China-Taiwan Weekly Update, December 21, 2023

Editors: Dan Blumenthal and Frederick W. Kagan of the American Enterprise Institute

Data Cutoff: December 21, 2023 at 12pm EST

The China–Taiwan Weekly Update focuses on the Chinese Communist Party’s paths to controlling Taiwan and relevant cross–Taiwan Strait developments.

Key Takeaways  

1. The Taiwanese government and DPP officials, including Vice President Lai Ching-te, accused the PRC of using an ongoing trade investigation to interfere in Taiwan’s election.
2. ROC authorities are investigating reports that local Taiwanese officials accepted CCP-funded trips to the PRC and received instructions to back particular candidates in the presidential elections.
3. Five Chinese balloons moved through Taiwan’s Air Defense Identification Zone since December 7. This may be part of a broader effort to wear down Taiwan’s resources and response capabilities.
4. Chinese Maritime Militia vessels entered the Philippines-controlled Second Thomas Shoal after the PRC attempted to deny access to Filipino government vessels on routine resupply missions on December 9 and 10.
5. The PRC, Saudi Arabia, and Iran held their first trilateral joint committee on December 15 in Beijing.

Taiwan

Democratic Progressive Party (DPP) presidential candidate Lai Ching-te continues to lead in the polls. A Taiwan News Poll of Polls released on December 20 showed Lai with 34.34% support, Hou with 30.01%, and Taiwan People’s Party (TPP) candidate Ko Wen-je in third place with 20.83%.[1] The Poll of Polls is a weighted average of all public election polls in Taiwan over the past 15 days. The previous polling release on December 15 release showed that both Lai and Hou briefly reached their highest levels of support since the Poll of Polls began on September 1, with 15-day averages of 36% and 31.2% support, respectively. Ko has dropped from 21.84% on December 10.[2]

Support for Kuomintang (KMT) candidate Hou Yu-ih has plateaued even as he has become the clear leader of the opposition to Lai. Hou and his running mate Jaw Shaw-kong are continuing efforts to consolidate the KMT base. Their efforts include Hou supporting the revival the Cross-Strait Services Trade Agreement (CSSTA), which is an unratified 2010 trade agreement with the PRC that the KMT Ma Ying-jeou administration negotiated.[3] KMT Chairman Eric Chu also claimed that “nearly all” supporters of former independent candidate Terry Gou have shifted to supporting the KMT ticket.[4] The KMT is seeing diminishing returns, however. Formosa E-News polling shows Hou’s support from self-identified KMT voters rose above 90 percent after November 25 but stayed in the low 90s since then.[5]  The KMT has also been making outreach efforts to young voters, one of its weakest demographics.[6]

Ko remains in third place in the polls and his level of support has gradually declined since the November 25 candidate registration. Taiwanese media have reported that a type of strategic voting called the “dump/save” effect may be one factor influencing the polling trends.[7] The dump/save effect is a phenomenon in which supporters of a third-place candidate shift to a higher-ranked candidate once it is clear who the race’s two frontrunners are. Ko acknowledged that such an effect may be occurring but downplayed its impact, saying his “third force” would persist.[8]

The PRC’s Ministry of Commerce announced on December 15 that Taiwan violated a joint economic cooperation agreement. The PRC announced after an eight-month investigation that “Taiwan’s trade restrictions on the mainland [China] constitute a trade barrier” in violation of the Economic Cooperation Framework Agreement (ECFA). The PRC and ROC signed the EFCA in 2010, which committed both parties to gradually eliminate most of the trade barriers between them. The PRC’s Ministry of Commerce alleged that Taiwan had banned 2,509 imports from the PRC as of November 2023.[9] The PRC’s Ministry of Commerce announced the investigation on April 12, the same day the DPP nominated Lai Ching-te as its presidential candidate and said that it would last until October 9.[10] On October 9, the ministry extended the investigation to January 12, the day before Taiwan’s election, however.[11] The timing suggests that the PRC intends for the investigation to influence the election.

The PRC’s Taiwan Affairs Office announced its support for implementing “corresponding measures” in response to Taiwan’s alleged violations on December 15.[12] The PRC’s State Council’s Customs Tariff Commission announced on December 12 that it will end tariff reductions on 12 chemical products from Taiwan on January 1.[13] It is unclear whether the PRC will impose additional measures in the future.

The Taiwanese government and DPP officials, including Vice President Lai Ching-te, accused the PRC of using an ongoing trade investigation to interfere in Taiwan’s election. Taiwan’s Mainland Affairs Council said that Taiwan cannot accept the PRC’s “political manipulation” and “violation of WTO norms” by “unilaterally conducting an investigation against us.” It called on the PRC to resolve trade disputes through the World Trade Organization (WTO).[14] Taiwan and the PRC are both WTO members.[15] Lai called the announcement “blatant interference in Taiwan’s election” and also said the PRC should resolve disputes through the WTO.[16] DPP spokesperson Chang Chih-hao questioned if the investigation result was the result of “collusion” between China and the Kuomintang following KMT vice chair Andrew Hsia’s trip to the PRC from December 13-20.[17] The KMT said Hsia was meeting with Taiwanese businessmen in China and would not meet with senior officials of the Taiwan Affairs Office.[18]

KMT Chairman Eric Chu said that the DPP government should address the PRC’s accusations with “real action” instead of just words.[19] TPP candidate Ko Wen-je’s spokesperson called on the DPP to propose countermeasures instead of rhetoric.[20] Both Ko and Hou Yu-ih support increasing cross-strait trade and reviving the Cross-Strait Services Trade Agreement (CSSTA) under the framework of ECFA.[21]

ROC authorities are investigating reports that local Taiwanese officials accepted CCP-funded trips to the PRC and received instructions to back particular candidates in the presidential elections. Taipei authorities questioned 41 borough wardens on December 15 about trips the wardens took to the PRC during the last several months. A borough warden is a type of political office below the municipal level. The investigation received reports that many borough wardens and their friends and relatives in Taipei accepted funding from the PRC’s Shanghai Taiwan Affairs Office to travel to Shanghai and other places in the PRC. The PRC allegedly offered favorable prices for group travel of this nature.[22] The reports also stated that the chiefs received instructions to grant or withhold support for certain candidates in Taiwan’s presidential or legislative election. An unnamed “national security source” told the Taipei Times on December 16 that the PRC has now delayed future all-expenses-paid trips to the PRC until after Taiwan’s election considering Taiwan’s crackdown on such trips.[23]

The Taipei Times also cited an unnamed Taiwanese official who said the PRC is using TikTok to influence target young voters.[24] Polling released December 19 by the Taiwan Information Environment Research Center (IORG) showed a correlation between Taiwanese people’s use of TikTok and higher acceptance of pro-China narratives. For example, the statement “the government's pro-American stance is provoking China and will lead to a cross-strait war” received 51% agreement from Taiwanese TikTok users compared to 38.8% of the general population. The same poll found agreement with this statement was correlated with support for Hou or Ko. About 18% of Taiwanese use TikTok.[25]

Five Chinese high-altitude balloons moved through Taiwan’s Air Defense Identification Zone (ADIZ) since December 7. One balloon crossed the median line of the Taiwan Strait on December 7. The other four crossed the median line over a four-day period; two on December 16, one on December 17, and one on December 19. The balloons floated at altitudes between 12,000 and 27,000 feet.[26] Taiwan’s Ministry of National Defense (MND) publicly stated that these were weather balloons but included them for the first time among its daily reports of ADIZ violations by the PRC.[27] The MND previously reported a similar balloon above Taipei on February 10.[28] The MND and the director-general of Taiwan’s Central Weather Service have also reported at least seven balloon sightings over Taiwan between 2021 and 2022. A February 12 Financial Times report cited unnamed Taiwanese officials who said such balloons flew over Taiwan once a month on average.[29]

Sending the balloons across the median line of the Taiwan Strait is likely part of a broader effort to wear down Taiwan’s resources and response capabilities.[30] The PRC has normalized daily air and naval activities around Taiwan, including near-daily aerial crossings of the median line in the Taiwan Strait, since 2020.[31] MND’s unprecedented inclusion of the balloon flights in its daily updates and maps of ADIZ violations in December shows that Taiwan is increasingly concerned about these balloons and may consider them part of the PRC’s broader harassment campaign against Taiwan. NPR reported on December 18 that the PRC is “subtly increasing” military coercion and gray zone tactics to influence the presidential election. NPR said Beijing aims to wear down Taiwan’s capabilities through intimidation and daily harassment without triggering a larger conflict. Former Taiwanese defense chief Admiral Lee Hsi-ming said the PRC uses such activities to test its military requirements and Taiwanese responses. Taiwan’s resources are stretched thinner because Taiwan must “scramble its own jets and ships” in response but cannot match the PRC’s military resources or manpower.[32]

These activities aim to wear down Taiwanese military readiness, force difficult decisions regarding ROC resource allocation, and create a sense of impenetrable siege among the Taiwanese population. These effects support CCP efforts to degrade the Taiwanese populace’s confidence in its government’s capacity to defend the country, a key part of the longer-term CCP coercion campaign to induce unification under the PRC. Compressed decision-making timelines about whether to engage PLA aircraft also enhance the risk of miscalculation by the PRC or ROC that could lead to a crisis. ISW does not assess that Chinese balloon flights over Taiwan presage an imminent invasion or other intentional acts of war by the PRC or ROC.

South China Sea

Chinese Maritime Militia (CMM) vessels entered the Philippines-controlled Second Thomas Shoal after the PRC attempted to deny access to Filipino government vessels on routine resupply missions on December 9 and 10. Commercially available satellite imagery from December 11 showed that 11 CMM vessels had entered the Second Thomas Shoal. This is the largest observed number of CCM vessels that have entered the shoal to date.[33] None of the ships were broadcasting transponder signals, which most larger vessels are required to use for maritime traffic safety. “Going dark” is a common tactic used by PRC vessels in the South China Sea (SCS) that want to avoid detection, and have previously played a role in the PRC’s blockading Filipino resupply missions.[34]  27 other PRC vessels surrounded the Shoal on December 11 and were identifiable through their transponder signals. Among them was a Chinese Coast Guard ship and multiple CMM vessels that were present during the December 10 confrontation.[35] Four CMM vessels remained within the Shoal while five others remained outside the shoal as of December 14.[36] The lingering presence of PRC vessels is unusual, as they normally return to the PRC’s nearby Mischief Reef after such incidents.[37]

The Philippines Coast Guard (PCG) immediately publicized videos of CCG vessels using water cannons against Philippines Bureau of Fisheries and Aquatic Resources (BFAR) vessels during the confrontations at Scarborough Shoal and Second Thomas Shoal.[38] The Philippines’ active transparency serves to preempt the PRC-propagated notion that the Philippines is instigating confrontation and acting aggressively against PRC vessels.

Armed Forces of the Philippines Western Command (WesCom) Commander Vice Admiral Alberto Carlos stated on December 13 that the PRC is escalating actions short of armed attacks against Filipino vessels.[39] Carlos downplayed the extended contingent of CMM vessels within the Shoal as a common swarming tactic.[40] Carlos earlier stated, however, that he expects the PRC to resort to greater use of water cannons, lasers, ramming, and eventual boarding of Filipino vessels to deny the Philippines access to disputed locations.[41] Carlos announced that the Philippines’ National Task Force for the West Philippine Sea is devising a new strategy to carry out rotation and resupply (RoRe) missions following the PRC’s most recent confrontation.[42]

PRC officials and media unleashed a barrage of criticism against the United States and the Philippines after the confrontations at Scarborough Shoal and Second Thomas Shoal.  Ministry of Defense Spokesperson Zhang Xiaogang condemned the USS Gabrielle Giffords on December 14 for “illegally intruding” into waters adjacent to the Second Thomas Shoal during a routine transit a week earlier.[43] State-media outlet Global Times published an article on December 19 accusing the United States of waging cognitive warfare against China over the SCS.[44] The article was the second of its kind from PRC state media this month. PRC Ministry of Foreign Affairs Spokesperson Wang Wenbin criticized Filipino President Ferdinand Marcos on December 18 for expressing support for trilateral cooperation with the US and Japan in the SCS. Wang urged the Philippines to “recognize the futility of tying up with certain major powers and compromising China's core interests.”[45]

The criticisms follow US efforts to reassure the Philippines of its support in the face of the PRC’s aggression. US, Japanese, and Filipino national security advisors participated in a trilateral call on December 13 in which they denounced the PRC’s aggression against the Philippines and committed to closer security cooperation.[46] US Secretary of Defense Lloyd Austin called his Filipino counterpart on December 14 to reaffirm the United States' commitment to the Philippines.[47]

Compacts of Free Association

A loss of Compacts of Free Association (COFA) funding for Palau, Micronesia, and the Marshall Islands would enable the CCP to expand its leverage points over these countries. These COFAs govern the United States’ relationship with Palau, Micronesia, and the Marshall Islands while also granting the United States extensive military access throughout their territories. The United States renewed COFAs with Palau and Micronesia in May.[48] It then did so with the Marshall Islands in October.[49] The signed agreements are now before Congress for funding consideration. Congress previously funded the COFAs for a twenty-year period in 2003.[50] The total cost for all three of the twenty-year agreements would be roughly $7 billion spread over the period 2024 to 2043, according to the Congressional Research Service.[51] Deputy Secretary of State nominee Kurt Campbell stated during his Senate confirmation hearing on December 7 that “if we don’t get it [COFA funding] you can expect that literally the next day Chinese diplomats — military and other folks — will be on the plane…trying to secure a better deal for China.”[52] The US House of Representatives Select Committee on the Strategic Competition between the United States and the Chinese Communist Party also called for renewing the COFAs in a mid-December report.[53] The 2024 National Defense Authorization Act that passed both the Senate and House of Representatives as of December 14 did not include COFA funding.[54]

These three island countries control key sea lanes that provide a secure route connecting American allies and partners, such as the Philippines and Taiwan, to the US territory of Guam and the state of Hawaii. Palau and the Marshall Islands are 2 of the 13 countries that maintain official diplomatic relations with Taiwan.[55]

The loss of COFA funding would present an opportunity for the CCP to expand its economic influence with these vital Pacific Island countries. For example, this funding loss would exacerbate Palau’s existing deficit, which amounts to $37 million as of its 2021 budget of $150 million.[56] This is an economic vulnerability that the CCP could partially fill by encouraging PRC nationals to vacation in Palau. The CCP cut tourism to Palau over the last decade to nearly zero as punishment for maintaining full diplomatic relations with Taiwan.[57] The reversal of this CCP policy would provide the party with economic leverage to wield over Palau in the event of future policy disagreements. The expansion of the CCP’s economic influence in Palau would also provide the party a leverage point to coerce the countries into switching diplomatic recognition from Taiwan to the People's Republic of China (PRC). The PRC aims to coerce countries into switching diplomatic recognition to falsely argue that Taiwan is a province of the People’s Republic of China rather than a legitimate country named the Republic of China.

The loss of COFA funding would also provide the CCP an opportunity to expand influence efforts targeting Micronesian political elites. The CCP has completed infrastructure projects throughout the country, such as houses for the country’s president, vice president, speakers of congress, and chief justice.[58] Axios reported that former Micronesian officials confirmed receiving gifts from the PRC, such as money, while on official state visits to the country.[59] The lack of COFA funding would exacerbate the appeal of CCP monetary gifts or infrastructure projects that target the Micronesian political elite. Micronesian President Wesley Simina also stated in late November that his country would be at a “fiscal cliff” without US Congressional approval of COFA funding. This would mean that “we [Micronesia] will have to find different sources of funding… and that’s not out there available immediately.”[60] The loss of COFA funding would also provide opportunities for external powers such as the CCP to enhance their economic influence in the country by filling these funding gaps.

China in the Middle East

The PRC, Saudi Arabia, and Iran held their first trilateral joint committee on December 15 in Beijing. The PRC Ministry of Foreign Affairs stated that the meeting focused on improving Iran-Saudi relations as well as the cessation of military operations in the Gaza Strip.[61] PRC officials met with their Iranian counterparts four times since November 26 to discuss enhancing mutual cooperation, regional stability, and the Gaza Strip.[62] This meeting comes after three weeks of Houthi attacks in the Red Sea, which have caused international shipping disruptions.[63]