Issue: 2022: Vol. 21, No. 1

Security and Economic Challenges for Taiwan in Cross-Strait Relations

Article Author(s)

Chien-Pin Li

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Chien-pin Li is Professor of Political Science and Dean of the College of Humanities and Social Sciences at Sam Houston State University. Before his current position, he taught at Kennesaw State University for 26 years, and was a founding member of the China Research Center. He received his Ph.D. in Political Science from the University of Iowa and was an Associate Research Fellow at Academia Sinica (Taipei, Taiwan), a Senior Fellow at the Atlantic Council of the United States (Washington, ... 
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The security and economic landscape in the Indo-Pacific is increasingly difficult to navigate. While trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the successor to the Trans-Pacific Partnership or TPP, and the Regional Comprehensive Economic Partnership signal an interest to cooperate in a region full of economic vibrancy, competition and rivalry between great powers cast significant uncertainty over the peace and stability in the region. The paradoxical trends in economic and security affairs are particularly evident in cross-Strait relations between Taiwan and China.

Taiwan is on the defensive economically and politically in its effort to maintain security from China despite their robust economic ties. China has been Taiwan’s biggest export market since 2004 and is Taiwan’s largest source of its trade surplus. However, Taiwan has grown politically more distant from the mainland in recent years. Since Taiwan’s democratization in the late 1980s, more and more of its citizens have formed their political identity independent from the historical connection with China. The trend has alarmed China. To prevent the island from drifting away, China has intensified its diplomatic and military pressure on Taiwan.

The cross-Strait dynamic is remarkably similar to the volatile relationship between Russia and Ukraine. In light of the Russian invasion of Ukraine, how far will China go in dealing with Taiwan? To thoroughly understand this issue, a historical review is in order.

Security Challenges

China has launched military operations in the Taiwan Strait on three separate occasions during last 70 years. During the first Taiwan Strait crisis (1954-55), the People’s Liberation Army unleashed heavy artillery attacks on the offshore islands of Jinmen (Kinmen/Quemoy) and Mazu (Matsu) to “liberate” Taiwan. In December 1954, the United States and Taiwan signed the mutual defense treaty, and in January 1955, President Eisenhower signed the Formosa Resolution, a joint measure passed by the U.S. House and Senate granting the president pre-authorization to use armed forces to protect Taiwan. In May 1955, the PLA backed down and the shelling ceased, ending the crisis.

In 1958, China resumed its bombardment of Jinmen and Mazu to block Taiwan from resupplying garrisons on the islands, triggering the second crisis. The United States responded by sending a large naval contingent to the Taiwan Strait. Tensions eased when China suspended its bombing campaign after high-level talks with the U.S. in Warsaw.

In 1995, in protest over the U.S. decision to grant visa for Taiwan president Lee Teng-hui to visit Cornell University (his alma mater in the United States), China deployed some 150,000 troops in areas bordering the Strait. There they conducted three consecutive military exercises, including missile tests, live-fire war games, and air exercises to issue warnings to both Taiwan and the United States. The United States responded with its own show of force by sending two aircraft carrier battle groups to international waters near Taiwan — the biggest display of American military force in Asia since the Vietnam War.

In each of these cases, China demonstrated its intention to use military force to reclaim Taiwan. Despite the role of the United States in defusing these tensions in the past, the Taiwan Strait remains a major source of regional instability.

Recently there has been much attention on Chinese “gray zone” activities in the Taiwan Strait that involve various forms of assertive and coercive actions to achieve strategic goals without provoking war or military conflicts. Besides increasing diplomatic and economic pressure on Taiwan, China has deployed naval forces to conduct “combat drills” off the coast and dispatched aircraft into Taiwan’s air defense identification zone, a marked area in which air traffic controllers request incoming flights to identify themselves. Consequently, the 2021 and 2022 Preventive Priorities Surveys conducted by the Council of Foreign Relations classified the Taiwan Strait as a Tier 1 (High Priority) risk area.

PLA aircraft began to enter Taiwan’s identification zone in June 2020, and operations became more frequent in September 2020. Twice that month, PLA fighters crossed the sensitive median line in the Taiwan Strait. Since then, no major median-line violations have been reported, and most PLA incursions were staged away from Taiwanese territory over the ocean in the southwest corner of Taiwan’s identification zone.

Initially, Taiwan’s air force scrambled to intercept the intruding PLA military aircraft. Chinese air operations began to exact a toll on the island’s military readiness as they intensified and increased in frequency and scale.  The impact on fuel costs, pilot fatigue, and wear and tear on Taiwanese aircraft had to be considered. In March 2021, Taiwan’s defense authority decided to stop intercepting every Chinese aircraft but continue to monitor and gather intelligence on PRC air activities. The recording and publishing of detailed tracking data of PLA operations by the Taiwan military indicates their technical ability to identify aircraft type using long-range electronic sensors.

According to data released by Taiwan’s Defense, 958 PLA aircraft entered Taiwan’s identification zone on 238 days in 2021. The largest single-day record — 56 incursions — happened on October 4, which included 40 fighters, 12 bombers, and four supporting aircraft. Two days previously, on October 2, China launched 39 sorties, with 36 fighters and three supporting planes.

In the beginning, operations happened during the day, particularly in early mornings. Later, they expanded to include nighttime incursions, suggesting an expansion in the effort. Formations also evolved.  Initially, Y-8 ASW (anti-submarine warfare) aircraft were dispatched with occasional fighter jets such as J-16s and J-10s and bombers such as H-6 and JH-7 series. More recently J-16s were most prominent, with Y-8 ASWs ranked second, followed by J-10s.  Other types of planes involved in the operations include Y-8 EW (electronic warfare), Y-8 reconnaissance, and KJ-500 airborne early warning and control aircraft.

Why has China been conducting these operations?  Some analysts suggest that spikes in PLA incursions are reflections of Beijing’s reactions to specific events or actions, such as a comment made by U.S. Secretary of State Antony Blinken to support Taiwan in the face of Chinese aggression in April 2021, and Taiwan’s application to join the TPP in September 2021.  Others (Layton 2021), however, point out that formations combining fighters, bombers, support aircraft, and electronic warfare aircraft require up to six months of extensive planning and training. It is plausible that some of these exercises were pre-planned but held until the right moment for signaling purposes.

It is reasonable to assume that the PLA has been carrying out these operations for multiple reasons (Ang U-Jin & Suorsa, October 2021).  First, as mentioned earlier, these operations intend to show Beijing’s displeasure at Washington’s diplomatic engagement with Taipei, and demonstrate to internal and external audiences the PLA’s resolve to protect Chinese security and sovereignty.  In responding to the U.S. statement urging China to stop its provocative military activities near Taiwan in early October 2021, China’s Foreign Ministry put the blame on the United States for undermining regional peace and stability by supporting Taiwan’s separatist forces with arms sales to Taiwan and warships regularly sailing through the Taiwan Strait. Thus, these aerial operations are indeed designed to respond to the alleged “Western provocations” or “Taiwanese independence” forces.

Second, China’s air operations may be designed to monitor sea and air traffic in the strategically important Bashi channel, to track foreign submarines, and to monitor foreign warship movements in and out of the South China Sea. The presence of maritime patrol aircraft, airborne early-warning and control aircraft, and intelligence-gathering and electronic warfare platforms in the formations reveal the complexity of the operations. The surveillance function becomes especially relevant because the United States and its allies have conducted large-scale naval exercises in the surrounding areas. In those situations, the operations are less about Taiwan and more about monitoring and challenging the U.S. military presence.

Finally, these operations represent a PLA effort to expand training and exercises farther from China’s coast and into the open sea. These flights could serve the purpose of long-range training and provide PLA pilots an opportunity to interact with foreign air forces. The paths of some sorties and the integration of diverse aircraft types into a single unit with strike capabilities demonstrate sophistication in coordination.

One may argue that these operations are multipurpose and may not be an imminent threat to Taiwan’s national security yet. But these near-daily air incursions surely are having their effects. There is no doubt that training and monitoring exercises are helping the PLA to become more capable and confident in maintaining patrol sorties near critical choke points. For Taiwan, however, there is a serious concern that routine incursions could shape the public perception of a “new normal” and affect the island’s overall vigilance.

Economic Challenges

Ironically, escalating cross-Strait tensions have done little to discourage the economic interactions between China and Taiwan. In 2021, the total volume of cross-Strait trade set a record, growing to $328 billion, double the amount in 2011, according to Chinese trade statistics.

Since the 1990s, Taiwan has attempted to minimize its economic dependence on China. President Lee Teng-hui’s Southbound Policy was aimed at expanding economic exchanges with countries “south” of Taiwan.  Some factories were relocated to Southeast Asia to expand economic ties with the region. President Chen Shui-bian, Lee’s successor, sought to negotiate bilateral free trade agreements with some of the countries in the Association of the Southeast Asian Nations.  Under President Ma Ying-jeou, Taiwan achieved some breakthroughs by successfully negotiating economic partnerships with New Zealand and Singapore.

In 2016, President Tsai Ing-wen proposed a “New Southbound Policy” to expand the diversification to South Asia, particularly to India. The goal was to form a “common consciousness of economic community” through cooperation in functional areas of Taiwan’s soft power, such as public health, education, science, and agriculture.

With these efforts, ASEAN states together have taken a bigger share in Taiwan’s imports and exports and Taiwan’s economic importance in ASEAN appears to have slightly increased. Nevertheless, Taiwan’s economy remains heavily dependent on China’s market.

Taiwan has attempted to expand its economic connections with others in the region through the mega-agreements such as the TPP and the Regional Comprehensive Economic Partnership.  The opportunity in the latter was limited because of China’s dominant role in the negotiations. Nevertheless, the TPP initially looked promising, partly because of the pivotal role of the United States in the negotiations, and partly because of its connection to the Asia Pacific Economic Cooperation forum, or APEC, of which Taiwan was already a member.

In 2016, Taiwan began preparing for the TPP accession process, examining and reviewing laws and regulations to identify potential gaps and discrepancies based on the proposed TPP standards. After the United States withdrew from the TPP in 2017, the remaining 11 countries decided to move forward with the creation of the CPTPP in 2018.  In February 2021, the United Kingdom formally applied to join the CPTPP, and Taiwan applied to join as a “Separate Customs Territory,” after China did in September 2021.

For the past several years, Taiwan has revised regulations in key areas such as environment, intellectual property, administrative transparency, service trade, and movement of professionals to comply with CPTPP regulations. Eight of 12 laws identified for revision have been modified and the remaining four are going through the amendment process.

Taiwan’s application, however, faces decisive opposition from China. After Taiwan announced its membership bid, Beijing was quick to strongly urge other CPTPP members to reject the island’s application. China’s economic influence will undoubtedly affect some members’ decision-making. The fact that final decision requires consensus by the CPTPP members further complicates the situation for Taiwan, as any member could exercise a veto.

While these challenges are unique to Taiwan, the complexity of cross-Strait relations is, in fact, a microcosm of the Indo-Pacific, where political leaders must constantly evaluate and balance the cross currents of competition and cooperation.  Stakes are high, and solutions are elusive.  One thing is clear though: any miscalculation in decisions could have significant implications for stability and prosperity in the region and the rest of the world.


Ang U-Jin, A., & Suorsa, O. P. (2021, October 14). “Explaining the PLA’s Record-Setting Air Incursions Into Taiwan’s ADIZ: Multiple Reasons Likely Contributed to the Spike Inincursions and Sorties in Early October,” The Diplomat.

Layton, P. (2021, October 6). “Chinese Warplanes Overhead Taiwan (Or Maybe Not),” The Interpreter.

Ministry of Foreign Affairs of the People’s Republic of China. (2021, October 4). Foreign “Ministry Spokesperson Hua Chunying’s Remarks on Taiwan-related Statement Issued by US State Department Spokesperson,” Spokesperson’s Remarks