Vol. 3, Issue 2
The Global Taiwan Brief Volume 3, Issue 2
By: Russell Hsiao
Far Beyond the Centerline: China’s Assertive Bomber Flights Around Taiwan
By: David An
Why China Should (Still) Feel Good About Taiwan… But Maybe Not For Long
By: Derek Grossman
Taiwan’s Demographic Crunch and its Military Implications
By: Michael Mazza
Taiwanese Public Opinion on the Future of Cross-Strait Relations
By: Austin Horng-En Wang
Russell Hsiao is the executive director of the Global Taiwan Institute and the editor-in-chief of the Global Taiwan Brief.
Taiwan to Boost Energy Cooperation and Reduce Trade Deficit with US through LNG Imports
In an apparent effort to assuage the Trump administration’s principal trade concern of reducing the United States’ trade deficit with foreign partners, Taiwan’s Minister for Economic Affairs, Shen Jong-chin (沈榮津), announced that Taiwan would import more liquefied natural gas (LNG) from the United States to reduce the former’s trade surplus with the world’s largest economy. In an interview with US-based Politico in December 2017, the minister said that Taiwan’s state-owned energy company, CPC Corp., has signed a 20-year contract to import LNG from the United States. According to the minister, “we [Taiwan] believe we can efficiently solve the problem of deficits between Taiwan and the US.”
Immediately upon taking office, the new US president quickly signaled his administration’s intent to prioritize the reduction of the nation’s ballooning trade deficits. In March 2017, President Trump issued Executive Order 13786—Omnibus Report on Significant Trade Deficits. The Executive Order highlighted that the US annual trade deficit in goods exceeded $700 billion and overall trade deficit exceeded $500 billion in 2016. Consequently, the President directed the Commerce Department and the Office of the US Trade Representative to assess the major causes of the trade deficit with foreign trading partners that the United States had a significant trade deficit in goods in 2016 and whether those trading partners were engaged in “unfair and discriminatory trade practices.” The United States’ trade deficit with Taiwan was reportedly US$15.5 billion through the first 11 months of 2017. As such, Taiwan was targeted along with 12 other trading partners (i.e., Canada, China, the European Union, India, Indonesia, Japan, Korea, Malaysia, Mexico, Switzerland, Thailand, and Vietnam).
Minister Shen’s announcement that Taiwan will increase LNG imports also follows in line with the Tsai administration’s ambitious push towards green energy that will see gas become the dominant fuel source in the country’s energy profile for electricity production by the mid-2020s.
Under the current government’s plan, Taiwan is undergoing a long-term transformation of its energy profile for electricity production. Indeed, the current energy mix is composed of coal (46 percent), gas (32 percent), nuclear (12 percent), renewables (6 percent), and oil (4 percent). In pursuit of the Tsai administration’s goal to completely phase-out nuclear power, the Tsai government is aiming to rebalance the country’s energy mix to gas (50 percent), coal (30 percent), renewables (20 percent), while eliminating nuclear and oil as fuel sources for electricity production by 2025.
The long-term contract signed by CPC Corp. touted by the minister was for 800,000 tons of LNG per annum that will be delivered over 20 years and worth US$ 10.7 billion from the Cameron LNG liquefaction project in Louisiana. By comparison, CPC Corp. received only two LNG shipments in June and in December in 2017. In accordance with the new contract, starting from 2018 CPC Corp will receive from ENGIE, a global business providing electricity, natural gas and energy services, a monthly delivery of LNG shipments at the country’s Yongan regasification terminal in Kaohsiung.
With a population of just 23.5 million, Taiwan was the 5th largest LNG buyer in the world in 2016—only behind Japan, South Korea, China, and India. The top five countries from which Taiwan imports LNG from Qatar, Malaysia, Indonesia, Papua New Guinea, and Russia. Taiwan began importing LNG from Qatar in 2005, and the gulf state quickly began the leading supplier accounting for between 30 – 40 percent of Taiwan’s total LNG imports in 2016. However, as tensions in the Middle East festers, there are concerns in Taiwan that events like the mid-2017 row over Middle Eastern countries with Qatar could negatively impact the availability of LNG imports from the region. As Taiwan increases the profile of gas in its future energy mix, Taipei may be looking for more reliable and less-risk prone suppliers for its LNG supplies to increase its energy security. At the same time, the United States is set to become the world’s second largest exporter of LNG by the end of 2022—just behind Australia and ahead of Qatar—accounting for 22 percent of the total global gas output.
There appears to be a growing alignment of interests between Taiwan’s energy security and US concern over the bilateral trade deficit. While Taiwan’s decision to import more LNG from the United States will help lessen friction over the bilateral trade deficit and deepen energy ties between Taipei and Washington, the former’s capacity to utilize the growing supply and demand of LNG depends on more than adding additional supply. To be sure, Taiwan must also address capacity issues such as in its ability to store and reprocess the LNG for use by its limited regasification facilities and power generators. Additional infrastructure such as new receiving terminals and storage, pipelines, as well as regasification facilities are necessary to increase the capacity to provide and transmit increased supply under the government’s plan.
The main point: Taiwan state-owned CPC Corp.’s deal to import more LNG over the next 20 years from the United States will help kill two birds with one stone: one, it will help reduce the trade deficit with the United States and also contribute to the push towards increasing gas in the country’s energy profile.
Correction: A previous version of the article imprecisely described ENGIE as an electric utility.
Ready, Set, Go: Race for 2018 Nine-in-One Elections Begins
With the date for Taiwan’s local elections set for later this year on November 24, the race for the nine-in-one elections is officially underway. The local elections combine municipal mayors/councilors, county magistrates, county/city councilors, township chiefs/councilors, borough chiefs in six municipalities and 16 counties/cities, chiefs of indigenous districts in municipalities, and councilors of indigenous districts in municipalities. The primary season is heating up with Taiwan’s major political parties horse-trading with coalition partners and prospective candidates jockeying to be their respective party’s nominee in these elections that will serve as a bellwether for the 2020-presidential election.
The last local elections held in 2014 resulted in the ruling-Democratic Progressive Party (DPP) controlling a majority of the city/county seats with 13 of the 22 city and county mayoral posts—notably wresting control of Taichung city in central Taiwan from the Nationalist Party (Kuomintang, KMT) and successfully supporting an independent candidate to win in a traditional-KMT stronghold, Taipei city. The KMT managed to retain only six of the seats with the remaining three won by independent candidates. The political momentum generated by this landslide electoral victory for the DPP in the local elections paved the way towards its return to power in the national-level 2016 presidential and legislative elections.
While local elections in Taiwan generally focus on domestic issues and prior local races before 2014 may shed little light on nation-wide trends, all politics in Taiwan is increasingly local. Since President Tsai Ing-wen has made domestic issues the focal point of her administration’s priority, the results of the upcoming elections will likely be seen as an assessment of her administration, as well as DPP’s ability, to govern and deliver on those social promises.
As much as the elections will be about Tsai’s and the DPP’s performance, it is also a test of the voters’ confidence in the ailing-KMT to govern again—which has been undergoing an intense intra-party reformation since its crushing defeat in 2016. Relatedly, it provides a window into the lingering power competition between different factions within the KMT, most notably the faction of the former pro-China KMT Chairwoman Hung Hsiu-chu (洪秀柱) and the current more moderate Chairman Wu Den-yih (吳敦義).
Interestingly, a new power base within the KMT seems to be emerging with the formation of the so-called the Pan-Blue Alliance (泛藍聯盟) established by former New Party (新黨) lawmaker Cheng Lung-shui (鄭龍水), National Committee of Civil Servants (全國公務人員協會) Chairman Li Lai-hsi (李來希), and former KMT National Development Institute Chairman Lin Chung-san (林忠山), who will serve as the coordinator of the group and is a close ally of former KMT Chairwoman Hung. The group’s aim is to field their preferred candidates in the upcoming local elections.
Two electoral races that are being closely watched by political observers are for Taipei city and New Taipei City, positions currently held by the non-affiliated Ko Wen-je (柯文哲)—which the DPP supported in 2014 by not fielding its own candidate—and the KMT’s Eric Chu (朱立倫), respectively. In a surprising statement, a promising KMT contender for the Taipei city position, Chiang Wan-an (蔣萬安), announced that he will not be running in the party’s primary—leaving open to question whom will emerge from the KMT’s primary to compete against the incumbent for the important post of mayor of Taiwan’s capital. At the moment, the most likely candidate will be KMT Taipei mayoral candidate hopeful Ting Shou-chung (丁守中). In New Taipei City, which is under KMT control but considered in play due to the razor thin margin of the incumbent’s victory in 2014 and since KMT mayor Chu has reached the term limit, the Deputy Mayor Hou Yo-yi (侯友宜) or former Taipei County commissioner Chou Hsi-wei (周錫瑋) may become the Party’s pick to become Chu’s successor.
With some already looking towards Taiwan’s 2020 presidential election, the green-leaning Taiwan Brain Trust (新台灣國策智庫)—funded by pro-independence heavyweight Koo Kwang-ming (辜寬敏)—recently conducted a public opinion poll that showed only 32.4 percent of respondents believe that President Tsai would be re-elected in 2020, and 43.9 percent said she would not. Some analysts interpret the polling data to mean that President Tsai has lost support from independent voters, yet it is also plausible that the likely cause of the result is from waning support from the deep-green elements from within her own party.
The godfather of Taiwan independence and also senior adviser to the president, Koo has publicly indicated his preference for Premier and former Tainan mayor William Lai (賴清德) to run as the DPP’s presidential candidate in 2020. Interestingly, the TBT poll also asked respondents whether they prefer Tsai or Lai as the next president with 42.3 percent supporting Lai and only 24.4 percent supporting Tsai. In a match up against KMT candidates, Tsai’s support rating was 45.4 percent compared with KMT Chairman Wu Den-yih’s 29.6 percent, and lower at 38.2 percent against the former KMT presidential candidate and current New Taipei City Mayor Eric Chu with a support rating of 43.9 percent. Whereas if Lai was the DPP’s presidential candidate, according to the poll, he would have a 57.7 percent support rating against Wu’s 22.1 percent, and 47.9 percent support against Chu at 35 percent.
The main point: The race for the nine-in-one elections is underway. The results of the elections will likely be seen as an assessment of Tsai administration as well as DPP’s ability to govern and deliver on domestic concerns. At the same time, it is also a test of the voters’ confidence in the ailing-KMT to govern again.
Far Beyond the Centerline: China’s Assertive Bomber Flights Around Taiwan
David An is a senior research fellow at the Global Taiwan Institute and was previously a political military officer at the US Department of State.
The Chinese People’s Liberation Army Air Force (PLAAF) did not conduct any flights that circled around Taiwan prior to 2016. It had stayed to its side of the centerline of the Taiwan Strait before then. However, since 2016, China has conducted numerous flights that circumnavigate Taiwan, and is doing so on an increasingly regular and threatening basis. For these sorties, China often flies its H-6 bombers, which are a modern version of the old Soviet Cold War Tu-16 Badger aircraft. They can carry cruise missiles—which could be either armed with nuclear or conventional warheads. Media reports mention that they keep a distance from Taiwan, and do not cross within Taiwan’s territorial airspace—defined as 12 nautical miles from shore. However, it is puzzling that China would break from precedence in this new and assertive way. In addition, though Taiwan is actively working on mitigating the threat, but it should consider reciprocating such threatening flights as the best way to push China to de-escalate.
Chinese PLA military aircraft have conducted frequent flights near Taiwan since 2016, and this list includes flights that have circumnavigated Taiwan:
- October 27, 2016
- November 25, 2016
- December 10, 2016
- March 2, 2017
- July 13, 2017
- July 20, 2017
- July 24, 2017
- August 9, 2017
- August 12, 2017
- August 13, 2017
- August 14, 2017
- November 18, 2017
- November 23, 2017
- December 7, 2017
- December 11, 2017
China’s bombers and transport aircraft are circumnavigating Taiwan, but this has been occurring within a regional context. China’s previously mentioned H-6 bombers have recently been a common sight over South China Sea islands claimed by Philippines, Vietnam and Australia. Furthermore, the US Chairman of the Joint Chiefs of Staff General Joseph Dunford mentioned that China’s nuclear capable bombers had been conducting flights near US mid-Pacific naval and air force facilities; and they have been observed practicing “attacks on Guam.” US officials warned that practice bomb runs by Chinese aircraft on US bases in the Pacific is “not in China’s interest.” As China’s military aircraft are adopting increasingly assertive flight paths, it’s important to note that it is happening in the context where Taiwan previously possessed air dominance throughout entire cross-Strait area two decades ago.
Taiwan’s prior air and sea dominance
Prior to 1996, the PLA Air Force refrained from flying any distance into the Taiwan Strait, but instead either stayed inland or close to shore. From 1958 to the 1990s, Taiwan’s fighter aircraft had free movement throughout the entire Strait up until 30 nautical miles from China’s coast, while PLA fighter aircraft stayed close to their own shoreline. According to a Taiwan Ministry of National Defense spokesperson, the PLAAF began to fly deeper into the Taiwan Strait following China’s 1996 military exercise that led to the cross-Strait missile crisis that year, but aircraft still not venture near the centerline. It was in 1998 that Chinese fighter aircraft started to fly near the centerline, with numbers for military flights quickly rising to around 1,200 sorties per year.
When Taiwan President Lee Teng-hui declared in July 9, 1999, that a special state-to-state relationship existed between Taiwan and China, PLAAF flights crossed the centerline for the first time. Now, two decades later, China is pushing the limits far beyond the centerline by flying sorties that encircle Taiwan, and with alarming regularity.
Even China’s commercial aircraft are flying closer to the centerline. Recently on January 4, 2018, China unilaterally re-opened M503 flight route that flows north along the centerline of the Strait. Earlier in 2015, Taiwan’s government stated that China’s commercial airliners that fly close to the centerline may be intercepted by Taiwan’s military. Tseng Dar-jen, Taiwan’s Deputy Minister for Home Affairs in the Ministry of Transportation and Communication at the time, said that China is well aware that the new airline routes will affect security in the border area between China and Taiwan, but unfortunately, he added that China often shows no respect for its neighbors and ignores steps like communicating and negotiating with other entities in matters that affect both sides. He also mentioned how such behavior does not conform to established international practice.
Possibility of de-escalation through reciprocity
In the current situation, there is little hope of China unilaterally de-escalating because while its assertiveness threatens others, there is little incentive for China to de-escalate. Complaining, protesting, and intercepting flights are not enough to change China’s behavior. To Taiwan’s credit, it does increase its sorties along with China’s increase, and Taiwan’s aircraft would occasionally venture over the centerline of the Strait in response to China’s movements. When China conducted a major air exercise in the Taiwan Strait in September 2004, mobilizing various fighter aircraft and bombers, Taiwan responded with a similar show of force involving a large number of Taiwan’s fighter aircraft. The reasoning is that two sides would more likely back away from a precipice when both sides face threats and costs from one another. They would agree that if one side stops threatening the other side, then the other side will stop too. Both would become more secure, and would therefore back down in this scenario.
Taiwan could gain leverage over China through such a tit-for-tat strategy of reciprocity. Robert Axelrod’s seminal Evolution of Cooperation mentions that tit-for-tat is a strategy based on reciprocity, which is to reciprocate another’s cooperation as well as defection. Defecting when others defect show that you will not be exploited. According to Axelrod, for cooperation to be stable, there must be a large shadow of the future—which is an expectation of consequences of failure to cooperate—so individuals would be aware that lack of cooperation is an unprofitable strategy. How it applies to the situation with China’s bomber flights is that Taiwan should display similar types of activity toward China so both sides realize that continued aggression and lack of cooperation is an unprofitable strategy.
If China circumnavigates Taiwan while keeping outside of Taiwan’s 12 nautical mile territorial seas and airspace, then Taiwan could partially circumnavigate a Chinese island too. To mirror China, Taiwan’s aircraft can even keep to its side of the centerline, but then cross over at exactly the same spot that Chinese aircraft crossed over last time if the island is located near China’s coast. These actions would turn around and apply China’s new and assertive actions back against China. Both sides could then determine that they are causing unnecessary risk and threat toward one another, giving reasons for both to back down. If only one side is threatening the other without itself being threatened, then there is little reason to back down.
Some of China’s islands are seemingly distant, but they are within reach of Taiwan’s F-16 fighter aircraft or C-130 aircraft without refueling. Taiwan’s military aircraft can reach locations roughly 1,000 km to 1,500 km away from Taiwan. Taiwan’s F-16 aircraft range is 3,200 km, which makes most of the West Pacific accessible for a round trip flight. Taiwan’s C-130 cargo aircraft could possibly be converted into bomber aircraft, and its range is 2,400 km. The key is to not require refueling, since Taiwan does not possess in-flight refueling tanker aircraft, and there is little hope that the United States or other regional partners would refuel Taiwan’s aircraft for such missions. These are ways for Taiwan to engage with China in exactly the same way that China is dealing with Taiwan through bomber flights, rather than Taiwan simply trying to minimize the threat that China’s bombers pose toward Taiwan.
Over the past two years, China has started to hold bomber flights that circle around Taiwan. This violates the past norm established in the 1990s where each side stays on its half of centerline that bisects the Taiwan Strait. Prior to the 1990s, Taiwan’s air force was superior to the PLA and Taiwan’s aircraft had free reign of the entire Taiwan Strait, up to China’s territorial waters at 12 nm away from land.
Today, Taiwan’s Air Force aircraft intercept Chinese PLA bombers in an effort to protect itself and lessen the threat. However, a more robust reciprocation through a de-escalatory tit-for-tat strategy could ultimately bring both China and Taiwan agree to make the situation safer for themselves by being less aggressive toward one another.
Main point: Taiwan historically dominated the entire Taiwan Strait, but China is now violating the centerline norm with its new and provocative bomber flights around Taiwan. To prevent accidents or misunderstandings, both sides should unilaterally revert back to keeping within their sides of the centerline; yet if China continues to disregard to centerline norm, then Taiwan should toughen reciprocal tit-for-tat measures to incentivize China to de-escalate.
¹Taiwan Ministry of Defense. 2017 National Defense Report. Taipei: Ministry of Defense, 2017. Page 38
²Zagoria, Donald. Breaking the China-Taiwan Impasse. Santa Barbara, CA: ABC-CLIO, 2003. Page 177
Note: Although articles published by the Diplomat, CBS News, Australian news list China’s H-6 aircraft as capable of carrying nuclear weapons, the US Department of Defense notes that this may not be the case since only the PLA Rocket Force and PLA Navy have a nuclear mission, not the PLA Air Force (US Department of Defense, 2017 Annual Report to Congress on the Military and Security Developments involving the PRC, page 61).
Why China Should (Still) Feel Good About Taiwan… But Maybe Not For Long
Derek Grossman is a senior defense analyst at the nonprofit, nonpartisan RAND Corporation. He formerly served as the daily intelligence briefer to the Assistant Secretary of Defense for Asian and Pacific Security Affairs at the Pentagon.
Upon the second anniversary of the election of Taiwan President Tsai Ing-wen, it is worth taking stock of whether the People’s Republic of China’s (PRC) initial fears of Tsai’s political intentions have panned out. As I observed at roughly the one-year mark, Chinese leaders have ample reason to feel good about Taiwan, namely because Tsai had been focusing her energy on stabilizing cross-Strait relations based on the status quo rather than moving toward independence. This trend has only continued, undermining Beijing’s rationale for ratcheting up pressure against the island nation. China, however, has ramped up its coercive efforts, prompting questions about Beijing’s intentions and the long-term stability of cross-Strait relations. Beijing should recognize that Tsai is indeed a moderate, and China will be hard-pressed to find a more reliable and stable Taiwanese leader in the future. And yet, Beijing is harming relations with Taiwan under Tsai through its actions.
Over the past year, Tsai has proactively endeavored to negotiate a practical workaround to her endorsement of the so-called “1992 Consensus”, a concept that acknowledges the existence of only “one China,” but allows each side to interpret what that means. Tsai has recognized “the historical fact” of the consensus, though not the agreement’s exact wording, in order to preserve Taiwan’s de facto sovereignty. Tsai’s decision has fueled Chinese suspicions of her. In the late 1990s, Tsai assisted then-President Lee Teng-hui in crafting the “special state-to-state” formulation for cross-Strait ties. When Tsai was running for the presidency in 2012, she explicitly rejected the “1992 Consensus”.
Nevertheless, the first two years of Tsai’s presidency have demonstrated that she prioritizes caution, pragmatism and, most importantly, transparency, in dealing with China. Most notably, Tsai has reached out in a show of “goodwill” to engage Beijing on establishing a new model of cross-Strait relations. In a speech in August, Tsai said that “we hope that both sides of the Taiwan Strait can work on a new model for cross-Strait interactions that benefit the stability and prosperity of both sides and the region as a whole.” Tsai’s remark was immediately panned in Beijing, with China’s Taiwan Affairs Office accusing the Tsai administration of attempting to “de-Sinicize,” or eliminate Chinese influence over, Taiwan. One mainland scholar added that the “1992 Consensus” already exists so “why bother to find a new model if the existing one works fine?”
Prior to China’s 19th Party Congress in early October, Tsai reiterated her administration’s desire to engage Beijing on cross-Strait stability. However, Chinese President Xi Jinping refused to give an inch during his marathon speech at the congress, forcefully stating that “we have firm will, full confidence and sufficient capability to defeat any form of Taiwan independence secession plot.” According to Taiwan expert Richard C. Bush, Xi’s language was the toughest observed yet of any Chinese leader when dealing with the independence-leaning Democratic Progressive Party (DPP) in Taiwan. This impasse may have hurt Tsai politically. Polling analysis from October 2017 indicates the percentage of Taiwanese who believe she is performing well on China policy dropped from about 50 percent in 2016 to about 35 percent in 2017. Tsai’s falling approval rating on cross-Strait relations may be seen as a positive development for Beijing since past polls have consistently shown that most Taiwanese do not seek conflict with China.
In addition, Tsai’s dealings with the United States have been exceptionally measured. Following the historic phone call between Tsai and the President-elect Donald Trump in December 2016, she sought to play down the significance of the unprecedented moment. Tsai informed visiting US journalists that the call was “not a policy shift of the United States.” She was also quick to deploy her spokesman to reiterate Taipei’s strong interest in maintaining positive and stable cross-Strait ties when it became apparent a week later that Trump might seek to renegotiate Washington’s “One-China” policy. In an interview last April, Tsai said she would be open to a second call with now-President Trump but hedged, saying “it depends on the needs of the situation and the US government’s consideration of regional affairs.” She suggested such a call might only be necessary if cross-Strait tensions escalated significantly. Either way, Trump responded that he would want to speak with Xi before having any further contact with Tsai, a statement that should further ease Beijing’s concerns.
Regarding the defense of Taiwan, Tsai has not deviated from past practices. She continues to advocate raising defense spending above 3 percent of gross domestic product to better fund the island’s defense programs—a priority under her predecessor President Ma Ying-jeou, who hailed from the more PRC-friendly Kuomintang party. Tsai’s administration continues to actively invest in domestic defense industrial programs such as the indigenous defensive submarine to reduce Taiwan’s dependence on the US for arms. Nevertheless, Tsai would probably be happy to accept US arms that might be useful to the island’s defense. For example, she has publicly highlighted the need to acquire a fighter aircraft capable of vertical or short takeoff and landing, such as the F-35. (Ma sought the F-16 C/D upgrade). Despite the similarities Tsai shares with Ma, Beijing trusts Tsai far less because of her past and her decision not to recognize the so-called “1992 Consensus”.
For Chinese leaders, words appear to speak louder than actions. Without Tsai’s full-throated endorsement of the “1992 Consensus”, the two sides cannot seem to move beyond their cold peace. Beijing has embarked on a multi-pronged pressure campaign to discredit Tsai’s administration. The news media has extensively covered China’s theft of Taipei’s diplomatic partners, including The Gambia, Panama, and others. The media has given less attention to the PRC’s recently self-imposed ban on its citizens from visiting Taiwan’s remaining allies, such as the Vatican and Palau, in an apparent attempt to convince these countries to abandon their diplomatic recognition of the island. Meanwhile, official cross-Strait communication mechanisms remain frozen, and although trade agreements signed under Ma remain in effect, no new agreements have been made.
In the military sphere, China’s People’s Liberation Army Air Force (PLAAF) has circumnavigated the island in 2016 and 2017 with its bombers in an unprecedented amount of air activity. In another first, the PLAAF explicitly signaled to Taiwan in December 2017 that the purpose of the flights was coercion. PLAAF bomber and other flights have become so commonplace that they appear to have overwhelmed the Taiwanese Ministry of National Defense, which declared in late December that it would no longer publicize PLAAF flights. China has also recently sent its only aircraft carrier, the Liaoning, through the Taiwan Strait.
China’s short-term strategy has accomplished its main task—namely to weaken Tsai and hamper Taiwan’s autonomy or any formal independence movements. Over the longer-term, this same strategy could increasingly become a liability for Beijing. Recent Chinese attempts at coercion—for example Beijing’s decision to close off civilian northern air route M503 in the Taiwan Strait and its move to publicly shame companies recognizing Taiwan as a country—will likely only harden Taiwanese resolve to resist. Beijing’s heightened military drills may create a more antagonistic environment as well that, if sustained, could bring a true independence advocate to the fore of Taiwan’s leadership.
Ostensibly to shore up her sagging poll numbers, Tsai replaced Premier Lin Chuan with William Lai in September. Lai is from the southern city of Tainan, a DPP-stronghold that is considered very pro-independence. When asked about his recent statement in the legislature that seemed to endorse Taiwanese independence, Tsai noted that Lai was fully aware of “what the limits are” of government policy. In so doing, Tsai once again reliably demonstrated that she values the status quo. But this could slip beyond her control in the years to come if Lai remains popular—he is widely regarded as a potential presidential contender—and Chinese pressure convinces Taiwan that a more radical approach to cross-Strait relations is required. Lai’s matter of fact manner on Taiwan’s legal status might resonate with the approximately 70 percent of people age 20 to 29—and roughly 60 percent of the population overall—who view themselves as “Taiwanese” rather than “Chinese.”
On the economic front, Chinese attempts to punish Taiwan have already prompted Tsai to implement her New Southbound Policy, designed to diversify the island’s economic and trade relationships beyond dependence on China. New Southbound has already yielded tangible results, with Taiwan and the Philippines recently inking an updated bilateral investment deal. India has also expressed strong receptivity and others may follow. The policy is already changing the face of Taiwan. According to one estimate, the percentage of Southeast Asian students attending school in Taiwan has increased nearly 10 percent from the previous academic year. And Tsai has highlighted the fact that 600,000 blue-collar immigrant workers along with about 500,000 spouses mainly from Southeast Asia now reside in Taiwan. Thus, China’s fears of “de-Sinicization” leading to an eventual drifting away of Taiwan from Beijing’s orbit is a real possibility. Further forced estrangement over the “1992 Consensus” will likely spur this trend and create more problems in the cross-Strait relationship.
In late December 2017, a senior Chinese official serving as liaison to the Taiwan Affairs Office confidently stated that Beijing maintains an “overwhelming advantage” against Taiwan for years to come. The official, Liu Junchuan, predicted that “the economic, political, social, cultural and military conditions for achieving the complete reunification [sic] of the motherland will become even more ample.” He also argued that “the basic situation of the Taiwan Strait continuing to develop in a direction beneficial to us will not change, and time and momentum are on our side.” Chinese confidence should not get out ahead of itself. Because of its pressure tactics, Beijing may inadvertently push Taiwan in a more extreme direction. Tsai is probably the best Taiwanese leader China can hope for right now. Despite her reputation in Beijing, she is actually quite pragmatic.
The main point: Chinese leaders have ample reason to feel good about Taiwan, namely because Tsai had been focusing her energy on stabilizing cross-Strait relations based on the status quo rather than moving toward independence. Beijing should recognize that Tsai is indeed a moderate, and yet, Beijing is harming relations with Taiwan under Tsai through its actions. Because of its pressure tactics, Beijing may inadvertently push Taiwan in a more extreme direction.
Taiwan’s Demographic Crunch and its Military Implications
Michael Mazza is a Research Fellow in the Foreign & Defense Policy Studies program at the American Enterprise Institute.
Trends in Chinese military modernization and the Chinese Communist Party’s (CCP) apparent turn towards a more chauvinistic foreign policy should have Taiwan and its friends worried. Yet, a quieter threat looms, one that is already complicating the island’s efforts to maintain a balance of power conducive to its own security. Taiwan’s population has been aging for some time and will soon begin shrinking. Both trends will constrain manpower resources to the detriment of Taiwan’s national security. In 2011, the Ministry of National Defense described demographic changes as “a secret worry of our national defense.”
According to Taiwan’s National Development Council, the total fertility rate has not been at replacement level since the early 1980s and has evinced a downward trajectory since. Total births have dropped as well.
The island’s population will peak between 2021 and 2025 at nearly 24 million people, and thereafter drop to between 17.3 million and 19.7 million by 2060. The working age population (people aged 15-64) peaked in 2012, and the old-age population (≥65) was projected to surpass the young population (0-14) this past year. Between 2016 and 2060, the size of the young and working-age cohorts is expected to shrink by 43.4percent and 44.2percent, respectively, with the elderly population growing by 131 percent. Taiwan’s median age is expected to grow from 39.9 in 2015 to 57 in 2060. Finally, the dependency ratio—the number of children and elderly per 100 working-age persons—is growing. In 2016, the dependency ratio was 36.2 percent. In 2060, it will rise to 92.9 percent.
What does all of this mean for Taiwan’s national security? These trends have a number of troubling implications. First, with an aging and shrinking population, government tax revenues are almost certain to contract. Meanwhile, the rising dependency ratio—combined, by the way, with lengthening life expectancy—will lead to growing demands for government to step in to support the elderly population, as the working-age cohort is less able to do so directly. The national budget pie is likely to shrink in the coming decades. Even if defense spending does not shrink relative to other line items, it will shrink in absolute terms. Of course, there is a distinct possibility that defense will receive a smaller portion of that shrinking pie if Taiwan finds it must dedicate more and more resources to elderly care.
Allocation of resources is a political decision, but Taiwan’s demographic trends also have a more direct effect on the island’s defense. As Taiwan’s 2017 Quadrennial Defense Review noted, “the impact of our social and economic environment, along with a low birth rate, has been to reduce available manpower, negatively impacting our troop replenishment and operational strength.” The 2015 and 2013 National Defense Reports also raised this issue, but not as fully as the 2011 report:
The number of draft age men has trended downwards in recent years due to the low birth rates; statistics show that the number of draft age men each year has dropped from over 120 thousand to some 110 thousand, and this number will continue to drop in the future…Moreover, competition from similar agencies, such as the police and coast guard, has made talent recruitment more and more difficult.
According to that report, the number of draft age men was projected to drop from 123,465 men in 2010 to 75,338 men in 2025.
Taiwan’s answer to this conundrum has, in part, been to move from a conscripted force to an all-volunteer force. Over the long term, manning a large, conscripted force without negatively affecting the domestic economy will become a growing challenge. The 2011 Ministry of National Defense report argues, “voluntarism will not only maintain forces’ capabilities and allow experiences to be passed down, it will also lift the burden of compulsory military service from citizens, releasing human resources for economic development, and allowing the nation’s human resources to create maximum benefits” (emphasis added). Taiwan’s armed forces will now have to compete for increasingly limited manpower, but they will also need less of it than they once did.
Ideally, moving to a smaller, all-volunteer force will contribute to a better allocation of human resources in Taiwan, while creating a leaner, more professional military. On the other hand, all-volunteer forces are expensive to maintain due to the need to offer competitive pay, benefits, better healthcare, and pensions. This will present a challenge as government revenues decline. Over time, personnel costs in Taiwan will threaten to crowd out spending on training and advanced armaments, which, if anything, become more important the smaller a military becomes—and if tax revenues do decrease over time, mounting political pressure could see the active-duty force shrunk further.
Unfortunately, Taiwan’s shifting demographics may have consequences beyond the active-duty force as well. In Taiwan’s defense strategy, as described in the 2017 QDR, the reserve system plays a key role in “a defense force that deters military threats and denies invasions.” The 2015 National Defense Report put it this way
Force streamlining as well as extensive mobilization and combat readiness systems have been implemented to achieve the concept of having a small standing army with the potential of drawing up vast reserves during wartime and building an elite national defense force. (emphasis added)
This is, of course, sensible. With every citizen a soldier, Taiwan could be incredibly tough for China to swallow should the PLA succeed in establishing a beachhead—this is the ultimate deterrent. But as Taiwan’s population both shrinks and ages, so will the reserve force. Due to the shift to an all-volunteer force, moreover, many reserve personnel will have less military training and experience than during the days of conscription.
What’s more, in the future, limited defense resources are certain to first go to what the Ministry of National Defense hopes will be a professional, effective, high-tech, all-volunteer force. Training for reserve personnel, maintenance of weapons for reserve forces, and stockpiling of supplies will likely be neglected in favor of the active-duty military. Finally, a shrinking working age population will likely increase pressure on the government to minimize reserve training, with further deleterious effects on the reserve force’s effectiveness and, thus, its deterrent value.
Demography may or may not be destiny, but there are steps Taiwan can take to mitigate the national security effects of its troublesome demographic profile. Taiwan’s relationship with the United States will grow only more important as the island grapples with changes in its population structure. As ever, drawing closer to Washington will remain a priority for Taipei.
Relations with Japan are also important. Tokyo and Taipei have overlapping security challenges and both face similar demographic challenges; going forward, they may seek strength in numbers. Japan’s expertise in robotics should be particularly interesting to Taiwan, with has a strong tech sector of its own. There may be opportunities to collaborate in search of technological alternatives to manpower-intensive defense strategies.
The road ahead is a difficult one for Taiwan. A smaller, older population will likely lead to lower government revenues, with a larger share of those revenues dedicated to elderly care. On the other hand, population change is an important impetus behind Taiwan’s shift to an all-volunteer military, which will require greater investment in personnel, materiel, and training if it is to be an effective fighting force. How Taipei manages this tension will have far-reaching effects on Taiwan’s national security in the coming decades.
Main point: Taiwan’s population is aging and will soon begin to shrink. As a result, funding and operating the armed forces will become a growing challenge, with deleterious results for the cross-Strait military balance and for the effectiveness of Taiwan’s deterrent.
¹National Statistics, Republic of China, “Table 4. Number and rates of births, deaths, immigrants and emigrants, marriages and divorces.”
²National Development Council, “Population Projections for ROC (Taiwan): 2016-2060.”
³Ministry of National Defense, National Defense Report, Republic of China (Taipei, Taiwan: Ministry of National Defense, 2011.)
4Ministry of National Defense, National Defense Report, Ministry of National Defense, ROC 2015 (Taipei, Taiwan: Ministry of National Defense, 2015), 68.
Taiwanese Public Opinion on the Future of Cross-Strait Relations
Austin Wang is a Ph.D. Candidate in the Department of Political Science at Duke University. He is a recipient of GTI’s Taiwan Scholarship in 2017.
In democracies, public opinion matters and can affect policies. In the democratic nation of Taiwan, cross-strait relations are not an exception. To explain and perhaps predict the future of relations between China and Taiwan, it is necessary to understand how Taiwanese people think of the future of cross-Strait relations. Do Taiwanese people support (re)unification or independence? And is their preference contingent on certain conditions? From 2003 to 2017, the Program in Asian Security Studies at Duke University conducted 11 waves of National Security Studies Surveys (TNSS) in Taiwan. TNSS was designed precisely for understanding the public opinion of cross-Strait relations among Taiwanese people. With the help of National Chengchi University in Taipei, each wave of TNSS recruited at least 1,000 nationally-representative Taiwanese respondents through landline phone calls. The range of TNSS goes across the second and third presidential turnover in 2008 and 2016, respectively. There are three discernible findings based on the results of the 11 surveys: consistent preference for the “status quo”; preference for “status quo” related to China’s military threat; and pragmatism in outlook towards the future of cross-Strait relations.
First: 60 percent of Taiwanese people prefer to maintain the “status quo.”
The proportion of people supporting unification and independence may fluctuate across time, but the overall distribution has been stable over the previous 14 years. In 2003, 52.2 percent of Taiwanese preferred status quo, 13.5 percent for independence, and 20.4 percent for unification. The proportion of Taiwanese preference for status quo and independence reached their pinnacles in 2011, which was about 65.9 percent and 23.4 percent, respectively. In that same year, only 8 percent of Taiwanese preferred unification. After the third turnover, the number of status-quo and independence supporters decreased to some extent, which was about 60 percent and 16.6 percent in 2017, respectively.
Without a clear explanation, the result indicates that more Taiwanese people preferred status quo and independence under the ruling of KMT during 2008-2016, which was about 63.8 percent and 22.5 percent in average; besides, only 4.7 percent of respondents did not give an answer in this question. When DPP won the presidency before 2008, and after 2016, however, the average proportion of Taiwanese pursuing status quo and independence dropped to 57.0 percent and 19.2 percent; about 8 percent of the respondents failed to provide an answer when they were asked about their attitude toward the cross-strait relationship.
Regardless the slight fluctuation, the overall stable distribution across years is quite impressive given the significant changes in global politics and cross-Strait interactions during this period. For example, China’s anti-secession law was passed in 2005, the Economic Cooperation Framework Agreement (ECFA) in 2011, the Sunflower Movement in 2014, the Xi-Ma meeting in 2015, and the Trump-Tsai call in late 2016. Moreover, the percentage of people who identified themselves as “Taiwanese,” rather than “Chinese” or “both,” increased from 42 percent in 2003 to 60 percent in 2017 (at the same time, 33 percent identified as “both” and 3 percent as “Chinese”). Despite an increase in acknowledgment and affinity with a “Taiwanese” identity as distinct from “Chinese,” popular opinion toward how to conduct cross-Strait relations did not change accordingly.
Second: The “status quo” majority is related to the military threat from China.
The most important feature of the TNSS survey is the inclusion of “conditional preference” as a variable. Conditional preference refers to how people may change their preference under different scenarios. Regarding cross-Strait relations, TNSS asked respondents their preference for independence “if China will not attack Taiwan.” In this scenario, over 60 percent polled support the declaration of independence across the previous 14 years. The proportion reached 73 percent when ECFA was signed in 2011, but declined to 60 percent in 2017. In contrast, less than 22 percent rejected the idea of Taiwan independence across the survey’s time horizon.
Third: Taiwanese people are pragmatic about the future of cross-Strait relations.
The previous two figures captured what Taiwanese people preferred and aspired to happen, but what do they think will happen? In the same survey, TNSS asked respondents to “estimate the probability that Taiwan will be independent successfully in the future” and to “estimate the probability that the cross-Strait will unify in the future.” The figure below shows the mean probability among respondents across time. The result reveals that respondents are pragmatic in their outlook. On average, Taiwanese people believed that the chance of cross-Strait unification is about 47 percent, and the likelihood of successful independence is nearly 36 percent. The prediction of unification reached the highest point in 2012 when Ma won the re-election, and independence peaked in 2014 when the Sunflower Movement blocked the Cross-Strait Service Trade Agreement.
The probability of unification in the future is 67 percent among respondents that are “pro-unification” (based on Figure 1), and the chance of independence is 25 percent. Among the respondents that are “pro-independence,” 52 percent think that Taiwan will become independent, whereas 40 percent think that unification is more likely. Hence, the pro-independence people do not underestimate the possibility of unification.
Implications from the surveys spanning 2003-2017
What can we learn from the surveys? First of all, the results clearly show that Taiwanese people are not troublemakers but rational and informative decision makers. They clearly perceived the possibility of military conflict, and they did not overestimate the chance for their dream to be realized shortly.
Second, even though the proportion of Taiwanese people that prefer unification increased in 2017, the overall distribution will not likely change dramatically. Across the surveys, even the 2005 Anti-secession Law and 2014 ECFA failed to overturn the distribution. It is understandable that many people may link their discontent to President Tsai Ing-wen and any issues Tsai and DPP support. However, the former KMT President Ma’s low approval rating also failed to cause significant shift in people’s attitude toward the cross-strait relationship.
Third, it is worth noting that the surveys were conducted through landline telephones in Taiwan. Therefore, the survey results may fail to capture two major groups: those who lived aboard (including China), and those who did not live in their home (such as the young people who only has a cellphone and work in the big cities). The bias of telephone surveys is one of the primary reasons that many survey firms failed to predict Trump’s win. According to recent studies, about 20 percent of Taiwanese people do not live in their registered residency, and about 3 percent work abroad.
In the final analysis, the survey results highlight the centrality of the “status quo” in Taiwanese public opinion. While the majority of Taiwanese people prefer the “status quo,” the reality could change given the rapid expansion of China’s military, economic, and political influence in Asia and beyond.
The main point: The TNSS results underscore a consistent preference among Taiwanese people for the “status quo”; that the preference for preserving the “status quo” is related to China’s military threat; and the people of Taiwan are pragmatic in their outlook about the future of cross-Strait relations. While the majority of Taiwanese people prefer the “status quo,” the reality may be changing given the rapid expansion of China’s influence in Asia and beyond.