Taiwan’s survival as a democracy and free society is under imminent threat. While invasion and blockade are the greatest dangers, economic and political threats also demand attention. All are interdependent, and all require close and continuing cooperation among Japan, Taiwan, the United States, and other Allies and Partners. Over the past decade, significant progress has been made in meeting the threats, and today, that progress has achieved potentially decisive momentum. If it continues, the People’s Republic of China’s (PRC) aggression is highly likely to be deterred or defeated.
The U.S. remains committed to its long-standing “One China” policy, guided by the Taiwan Relations Act, which then-President Jimmy Carter signed into law in 1979 after Washington said it would formalize diplomatic relations with the PRC. The act authorized economic and unofficial diplomatic relations between Taiwan and the U.S., which recognizes the PRC as China’s legal government but does not take a position on Taiwan’s status.
Since 1949, the Chinese Communist Party (CCP) has viewed Taiwan’s continuing self-rule as unfinished business. Even the narrower, more nationalist ideology of Deng Xiaoping, the PRC’s supreme leader from 1978 through the early 1990s, made absorbing Taiwan the CCP’s most important long-term foreign policy goal. Since the modernization of the People’s Liberation Army (PLA) began in the 1990s, the huge buildup of capabilities has focused on invading Taiwan and expanding operational capacity beyond the South China Sea. Since 2012, under CCP General Secretary Xi Jinping, there is an ideological urgency to forge a “New Era” and achieve China’s “national rejuvenation.” This involves moving China into a more prominent, central position on the world stage, creating an alternative to the U.S.-led international order and, perhaps above all, taking control of Taiwan.
The Military Threat: Defeating Invasion
Invasion is the most dangerous threat to Taiwan. Deterrence is the best way to guard against this threat. If the PRC believes an invasion is unlikely to succeed, this will also deter lesser threats, such as blockades or limited military attacks. But if the PRC believes an invasion could succeed, it is also more likely to act on the lesser threats, so as to be able to absorb Taiwan without a full-scale war.
Invasion requires landing a sufficiently large force and then building and sustaining it until Taiwan’s resistance fails. U.S. forces in the Western Pacific, if left intact, can rapidly destroy a PLA invasion fleet and its direct support vessels. Therefore, the PLA has prepared a massive first strike, targeting not only Taiwan’s air and naval bases and other critical military assets but also those of the U.S., Japan and other allies.
Three elements are necessary in defeating a PLA preemptive strike and follow-on invasion:
First, Taiwan’s military prevents an uncontrolled breakout by the invaders.
Second, the U.S. military has sufficient surviving and reinforcing strike forces to destroy or degrade the PLA invasion fleet; and U.S. and Taiwan forces prevent the PLA’s use of local ports and airfields to ferry in sufficient reinforcements and supplies.
Third, Taiwan cooperates with many defense forces and benefits from these relationships.
For much of the past 30 years, Taiwan was complacent about a slowly growing threat. Military spending fell from nearly 5% of gross domestic product in 1993 to about 2% in the early 2000s. Moreover, Taiwan remained wedded to a symmetrical military strategy, which maintained expensive and vulnerable air and naval assets to confront increasingly advanced PLA forces.
Beginning in 2016, Taiwan awakened to the rising threat and started preparing. Military spending rebounded to about 2.5% of GDP in 2024. More importantly, an asymmetrical strategy has been put in place alongside the traditional symmetrical capabilities. This approach emphasizes cheaper, more survivable missile and drone munitions to target invading PLA forces on land and sea and in the air. Taiwan has also set aside its effort to build a volunteer-professional military and returned to a conscription-based force. Other crucial efforts include minimizing early loss of symmetrical and asymmetrical capabilities by hardening, dispersing and preparing to maneuver forces; and preparing and training to respond to invasion quickly at any of a small number of likely locations, while rendering relevant airfields and ports unusable for the invaders.
The U.S. has also gradually reoriented its own strategy, recognizing the PRC as the primary threat and Taiwan as the most dangerous flashpoint in the Indo-Pacific. U.S. preparations and procurement have shifted to address a similar range of issues: hardening, dispersing and preparing to maneuver regional forces; and increasing longer-range strike capacities that are less expensive, more survivable and more likely to decimate a PLA invasion force.
Although the U.S. has followed a policy of ambiguity on Taiwan, U.S. President Joe Biden has publicly committed to defend Taiwan against invasion, making it much less likely that future presidents will invite conflict by withdrawing the commitment. White House officials have repeatedly reiterated in recent years that the U.S. policy toward Taiwan remains unchanged. The U.S.’s “One China” policy is guided by the goal of maintaining peace and stability across the Taiwan Strait, an international waterway key to global commerce. The policy upholds the status quo by opposing unilateral changes by Beijing or Taipei. Still, the U.S. public and both major political parties have become much more aware of the broader PRC threat.
In recent years, Japanese leaders have made unprecedented statements in support of Taiwan, while inaugurating massive quantitative and qualitative defense improvements. Together, Japan and the U.S. can prepare and protect Japanese bases in ways that make it difficult for an invasion of Taiwan to succeed. These efforts also protect other core Japanese and U.S. interests — such as the Japanese-held island chain between the Home Islands and Taiwan, U.S. bases, and military and commercial sea lanes.
Economic Threat: Building Resilience, Diversifying Supply Chains
The economic threat to Taiwan has two major dimensions: resilience to invasion and blockade; and broader impacts on the international economy. Economic resilience involves protecting and backstopping critical infrastructure and preparing to maintain essential services and functions during war or blockade. The PLA, aiming to disrupt Taiwan’s military operations and economy and induce panic, would likely attack communications and transportation networks, the electrical grid, and other infrastructure. A shorter, sharp war or a longer, blockade-siege are possible. Contingencies must be developed and rehearsed to protect all vital systems and services. The wider public should participate and learn what to expect. Amid the fog of war, this will enable Taiwan’s robust civil society and network of small and medium businesses to respond rapidly and effectively.
Taiwan’s most important role in international supply chains is in the semiconductor sector. Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chipmaker, produces the most advanced chips for a wide range of essential businesses, from automobiles and machinery to cellphones and other consumer electronics. TSMC and other Taiwan manufacturers account for over 60% of global semiconductor production. Taiwan is also a key global producer of laptops, machine tools, and various electronic and electro-optical components.
During the early decades of the PRC’s economic reform, Taiwan embraced economic integration with the PRC’s global supply chains. Many believed that the benefits to Beijing would make any attack on Taiwan a kind of mutually assured economic destruction. But this was never the Chinese government’s view. It seeks to absorb — and then copy-and-replace — Taiwan’s technology and production, to the point where conflict mainly threatens Taiwan’s economy and its businesses become captive PRC proponents within Taiwan. The same applies to other foreigners doing business in the PRC.
Taiwan and others have woken up to this reality. Rising labor costs were already pushing many labor-intensive producers from the PRC toward Southeast Asia and India. Businesses are also confronted with rampant technology theft, regulatory discrimination, and shakedowns by local partners and CCP officials. Intensifying geopolitical friction and political repression as well as COVID-19 disruptions under Xi led to the retreat of investment and the “de-risking” of supply chains — moving toward separate supply chains for the Chinese and non-Chinese markets.
As a result, Taiwan investment in the PRC fell from more than 80% of its total foreign investments in 2012 to 13% in 2023, as investment moved elsewhere in Asia and to the U.S. Since 2016, Taiwan’s Southbound Policy, introduced by then-President Tsai Ing-wen, has subsidized expanded trade, investment, educational, and cultural cooperation with 18 countries in South and Southeast Asia and Oceania. Taiwan’s export markets have developed similarly. While the diversification of exports away from China has been less abrupt, the de-risking of Taiwan’s supply chains is well underway.
In the semiconductor sector, policies incentivize TSMC and other manufacturers to diversify production across the world’s major economic regions, while TSMC’s high-end production for the Chinese market remains largely in Taiwan. This is also a better arrangement for TSMC and similar Taiwan firms: A war or blockade would disrupt supply to China, while having less effect on Taiwan’s partners. At the same time, destroyed or disrupted plants would not prevent Taiwan-based multinational firms, operating from robust facilities overseas, from maintaining and rapidly rebuilding their businesses.
Political Threat: Fortifying Will
Just as all military affairs must serve political objectives and choose politically as well as militarily rational strategies, politics is at the center of meeting the CCP’s threat. Nothing can be done without political will. In Taiwan, that means democratically elected leaders, working through a multiparty, checks-and-balances system, responding to public opinion. Over the past decade, Taiwan’s democracy has overcome its old complacency and moved toward better defending the island against the CCP’s military and economic threats.
How and why did this happen, and what does it portend? An important trigger was the 2014 Sunflower Movement, in which student-led demonstrations blocked a services trade agreement that opponents said would give the PRC too much influence over Taiwan, especially in telecommunications, media, public opinion and politics. In 2016, the movement helped elect a Democratic Progressive Party (DPP) government, which presided over the reforms of Taiwan’s traditional symmetrical-warfare defense strategy and China-integrationist economic policy. The policy changes reflected underlying shifts in public opinion over the preceding decades, with polls showing an increasing percentage of the island’s populace as having a Taiwan-focused identity emphasizing local culture, freedom and democracy. The public remains overwhelmingly committed to maintaining the political status quo to avoid a high-stakes confrontation with the PRC. But over time the most popular long-term choices are increasingly either maintaining the status quo indefinitely or moving away from unifying with China.
For the past decade, this gradual identity change has been sharpened by external events. First, Xi’s “New Era” of China’s “national rejuvenation” most threatens Taiwan. Xi hasn’t limited himself to tough words. He eliminated Hong Kong’s freedoms, intended by his three predecessors to serve as a model for Taiwan’s peaceful unification, and he has intensified and regularized invasion-rehearsing military incursions and exercises around Taiwan. Second, Russia’s illegal invasion of Ukraine showed that large-scale war is a looming threat and also that smaller, determined powers can resist effectively. These events have bolstered support for Taiwan’s military reforms. Thus, roughly 75% of Taiwan residents support the recent extension of military conscription from four months to a year, while 70% say they would fight to protect the island from invasion.
What are the main political threats to Taiwan’s turn toward more effective defense and economic policies? Although the May 2024 presidential inauguration of Lai Ching-te as Tsai’s successor means a third consecutive four-year term for the DPP, no one party controls the parliament. Yet there is surprising consensus among the three main parties on major military and economic policies — based on both party ideology and public support.
The PRC has also built significant influence operations in Taiwan. For example, there is the strident and threatening drumbeat of the CCP line: Taiwan must return to the fold of a united China; Taiwan’s leaders are betraying the great, unified Chinese people and culture; democracy is a failure; and CCP-led China is good and the U.S. is bad. In addition to being false, these claims are unpopular in Taiwan, and Xi has made them more so.
Second, and more effectively, China seeks to launder more subtle versions of these arguments through local political connections, mass media and social media. The goal is to intensify polarization at the extremes and cynicism in the middle. However, Taiwan’s populace is considered less susceptible to influence operations because robust public discussion and debate keep it informed about key issues. The PRC’s influence campaigns are also countered by official initiatives and innovative civil society organizations. With Xi in power, moreover, Taiwan is much less likely to let down its guard.
Staying the Course Together
Taiwan has made impressive progress in responding to military, economic and political threats. Its military is better financed and moving toward more effective asymmetric defense, while Japan and the U.S. undertake complementary initiatives. Taiwan is building economic resilience at home and working with partners to establish alternative supply chains overseas. These reforms are driven by political leadership and public opinion more determined to respond to the PRC’s threats and protect Taiwan’s freedoms and achievements.
As the mutually supporting policies continue to achieve critical mass, it is vital to sustain progress on all fronts. Doing so requires constant engagement among Japan, Taiwan and the U.S. Each must build the closest possible ties with the others, communicating its own capacities, needs and suggestions and responding to those of the other partners. Each must strive to excel in its areas of greatest responsibility — above all in deterring and defeating the invasion threat. Trends are moving in the right direction, but success will have to be maintained over decades. Other Allies and Partners should be encouraged to join the effort in ways that serve their interests and incorporate their abilities. Here, too, there has been important progress, from Australia through Southeast Asia to India and Europe.
