China-Taiwan Weekly Update, January 4, 2024

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

Data Cutoff: January 2 at 5pm ET 

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. Democratic Progressive Party (DPP) presidential candidate Lai Ching-te continues to lead in the polls.
2. Taiwan’s three presidential candidates participated in a televised debate on December 30.
3. The PRC is continuing its intimidation tactics toward Taiwan before the election.
4. The PRC’s removal of top military and defense industry officials from political bodies reflects Xi Jinping’s continuing efforts to purge corruption and strengthen the loyalty of the military.
5. Xi Jinping appointed Admiral Dong Jun as the new Minister of National Defense on December 29.
6. CCP General Secretary Xi Jinping reiterated his vision to forge a Sino-centric international order in statements around the new year.
7. 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.
8. PRC Consul General in Jeddah Wang Qiming authored an article on the “Palestinian-Israeli conflict” in the Saudi media outlet Okaz that supports a CCP line of effort to supplant US influence in Arab states.

Taiwan

Democratic Progressive Party (DPP) presidential candidate Lai Ching-te continues to lead in the polls. Polls from all major organizations in Taiwan show that Lai maintains a lead of at least three percentage points over Kuomintang (KMT) candidate Hou Yu-ih. Lai’s lead is greater than the margin of error. Some polls, such as Formosa and Mirror News, show that Lai holds more than a ten-point lead over Hou. The Poll of Polls, which is a weighted average of public election polls over the past 15 days that Taiwan News publishes, shows slight changes in candidate support levels since last week. Lai’s support has remained mostly steady at 35.3%, while support for Taiwan People’s Party (TPP) candidate Ko Wen-je grew by three percentage points to 24%. Hou fell nearly two points to 28.7%, however.[1] The slight shift in voter support comes after three televised policy presentations from the presidential candidates on December 20, 22, and 26. These are the last polls in the run-up to the presidential election, as Taiwan entered a ten-day poll “blackout” period on January 3 ahead of the election on January 13.[2] [3]

Taiwan’s three presidential candidates participated in a televised debate on December 30. This is the first time the candidates have directly faced off against each other in the election. Cross-strait issues dominated the debate and were a main source of criticism from all three candidates. The candidates also sparred over individual real estate controversies and attacked each other’s integrity for alleged improprieties. KMT candidate Hou Yu-ih and TPP candidate Ko Wen-je took an especially offensive position against DPP candidate Lai Ching-te, sharply criticizing the latter’s cross-strait policy and alleging illegal construction practices on his home in New Taipei City. The candidates did not raise any new issues or make major announcements. They mostly reiterated previously stated policy positions.

DPP candidate Lai Ching-te maintained his emphasis on cross-strait issues, consistent with his presidential platform. Lai signaled continuity with President Tsai Ing-wen in foreign and domestic policy, touting the DPP’s diplomacy as the reason for Taiwan’s deepening integration into the international community.[4] Lai advocated for giving priority to the protection of human rights, democracy, and freedom in Taiwan, and promised not to allow the Republic of China (ROC) constitution’s surviving claims to mainland China to steer cross-strait relations.[5] Lai labeled the People’s Republic of China (PRC) as the greatest threat to Taiwan’s existence, while the other two candidates refrained from doing so when prompted.[6] Lai addressed criticisms of support for Taiwan’s independence, stating that the PRC and ROC’s existence are not at odds with each other and are completely unrelated, which is the definition of independence.[7] The PRC Taiwan Affairs Office (TAO) condemned Lai’s statements during the debate. TAO spokesperson Chen Binhua threatened Lai that Taiwanese independence is incompatible with cross-strait peace.[8]

KMT candidate Hou Yu-ih called out the perceived failures of the incumbent DPP administration, ranging from the deterioration of cross-strait relations to domestic governance issues. Hou criticized President Tsai’s diplomatic strategy, pointing to Taiwan’s loss of nine diplomatic partners during her presidency.[9] Hou highlighted the lack of cross-strait communication, dialogue, and exchange under Tsai. Hou expressed disapproval at the high rate of prosecution under Taiwan’s Anti-Infiltration Act during the election process and stated the judiciary should not be used as a tool for political gain.[10] The Anti-Infiltration Act is a law passed in 2019 that aims to prevent foreign influence from undermining Taiwan’s national interests.[11] Taipei authorities launched an investigation of 41 municipal borough wardens for suspected violation of the Anti-Infiltration Act after the wardens made a series of trips to the PRC at the invitation of the Taiwan Affairs Office.[12] Hou and his running mate Jaw Shaw-kong previously downplayed wrongdoing and accused the DPP of selectively prosecuting during the election process.[13]

TPP candidate Ko Wen-je appealed to voters to seize the chance to break the cycle of DPP and KMT governments. Ko championed a new Taiwan that rejects societal division and the entrenched ideology of former administrations. He characterized the DPP government as one of shortage and waste, advocating for a government that favors rationality, pragmatism, and science. Ko sought to distance himself from the other candidates’ polarizing positions on cross-strait relations. He urged Taiwan to find balance in an international structure increasingly defined by US-China competition. Ko asserted that Taiwan should be a bridge between the US and China, not a pawn in their confrontation.[14] He distanced himself from the concept that “two sides of the strait are one family,” calling the statement a symbol of goodwill while noting the differences in values and way of life between the PRC and Taiwan.[15] “Two sides of the Strait are one family” is a political platitude pushed by the CCP to lend credence to its One-China principle and warm Taiwan to the idea of unification.[16] Ko previously expressed support for the concept in 2017 during his tenure as mayor of Taipei.[17]

The PRC is continuing its intimidation tactics toward Taiwan before the election. Revelations of numerous possible PRC gray zone activities and influence operations against Taiwan circulated throughout Taiwanese media since last week.

Reuters reported on December 28 that the PRC pressured the popular Taiwanese band Mayday to support the PRC’s claim that Taiwan is a part of China.[18] Reuters cited an anonymous source who provided access to an internal security note that details the PRC’s threats to fine the band for lip-syncing, a fraudulent offense in the PRC. A Taiwanese security official asserted that the PRC’s intimidation of Mayday was to influence Taiwan’s youth vote. Spokesperson for Lai’s campaign Chao Yi-hsiang stated the Chinese Communist Party’s (CCP) election interference is becoming increasingly obvious.[19] Ko Wen-je stated that he condemned the PRC’s actions if the story was true.[20] The KMT issued a press release calling on Reuters to release its source for verification.[21]

Two PRC tugboats entered within three nautical miles of Taiwan’s southern coast on December 31.[22] Taiwan’s Coast Guard Administration (CGA) dispatched a vessel to expel the boats, which were towing a barge northward. The radio operator on one of the tugboats mocked the CGA’s warnings but left Taiwan’s waters without incident.

PRC high-altitude balloons passed directly over Taiwan for the first time on January 1, 2, and 3. At least five of the nine balloons that Taiwan’s Ministry of National Defense (MND) detected within Taiwan’s Air Defense Identification Zone (ADIZ) since January 1 flew above the island. The MND detected two balloons on January 1, one of which flew over Taiwan.[23] The MND detected four balloons on January 2, with three flying over Taiwan.[24] The MND detected 3 balloons on January 3, with at least one flying over the island.[25]

The PRC sending the balloons over Taiwan is likely part of a broader effort to wear down Taiwan’s resources and response capabilities. 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. The MND publicly stated that the balloons were weather balloons but has started including them among its daily reports of PRC ADIZ incursions since December 8.[26] The frequency and number of consecutive instances is increasing since the MND started reporting the balloons. MND’s unprecedented inclusion of 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 coercion campaign.

China
The PRC’s removal of top military and defense industry officials from political bodies reflects Xi Jinping’s continuing efforts to purge corruption and strengthen the loyalty of the military. The PRC’s National People’s Congress (NPC) abruptly removed nine high-ranking military figures as representatives to the legislative body on December 29. It did not explain the decision. The purged members included five current or former commanders of the People’s Liberation Army Rocket Force (PLARF), two members from the Equipment Development Department (EDD), one from the PLA Air Force (PLAAF), and one from the PLA Navy (PLAN). This is the first time that top air force and naval officers were implicated in the recent purges.

• Former PLARF commander Li Yuchao, who was relieved of command in July 2023 due to a corruption investigation.
• Former PLARF commander Zhou Yaning, Li Yuchao’s predecessor.
• PLARF deputy commander Li Chuanguang.
• Former PLARF deputy commander Zhang Zhenzhong. Zhang was Li Yuchao’s deputy and was placed under corruption investigations at the same time as Li.
• PLARF head of equipment development Lu Hong.
• Former deputy director of the General Armament Department (now replaced by the EDD) Zhang Yulin.
• EDD deputy director Rao Wenmin.
• Former PLAAF commander Ding Laihang.
• PLAN Southern Theater Commander Ju Xinchun.[27]

The EDD opened a corruption investigation in the summer of 2023 into hardware procurement going back to 2017, which overlaps with the period that former defense minister Li Shangfu led the procurement department. Li Shangfu was removed from his post in October 2023 following a corruption investigation.[28] Hong Kong-based South China Morning Post (SCMP) said the purged Rocket Force members represented most of the PLARF’s top leadership since the service was established in the 2015 reorganization of the PLA. SCMP also reported that removal from the NPC may be a sign of future disciplinary action, as NPC members are immune from arrest or criminal charges. The Chinese People’s Political Consultative Conference (CPPCC) also removed three defense industry executives as representatives on December 27. The executives were Wu Yansheng, chairman of the China Aerospace Science and Technology Corporation (CASC); Liu Shiquan, chairman of the board of China North Industries Group Corporation (Norinco); and Wang Changqing, deputy manager of China Aerospace Science and Industry Corporation (CASIC). All three are top executives at major state-owned defense technology firms and do not appear to have lost their positions at their companies as of January 2.[29]

The purges from the NPC and CPPCC appear as part of a trend of intensifying anti-corruption efforts in the military in 2023, which primarily focused on the Rocket Force and equipment procurement department. They are also part of Xi Jinping’s broader Anti-Corruption Campaign that began in 2013, and has recently intensified its targeting of senior PRC officials. SCMP reported that the PRC’s Central Commission for Discipline Inspection (CCDI) investigated a record-breaking 45 senior officials in 2023, a 40% jump from 32 senior officials in 2022. 27 of the 45 officials had already retired from their roles, showing that CCDI is breaking from precedent by investigating retired officials.[30] The purges indicate Xi’s perspective that the PLA is not sufficiently loyal to the party and his willingness to risk projecting instability within the CCP to establish loyalty within the party.

Xi Jinping appointed Admiral Dong Jun as the new Minister of National Defense on December 29.[31] He is replacing former Minister of National Defense Li Shangfu, who disappeared from public view in August and formally lost his position in October.[32] The PRC has not had a Minister of National Defense since then. Dong most recently served as commander of the PLAN from September 2021 to December 2023.[33] Xi promoted Hu Zhongming to the rank of admiral to replace Dong as the PLAN commander.[34] Dong is the first PLAN officer to become Minister of National Defense. He has experience commanding theater joint operations within the PLA since 2013 and extensive international engagement with navies ranging from Chile to Sweden, including joint exercises with Russia and Pakistan.[35] His background in joint operations aligns with ongoing efforts to enhance interoperability between service branches. Dong’s experience engaging with foreign interlocutors prepares him for the international representation and communication component inherent in the position of Minister of National Defense.

CCP General Secretary Xi Jinping reiterated his vision to forge a Sino-centric international order in statements around the new year. The Central Conference on Work Relating to Foreign Affairs is a key foreign policy meeting that occurs approximately every five years. Xi’s December 28 speech at the Central Conference on Work Relating to Foreign Affairs conveyed his view that “the world has entered into a new period of turbulence and change,” but the general trend toward “a shared destiny for the international community will not change.”[36] He further stated that the PRC has “greater moral appeal” and needs to “hold the international moral high ground, and unite and rally the overwhelming majority of the world.”[37] His rhetoric on holding the international moral high ground includes taking policy positions opposing American geopolitical stances. One example of this is the PRC claiming to hold the moral high ground in the Israel-Hamas War by advocating for an immediate ceasefire in contrast to the allegedly “biased” United States.[38]

Xi framed the People’s Republic of China as pursuing a path of “peaceful development” and “win-win cooperation” while building “a community with a shared future for mankind” in his New Year’s speech.[39] Xi also reiterated the CCP’s view in his New Year’s speech that unifying with Taiwan was a “historical necessity.”[40] His rhetoric toward Taiwan in this speech is consistent with CCP policy that falsely views Taiwan as a province of the People’s Republic of China rather than the current sovereign state of the Republic of China. Xi’s rhetoric does not indicate that the CCP intends to manufacture an imminent crisis over Taiwan. Eventual unification with Taiwan is central to Xi’s objective of forging a Sino-centric international system.

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.[41] It then did so with the Marshall Islands in October.[42] The signed agreements are now before Congress for funding consideration. Congress previously funded the COFAs for a twenty-year period in 2003.[43] 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.[44] 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.”[45] 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.[46] President Biden signed the 2024 National Defense Authorization Act into law on December 22, but it did not include COFA funding.[47] Palau’s President Surangel Whipps Jr expressed concern in a December 27 interview with ABC Australia over the lack of Congressional-approved funding for the COFA agreement, in part because the 2010 Palau Compact Review Agreement was not funded by the US Congress until 2018.[48]

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.[49]

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 cause severe financial pressure in Palau because COFA funding accounts for $36.9 million of the national government’s annual $124.2 million revenue as of fiscal year 2023.[50] 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.[51] 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 exacerbate the CCP narrative put forth by the propaganda outlet Global Times that the United States only cares about Palau for security reasons rather than mutually beneficial cooperation. [52] The Palau Senate passed a resolution in November rejecting the permanent deployment of a US Patriot missile defense battery.[53] This was the first instance of lawmakers challenging President Surangel Whipps Jr’s request for the United States to construct an over-the-horizon radar system in Palau.[54] In a December 27 interview with ABC Australia, Whipps tied this Palau Senate resolution to a narrative among unspecified portions of Palau that the United States actions were not in the best interests of Palau, as seen by the repeated delay in COFA funding.[55] The associated fiscal challenges that Palau faces without COFA funding buttresses the CCP’s narrative, which in turn creates hurdles for deploying mutually beneficial United States defense resources to the country.

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.[56] Axios reported that former Micronesian officials confirmed receiving gifts from the PRC, such as money, while on official state visits to the country.[57] 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.”[58] 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.

The COFA funding also makes up $35.2 million of the Marshall Islands national government's annual $173.9 million revenue as of fiscal year 2023.[59] The loss of COFA funding would expose the country to similar severe fiscal challenges as Palau and Micronesia.

COFA Funding as Share of Government Revenue in Freely Associated States[60]

Percentage of total government revenue, FY2023*

Israel-Hamas War

PRC Consul General in Jeddah Wang Qiming authored an article on the “Palestinian-Israeli conflict” in the Saudi media outlet Okaz that supports a CCP line of effort to supplant US influence in Arab states. He framed the PRC as standing “on the side of peace, justice, [and] international law” by making “efforts to alleviate the humanitarian crisis in Gaza.”[61] Wang emphasized that the PRC's efforts to push for an immediate ceasefire and two-state solution as evidence for this framing. He then touted the Global Security Initiative to show that the CCP is dedicated to achieving “security and stability in the Middle East.”[62] Wang’s article aligns with the PRC’s diplomatic and information lines of effort that aim to supplant US influence with Arab states by proposing what it claims to be a more inclusive and cooperative regional security framework.[63] This involves portraying Washington as a self-interested and destabilizing influence in the region while simultaneously positioning Beijing as an altruistic and unbiased actor.[64]