On August 2-3, the US speaker of the House of Representatives, Nancy Pelosi, visited Taiwan for 16 hours. It was a visit of seismic proportions along the Pacific Ring of Fire. Speaker Pelosi became the highest-ranking US official to visit Taiwan since the unannounced stopover by then-speaker Newt Gingrich in 1997. China has reacted to speaker Pelosi's visit by vehemently condemning the visit, noting that it will undertake "resolute, forceful, and effective" responses. Should we be concerned? The answer is yes.
We may not see any direct military confrontation immediately. However, China's leadership may significantly escalate its threats to Taiwan's democracy. The inept/poorly organized Pelosi visit did not spark a new campaign against Taiwan. Instead, it provided an excuse for Xi Jinping, China's leader, to continue to escalate China's threats against the free Taiwan people. China's foreign minister Wang Yi warned: "Those who play with fire will not come to a good end, and those who offend China will be punished" - during the next 3-5 years (timing is my prediction, not his).
During the first six months of 2022, China undertook 555 military drills, including 398 combat aircraft sorties near and around Taiwan. Within the four days during August 3-7, immediately after speaker Pelosi departed Taiwan, China intensified single-day military exercises. Initially, it was 27 airplanes - consisting of six-J-11 fighter jets, five-J-16 fighter jets, and 16 SU-30 fighter jets. Last year's largest single-day number was 56 combat aircraft sorties. But China continued to send 68 warplanes and 13 vessels as part of live fire drills. Then, on Saturday, August 6, it flew 66 combat aircraft missions, and launched 11 ballistic missiles near Taiwan in one single day.
In addition to military exercises, China suspended citrus fruit imports and seafood imports from Taiwan (allegedly due to excessive pesticide residues and COVID prevention). To date, China has imposed an estimated 100 additional economic sanctions on Taiwan's trade and commerce. There is a strong risk that the sanctions will intensify during the next 30-60 days.
Shortly, Congress may enact strong measures against China. For example, Congress is considering legislation that will re-link trade relations with human rights abuses of China. Since president Clinton delinked human rights from trade matters in 1994 (and thereafter upheld by the Democrat Obama and Biden administrations to date), for the first time a bipartisan bill may revoke what is known as Permanent Normal Trade Relations status to China. A Generalized System of Tariffs may re-emerge but exclude China. Although very restrictive anti-China restrictions disappeared from the Chips and Science Act signed by president Biden on August 9, Republican senators and a few Democrats have promised those restrictions would soon reappear. Also, Congress is likely to enact this fall the Taiwan Policy Act of 2022 that may very well change the status quo in US-Taiwan relations, including US$4.5 billion in security assistance over the next four years and designating Taiwan as a "Major Non-Nato-Ally." During her visit, Pelosi emphasized that the US will "not abandon" Taiwan. Noting that the US is "Proud of our enduring friendship" the speaker went on to declare that "America stands with Taiwan."
In response to China's bullying, the US aircraft carrier USS Ronald Reagan (Nimitz Class nuclear powered supercarrier) and its strike group have been stationed nearby in the South China Sea (Philippines), after a five-day port call in Singapore.
Consequently, we will likely have more reasons to be alarmed. Several factors are at play:
China is facing significant internal economic pressures including the fact that manufacturing shrunk in July; it has suffered the slowest growth rate since 2019; property market values and stock market earnings have encountered precipitous declines and growing internal dissent.
Communist party general secretary Xi Jinping had been scheduled to be reelected this fall to an unprecedented third 5-year term as China's paramount leader (as general secretary or even chairman). He hopes to be crowned as the "People's Leader." He has made Taiwan reunification a cornerstone of his "rejuvenation project." When added to other mistakes and missteps, a failure to bring Taiwan into the fold diplomatically will tarnish his legacy considerably, narrowing his options to military ones.
Even more significant, the Chinese are very superstitious people. And, throughout the entirety of Chinese history, political leadership and its control has been legitimized by Heaven's ordination of China's rulers, known as the Mandate of Heaven. Unfortunately, China's Mandate from Heaven has never been earned/achieved by the Chinese Communist Party. Fearful of impending decline, general secretary Xi may be forced to unite Taiwan and China in order to be rewarded with the legitimacy of the Mandate of Heaven.
Consequently, we are entering a period of potentially high risk to maintaining peace and stability in the East Pacific Region. While I do not foresee immediate and direct military actions against the island of Taiwan on the horizon (if for no other reason than, today, they do not possess military superiority against a combined US-Japan military force), China could increase trade sanctions against Taiwan; initiate additional air, sea, and missile "tests"; cause issues for Taiwan companies with investments in China; embargo the Taiwan islands of Kinmen and Matsu; or other actions which it would portray as "dire consequences." I do not believe that China's military is careless enough to risk military accidents, but the domestic pressures on general secretary Xi and his government may increase the stakes requiring further escalation.
(Editor's note: The article was first published in Hudson Valley Hornet, on Aug 19, 2022. The author, Richard L Thurston, is an independent board member of Nantero. He previously spent more than 15 years at TSMC as a general counsel. He helped build up a sophisticated intellectual property and trade secret protection mechanism and participated in many key moments of the Taiwan-based foundry house's growth and success.)
