nationalist than its elders. Along with Beijing’s increased military capability, territorial assertiveness and diplomatic clout, a more unpredictable United States and a remilitarized Japan will continue to test the security of cross-strait relations, perhaps pushing even Beijing beyond peaceful means.

    ©STRATFOR

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