Many signs have recently emerged in China — including a housing bubble, mounting debts, deflation, shrinking exports, foreign investment fleeing, demographic issues, and youth unemployment soaring — that clearly indicate that leader Xi Jinping’s regime is facing unprecedented challenges that are undeniable but difficult to tackle. Will China stop or postpone the process of reunification of Taiwan under these circumstances?
Ample evidence, including China’s military preparation, reorganization of the military system, and newly promulgated domestic law and policy, suggest Taiwan is being pushed to the brink of a proxy war, with the U.S. vying for influence in the Indo-Pacific region to maintain its global dominance, while China is determined to establish its dominance in the same region. From the Chinese perspective in the current global context, the sooner China unifies with Taiwan the better. It is urgent for the United States to avert the nightmarish scenario of Taiwan becoming entangled in a proxy war. Failing to achieve this objective would undoubtedly mark a colossal U.S. failure and produce a consequence much worse than 50 years ago, when other China challenges arose.
Half a century ago, the Nixon administration began to utilize the “China card” to counter the former Soviet Union and made a significant shift in U.S. foreign policy toward China, reflected in the three communiqués. Although these documents aimed to address various Taiwan issues while improving U.S.-China relations, the two governments had divergent interpretations and implementations of the three communiqués. These unresolved disputes persist to this day and could ultimately lead to the gravest of consequences for Taiwan in the future.
Taiwan has emerged as a critical focal point in the ongoing great power competition between the United States and China, drawing unprecedented international attention, especially following the Russian invasion of Ukraine. Theoretically, the United States has the moral responsibility to help Taiwan secure its prosperous future due to its strategic location, important partnership with the United States, and Taiwanese democratic identity. However, the future of Taiwan remains uncertain largely because of the dynamic of triangular relations. Taiwan is caught in the great power competition between China and the United States.
The future of Taiwan encompasses roughly four potential scenarios: Taiwan and China maintaining the status quo within the framework of China’s one-China principle and the U.S. one-China policy; a peaceful reunification achieved through arduous negotiations between Taiwan and China; direct U.S. military involvement in a war against China’s military efforts to reunify Taiwan; and a Chinese military attack on Taiwan, leading to a proxy war without direct U.S. military intervention.
Among these four possibilities, the first scenario is the best for the United States, as it would allow the United States to maintain its influence in the region without having to commit to a military conflict with China. The second scenario is ideal for China, as it would achieve its goal of reunification without having to use force. The third scenario is the most dangerous for the two nuclear powers, as it could lead to a wider war over the Taiwan Strait, potentially triggering World War III. The fourth scenario presents the gravest consequences for Taiwan and would constitute the United States’ biggest failure in its history.
Proxy wars are not a new phenomenon in international relations and have increasingly become a common practice employed by major powers as a strategic tactic in competition between great powers. During the Cold War, both the United States and the Soviet Union supported different states and non-state actors in regions such as Korea, Vietnam, Afghanistan, Angola, and Nicaragua, but the United States ultimately triumphed through various strategies, including the utilization of proxy wars. Between 1946 and 2017, there were 115 proxy wars, involving 25 different sponsors and 143 different proxies, according to a RAND report. The United States was the most frequent sponsor, with 33 proxy wars, followed by the Soviet Union/Russia with 29, and China with 14.
Great power competition creates proxy wars because it allows the competing powers to pursue their strategic goals by maximizing national interests while minimizing costs and risks associated with a direct confrontation against opposing major powers. Specifically, proxy wars can exploit existing conflicts in regions that are of strategic importance to the competing powers, serve as a form of deterrence or coercion against the rival power, and pave the way for gaining leverage power in negotiations with the rival power. Taiwan’s situation meets all the prerequisites for a proxy war. If China attacked Taiwan, the U.S. would not necessarily directly participate in the war against China given the legal consideration, potentially grave consequences of direct war with China, and the actual capability of mobilizing a war. This partially explains why the U.S. strategic ambiguity remains unchanged.
U.S. in Quagmire, China Rising
Since Russia invaded Ukraine, Ukraine and its people have greatly suffered from Russia’s atrocities. Although Ukraine hopes to hold a peace summit this autumn, the war will not be over sometime soon due to various reasons. The war involves a wide range of actors, such as Ukraine, Russia, Ukraine, NATO, the EU, the U.S., and the UN. The war is not only a military confrontation, but also a political, economic, social, and environmental challenge. As a great military power, Russia has not exhausted its national resources for running the war. The war could last much longer than expected. Under these circumstances, if China decided to unify Taiwan, it would be very difficult for the U.S. to directly join the war while it is entangled in the quagmire of the Ukraine war.
Prior to 2010, China was relatively economically and militarily weak, not yet fully prepared to directly challenge U.S. hegemony. However, the global power dynamics have shifted in China’s favor since it became the world’s second-largest economy in 2010, ushering in a new era of great power competition. Defense Secretary Lloyd Austin acknowledges that China is now the sole competitor with both the intention and capability to reshape the U.S.-led international order. Consequently, the reunification of Taiwan has become a pressing objective for China as part of the China Dream, guided by Xi’s ambitious and assertive foreign policy.
U.S.-China relations are further deteriorating. On Aug. 9, President Joe Biden signed an executive order restricting U.S. investment in some high-tech industries in China, focusing on advanced semiconductors, quantum computing, and artificial intelligence. This could make China’s economy worse because it will reduce the inflow of foreign investment into the Chinese technology sector and have a knock-on effect on the growth and profitability of some Chinese companies, as their ability to access global markets is reduced. Unsurprisingly, China perceives this executive order as a hostile maneuver that directly undermines its perceived rightful interests. China is likely to devise countermeasures designed to offset the perceived damage, thereby exacerbating the already strained tensions between these two global powers.
Xi’s third term as China’s president has given him a greater mandate to unify Taiwan. He sees the reunification of Taiwan as essential to his legitimacy and to the future of China. On Aug. 15, in response to Biden’s remarks that China is a ticking time bomb, the Chinese Communist Party’s mouthpiece Qiushi Magazine published Xi’s speech to deliver his strongest criticism of Western countries since taking office, stating that “the modernization of Western countries is full of bloody evils such as war, slavery, colonization, and plundering, which have brought profound suffering to the vast number of developing countries.” This not only shows Xi’s strong rhetoric but also signifies that he is prepared for a showdown with the United States.
Confronted with domestic economic dilemmas and a surge in nationalism, if there is no way forward or no way to retreat, the possibility of Xi’s China turning its domestic crisis into an external conflict will greatly increase.