How likely is China’s economic blockade of Taiwan, and will it provoke further escalation of tensions in the region, War on the Rocks argues.
China began last month one of the largest military exercises in recent memory, almost completely surrounding Taiwan with dozens of warships and fighter jets. The exercise, called Joint Sword 2024A, was a response to the inauguration of Taiwanese President Lai Ching-te. Judging by the name, the exercise may be just the first of many such threatening drills this year, raising new concerns about the threat of a Chinese blockade of Taiwan’s de facto sovereignty.
In recent months, many analysts have argued that the main threat facing Taiwan is not the possibility of a massive maritime invasion of the island, but rather a coercive campaign in the “grey zone” or a blockade forcing Taiwan to capitulate to China.
First signs of an impending blockade
There are signs that this line of thinking reflects the views of Taiwanese officials themselves, such as when last year Taiwan’s Deputy Foreign Minister Roy Chun Lee suggested that China would be more likely to implement an economic blockade of Taiwan than launch a direct military attack on the island nation.
He said Taiwan’s assumption is that the blockade stems directly from China’s desire to “[win] a war without actually fighting,” prompting Taipei to work with its allies to prepare for an economic blockade. During his recent trip to Taiwan, the journalist discovered that this is precisely the leading viewpoint in Taipei’s national security community.
However, having spent years conducting extensive war games with senior US and allied government officials on various cross-Strait threat scenarios, the journalist is convinced that an economic blockade rather than a full-scale military invasion has a low probability of success and therefore Beijing is unlikely to go ahead with such an operation and, indeed, has yet to attempt one, although it has had the capability to do so for decades.
In fact, an attempted economic blockade would almost inevitably lead to war or Chinese defeat. Therefore, if Taipei pins its hopes for survival on Beijing pursuing non-war options, it is making a grave mistake.
Expansion of influence without war
If China could force Taiwan to surrender through a combination of military action in the grey zone, a coordinated propaganda campaign, and a far-reaching “re-education” plan, it would undoubtedly go that route. But such an approach is unlikely to be successful. Despite China’s extensive influence operations in Taiwan, the recruitment of agents, and the economic and military pressure it exerts on the island, the Taiwanese people overwhelmingly reject unification: only 1.2 per cent of Taiwanese citizens want unification as soon as possible and only 7 per cent want it at all.
A sense of national pride, history, and a desire for self-determination have grown dramatically on the island since the transition to a democratic system of government in the 1990s. Chinese officials seem to acknowledge this reality themselves: this month, Defence Minister Dong Jun complained bitterly at the Shangri-La dialogue that the prospect of “peaceful reunification…. is increasingly undermined by separatists in favour of Taiwanese independence and foreign forces.”
Goals of the economic blockade
An economic blockade designed to strangle Taiwan’s domestic economy seems to present China with a viable alternative to avoid the costs, contingencies and risks of all-out war. A potential Chinese blockade of the island could take many forms. Beijing could simply declare a ban on shipping in a defined maritime zone around Taiwan and declare that any vessel in the area would be targeted. Under such circumstances, international commercial insurers and carriers would largely cease operations to and from Taiwan.
China could also take a more flexible and selective approach and use its navy to impose a partial or complete maritime quarantine on the island, requiring inspection of any vessel entering or leaving Taiwan’s ports. In any case, Taipei understandably fears that such action would undermine its economy and fatally threaten the island’s de facto independence. However, an economic blockade would run into inevitable stumbling blocks.
Potential reasons for the blockade’s collapse
There are major reasons why a Chinese economic blockade would fail: it would hit China’s own economy, likely escalate into a full-scale war, and entail serious geopolitical risks.
An economic blockade of Taiwan would be detrimental to China’s own economy, which relies on Taiwan to import critical technologies such as advanced semiconductors. China is farther away than ever from being able to develop these technologies on its own, due in part to new export controls imposed by the US last year. In 2022, Taiwan will produce more than 60 per cent of the world’s semiconductors and more than 70 per cent of advanced microchips. They are essential for all modern electronics, from weapons platforms to cars and home appliances, as well as for power management of computers and phones. Because of their small size, these chips leave Taiwan mostly by civilian aircraft rather than by sea.
Taiwan’s first response to any kind of quarantine or partial blockade of the island is likely to be to stop supplying such chips to China, while continuing to supply the rest of the world. Recent economic modelling published by Bloomberg Economics suggests that China’s gross domestic product would shrink by 9% in the first year of the blockade. If China imposes a full blockade – including threats to shoot down civilian airliners carrying semiconductors in cargo bays and the risk of MH17-type condemnation by the rest of the world – global gross domestic product would shrink by 5%.
Potential Taiwanese counter-blockade
Of course, this does not take into account China’s potential Taiwanese counter-blockade. Five of China’s busiest ports – Shanghai, Ningbo-Zhoushan, Shenzhen, Qingdao and Guangzhou – are a thousand miles from Taiwan and within range of Taiwan’s own Ching Tien supersonic cruise missile. Over the past six months, we have witnessed how the Yemeni Houthis, using a relatively small missile arsenal supplied by Iran, have been able to virtually cut off commercial maritime traffic in the Red Sea, despite the best efforts of the US and European allies to resist. Even without direct US military support, Taiwan would be in a much better position to threaten ships leaving Chinese ports, the mere warning of which could cause international insurers and shippers to suspend operations in the area.
Thus, any attempt to blockade Taiwan could have devastating economic consequences for China and, depending on how fully implemented, for the rest of the world. The domestic and international pressure on the Chinese leadership to abandon the blockade would be enormous, and would only grow over time and become more intense the longer the disruption of supply chains continues.
Turning the blockade into war
Second, the economic blockade is likely to escalate into full-scale military action, if not all-out war, because of the risk of retaliation from Taiwan and the possibility of US and Japanese military involvement in stopping the blockade or even imposing additional costs on China backed by military force.
In the event of such a challenge, China could find itself embroiled in a potentially costly sea and air war with no prospect of achieving its primary goal of conquering the island. Thus, if China is not prepared for a full-scale invasion and the blockade is merely a prelude to such an attack, it could suffer a crushing and humiliating defeat.
Geopolitical risks of blockade
Third, a blockade would entail serious geopolitical risks. At a minimum, a blockade would likely force a reassessment of the international status quo regarding Taiwan’s political status, opening the door for Taiwan and its supporters to take more dramatic steps to challenge it-even a dramatic step such as a formal declaration of independence. Indeed, one option the United States and its allies might consider is to threaten to recognise Taiwan’s independence and abandon their long-standing “one China” policy if China does not end its blockade of the island.
After all, the key point of Washington’s 50-year policy has been to insist on maintaining the status quo, meaning no unification by force or coercion by China and the declaration of Taipei’s independence. The US, along with strong allies, will have a strong case to make that China’s blockade of Taiwan cancels this long-standing status quo and no longer obliges it to oppose Taiwanese independence.
Moreover, to further strengthen deterrence, the US would be wise to make such a threat explicit and tell Beijing that any attempt to blockade or invade Taiwan would immediately result in the abandonment of the “one China” policy and the recognition of Taiwanese independence.
Can Taiwan withstand the blockade
Taiwan’s economy and population would certainly be hit hard by a Chinese blockade, but many underestimate the resources the island has to survive it.
Taiwan imports about $21 billion worth of food annually, especially meat products from the US. However, the island also has a developed agriculture and produces huge amounts of rice, vegetables and fruit, and its rivers and seas are abundant with fish. Thus, even if China were to impose an illegal and immoral blockade on food imports to the island, the Taiwanese people would be able to feed themselves.
Taiwan is heavily dependent on energy imports, with coal, crude oil and liquefied natural gas accounting for up to 98 per cent of the island’s energy mix. While the energy situation would certainly be dire in the event of a blockade, Taiwan, unlike Ukraine, has a tropical and favourable climate where energy shortages would not lead to death from cold. In addition, Taiwan has its own resources for energy production, including rapidly developing solar power, offshore wind farms and hydropower.
The island also has two operating nuclear reactors (although the ruling party has expressed a desire to decommission them next year) and four other reactors that are in the process of being decommissioned but could potentially be restarted if the energy situation becomes too dire. In an energy shortage, Taiwan’s population, not to mention its economy, would undoubtedly suffer greatly, but it would not become an existential issue and some, albeit far from ideal, mitigation options would remain at its disposal.
Exports account for more than 60 per cent of Taiwan’s gross domestic product, and a partial or complete blockade of them would undoubtedly be devastating to the Taiwanese economy, further exacerbated by energy shortages.
Economic blockades don’t break countries
However, there is no precedent in modern history for countries or even cities to surrender under duress simply because of economic devastation. Whether it was US sanctions against Iraq, Iran, and North Korea, none of these pressures forced these countries to change their policies, much less surrender. In fact, if we look at the modern history of blockades, there is little evidence that they lead to the surrender of a population under siege. Nazi Germany famously spent two and a half years in a horrifyingly barbaric blockade of Leningrad during World War II that resulted in the death and starvation of over a million civilians, and yet the city did not surrender. China simply has no historical examples to convince it that an economic blockade of Taiwan could lead to the surrender of its government.
Some analysts, such as Isaac Cardon and Jennifer Cavanaugh, argue that while “a campaign of influence in the “grey zone” alone would not force Taiwan to formally unify with the mainland, it could prevent “the island from achieving formal independence.”
However, this not only contradicts the stated goal of formal unification by Chinese General Secretary Xi Jinping and the Communist Party of China, but also does not reflect reality: the US and its allies oppose formal independence for Taiwan, preferring to maintain the status quo, while Taipei itself believes that it does not need to declare formal independence as the country is already independent. Thus, it is unclear how grey zone influence and other coercive campaigns would achieve China’s goals or thwart America and Taiwan.
Taiwanese residents against unification
In another exercise, researchers at the American Enterprise Institute analysed a course of action involving an influence campaign aimed at changing “the Taiwanese political environment so that resistance to [the People’s Republic of China’s] goals is negligible” and further isolating Taiwan by “deteriorating its ties with the outside world and neutralising foreign efforts to deter [Chinese] aggression against Taiwan and establishing a new cross-Strait legal framework [that] includes securing [Taipei’s] consent.” The main problem with this scenario is that China’s development trends on all of these fronts are directly opposite.
The Taiwanese population has become much more opposed to unification, and this will not change in the near future, as even the Chinese leadership recognises. Analysts have also written about the need for China to “contain US engagement with Taiwanese leaders.”
Nevertheless, official US engagement with Taiwan is at its highest level since Taiwan’s recognition was withdrawn in 1979, with a near-constant flow of US congressional delegations to Taipei and deeper interactions between the US and Taiwanese militaries. And this trajectory seems to lead only one way – toward more interaction, not less.
Signing the peace agreement
Finally, the scenario asserts that China “should follow through with the signing of a compliant peace agreement and ratification of a binding inter-Taiwanese decision-making body by elements of the [Republic of China] government that the Taiwanese people consider legitimate.”
Again, it is almost impossible to imagine a scenario in which this could happen in the foreseeable future, given the independence and preference for the status quo by the Taiwanese people, as well as the historical precedent of even the proposed China-Taiwan Trade in Services Agreement, which sparked a massive backlash and gave rise to the Sunflower student movement in 2014 that helped bring the hawkish Democratic Progressive Party to power two years later.
Given today’s political realities, it is difficult to see how a “peace agreement” that would lead to Taiwan’s complete surrender to China could pass through the Taiwanese legislature, much less be recognised as legitimate by the Taiwanese people.
“Indirect control” scenario
Philip Zelikow proposes an “indirect control” scenario in which “China would impose air and maritime border controls to turn Taiwan into a self-governing administrative region of China.” He considers this option “the most likely” and one that is “possible now, without much warning.”
Zelikou believes this option differs from a blockade in that selective restrictions are applied through customs and immigration controls. However, this scenario suffers from the same problems as those described above. If this is such an easy alternative to war to achieve all of Xi’s dreams and desires for unification with Taiwan, why hasn’t China tried it yet? It also ignores the fact that Taiwan, along with the US, has numerous economic, diplomatic, and military options to retaliate, and that such coercion, even if it were the most extreme – a complete economic blockade – would be unlikely to result in Taiwan’s capitulation for all the reasons mentioned above.
Costs of failure
It is likely that China’s economic blockade will eventually fail, either because Taiwan and its partners will break it, or because China will be unable to sustain it either politically or economically. The likelihood of that happening increases if the US and its allies intervene to break the blockade – either with submarines and surface ships, or by airlifting supplies and perhaps even military assets to the island. In the latter case, China would face a choice: fight US forces, which could escalate into a global war, or retreat and accept a humiliating political and military defeat.
The dim prospects for a “blockade-only” strategy that is not the beginning of an invasion become even clearer when one compares the risks of this situation with the dangers to Taiwan posed by the most likely alternative – namely, a full mobilisation of Chinese naval, air and land forces against Taiwan within a matter of months.
Blockade and war option
If China mobilised its invasion forces and only then launched a blockade coinciding with an ultimatum for Taiwan’s surrender, it could realistically threaten a full-scale invasion if the blockade were challenged. This mobilisation phase would also give China time to determine whether the US, Japan or other allies plan to intervene on Taiwan’s behalf, giving Beijing the opportunity to observe any public statements, preparations and troop deployments these countries undertake to determine their capabilities and intentions.
In sum, there is a scenario in which Taiwan could face an economic blockade from China, but such a blockade would only make strategic sense if China had already mobilised its military for a full-scale invasion in anticipation of the need to escalate or at least reinforce the blockade with the threat of force.
In either case, Taiwan would find itself in virtually the same place: facing the full military might of the People’s Republic of China. China could, of course, miscalculate and launch a blockade without backing it up with the threat of invasion – though it is unclear why it has not done so so far if it truly believes that doing so would lead to victory without a fight – but it would likely lead to strategic defeat.
Even if an economic blockade is theoretically possible, it is neither the most likely nor the most dire outcome that Taiwan currently faces. That risk is the threat of military invasion, a threat for which, unfortunately, Taiwan still has a long time to prepare. If Taiwan believes that a blockade is more likely than a military attack, or that a blockade will end the matter, it is making a dangerous miscalculation.
