ChinaWatch Vol. 2 No. 3

A regular feature of Taiwan Sentinel, ChinaWatch examines developments in China in the areas of internal politics, economics and trade, geopolitics and Taiwan engagement and analyzes their advantages or disadvantages for Taiwan’s standing in the region and the world. This feature is based on the premise that what happens in China has direct relevance for the durability of Taiwan’s de facto independence. ChinaWatch is updated monthly.

Geopolitics

Taiwan Travel Act Becomes Law

On Feb. 28, the United States Senate passed by unanimous consent the Taiwan Travel Act, following similar action taken by the House of Representatives on Jan. 9. With U.S. President Donald Trump’s signature on the bill on March 16 it became law, sending a strong signal to China that its once strong relations with the U.S. may be reaching an inflection point.

The Taiwan Travel Act upgrades official exchanges between the U.S. and Taiwan. It allows senior American government officials to travel to Taiwan to meet with their counterparts there and also permits senior Taiwanese functionaries to come to the U.S. for discussions with senior American officials, including those in the State Department and the Pentagon.

Taiwan visits by senior American officials are extremely rare because a succession of American administrations has been unwilling to risk Chinese ire by sanctioning them. China views the existence of diplomatic relations between it and Washington as providing it with effective veto power over U.S.-Taiwanese personnel exchanges.

Then Environmental Protection Agency administrator Gina McCarthy visited Taiwan in 2014, becoming the first Cabinet-level official to do so in 14 years. No American official of a comparable level has visited Taiwan since.

China hit out at the enactment of the legislation almost immediately.

“The relevant clauses of the Taiwan Travel Act severely violate the one-China principle,” the Chinese embassy in Washington said. “China is strongly dissatisfied with that and firmly opposes it.”

The enactment of the new legislation could be a precursor to more difficult Sino-American ties over the near and medium term future. In a largely symbolic act, the U.S. will open a new US$170 million AIT complex in Taipei later this year, adding ballast to its unofficial ties with Taiwan. Even more to the point, U.S. negotiators have demanded that China reduce its US$375 billion trade surplus with Washington by a significant amount — somewhere between US$30 billion and US$100 billion. With the imminent replacement of Rex Tillerson by China hawk Mike Pompeo at the State Department, chances are increasing that these sorts of moves will become par for the course in Sino-U.S. ties moving forward, always assuming that President Trump feels that he can deal effectively with North Korea without substantial Chinese input. In this regard, the intended meeting between Trump and North Korean dictator Kim Jong-un takes on special significance, particularly if Trump believes he can sell the results of the meeting to the American public.

U.S. and Taiwan: Toward a New Arrangement on the F-35?

For more than four decades Stephen Bryen has been a leading light of the American defense establishment, serving as both a commissioner of the U.S.-China Security Review Commission (USCC) and a Deputy Undersecretary of Defense for Trade Security Policy. The late Morley Safer of the CBS 60 Minutes program once described him as “the Pentagon’s top cop, the man whose job it was to insure that sensitive technology would be kept from enemies, potential enemies, and questionable allies.”

Bryen was recently in Taiwan, where he addressed the East Asia Peace Forum and the National Defense University. His subject was the U.S.-Taiwan defense relationship, and he had a number of interesting things to say about it — interesting in the sense that they reflected a keen understanding of the limits of that relationship, while still trying to push the envelope on it. More than most Bryen is aware that any move by Washington to openly embrace Taiwan as a strategic partner would signal the deal knell for U.S.-China relations — a step it is still unwilling to take, despite having recently declared that China is an American strategic competitor. For all that, he also understands that for Taiwan to maintain its de facto independence — to say nothing of its provisional status as a U.S. ally — it needs a lot more defense help from Washington than it is currently getting.

Bryen offered three specific suggestions to help Taiwan deal with recent advances in Chinese air power, which in his view seriously threatens its security. He defined these advances as China’s production of its first stealth aircraft (the Chengdu J-20) the progress it has made on another (the Shenyang J-31) and its acquisition of the Russian S-400 air defense system. The problem for Taiwan, Bryen believes, is to somehow acquire stealth aircraft of its own, and at the same time gain access to other aircraft and missiles capable of neutralizing China’s new generation of fighters and missile defense systems.

Because it is so unlikely that the U.S. will sell Taiwan its own F-35 stealth fighter (reflecting concerns over Beijing’s presumably negative reaction and the possibility that the plane’s technology could in whole or in part find its way to China) Bryen’s suggestions tried to work around that. Specifically, they were:

1. Equip Taiwan’s F-16s with some of the equipment in the F-35 capable of giving it some of the force multiplier effect of networked airpower and advanced sensors inherent in the F-35 computer and communications systems;

2. Train Taiwanese pilots on the F-35 in the United States so that a cadre of Taiwanese airmen would be capable of operating this advanced system in the event of a national emergency;

3. Support a fleet of F-35s in the United States assigned to Taiwan through some kind of lease or rental arrangement.

The bottom line in all of this, Byren believes, is that F-35 training and deployment involving Taiwan acts as a powerful deterrent to potential Chinese aggression. That in itself, he says, is well worth any risk the U.S. might take on, particularly now, with Washington ever more concerned about Chinese strategic intentions in the western Pacific.

For its own part, Taiwan has long coveted the F-35. On March 15 newly installed Defense Minister Yen Teh-fa confirmed to the Legislative Yuan that an official request to that effect had been made to the United States. He declined to say how many units of the aircraft Taiwan was interested in acquiring.

The F-35 combines characteristics of a fifth generation fighter aircraft, including advanced stealth, integrated avionics, superior logistics support and sensor fusion. Priced at between US$94.6 million and US$122.8 million, the Lockheed Martin product comes in three variants — conventional take-off and landing, short takeoff and vertical landing, and carrier based. The second of these — the F-35B — could be particularly appropriate to Taiwan’s needs, given the strong possibility that Chinese attacks against conventional air force runways might obligate pilots to take off and land on public highways in any future conflict situation.

In his comments to the legislature, Defense Minister Yen also revealed that Taiwan was interested in acquiring the Boeing K-35 Stratotanker. If this were to come to pass, it would become the first aerial refueling aircraft in the Taiwan air force’s inventory.

On March 15 newly installed Defense Minister Yen Teh-fa confirmed to the Legislative Yuan that an official request for the F-35 has been made to the United States. He declined to say how many units of the aircraft Taiwan was interested in acquiring. (Photo: Creative Commons)

Trump and Kim Jong-un: Is North Korea the new China?

The Trump administration’s National Security Strategy, which was unveiled late last year, pointedly identified China as a strategic competitor of the United States. Russia received that designation as well, though it remains to be seen just how serious the president will take it to task for its perceived international transgressions. China, however, appears to be in an entirely different category. One clear expression of this was Trump’s decision in March to impose tariffs on steel and aluminum imports to the United States. Another — related to the first — is the rapid White House ascent of China-hawk Peter Navarro, who has made no secret of his belief that for many years now, China has been riding roughshod over the U.S. in the spheres of strategic behavior and international trade.

These developments, among several others, raise the question of whether the United States is finally reaching an inflection point in its strategic and economic relations with China. For more than four decades those relations were defined by the strong belief that with enough patience and prodding, China could become a responsible international stakeholder whose national values came to reflect those of the West in general and the U.S. in particular. Jim Mann’s The China Fantasy tried to puncture this shibboleth in 2006, but such was the lure of the China market then that no one paid him much mind. The lure remains as it was (it has probably even increased) but even so, more and more American opinion makers have come to believe that no amount of persuasion will ever deflect China from its desire to expel the United States from the western Pacific and substantially increase its economic and commercial power all around the world. This has become particularly evident over the past several months, as China has moved aggressively with its One Belt, One Road initiative and Xi Jinping has consolidated power in Zhongnanhai by amending the Chinese constitution to do away with term limits.

It is within the context of the NSS’s designation of China as a strategic competitor of the U.S. and the rapid crystallization of China-skeptical views in Washington that President Trump’s surprise decision to meet with North Korean dictator Kim Jong-un might best be seen. To be sure, the main purpose of the meeting, at least from the American perspective, is to try to get Pyongyang to commit itself to eventual de-nuclearization. At the same time however, the meeting could also hold out the prospect of the establishment of a new relationship between the sides. Such a relationship could well be directed toward China — specifically, toward curbing its power in Asia. After all, it is no secret that Pyongyang has long been unhappy with Beijing’s attempts to pressure it economically over the nuclear issue. What better response than to transform itself from Chinese ally to Chinese nemesis in concert with the United States?

By much the same token, Washington could well be tempted to use the North Koreans as another anti-China wedge, more or less along the lines that Richard Nixon and Henry Kissinger employed in 1972 when China itself was the wedge against the Soviet Union. In those days of course Beijing was widely seen in the United States as the apotheosis of political and geopolitical evil — much like North Korea today, in fact. Will history repeat itself? Among other countries in the region, Taiwan should be watching this situation closely, if only because the more China has to worry about on its own periphery, the better Taiwan’s situation becomes. To be sure, an American-North Korean compact is still unlikely, but given the topsy-turvy world of Trump’s diplomacy, nothing can be ruled out entirely — even a pact with the devil.

Taiwan Moves to Counter China Outreach Program

Taiwan has said it is taking steps to counter a Chinese outreach program, aimed at convincing Taiwanese businesspeople that their future lies in China.

Deputy Premier Shih Jun-ji said in mid-March that the Tsai Ing-wen administration planned on offering enhanced incentives to retain skilled workers in Taiwan-based enterprises and to protect Taiwanese trade secrets.

Shih’s comments followed a February announcement by China that it would begin offering Taiwanese companies operating in designated sectors the same benefits it provides their Chinese counterparts. The concession, China said, would substantially reduce the companies’ manufacturing and operating costs in China.

The Chinese announcement was part and parcel of a new Chinese campaign to try to work around the Tsai government by appealing directly to medium and small Taiwanese businesses, particularly in southern Taiwan, the locus of much of Tsai’s political support.

China continues to lambaste Tsai at almost every opportunity, accusing her of strong support for formal Taiwanese independence. For her own part, Tsai insists she still wants peaceful relations with Beijing.

Since the shellacking the China-friendly Kuomintang (KMT) took at the polls in Taiwan’s presidential and legislative elections in January 2016, China has been working hard to develop an alternative strategy to entice ordinary Taiwanese to support political union China. Sympathy for such a stance remains extremely low however — probably in the range of only 10-15 percent of the population.

The new Taiwanese measures for appealing to local companies include substantial material incentives, particularly for high-tech start-ups; shortening the government review period for initial public offerings from eight weeks to six weeks; and increasing the government’s commitment to investigating cases involving the transmission of trade secrets from Taiwan to China.

According to Taiwan government figures, some 470,000 Taiwanese currently work in China. However, independent estimates suggest the true figure is closer to one million.

Internal Politics

The End of Term Limits for Xi Jinping and Taiwan’s Future

To the surprise of virtually no one, China’s rubber stamp National People’s Congress voted almost unanimously on March 11 to abolish term limits for the country’s president, allowing Xi Jinping to remain in office in perpetuity.

While the main significance of the legislation is to redefine the relationship between China’s leader and the ruling Communist Party, it could also have important implications for Taiwan’s future, particularly as Xi is on record stating that Taiwan’s de facto independence should not be allowed to continue indefinitely. In theory at least, any development that strengthens Xi’s hand should increase his ability to move forward with his “China rejuvenation” project, a major part of which is Taiwan’s absorption by China.

That having been said however, objective factors beyond Xi’s control will continue to dominate China’s calculations with respect to Taiwanese unification, especially by force. These factors include China’s ability to carry off an amphibious invasion of the island; China’s perception of Taiwanese resistance to unification through persuasion; and China’s perception of foreign (particularly American) reaction to an armed invasion of Taiwan. Insofar as China believes that it can prevail in a future armed conflict with a hopelessly recidivist Taiwan without incurring unacceptable negative reaction abroad, it will be emboldened to move against Taiwan militarily. In the absence of any of these factors however, it will likely be deterred from carrying out an attack.

Xi himself, it must be said, is a remarkably bold man — certainly the most audacious leader China has had since Deng Xiaoping or even Mao Zedong several decades ago. In this sense, the political boost he received on March 11 from the National People’s Congress cannot bode well for Taiwan, given his stated desire to bring it into the Chinese fold sooner rather than later. But without feeling confident on the three critical fronts mentioned above, he is probably unlikely to attack across the strait. Developments like the apparent emboldening of U.S. policy toward China are likely to play a far more important role in his calculations than his enhanced political status in Zhongnanhai, as important as that might be both inside and outside of China.