China-Taiwan Weekly Update, July 18, 2024

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

Data Cutoff: July 16, 2024

The China–Taiwan Weekly Update is a joint product from the Institute for the Study of War and the American Enterprise Institute. The update supports the ISW–AEI Coalition Defense of Taiwan project, which assesses Chinese campaigns against Taiwan, examines alternative strategies for the United States and its allies to deter the Chinese Communist Party’s (CCP) aggression, and—if necessary—defeat the People’s Liberation Army (PLA). The update focuses on the Chinese Communist Party’s paths to controlling Taiwan and cross–Taiwan Strait developments.

Key Takeaways  

• Taiwan Affairs Office Spokesperson Chen Binhua accused the DPP of intentionally distorting information about the People’s Republic of China’s (PRC) recent legal guidelines for punishing Taiwanese separatism and generating undeserved fear among the Taiwanese public.
• Taiwan’s Ministry of National Defense (MND) spokesperson Sun Li-fang warned about the PRC’s weaponization of AI and deepfakes to conduct cognitive warfare operations.
• PRC state media promoted “high-quality development,” self-reliance, and overcoming “obstacles” to economic reform ahead of the CCP Central Committee’s Third Plenum. The CCP is trying to shore up perceptions of a weak economy and lay the groundwork for upcoming economic reforms because its domestic legitimacy increasingly rests on its ability to deliver economic prosperity.
• A PRC-Philippine agreement signed after the Bilateral Consultation Mechanism on July 2 set up a direct presidential-level line of communication for bilateral crisis management. The hotline may provide a mechanism for escalation management but does not indicate a change in the PRC’s aggressive posture in the South China Sea.
• The PRC and Russia conducted joint naval exercises in the South China Sea concurrently with a joint naval patrol in the North Pacific.

Cross-Strait Relations

Taiwan

Taiwan Affairs Office (TAO) Spokesperson Chen Binhua accused the DPP of intentionally distorting information about the PRC’s recent legal guidelines for punishing Taiwanese separatism and generating undeserved fear among the Taiwanese public.[i] Chen stated that the recent regulations outlining severe punishment for “Taiwan independence forces” are not targeted at the vast majority of Taiwanese people but only against specific “die-hard elements.” Chen cited recent cross-strait exchanges as proof that the general public does not identify with the DPP’s alleged separatist policies.

The TAO announcement aims to assuage concerns with the legal guidelines that caused alarm in Taiwan over the prospect of arbitrary incarceration and prosecution for those who travel to the mainland. Chen’s specification regarding the focus of the legal guidelines aims to clarify the target of the PRC’s recent ire following intensifying coercion towards Taiwan after the inauguration of President Lai Ching-te, a DPP member whom the PRC regards as a separatist advancing Taiwanese sovereignty.

The guidelines follow a series of actions by the PRC to escalate pressure on Taiwan since the new administration, including large-scale military exercises around Taiwan in May, increasing encroachment on Taiwan’s Air Defense Identification Zone (ADIZ) by military aircraft, and the erosion of Taiwanese jurisdiction in waters around its outer islands. The PRC’s messaging toward the DPP directly links the aggressive PRC behavior to the DPP. The PRC justified its most recent military exercises, which took place three days after Lai’s inauguration, as a “strong punishment for the separatist acts of ‘Taiwan independence’ forces.”[ii]

There were at least 325 People’s Liberation Army (PLA) violations of Taiwan’s ADIZ in June and 289 in May, the second and third-highest monthly totals on record, respectively. The June total is the highest for any month without a large-scale PLA exercise. The heightened number of ADIZ violations reflects an intensified PRC pressure campaign against Taiwan under Lai’s administration. The high frequency of ADIZ violations drains Taiwan’s resources, exhausts military personnel, and degrades Taiwan’s threat awareness. Taiwan does not scramble aircraft in response to all PRC ADIZ violations, but it does put military personnel on standby to respond quickly if needed.

Four Chinese Coast Guard (CCG) ships entered Taiwan’s restricted waters around Kinmen on July 11.[iii] The four ships approached the outer limits of Kinmen’s restricted waters in four different locations and simultaneously sailed across the boundary an hour later. This is the second instance that CCG ships have sailed simultaneously in multiple locations since a state media-affiliated social media account Yuyuan Tantian stated that the CCG was pursuing a “new model” of law enforcement patrols around Kinmen in June.[iv] The social media account claimed that CCG patrols since June have moved away from fixed routes and to new formations consisting of single ships and pairs, which will increase the number of patrol areas. Yuyuan Tantian also stated that the CCG has increased the intensity of patrols and is conducting them around the clock. Violating Taiwan’s jurisdiction in multiple areas at once with individual CCG ships stretches Taiwanese Coast Guard resources and reduces its ability to respond to incursions, similar to ADIZ incursions.

Yuyuan Tantian stated that the original purpose of the CCG patrols was to defy Taiwan’s control over its restricted and prohibited waters. This contradicts the CCG’s stated purpose of their patrols in Kinmen’s waters, which is to “safeguard the legitimate rights and interests of Chinese fishermen, including Taiwan… and ensure normal navigation and operation in Kinmen-Xiamen waters.”[v] Taiwan does not formally claim any territorial waters around Kinmen partly due to its proximity to the PRC, but it designates “prohibited” and “restricted” waters around Kinmen, which it treats as equivalent to "territorial waters" and a "contiguous zone," respectively. The PRC does not officially recognize the existence of any restricted or prohibited waters around Taiwan’s outlying islands and claims the right to conduct law enforcement activities there, however. 

The Taiwan Affairs Office of Shanghai is holding an annual summer program that provides Taiwanese college students with internships at prestigious companies in Shanghai’s central business district.[vi] The program is one of countless sociocultural exchanges under the coordination of the PRC’s United Front agencies that aim to strengthen young Taiwanese people’s connection to the mainland and promote Chinese identity. The United Front is a whole-of-government and society effort to advance the CCP’s ideology and win the hearts and minds of the Chinese people by forming a thorough alliance between the CCP and the rest of society.

The program’s name, the “Stars Project,” mimics a well-respected Taiwanese program by the same name that helps promising high school students apply to universities in Taiwan.[vii] The name is designed to leverage Taiwanese students’ association of the term with a prestigious program and encourage participation.

President of the Taiwan Professors Association Chen Li-fu stated that the PRC’s United Front activities directed at Taiwan’s youth aim to influence their national identity.[viii] Chen warned that the focus of the PRC’s United Front work against Taiwan has shifted to young people after the Sunflower Movement in 2014. The Sunflower Movement was a primarily student-led wave of political activism in 2014 that rejected integration policies with the PRC and championed Taiwanese identity.

China-Taiwan Net, a news outlet that the TAO runs, features a constant stream of youth-focused cross-straits exchanges, demonstrating the emphasis of the PRC’s United Front work on reaching young Taiwanese people.[ix] The PRC held the Cross-Strait Youth Summit in Beijing on July 3 and the Cross-Strait Youth Development Forum in Hangzhou and other cities on July 6.[x] The forums are annual events that the TAO and other United Front agencies host to promote cross-strait youth exchanges while pressuring attendees to adopt PRC-aligned political narratives, such as opposition to Taiwan's independence and acceptance of a shared national identity.

Taiwan’s Ministry of National Defense (MND) spokesperson Sun Li-fang warned about the PRC’s weaponization of AI and deepfakes to conduct cognitive warfare operations. Sun stated that the PRC’s cognitive warfare strategy is not limited to disseminating disinformation, but is closely integrated with the military operations of the PLA. The MND invited Academia Sinica Director of the Institute of Information and Communications Technology Huang Chin-i to advise on the PLA’s use of AI and disinformation to degrade the situational awareness and morale of its targets. Sun cited past examples of PRC disinformation targeted at Taiwan’s annual Han Kuang military exercise, including that the purpose of the exercises was for the commander-in-chief to plan an escape route, officers and soldiers defected due to the pressure of the exercises, and the equipment malfunctions casualties.[xi]

Huang also detailed the PLA’s goal to use AI-enabled disinformation to create political polarization among the public and incite divisions. The PRC’s political warfare against Taiwan features constant information operations that aim to degrade support for the DPP and suppress Taiwanese sovereignty and identity. Governments and threat intelligence organizations have called repeated attention to sprawling PRC disinformation operations in coordinated campaigns such as Spamouflage.[xii] A report from DoubleThink Labs, a Taiwanese firm that researches PRC influence operations, released a report in January that detailed the wide range of narratives that PRC threat actors propagate to negatively influence Taiwanese people’s perception of the DPP. The narratives opportunistically seize on topical controversies in Taiwanese politics to amplify criticism of the DPP government, including egg and pork import scandals, fraud cases related to Taiwan’s domestic submarine production, compulsory military service extensions, Indian migrant worker inflows, and false rumors about President Lai Ching-te’s supposed illegitimate child.[xiii]

China

PRC state media promoted “high-quality development,” self-reliance, and overcoming “obstacles” to economic reform ahead of the CCP Central Committee’s Third Plenum. The CCP’s 20th Central Committee held its Third Plenary Session from July 15-18. The Third Plenum for each CCP Central Committee, convened roughly every five years, sets the top economic policy agenda for the CCP’s next economic Five-Year Plan.[xiv] PRC state media including Xinhua and the CCP Central Party School journal Study Times called for the country to open itself to deeper economic reforms and to overcome “ideological rigidity” as well as “institutional and mechanistic” obstacles to reform.[xv] A Study Times article on July 15, the first day of the Third Plenum, called for the party to push back on “misinterpretations” including the idea that reforms have stagnated.[xvi] An issue of the CCP theoretical magazine Qiushi released on the same day featured a series of excerpts from speeches by Xi Jinping that championed self-reliance and self-confidence.[xvii]

CCP leaders at the Third Plenum are likely trying to address of major economic challenges the PRC is facing, including a spiraling housing market, high local government debt, low consumer demand, weakening investor confidence, and slowing economic growth.[xviii] The PRC’s National Bureau of Statistics released new economic numbers on July 15 that showed that the economy grew 5.3% in the first quarter and 4.7% in the second quarter, underperforming expectations. A spokesperson for the bureau framed the economy’s performance as “relatively good” and stable. The spokesperson blamed the second-quarter slowdown in growth on recent floods as well as insufficient domestic demand and “lack of smoothness in domestic circulation.”[xix] A spokesperson for the Ministry of Foreign Affairs (MFA) called the semi-annual economic report “remarkable” and said it showed that the PRC withstood the pressures of global instability and continued its “steady and positive” trend of “high-quality development” and “high-level opening-up.”[xx]

The CCP is trying to shore up perceptions of a weak economy and lay the groundwork for upcoming economic reforms because its legitimacy as the PRC’s one-party government increasingly rests on its ability to deliver economic prosperity. The Center for Strategic and International Studies (CSIS) released a report on July 9 based on surveys of PRC citizens that showed that the PRC populace increasingly blames unequal opportunity and an unfair economic system for poverty, while citing “connections” and generational wealth as the top two reasons for a person to be rich. The results show a dramatic change since 2014, when surveyed people cited talent and hard work as the top two reasons for wealth, while lack of ability and effort were the top two reasons given for poverty.[xxi]

The PRC Ministry of Foreign Affairs (MFA) announced new sanctions on six US defense firms over arms sales to Taiwan. The MFA announced on July 12 that it was imposing “countermeasures” on six US defense firms and five senior executives for arms sales to Taiwan. The sanctions freeze the PRC-based assets of Anduril Industries, Maritime Tactical Systems, Pacific Rim Defense, AEVEX Aerospace, LKD Aerospace, and Summit Technologies Inc. They also bar three Anduril executives and two executives of the drone manufacturer AeroVironment from entering the PRC and freeze any PRC-based assets they hold The MFA announcement said that US arms sales to Taiwan “seriously violated the one-China principle,” interfered in China’s domestic affairs, and damaged China’s sovereignty and territorial integrity.[xxii] The PRC has imposed sanctions on at least nine other US firms and their executives for the same reason in 2024, including Boeing, Lockheed Martin, General Atomics Aeronautical Systems, and General Dynamics Land Systems.[xxiii] A 2023 report by the German think tank Mercator Institute for China Studies (MERICS) found that the PRC has significantly increased its use of unilateral sanctions since 2018 against US individuals, groups, or companies it perceives to be interfering in its internal affairs.[xxiv] The PRC has repeatedly expressed opposition to unilateral sanctions in general, however, including US sanctions against it and other countries such as Russia and Iran.[xxv]

Southeast Asia

Philippines

A PRC-Philippine agreement signed after the Bilateral Consultation Mechanism (BCM) on July 2 set up a direct presidential-level line of communication for bilateral crisis management. Philippine Department of Foreign Affairs (DFA) Undersecretary Maria Theresa Lazaro and PRC Vice Foreign Minister Chen Xiaodong met in Manila on July 2 for talks about the PRC-Philippine disputes in the South China Sea as part of the ninth round of BCM talks. The two countries signed the Arrangement on Improving Philippines-China Maritime Communication Mechanisms.[xxvi] The Associated Press reported on July 16 that the agreement included the opening of a direct line of communication between the presidential offices of both countries to better manage disputes in the South China Sea.[xxvii] The PRC and the Philippines have had a series of tense confrontations over the past several months over control of disputed islands and maritime features in the South China Sea. The Chinese Coast Guard (CCG) has used increasingly aggressive tactics including ramming and water cannons to prevent Philippine government ships from reaching Scarborough Shoal and Second Thomas Shoal. The PRC has controlled Scarborough Shoal since 2012 but has not built any facilities there. The Philippines controls the Second Thomas Shoal using a beached derelict warship as an outpost. Both sides have avoided directly attacking each other’s personnel with weapons to prevent the dispute from escalating into a violent conflict, which could trigger the US-Philippine mutual defense treaty.

The establishment of a presidential-level hotline with the Philippines may provide a mechanism for escalation management but does not indicate a change in the PRC’s aggressive posture in the South China Sea. The PRC has continued its rhetoric regarding the Philippines’ “provocations” around PRC-claimed territories in the South China Sea since the July 2 agreement. It anchored its largest CCG vessel, CCG-5901, less than 800 yards from the Philippine Coast Guard ship at the Philippine-controlled Sabina Shoal on July 3, released a report on July 8 blaming the Philippine warship on Second Thomas Shoal for environmental damage, and deployed CCG vessels to assert PRC claims to Second Thomas Shoal while “allowing” the Philippines to perform a medical evacuation on July 9.[xxviii] Additionally, it is unclear how or whether the PRC will use the new hotline to defuse crises. The Philippines said that it was unable to reach PRC officials through a preexisting “maritime communication mechanism” during a confrontation at Second Thomas Shoal in August 2023.[xxix] An unspecified “highly placed” Philippine source told the South China Morning Post that the pre-existing hotline has never been used during Philippine resupply missions, a common flashpoint for conflict with the PRC, but has been used to coordinate with the PRC for search-and-rescue missions.[xxx]

North America

Canada

The PRC denied Canada’s accusations that the PRC set up clandestine overseas police stations in Toronto to harass Chinese expatriates. A July 13 Bloomberg article cited two anonymous sources within Canada’s government who stated that Canada has mapped out the locations of clandestine PRC police stations in its territory including in three majority-Chinese areas of Toronto.[xxxi] The anonymous sources stated that Canada intends to coordinate its response to covert overseas PRC police stations with other members of the G7. Among the G7, the United States, Germany, Italy, and the UK have each expressed concern about overseas PRC police presence in their territory in the previous two years.[xxxii] The United States and Canada released a joint communique on July 12 that highlighted common concerns of foreign interference including “transnational repression-related cases” such as the 2022 indictment of 5 US persons accused of working for the PRC government to silence expatriate criticism of the PRC.[xxxiii]

Spain-based human rights organization Safeguard Defenders claimed in a 2022 report that the PRC operates 54 overseas police stations on 5 continents.[xxxiv] The report further stated that these covert police stations formed a part of a PRC campaign to establish extraterritorial control over Chinese expatriates while circumventing formal legal structures that would provide protection to the expatriates. Safeguard Defenders additionally noted that the PRC instead uses these covert police stations to threaten and harass expatriates to pressure them to return to the PRC. The location of the alleged PRC police bases in Chinese-majority areas of Toronto indicates that the PRC police presence in Canada is likely a component of the PRC’s wider effort to monitor and influence its expatriate community both extraterritorially and extralegally.

PRC MFA spokesperson Lin Jian denied the existence of overseas PRC police stations and urged Canada to stop “smearing” the PRC in his daily remarks on July 15.[xxxv] The PRC Embassy in Ottawa likewise claimed that the PRC offices in Toronto are staffed by volunteers and aid Chinese people with documentation and stated that the PRC respects the “judicial sovereignty” of all nations.[xxxvi] These statements mirror recent PRC criticisms of the United States and its allies of overselling the “China threat theory” as an excuse to heighten cooperation targeted at the PRC’s influence abroad. The PRC also has painted itself as the victim of a growing “anti-China” coalition in the West.[xxxvii] The PRC response reflects growing concern over what the PRC views as increasing Western cooperation to "contain” the PRC, particularly if a joint-G7 effort to combat clandestine PRC police action abroad materializes.

Russia

The PRC and Russia conducted joint naval exercises in the South China Sea concurrently with a joint naval patrol in the North Pacific. The “Joint-Sea 2024” exercises began on July 14 at a port in Zhanjiang, Guangdong, the headquarters of the PLAN South Sea Fleet.[xxxviii] The joint exercises included air defense drills, anti-submarine drills, live-fire drills, and rescue training.[xxxix]  The Russian Navy corvettes Gromkiy and Rezkiy, Russian fleet oiler Irkut, PLAN destroyer Nanning, PLAN frigates Xianning and Dali, and PLAN supply ship Weishanhu, participated in the exercises.[xl]

Joint patrols began in the East China Sea, near South Korea’s Jeju Islands, and transited through Japan’s Osumi Strait before sailing to the South China Sea. The joint China-Russia Naval Patrol entered the South China Sea through the Balintang Channel located near the Luzon Strait.[xli] The Chinese Ministry of Defense (MOD) reported that the joint patrol was carried out by the PLAN destroyer Yinchuan, PLAN frigate Hengshui, Russian frigate Sovershennyi, and PLAN supply ship Weishanhu.[xlii] The participating vessels also participated in “search and arrest” and supply replenishment exercises.[xliii]

The PRC MOD denied that these exercises were in response to the recent NATO summit and stated that they were not intended to target any third party.[xliv] Instead, the PRC characterized them as a normal instance of cooperation between two militaries.

Annual “Joint-Sea” exercises have been an element of China-Russia military cooperation since 2012 and have focused on enhancing joint maritime operations and responding to security threats facing the two countries.[xlv] To date, 10 of the 13 ”Joint-Sea” exercises have transited through the Indo-Pacific, most commonly the Sea of Japan and East China Seas, strategically important locations for China and Russia.[xlvi] “Joint-Sea 2016” was the only exercise before “Joint-Sea 2024” to occur in the South China Sea, taking place a few months after the Permanent Court of Arbitration ruled that China’s expansive claims in the South China Sea were invalid.[xlvii]  “Joint-Sea 2024” occurred after the end of the United States, Japan, and South Korean trilateral “Freedom Edge” exercise in the East China Sea near Jeju Island and amid escalating tensions between the PRC and the Philippines.