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Are China and the US Drifting Towards War over Taiwan?

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The fundamental US strategic national interest in East Asia is to preserve peace and stability in the Taiwan Strait and throughout the region. Any US equivocation on Taiwan’s security would strike a devastating blow to American military credibility in greater Asia.

Are China and the US Drifting Towards War over Taiwan?

Soeren Kern | Elcano Royal Institute of Strategic Studies | March 3, 2005

Summary

On 14 March China approved a law that codifies its long-standing threat to use military force if Taiwan formally declares independence. The measure could touch off a destabilising action-reaction cycle that could spin out of control and draw China into unnecessary armed conflict with the United States over Taiwan.

The new law specifies that any attempt to legalise the self-governing island’s de facto independence by changing Taiwan’s Constitution could trigger military action by China. This is a direct challenge to Taiwanese President Chen Shui-bian, who made changing the Constitution a primary goal of his second term in office.

The measure also strengthens the US argument that the European Union should maintain its 15-year-old arms embargo on China.

The Taiwan Strait is one of the most dangerous military flashpoints in the world, and the Taiwan issue is the main obstacle to the idea that China can rise to global-power status in a peaceful manner. Indeed, China’s foreign policy, especially its relationship with the US, is hostage to the Taiwan issue.

Moreover, US President George W. Bush has reiterated long-standing US policy by saying that he would do “whatever it takes” to defend the island against a Chinese attack. The stakes are exceptionally high because any US equivocation on Taiwan’s security would strike a devastating blow to American military credibility in greater Asia.

Analysis:

A High Stakes Game

China has long regarded Taiwan as a renegade province that must be reunited with the mainland, by force if necessary, even though the island has governed itself since the end of a civil war in 1949. China believes that Taiwan’s integration under mainland authority is an essential step towards completing national unification following the reversions of Hong Kong and Macao in 1997 and 1999, respectively. Although there is no timeline to resolve the Taiwan issue, Chinese Prime Minister Wen Jiabao does not want to be accused of “losing” Taiwan. Indeed, the Taiwan issue has taken on a greater sense of urgency due to the surprise re-election of Taiwanese President Chen Shui-bian in March 2004. During his re-election campaign, Chen proposed to write a “brand new” constitution that would underscore Taiwan’s “sovereign, independent” status and discard the “fiction” that Taiwan is part of China. Although the US has warned Chen against taking steps that would change the status quo of cross-Strait relations, the mainland still fears he plans to declare Taiwanese independence before his term ends in 2008.

The controversial anti-secession bill enshrines into law China’s determination to use “non-peaceful means” as a last resort to prevent Taiwan from establishing formal independence. Although much of the law specifies that China’s goal is to achieve reunification through peaceful means, it also contains language that is provocative and belligerent. For example, Article 8 of the law states that China “shall employ non-peaceful means and other necessary measures” if Taiwanese independence forces “under any name or by any means” caused Taiwan’s secession, if “major incidents entailing Taiwan’s secession” should occur, or in case “possibilities for a peaceful reunification should be completely exhausted.” Moreover, the text is dangerously ambiguous in that it does not specify how China defines formal independence. Indeed, the vaguely worded conditions may be intended to serve as a deterrent rather than as a warning of imminent military action. But they do put Chen on notice that should he go too far in his quest for independence, Beijing will not be afraid to use its growing military power.

The Chinese measure could, however, provoke a popular backlash in Taiwan and quickly destabilise the fragile status quo in the Taiwan Strait. The United States, which is Taiwan’s only major ally and weapons supplier, criticised the legislation as “unhelpful” and urged Beijing to “reconsider passage of the law.” But China responded by warning that it has the “ability and the confidence to defend the territorial integrity of the nation” and added that it was not afraid to confront US forces over Taiwan. Indeed, the new law comes at a time when the US is upgrading its threat assessment of Chinese military power and its abilities to attack Taiwan.

The fundamental US strategic national interest in East Asia is to preserve peace and stability in the Taiwan Strait and throughout the region. To achieve this, the US has for decades sought to maintain a cross-Strait deterrent balance of power. But China’s military modernisation, financed by its growing economic strength, now threatens to disturb that delicate order. Indeed, the quantitative and qualitative equilibrium in the cross-Strait military balance is unquestionably shifting towards China. Until recently, the Chinese military was thought to be incapable of carrying out an invasion across the 150-km-wide strait. But Beijing has spent billions of dollars in recent years on buying Russian-made submarines, destroyers and other high-tech weapons to extend the reach of the 2.5 million-member People’s Liberation Army (PLA). On 4 March China announced a US$30 billion military budget for 2005, which represents a 13% increase on 2004. China’s defence spending has been growing at an annual rate of between 15% and 20% for the past decade.

Admiral William Fallon, Commander of the US Pacific Command, told the US Senate Armed Services Committee on 8 March that “we are concerned with the widening gap between China’s military capabilities and Taiwan’s ability to defend itself against this potential threats.” Fallon was especially concerned about the strength of the Chinese navy, including its growing fleet of submarines. “It’s disconcerting to see this build-up,” Fallon said. “It seems to be more than might be required for their defence,” he said. In fact, one Pentagon intelligence estimate expects the Chinese navy to surpass the US fleet within a decade.

Delivering the CIA’s annual assessment of worldwide threats, on 16 February CIA Director Porter Goss told the US Senate Committee on Intelligence that China’s build-up is “tilting the balance of power in the Taiwan Strait.” Goss dropped any mention of the cooperative elements of the US-China relationship that characterised recent CIA statements. Instead, he said China was making determined military and diplomatic efforts to “counter what it sees as US efforts to contain or encircle China.”

The “Annual Report on the Military Power of the People’s Republic of China” issued by the Pentagon in May 2004 states that the PLA is “focused on developing a variety of credible military options to deter moves by Taiwan toward permanent separation or, if required, to compel by force the integration of Taiwan under mainland authority. A second set of objectives, though no less important, includes capabilities to deter, delay or disrupt third-party intervention in a cross-Strait military crisis.”

Indeed, the focus of China’s military modernisation efforts has been to prepare for contingencies in the Taiwan Strait that include scenarios involving US military intervention. China’s strategy is to acquire sufficient air, sea and missile systems to: (a) carry out an attack before US forces can intervene; and/or (b) to deter, deny or delay US intervention and military operations for as long as possible, thereby hoping for a quick political capitulation by Taiwan. But what is the US policy on Taiwan?

Agreeing to Disagree

The US established full diplomatic relations with the People’s Republic of China (PRC) on 1 January 1979. As part of the effort to achieve normalisation, Washington acquiesced to three of Beijing’s long-standing demands: (a) termination of formal diplomatic relations with Taiwan; (b) removal of all US troops from Taiwan; and (c) abrogation of the 1954 US-Taiwan mutual defence treaty. The US also acknowledges the Chinese position that there is but one China and that Taiwan is part of China (also known as the “One-China” principle) although the US itself does not necessarily believe this formulation.

Since 1979, US policy towards Taiwan has been guided by the Taiwan Relations Act (TRA). The TRA was designed to provide protection for Taiwan by: (a) providing a legal framework for US commercial and cultural ties with Taiwan; (b) outlining the terms of Washington’s “unofficial” governmental relations with Taiwan; and (c) including provisions for Taiwan’s defence. Under the TRA, the US is obliged to help Taiwan build up its self-defence capability, which in practice means maintaining a military balance across the Taiwan Strait through the provision of arms, military services and training to Taipei.

The mid-air collision between a US spy plane and a PRC fighter jet in April 2001 prompted a major upgrade in US ties with Taiwan which resulted in an increase in weapons sales to the island. US President George W. Bush also signed into law the Foreign Relations Authorisation Act of Fiscal Year 2003, which says that “for the purposes of the transfer or possible transfer of defence articles or defence services, Taiwan shall be treated as though it were designated a major non-NATO ally.” In fact, no other US president has made such a sweeping commitment to Taiwan’s security since de-recognition in 1979.

But Bush has also taken steps to reduce the prospect of conflict across the Taiwan Strait by warning Taipei that the US opposes any unilateral change in the status quo. For example, in December 2003 Bush publicly rebuked Chen by stating that the “comments and actions made by the leader of Taiwan indicate that he may be willing to make decisions unilaterally to change the status quo, which we oppose.” In fact, one paradox of the cross-Strait problem is that because neither side wants a military confrontation over Taiwan, Beijing finds itself in the curious position of relying on the US to stop Taiwan from being provocative.

Indeed, for two decades US cross-Strait policy has been to deter and to reassure both sides. Washington has warned Beijing that the US will not stand by if China attacks Taiwan, but it has forewarned Taiwan that it cannot count on US protection if it recklessly provokes a war. Washington plays lip service to Beijing’s “One-China” principle (the US calls it a policy, which is more flexible than a principle) while promising Taipei that it will not sell out the island’s interests. Moreover, the US does not take a position on Taiwan’s final status: independence, unification with the mainland or some other arrangement agreed to by both sides of the Taiwan Strait. Although this policy has kept the peace, it has not solved the underlying stand-off, and the US now finds itself caught in the middle, committed to a peaceful resolution of differences between the two parties whose growing rift makes maintaining peace difficult.

Strategic Partners or Strategic Competitors?

During his first presidential election campaign, George W. Bush denounced Bill Clinton’s policy of engagement with China. In what was the best-known foreign policy speech of his campaign, in November 1999 Bush said that “China is a competitor, not a strategic partner” to the US. Indeed, international, regional and bilateral security cooperation between Beijing and Washington remains limited because of strong suspicion in both countries of the other’s long-term strategy and intentions.

The US does maintain a modest military-to-military relationship with China. Guided by the National Defence Authorisation Act of 2000, this relationship is limited to non-war-fighting venues such as high-level visits, professional military education exchanges and port visits. But as a result of the spy plane incident early in Bush’s first term, the White House essentially stopped all contacts between the Pentagon and the Chinese military and also reversed a twenty-year policy by agreeing to sell submarines to Taiwan. These developments reflected a sharp deterioration in the US-China strategic relationship.

But 9/11 created a common terrorist threat for Washington and Beijing. This prompted both countries to recognise that they needed to put aside bilateral differences on trade, human rights and on Taiwan and instead cooperate on counter-terrorism. Bilateral military contacts resumed when two US Navy ships arrived at Zhanjiang port in September 2003, the first time US vessels were ever allowed to visit the PRC Navy’s South Sea Fleet headquarters in southern Guangdong Province. Indeed, apart from the Taiwan issue, many analysts now say the US-China relationship is currently at its best (and most mature) shape since ties were normalised. Some even argue that the US and China now are strategic partners instead of strategic competitors.

However, despite engagement and cooperation between the two governments, 9/11 did not fundamentally alter the structure of the Sino-US strategic relationship. Although some policy priorities have changed in both Beijing and Washington, the two governments have not reached a common long-term agenda, and cooperation in international and regional security issues remains limited and based on realist considerations that both countries have of their own self-interests.

For example, US officials voice frustration that Beijing refuses to use its influence to pressure Pyongyang to abandon its nuclear weapons programme (indeed, North Korea’s nuclear programme was developed with China’s help in the first place). Moreover, the US has been unable to persuade China to revalue its currency, improve human rights or promote religious freedom, among other issues. China has also interfered with the effort to prod Iran to abandon its nuclear ambitions. During EU-Iranian negotiations in November 2004, Chinese Foreign Minister Li Zhaoxing flew to Tehran and announced that China would oppose any effort to haul the Iranian nuclear programme before the United Nations. Indeed, in October 2004 China and Iran singed a US$70 billion oil and natural gas deal that will lock both countries into a 30-year relationship. The deal will undercut the impact of any incentives or sanctions Europe or the US may link to Tehran’s disarmament.

Indeed, many fear that China poses a growing threat not only to US interests, but also to those of its allies in the Asia Pacific region. For example, in November 2004 Japan spotted a Chinese nuclear-powered submarine inside its waters. Japan’s navy was put on alert for the first time in five years to chase it. The incident fuelled tensions between the two countries, which are becoming increasingly competitive in their hunt for natural resources to power their economies; Japan and China are locked in disputes about contested islands and gas fields. Moreover, Beijing was angered by the National Defence Programme Outline published by the Japan Defence Agency in December 2004 which established three scenarios of possible attacks on Japan by China. It cited disputes over natural resources and territorial claims, as well as a wider conflict involving Taiwan.

For its part, China fears that Japan is becoming America’s main military ally in Asia, and that the US will use a militarised Japan to help it contain a rising China. In fact, Japan has reassessed its global strategic position and has embraced US primacy in East Asia; it is now revamping its defence policy accordingly. After a meeting of the US-Japan Security Consultative Committee on 19 February, the two countries declared for the first time in a joint agreement that Taiwan is a mutual security concern. In the most significant alteration in 50 years to the US-Japan Security Alliance, which remains the cornerstone of US interests in East Asia, Japan joins the Bush administration in identifying security in the Taiwan Strait as “a common strategic objective.” The revisions call for Japan to take a greater role in conjunction with US forces both in Asia and beyond.

But the idea of Japanese military cooperation with the US in the sea lanes north of Taiwan has angered Beijing. China says Taiwan should not be a concern for the bilateral alliances of other countries. On 6 March Li warned Japan and the US against interfering in China’s internal affairs, especially regarding Taiwan. “Any practice of putting Taiwan directly or indirectly into the scope of Japan-US security cooperation constitutes an encroachment on China’s sovereignty and interference in its internal affairs,” he said. Indeed, the rise of China has become the primary concern fuelling Japan’s shift away from nearly six decades of pacifism.

Australia is also nervous about China’s muscle-flexing. On 7 March China demanded that Australia review its 50-year-old military pact with the US, warning that the ANZUS alliance could threaten regional security if Australia were drawn into Sino-US conflict over Taiwan. Under the ANZUS alliance, Australia is obliged to support the US should China use force against Taiwan. Australia rebuffed China’s warning by saying that “neither Australia nor the US has any plans to amend the ANZUS alliance.” But the blunt warnings imply that Beijing is wary about how trilateral security arrangements between Australia, Japan and the US might develop in relation to Taiwan.

But is a Sino-US War Really Possible?

Stability in Asia largely hinges on preventing a conflict between China and Taiwan. Because the US would almost certainly be drawn into such a confrontation, war between China and the US is a distinct possibility. According to a December 2000 report delivered to the US Congress, the Pentagon has identified three scenarios that could lead to military action in the Taiwan Strait: (a) China launches an amphibious invasion of Taiwan; (b) China blockades Taiwan; and/or (c) China launches air or missile strikes against the island.

One possible scenario goes like this: China initiates a naval blockade of Taiwan. The US responds by sending two aircraft carrier groups to the area. China sinks a Taiwanese ship that refuses to yield. The US sinks a Chinese naval ship. China responds with a barrage of cruise missiles and sinks an American aircraft carrier. The US retaliates by destroying China’s military and military-industrial complex. Although the scenario seems unthinkable, it is in fact more possible than ever that such a conflict could at worst go nuclear, and even if it did not, it could wipe out US-China trade worth some US$100 billion in 2004 and trigger global economic collapse.

And this underscores the complete difference in strategic perspective between the US and the EU towards China and the Taiwan issue. For the US, Taiwan is one of its most important national security issues today, just behind post-war reconstruction in Iraq and the nuclear crisis in North Korea. Moreover, because the US is the primary guarantor of stability in East Asia, it has longstanding regional alliances and a deep seated commitment to Taiwan that goes far beyond trade and economics. By contrast, Europe has no military presence in East Asia nor does it have any strategic security responsibilities in the region. The two issues that define the US-China relationship (Taiwan and the strategic balance in East Asia) are completely absent in the EU-China relationship. Indeed, EU policies towards China are guided primarily or even exclusively by trade and economic interests, and ignore the strategic security dimension.

It is against this backdrop that the EU arms embargo is a potential major irritant in the trans-Atlantic relationship. From the US perspective, the EU wants to lift its arms embargo on China at a time when Beijing is implementing an ambitious military modernisation programme which could be used to coerce Taiwan into a political settlement on Beijing’s terms. This modernisation is aimed at improving China’s force options against Taiwan, and at deterring, countering or complicating US military intervention.

As a result, the US opposes lifting the EU arms embargo, which was imposed after the government crushed pro-democracy protests in Beijing’s Tiananmen Square in 1989. By lifting the embargo, Washington fears the EU will help China raise the cost of war for both Taiwan and the US, and the Pentagon is concerned that US troops might be attacked by a Chinese military equipped with European weapons. The US is also worried that lifting the embargo may encourage Russia (which supplies more than 80% of Beijing’s foreign-sourced weapons) to sell military technology to China that it has previously withheld because of concerns about how the US might react.

EU Foreign Policy Coordinator Javier Solana argues that lifting the embargo is “purely symbolic.” But French Defence Minister Michele Alliot-Marie February said on 15 February that “if we sell them the weapons ourselves, perhaps they won’t make them themselves.” Many analysts on both sides of the Atlantic say this convoluted logic implies that the EU has not made the serious security assessment that it needs to make before deciding to transfer technologies to China.

A case in point involves China’s participation in the European Galileo satellite navigation system. Critics say the EU has allowed China to invest €200 million in the project without giving much thought to the wider strategic consequences. For example, China will derive a military advantage from the Galileo project by using it to improve the accuracy of its missiles. (China is now estimated to have at least 700 missiles aimed at Taiwan, with at least 75 being added each year.) But allowing China unfettered access to highly accurate satellite navigation signals will also reduce deterrence between India and Pakistan. This is because Pakistan, which bought missiles systems from China that are now armed with nuclear warheads, could be tempted to use these missiles in a first strike if satellite navigation signals guarantee profound accuracy.

The arms to China issue was one of the few disagreements to spill into the open during Bush’s fence-mending trip to Europe. In his most explicit public argument against lifting the embargo, Bush said on 23 February: “There is deep concern in our country that a transfer of weapons would be a transfer of technology to China, which would change the balance of relations between China and Taiwan.” Bush also said he looked forward to seeing EU plans to restrict exports by tightening a code of conduct, but added: “They need to make sure that if they do so they can sell it to the US Congress. Congress will be making the decision on how to react about what some will perceive to be a technology transfer.”

But the EU has failed to convince the US Congress that it has thought seriously about the issue of security in East Asia. Moreover, Europeans may be underestimating the potential for a political backlash that has consequences as dramatic as a trade sanctions. Indeed, there is strong bi-partisan support for placing restrictions on the transfer of US technology to Europe if the EU resumes arms sales to China. The Chairman of the US Senate Foreign Relations Committee, Richard Lugar, said in an interview with the Financial Times on 20 February that he would support curbs on US sales of advanced military technology to Europe unless there are strong assurances that such technologies would not be diverted to China.  “The technology the US shares with European allies could be in jeopardy if allies were sharing that through these commercial sales with the Chinese,” said Lugar, who is considered both moderate and pro-European. And Joseph Biden, the top Democrat on the Senate Foreign Relations Committee is expected to introduce a resolution soon expressing concern about the EU lifting of the embargo.

The House of Representatives passed a similar bi-partisan resolution on 2 February by a 411-3 vote that condemned the EU’s plans. Moreover, many lawmakers are incensed that “pacifist” European countries would start exporting weapons to China in a way that increases the strategic burden on the US, and this at a time when Europeans are reducing their own defence budgets and free-riding on America for global policing. Others have openly ridiculed the EU claim that it is a “moral power.”

All of this implies that the EU’s efforts to improve its relations with China may come at the potentially high price of adding further stress to an already tense trans-Atlantic relationship. Because as long as Europe views weapons sales to China in strictly an economic sense, it will clash with Washington, which has to deal with the regional military and strategic repercussions of these sales.

But then again, perhaps Europe is seeking to become a rival, not an ally, of the US in East Asia. And maybe the real objective behind EU-China cooperation is a mutual desire to constrain American power and hegemony. Although Europe can do little to balance the US, it can accelerate the pace at which China may emerge to play that role.

Conclusion

China is engaged in a broad effort to wield its increasing military power to coerce greater obedience from its neighbours. As a result, the US seeks to maintain a military deterrent balance of power as the linchpin of security in the Taiwan Strait. For Taiwan and the US, such deterrence aims at preventing China from using force to compel reunification on Beijing’s terms. But for China it aims to prevent Taiwan from progressing from a de facto to a de jure independent country. Given the trans-Atlantic rift, Beijing perceives a window of opportunity to exercise leverage over the EU. But European arms sales to China could produce an imbalance and disturb the cross-Strait status quo, thereby increasing the likelihood of military conflict. The stakes are unusually high because US military credibility in Asia is tied to the security of Taiwan. Allowing Taiwan to fall to China by force or coercion would prove fatal to American leadership in East Asia.

Soeren Kern
Senior Analyst, United States and Transatlantic Relations, Elcano Royal Institute for Strategic and International Studies

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