In recent years, US military officials and analysts have been warning that the Chinese Communist Party (CCP) may invade or block Taiwan in order to achieve reunification. However, a report released on Friday, October 4th, suggests that in the future, the CCP may lean towards using non-military strategies to compel Taiwan to accept Beijing’s rule.
The Washington-based think tank, Foundation for Defense of Democracies (FDD), cautioned in its latest report that the CCP may have learned lessons from the Russia-Ukraine conflict and aims to “win without fighting” without a bloody war and widespread condemnation.
This indicates that the CCP may take weeks, months, or even years to slowly advance economic and cyber warfare, rather than directly resorting to military force. This “siege”-like grey zone operation could gradually deplete Taiwan’s resources, damage critical infrastructure, and ultimately exhaust its resilience.
Researchers warn that Taiwanese authorities should not underestimate this possibility, and the US government should be prepared for it.
“The economic coercion in cyberspace is the most strategic and logical approach for the CCP,” FDD believes that the CCP hopes to use minimal military force in the process of reunification while preserving Taiwan’s infrastructure and economy as much as possible.
Since 2016, the CCP has significantly ramped up diplomatic and military pressure on Taiwan, prompting increased US support for Taiwan. The US and Taiwan have also conducted more tabletop exercises (TTX) to study how to respond to CCP’s “trans-sea invasion” or “joint blockade.”
However, FDD states that there is a lack of research institutions currently simulating the CCP’s network and economic strategies towards Taiwan, and they aim to fill this analytical gap.
In August of this year, FDD sent an expert delegation to Taipei to collaborate with Taiwanese banks and financial experts. They spent two days simulating a series of potential grey zone invasion actions by the CCP, such as spreading disinformation campaigns, cyber-attacks on infrastructure, disrupting energy supplies, trade coercion, etc., to assess what actions the CCP might take to isolate and pressure Taiwan without triggering a full-scale war.
“The modern era of globalization has created more economic ties that China (CCP) can exploit to achieve its coercive goals,” the report states. “Technological innovation has created more digital connections, providing more possibilities for coercion, including targeting critical infrastructure.”
In the simulation exercises, experts suggested that the CCP might engage in psychological warfare to undermine public trust, ban imports of Taiwanese products or raise tariffs, short-sell Taiwanese stocks, launch malicious cyber activities, freeze cross-strait bank transfers, cut fiber-optic cables, and target energy imports and storage facilities.
Experts warn that many of the CCP’s actions do not necessarily cross the “red lines” between Washington and its allies like invasion or blockade. This also implies that without adjusting the US response to CCP’s economic and cyber grey activities, Washington might not be able to provide sufficient support for Taiwan.
The report recommends that Taiwan diversify energy imports, relocate businesses away from the mainland, develop new markets, and establish broader alliances and partnerships.
To enhance social resilience, Taiwan should continue investing in efforts to combat misinformation and propaganda that undermine public trust. Taiwan should also learn from Ukraine on how to quickly restore power supply networks.
The report also suggests establishing underwater cable connectivity between Japan, Taiwan, and other regions in Southeast Asia to make efforts to cut off Taiwan’s cables affect countries in the Indo-Pacific region. Experts also propose encouraging Southeast Asian countries to store data in Taiwan, creating a “data shield” to increase the cost of CCP’s threatening actions.
The report recommends that the US formulate a set of contingency plans against the CCP and enhance coordination with allied countries. Working with Asian allies, the US should strengthen Taiwan’s integration into the global market and assist Taiwan in establishing a more secure network environment.
The Taiwan Academy of Banking and Finance collaborated with FDD for this simulation exercise.