China-Taiwan Weekly Update, March 7, 2024

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

Data Cutoff: March 7 at noon 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

• Taiwan’s Coast Guard Administration claimed that three Chinese Coast Guard ships entered Taiwan’s contiguous zone off the east coast of the main island on February 27.
• The Kuomintang initiated a legislative inquiry into the Kinmen capsizing incident to determine the liability of Taiwan’s Coast Guard Administration. This supports the efforts of the Chinese Communist Party to vilify and undermine domestic Taiwanese support for the Democratic Progressive Party.
• PRC Premier Li Qiang’s work report to the National People’s Congress continued a trend of CCP officials using more belligerent language about “reunification” with Taiwan but did not signal a major policy change.
• Recent PRC diplomatic outreach in Europe may aim to advance the PRC’s September 2023 Proposal on the Reform and Development of Global Governance, which faults the West for the war in Ukraine.
• Chinese Coast Guard (CCG) ships fired water cannons and collided with Philippine ships while attempting to block a Philippine resupply mission to Second Thomas Shoal.

Cross-Strait Relations

Taiwan

Taiwan’s Coast Guard Administration claimed that three Chinese Coast Guard ships entered Taiwan’s contiguous zone off the east coast of the main island on February 27.[i] The contiguous zone around Taiwan and its closer islands constitutes the buffer between 12 and 24 nautical miles from the coast.[ii] Taiwanese media reported that the presence of Chinese Coast Guard (CCG) vessels in the waters along Taiwan’s east coast is rare, and the three vessels in question usually operate around the contested Senkaku Islands, which Japan controls.[iii] The CCG vessels left without incident after the Coast Guard Administration (CGA) deployed to the location and demanded that they depart the area.[iv] This incident coincides with a consistently higher presence of PRC ships in the waters around Kinmen since the capsizing incident. The Kinmen capsizing incident refers to the February 14 event in which a PRC fishing boat in Taiwan’s waters capsized while fleeing from a legal Taiwanese Coast Guard pursuit. The capsizing resulted in the deaths of two of the four fishermen onboard. CGA Director General Chou Mei-wu reported increased PRC vessel presence near Kinmen since the incident, with up to 11 vessels per day, including law enforcement and official ships.[v]

The presence of more CCG vessels around Taiwan’s water serves to incrementally challenge and erode the Republic of China's (ROC) sovereignty in its adjacent waters. Normalizing operations around Taiwan’s waters can set conditions for the PRC to apply further pressure on Taiwan in the future. The CCP does not accept Taiwan’s sovereignty over the waters. TAO spokesperson Zhu Fenglian denied the existence of Taiwan’s so-called prohibited and restricted waters on February 28.[vi] The increase in the number of the CCG vessels illustrates the PRC’s opportunism as it capitalizes on heightened cross-strait tensions and political sensitivity stemming from the Kinmen capsizing incident.

The PRC’s intensified maritime activities complement its regular violations of Taiwan’s Air Defense Identification Zone (ADIZ). Retired ROC Air Force Lieutenant General Chang Yen-ting pointed out on February 29 that the Ministry of National Defense (MND) detected a People’s Liberation Army (PLA) aircraft as close as 23 nautical miles from Taiwan’s northern coast.[vii] Chang highlighted the proximity to Taiwan’s airspace and the challenges to the military’s operational depth and early warning time. The ROC Air Force announced on March 6 that it would resume nighttime flight training.[viii] Chang stated in an interview that the measure is a necessary response to the higher frequency of PLA aircraft harassing Taiwan in recent years.[ix]

The Kuomintang initiated a legislative inquiry into the Kinmen capsizing incident to determine the liability of Taiwan’s Coast Guard Administration. This supports the efforts of the Chinese Communist Party to vilify and undermine domestic Taiwanese support for the Democratic Progressive Party. KMT-aligned independent legislator May Chin convened the Legislative Yuan’s Internal Affairs Committee on March 4, summoning Coast Guard and government officials to testify regarding the law enforcement process and subsequent handling of the incident. Chin favors closer relations with the PRC and has a history of meeting with CPP officials, prompting accusations from DPP members that she is under the CCP’s influence.[x] Ocean Affairs Council Minister and DPP member Kuan Bi-ling and CGA Director General Chou Mei-wu faced fierce questioning from Chin and KMT lawmakers about the cause of the incident and the liability of the CGA. Kuan and Chou pushed back against the notion that the CGA vessel’s collision with the mainland fishing boat caused it to capsize. Kuan and other DPP cabinet members stood by the Coast Guard’s actions as lawful and denied insinuations of guilt. DPP legislators disagreed with the KMT’s framing of the incident in a report, claiming it lent itself to the TAO’s position.[xi] Kuan refuted allegations that she ordered the Coast Guard to open fire or that she was a hindrance to the reconciliation process. Kuan characterized the rumors as a cognitive warfare strategy by the CCP and emphasized the role of misinformation in shaping public perception of sensitive cross-strait issues.[xii]

The Kuomintang and Chinese Communist Party (CPP) are urging the DPP to disclose the truth about the incident. The PRC blames the DPP and CGA for the deaths and failure of the reconciliation process.[xiii] The PRC has responded by repeatedly deploying CCG patrols into waters around Kinmen and Matsu, two Taiwan-controlled island groups that are close to the coast of the PRC.

China

The National People’s Congress announced a 5% GDP growth target and a 7.2% defense budget increase for 2024. PRC defense spending has outpaced the GDP growth target for over a decade.[xiv] Both figures are identical to growth targets announced at the 2023 National People’s Congress session.[xv] Premier Li Qiang’s work report to the annual session of the NPC focused primarily on the PRC’s economic goals, including maintaining target growth rates, developing “new productive forces” to drive the economy, and furthering “reform and opening up” policies. Li said the economy was improving with a growth rate of 5.2% in 2023 but acknowledged that achieving the economic growth goals would not be easy.[xvi] The spokesperson for the Chinese People’s Political Consultative Conference (CPPCC), the PRC’s top advisory body which is having its annual session concurrently with the NPC, also signaled that the CPPCC was chiefly concerned about the economy.[xvii]

The PRC has the world’s second largest defense budget after the United States and the budget is set to increase to 1.67 trillion yuan ($232 billion) in 2024. Although PRC defense spending has doubled since 2015, annual increases in defense spending have declined to single-digit percentages as economic growth has slowed. Official spending increases in defense have hovered around 7% each year since 2016.[xviii] The US Department of Defense estimated in 2021 that the PRC’s true spending on defense could be 1.1 to 2 times its official budget.[xix] The PRC can likely sustain its military spending despite slowing economic growth, however. The state exerts considerable control over the country’s economy and the distribution of resources to various sectors. The PRC’s official defense spending is also much smaller than US defense spending as a percentage of GDP, equaling 1.6% of GDP in 2022 compared to 3.5% for the United States.[xx]

PRC Premier Li Qiang’s work report to the National People’s Congress continued a trend of CCP officials using more belligerent language about “reunification” with Taiwan but did not signal a major policy change. Li stressed that the Chinese Communist Party (CCP) must “resolutely oppose ‘Taiwan independence’ separatism and external interference.” Li’s predecessor Li Keqiang said in the 2023 work report that the CCP should “advance the process of the peaceful reunification of the motherland,” but Li Qiang dropped the word “peaceful” and called on the CCP to “unswervingly advance the great cause of the reunification of the motherland.” Li Qiang did say the CCP should promote the “peaceful development” of cross-strait relations, however.[xxi] State-owned media Global Times cited PRC scholars who said that the omission of the term “peaceful reunification” does not signal that the CCP has dropped this goal but rather signals that it considers fighting Taiwanese “secessionism” will be a more urgent task in 2024.[xxii] The change in the language of the report is consistent with the change of tone in CPPCC Chairman Wang Huning’s speech at the Taiwan Work Conference on February 23, which emphasized the need to “fight” (rather than merely “oppose”) Taiwanese independence and foreign interference.[xxiii]

The premier’s government work report to the NPC also omitted the term “peaceful reunification” in 2016 and 2020, the years that ROC President Tsai Ing-wen won the presidential elections. That the report again dropped the term after the DPP won the 2024 presidential elections indicates that the change in rhetoric signals disapproval of the DPP presidency.[xxiv]

CCP Central Military Commission (CMC) Vice Chairmen Zhang Youxia and He Weidong highlighted the need to improve the military’s preparation for “major missions” at the annual National People’s Congress. Zhang and He participated in deliberations by the People’s Liberation Army (PLA) and People’s Armed Police (PAP) delegations as they reviewed the government work report at the NPC. Zhang highlighted the need to implement the CMC Chairman responsibility system, step up troop training, strengthen coordination of preparations for “major missions”, accelerate construction and implementation of network-enabled information systems, integrate military and civilian resources, and improve the military's “ability to win.” He Weidong stressed the need to strengthen training in CCP theory in the military and deepen political “rectification” and anti-corruption efforts.[xxv] Zhang and He’s recommendations provide insight into the PLA’s priorities in improving its readiness for “major missions” such as operations against Taiwan. These priorities include strengthening centralized CCP control over the military, strengthening personnel training and political loyalty, deepening military-civil fusion, and constructing information systems to facilitate joint operations in “informationized” warfare.

Russia

Recent PRC diplomatic outreach in Europe may aim to advance the PRC’s September 2023 Proposal on the Reform and Development of Global Governance, which faults the West for the war in Ukraine. The proposal calls the root of the “Ukraine crisis” lying “in the problem of security governance in Europe.” The “parties concerned… [must] accommodate each other’s legitimate concerns… [and] abandon the Cold War mentality.”[xxvi] These are thinly veiled references to accommodating Russian historical grievances at the price of NATO unity and Ukrainian territorial sovereignty. The alleged “stabilizing force” of any PRC-negotiated ceasefire along these lines would normalize the principle of revisionist international aggression. This principle would provide the CCP with a precedent for the party to falsely justify aggressive coercion aimed at Taiwan, with the eventual political objective of annexing Taiwan into the PRC.

PRC Special Representative for Eurasian Affairs Li Hui traveled to Europe on March 2 for a round of visits to Russia, the EU, Poland, Ukraine, Germany, and France. PRC MFA Spokeswoman Mao Ning claimed that Li Hui would “pave the way for peace talks.”[xxvii] Li’s comments align with Kremlin talking points, however. The South China Morning Post reported on March 6 that PRC Special Representative for Eurasian Affairs Li Hui reiterated the Kremlin talking point that the discussion of Ukrainian territorial sovereignty could only occur when violence ceases. He also implied that the EU needs to stop sending weapons to Ukraine for this to happen.[xxviii] Li’s claims align with PRC Foreign Minister Wang Yi’s message at the Munich Security Conference in mid-February that the PRC is a “responsible major country” that would serve as a “stabilizing force” amid global turmoil. [xxix] Wang also repeated his claim on March 7 that the PRC “supports the timely convening of an international peace conference” during a press conference at the annual Two Sessions meeting.[xxx]  CCP leadership delivers policy guidance for the upcoming year to the party cadre at this annual meeting.

The PRC and Russia are collaborating on the development of surveillance and energy-related space capabilities that threaten US access to space and space-based capabilities. The China National Space Administration (CNSA) stated in late February that the PRC plans to construct a surveillance system around the in-progress International Lunar Research Station. The surveillance system will use the Skynet mass surveillance system as a model.[xxxi] Skynet is the PRC’s nationwide camera surveillance system that includes over 600 million cameras.[xxxii] The ILRS is a multinational space station initiative that Russia and the PRC founded in 2021 that is scheduled for competition by the 2030s. CNSA did not specify how it would prioritize surveillance efforts in space. The head of Russia’s space agency, Roscosmos, Yuri Borisov also stated on March 5 that the PRC and Russia are considering cooperation to build a nuclear power plant on the moon in the early 2030s.[xxxiii] This is a competing initiative to an ongoing NASA project to design a nuclear fission reactor on the moon.[xxxiv]

Commander of United States Space Command General Stephen N. Whiting stated that these types of space-based systems compete with US interests during his February 29 testimony to the United States Senate Committee on Armed Services. He warned that the PRC “and the Russian Federation continued to field systems and engage in behavior that threaten U.S., Allied, and Partner access to space and space-based capabilities.”[xxxv]

Southeast Asia

Chinese Coast Guard (CCG) ships fired water cannons and collided with Philippine ships while attempting to block a Philippine resupply mission to Second Thomas Shoal. A CCG vessel attempted to block and collided with a Philippine Coast Guard (PCG) vessel escorting a supply mission to Second Thomas Shoal on March 5, causing minor damage to the Philippine ship.[xxxvi] PCG spokesperson for the West Philippine Sea Commodore Jay Tarriela said that the CCG and Chinese Maritime Militia ships attempted “dangerous” blocking maneuvers against PCG vessels in an “unprovoked [act] of coercion.”[xxxvii] Two CCG ships also fired water cannons at a Philippine supply ship, injuring four Philippine personnel, and later collided with it. The supply ship returned to the Philippines under PCG escort. Another Philippine ship completed its mission of delivering supplies to personnel on the BRP Sierra Madre, a deliberately grounded derelict warship that serves as the Philippine base on Second Thomas Shoal.[xxxviii] The MFA claimed the Philippine supply mission was transporting construction materials.[xxxix]

The CCG claimed that it took “control measures in accordance with the law” to stop the Philippines’ “illegal intrusion” and that a Philippine ship “deliberately rammed” a CCG ship.[xl] A PRC Ministry of Foreign Affairs (MFA) spokesperson accused the Philippines of violating its commitments to China to tow the Sierra Madre and violating the PRC’s territorial sovereignty and maritime rights by “infringing, provoking and causing trouble” in the waters of Second Thomas Shoal, which the PRC calls “Ren’ai Reef” and the Philippines calls “Ayungin Shoal.”

Second Thomas Shoal is a submerged reef in the Spratly Islands in the South China Sea which the Philippines and the PRC both claim. The Philippines controls the shoal with troops based on the grounded warship BRP Sierra Madre. It maintains its presence at the shoal with regular shipments of living supplies for its personnel and construction materials for repairing the World War II-era warship, which is in poor condition. The Philippines began “superficial repairs” on the ship in October 2023 to make it more livable for the roughly dozen Philippine military personnel stationed there.[xli]

The PRC opposes these shipments and claims the Philippine military presence is illegal. The PRC claims sovereignty over nearly the entirety of the South China Sea including the Spratly Islands through its “Nine Dash Line” maritime boundary. It rejects a 2016 Permanent Court of Arbitration ruling that found the Nine Dash Line claims are unlawful. The PRC has constructed, seized, and attempted to seize many islands in the South China Sea so it can build a military presence throughout the critical waterway. The PRC has built military infrastructure on islands that it has seized control of or artificially constructed to expand its power projection capability, strengthen domain awareness, and increase its ability to block critical Sea Lines of Communication (SLOCs) through the South China Sea. Developing the capability to monitor or restrict ships through the South China Sea would support a future PRC effort to implement a blockade of Taiwan or block US and allied reinforcements from reaching the Taiwan Strait in wartime.

The PRC Ministry of Foreign Affairs objected to the Philippines’ passage of the “Maritime Zones Act” that codifies Philippine territorial claims in the South China Sea. The act is based on the 2016 Arbitration ruling, which found the PRC’s competing territorial claims in the region to be invalid. The Philippine Senate passed the Maritime Zones Act on February 26. The act establishes the Philippines’ archipelagic boundaries, internal waters, and exclusive economic zone (EEZ) in accordance with the UN Convention on the Law of the Sea (UNCLOS) and the 2016 Arbitral Ruling.[xlii] The 2016 ruling by the Permanent Court of Arbitration found that the PRC’s “Nine Dash Line” territorial claims to nearly the entire South China Sea, including many Philippine-claimed features, had no legal basis.[xliii] A PRC MFA spokesperson said on March 5 that the PRC “firmly opposes” the law. She reiterated the PRC stance that the PRC has sovereignty over many islands the Philippines claims, including the Spratly Islands and Scarborough Shoal. She also asserted that the treaties originally delineating Philippine territory did not include these islands, that the Philippines illegally occupied PRC territory in the South China Sea, and that the 2016 arbitration ruling is illegal under UNCLOS.[xliv]

The PRC’s use of legal arguments in tandem with maritime operations to assert territorial claims over most of the South China Sea serves to lay the groundwork for PRC military control over the South China Sea. PRC control over the sea could enable it to establish domain awareness or block passage through the waterway to support a blockade or military operations against Taiwan. The legal arguments about UNCLOS and the territorial boundaries of rival claimants are part of a CCP effort to legitimize PLA and CCG actions in the South China Sea. “Legal warfare” is one of the PLA’s “three warfares” strategies of non-kinetic warfare, which also include psychological and public opinion warfare.

Oceania

Compacts of Free Association

The House of Representatives voted to renew the Compacts of Free Association (COFA) on March 6.[xlv] The bill is now before the Senate for consideration. The COFAs govern the United States’ relationship with Palau, Micronesia, and the Marshall Islands while granting the United States military access throughout their territories. The United States renewed COFAs with Palau and Micronesia in May and the Marshall Islands in October.[xlvi] [xlvii] Congress previously funded the COFAs for a twenty-year period in 2003.[xlviii] That funding has now expired. The renewal of the COFAs in 2024 would replenish this funding at a total cost for all three of the twenty-year agreements of roughly $7 billion spread over the period 2024 to 2043, according to the Congressional Research Service.[xlix]