U.S.-Taiwan Relations in a New Era

The prevailing political framework established over four decades ago has allowed for peace and stability in the Taiwan Strait while enabling rapid economic growth in both Taiwan and China.  

Driven by the strategic imperative of working with Beijing to contain Moscow, the United States sought a rapprochement with China in the early 1970s. The thorniest issue between the two sides was Taiwan, which they never resolved but successfully finessed in the Shanghai Communiqué (1972) and the Normalization Communiqué (1979). Although President Nixon and his national security advisor, Henry Kissinger, privately came closer to Beijing’s position on Taiwan, in these documents the United States acknowledged but did not recognize or endorse the PRC’s view that Taiwan is a part of China.25  

Even though the PRC did not achieve its objective of having the United States adopt its position on Taiwan, its leaders displayed pragmatism and patience.26  China’s willingness to accept fundamental differences over Taiwan’s status as long as the United States did not explicitly challenge China’s position and Taiwan did not pursue independence reflected the reality that, even if it wanted to use force, it did not have the requisite military capabilities. In addition, at the time of normalization, China’s priority was modernizing its economy and it desperately needed U.S. investment to do so. 

Equally important was the fact that Taiwan’s leadership agreed with the PRC that Taiwan was a part of China, only differing on which entity was the rightful “China”—the PRC or the ROC. Chiang Kai-shek did not allow the United States to pursue a more creative approach that would have attempted to secure representation in international organizations for both the PRC and Taiwan.27  Although this position was not unanimous among Taiwan’s population, its citizens could not express their views under Chiang’s authoritarian rule. Given the Taiwan government’s position, however, it did not pursue independence or otherwise challenge the status quo. 

Despite holding starkly different views on Taiwan’s status, for decades China, Taiwan, and the United States refrained from seeking to fundamentally overturn the status quo and did not cross each other’s red lines. The United States has maintained only unofficial relations with Taiwan, as establishing formal diplomatic relations with the island would necessitate severing relations with Beijing. China, while increasing its coercion of Taiwan, has not set a formal deadline for unification or pressured Taiwan to enter political negotiations. Although Taiwan’s Democratic Progressive Party (DPP), which has traditionally advocated for independence, pushed the envelope when it pursued a referendum in 2008 on joining the United Nations under the name “Taiwan,” it has since moderated its stance, asserting that Taiwan does not need to declare independence because it is already an independent country, the “Republic of China (Taiwan).” 

With this political framework and China’s economic liberalization as a foundation, cross-strait economic ties boomed, with Taiwanese investment helping fuel the PRC’s economic rise and Taiwanese businesses benefiting from the PRC’s low labor costs.28  During the three decades between 1991 and 2021, Taiwanese investment in the PRC totaled $194 billion.29  Cross-strait trade exploded, rising from $342 million in 1990 to $208 billion in 2021.30  China is now Taiwan’s largest trading partner, accounting for nearly 23 percent of its foreign trade, a number that increases to 30 percent if Hong Kong is included. With the help of this two-way trade, Taiwan’s gross domestic product (GDP) grew from $166 billion in 1990 to $775 billion in 2021.31  

The status quo is under increasing strain as China, Taiwan, and the United States reevaluate whether the long-standing political formulation continues to serve their respective interests. 

A number of factors—the emergence of a stronger and more assertive China, the rise of a distinct Taiwanese identity and the Taiwanese people’s lack of interest in becoming part of the PRC, growing U.S. support for Taiwan, and the steady deterioration of U.S.-China relations—have combined to prompt Beijing, Taipei, and Washington to question both the desirability of the status quo and one another’s commitment to it. 

The Chinese government believes that Taiwan’s separation was an injustice that the country had to endure because of its previous weakness. Its 2022 white paper on Taiwan reflected, “from the mid-19th century, due to the aggression of Western powers and the decadence of feudal rule, China…went through a period of suffering worse than anything it had previously known…Japan’s 50-year occupation of Taiwan epitomized this humiliation…The fact that we have not yet been reunified is a scar left by history on the Chinese nation.”32   

In the eyes of China’s leaders, the country no longer needs to tolerate what it was forced to when it was weak. Xi is using China’s growing power to alter the status quo, turning to coercive tools, such as military threats, diplomatic pressure, economic sanctions, and disinformation campaigns to erode public confidence in U.S. support, undermine Taiwan’s elected government, and convince Taiwanese people that unification with—and submission to—China is inevitable and therefore resistance is dangerous and ultimately futile. Beijing is also using economic leverage and information operations to try to build support or at least tolerance in Taiwan for a process leading to unification. China’s strategy is less risky than using force and is difficult for Taiwan or the United States to counter, but at the same time, it has largely backfired by increasing the sense of Taiwanese identity and further alienating the Taiwanese public from the PRC. 

Taiwan’s development into a vibrant democracy has allowed its citizens to express their opinions on cross-strait relations, while China’s turn toward even greater authoritarianism has made the Taiwanese more skeptical of living under PRC rule. Chiang Kai-shek, like his PRC counterparts, endorsed a “One-China” framework, agreeing that Taiwan and the mainland were both a part of the same polity but asserting that the Republic of China was the rightful government of all of China. For over four decades, this was the only view that could be publicly held in Taiwan. During the period of martial law that lasted until 1987, the KMT could theoretically have concluded a deal with Beijing and imposed its decision on the population. With Taiwan’s democratization in the 1980s and 1990s, however, citizens could challenge the KMT’s narrative and express a separate Taiwanese identity. As a result, most Taiwanese do not view their political status as in any way linked to the Chinese Civil War and do not want unification. Instead, they would point to the separate national and political identity that they have forged over decades as evidence that Taiwan should be viewed on its own terms and recognized as a separate polity. China’s crackdown on democracy and civil society in Hong Kong has accelerated these trends, convincing many Taiwanese that they cannot trust PRC promises and leading them to reject unification in any form. Another result of Taiwan’s democratization is that any change in the relationship between Taiwan and China now requires a constitutional amendment, which must be approved by three-fourths of the members of Taiwan’s legislature and a majority of all eligible voters. 

Reflecting these changing views within Taiwan, the share of Taiwanese people who favor moving toward unification has dropped significantly over time, while support for independence has dramatically risen (see figure below).33  These polls likely underestimate popular support for independence; a different survey found that more than two-thirds of Taiwanese support independence if Taiwan could still maintain peaceful relations with the PRC.34  This shift is occurring despite a continued affinity among Taiwanese people for Chinese culture and ultimately is rooted in a rejection of the PRC’s political system.35  

In the United States, Taiwan’s evolution into a democracy and a growing appreciation for its strategic importance, paired with increasing PRC pressure on Taiwan, have increased calls to upgrade relations and visibly demonstrate support for Taiwan. U.S.-Taiwan relations have consistently evolved to include more high-level interactions, but they are entering a qualitatively new territory. In 2020, for instance, the Trump administration lifted many “self-imposed restrictions” on contact with Taipei’s representatives in Washington, which the Biden administration upheld.36  Two former senior officials in the Trump administration, after stepping down, also called for the United States to abandon its One China policy and recognize Taiwan as an independent country.37  In 2021, two Republican congressmen introduced a bill advocating that the United States walk away from its One China policy and recognize Taiwan as an independent country; the bill was reintroduced in 2023 with eighteen Republican cosponsors.38  

Those calling for the United States to recognize Taiwan as an independent country are decidedly in the minority, as doing so would lead to a rupture in U.S.-China relations and could prompt major Chinese military action against Taiwan. In addition, if China were to take such an action following this unilateral U.S. move, it would be far more difficult for the United States to bring together an international coalition to sanction China or to enlist the help of regional allies for a defense of Taiwan. Instead, the United States would be cast as a destabilizing force, and the Taiwanese people would pay the greatest cost. Thus U.S. recognition of Taiwan as an independent country would be irresponsible and ill-advised. At the same time, however, growing calls for such a change in U.S. policy have put more pressure on presidential administrations to demonstrate support for Taiwan. 

Objecting to steps the United States has taken regarding relations with Taiwan, China has accused the United States of having a “fake” One China policy.39  The United States asserts that its actions are consistent with its One China policy and are a necessary response to heightened Chinese coercion of Taiwan. This discord has created an action-reaction dynamic whereby China puts pressure on Taiwan, prompting the United States to take steps to demonstrate its support for Taiwan, in turn leading to more Chinese pressure on the island. 

The Chinese government has also accused Taiwanese President Tsai Ing-wen of covertly pursuing independence by changing history textbooks to emphasize elements of Taiwan’s history that do not center on its relationship to China, redesigning its passports to display “Republic of China” in a smaller typeface to give prominence to the name “Taiwan,” and further pursuing “de-Sinicization.”40  To show its displeasure, China has shut off all channels of communication with Taiwan’s government, expanded disinformation and influence operations targeting the island, increased military activities near Taiwan—including erasing the median line in the Taiwan Strait—and ratcheted up economic pressure. 

Each side is now accusing the other of altering the status quo, while perceiving its own actions as necessary defensive steps to prevent further erosion of the status quo. The United States believes that its moves to strengthen ties with Taiwan are necessary responses to PRC provocations and that cross-strait relations are more stable when Taiwan can approach the PRC from a position of self-confidence and strength. China is convinced that the United States has effectively abandoned its One China policy, that it is actively endorsing or implicitly emboldening an independence movement in Taiwan, and that U.S. support for Taiwan remains the primary obstacle standing between China and its ability to achieve unification. In Taiwan’s democratic system, where leaders have to appeal to the voters who are alarmed by the PRC’s coercive actions, there is little desire for more cross-strait integration or political negotiations that would lead to PRC control, and there is growing impatience with Taiwan’s lack of international recognition. 

As a result of these dynamics, reassurances offered by each side over the past seven years are deemed by the other parties to be either insincere or inadequate. Despite Washington’s public and private statements that it continues to adhere to its One China policy and does not support Taiwan’s independence, Beijing believes that its actions belie those words and that Washington is using Taiwan to contain China.41  Though the Chinese government continues to publicly assert that it prefers to achieve peaceful unification, its coercive actions toward Taiwan and continued focus on developing a viable military option to capture the island leave the United States and Taiwan questioning its intentions. China’s failure to abide by its commitments to Hong Kong or to honor its pledges to the United States not to militarize the South China Sea or conduct cyber espionage for commercial gain have led many in Taipei and Washington to doubt whether any reassurances Beijing offers can be trusted. 

The likelihood of resolving cross-strait differences peacefully is steadily decreasing.  

For decades, analysts have assessed that China is willing to defer using force against Taiwan as long as it believes it can achieve peaceful unification at some point in the future. Because of the recent change in dynamics between Taiwan and China, however, the prospect of a peaceful and consensual resolution of cross-strait differences has grown increasingly remote. The PRC is likely to conclude that if it wants to achieve unification, it will need to resort to nonpeaceful means to do so. 

The most consequential change to cross-strait dynamics has been Taiwan’s democratization and the emergence of a separate political identity. According to one long-running poll, whereas only 18 percent of those in Taiwan identified as “Taiwanese” in 1992 (the first year of the survey), now nearly 64 percent identify as such, while those who identify as “Chinese” has declined from 25.5 percent to 2.4 percent and those who identify as “both Taiwanese and Chinese” has declined from 46 percent to 30 percent (see figure below).42  Accompanying this rise in Taiwanese identity has been a steep decline in support for unification and increased support for independence (see figure above).  

Taiwan’s growing alienation from China is driven above all by the PRC’s turn toward even greater authoritarianism and its violation of “One Country, Two Systems” in Hong Kong, which remains its proposed model for Taiwan. Under that arrangement, which Deng Xiaoping first introduced in the 1980s, the ROC would cease to exist, the PRC would govern Taiwan as a “special administrative region,” and it would control the island’s foreign and defense affairs. Taiwan would be allowed to maintain a separate economic and social system, and it would be granted a “high degree of autonomy” to oversee its internal affairs, but Beijing would be able to exercise a veto over Taipei’s leaders.  

In recent years, however, Beijing has made clear that it has no intention of honoring the legally binding commitments that it made when it took possession of Hong Kong, which has had chilling effects in Taiwan. In 2019, after Hong Kong’s government put forth a bill that would allow individuals from Hong Kong to be extradited to the PRC, massive protests erupted, which police quelled using tear gas and rubber bullets. Although Hong Kong’s government eventually withdrew the bill, China imposed a “national security law” the following year that severely curtails the rights of Hong Kong residents by targeting crimes of “secession” and “subversion.” The authorities have arrested protestors, former opposition lawmakers, and journalists under the auspices of this and earlier laws, demonstrating the meaninglessness of China’s pledges that Hong Kong would “enjoy a high degree of autonomy” and that its people would enjoy freedom of speech, of the press, and of assembly.43  

As these events in Hong Kong were unfolding, Taiwanese concerns about unification increased dramatically. Rather than providing reassurances to Taiwan or putting forward another proposal for unification that would guarantee Taiwanese more rights and freedoms, China has moved in the opposite direction. The Chinese government insists that the implementation of One Country, Two Systems in Hong Kong is a “resounding success” and continues to view it as “the best approach to realizing national reunification” with Taiwan. Interestingly, however, Beijing has made clear that “One Country is the precondition and foundation of Two Systems; Two Systems is subordinate to and derives from One Country.”44  Presumably, this means that if protests were to occur in Taiwan following unification, the PRC would impose limits on the separate social systems, as it has done in Hong Kong.  

The Chinese government has also reduced the number of guarantees it would offer to Taiwan under One Country, Two Systems, rendering an already unappealing proposal even more so. Whereas Beijing formerly pledged that the People’s Liberation Army (PLA) would not have a presence in Taiwan and that Taiwan could maintain some semblance of a military, in a major speech in 2019 Xi did not provide this reassurance. Xi also did not guarantee that Taiwan would be allowed to maintain its political institutions following unification. Instead, he pledged that “the social system and lifestyles of Taiwan compatriots will be fully respected…and the private property, religious beliefs, and legitimate rights and interests of Taiwan compatriots will be fully guaranteed.”45  Beijing, however, could be expected to define “legitimate rights and interests” narrowly, to exclude most political rights. 

Regardless of the specific offer Beijing makes to Taipei, its pledges will not be taken seriously given its actions in Hong Kong. Despite the Sino-British Joint Declaration’s status as a recognized international treaty, China’s foreign ministry spokesman explicitly dismissed it as a “historical document” that “no longer has any practical significance, and it is not at all binding for the central government’s management over Hong Kong.”46  As long as China continues to put forward One Country, Two Systems as the only basis for peaceful unification and flouts this arrangement in Hong Kong, the likelihood of peacefully resolving cross-strait differences is remote. 

As the prospect of achieving peaceful unification grows more remote, China will increasingly employ coercive tools against Taiwan.  

China is already using a range of tools against Taiwan to achieve its political objectives, including military threats, diplomatic pressure, economic sanctions, information campaigns, and psychological operations (see figure below). Although Beijing continues to develop its military options for Taiwan contingencies—which could take the form of a quarantine or blockade of the island, missile strikes against critical infrastructure, the seizure of one or more of Taiwan’s offshore islands, or a full invasion—the risk that these options carry means it likely views force as the last resort. Instead, the PRC will presumably attempt to gain control of Taiwan by leveraging an array of coercive instruments. Although the PRC views coercion as being consistent with peaceful unification, Taiwan and the United States would argue that relying on such pressure is incompatible with a consensual resolution of cross-strait issues. Nonetheless, in the years ahead, this pressure will likely intensify and could enter a qualitatively new realm. 

Beijing’s preferred course of action is to take a series of diplomatic, economic, military, and covert steps that taken alone do not rise to the level of prompting an international response but together could cause the Taiwanese people to lose faith in their ability to resist and doubt that countries will assist them. The Chinese government’s hope is that this prompts the Taiwanese public to support political leaders who favor negotiated acquiescence to its political demands. 

On the diplomatic front, China is attempting to peel away the roughly dozen remaining countries that maintain diplomatic relations with Taiwan by offering them economic inducements to instead establish diplomatic ties with the PRC. These relationships are important to Taiwan for a number of reasons; these countries often advocate for Taiwan’s participation in international organizations, and formal diplomatic ties with countries provide a psychological boost to the Taiwanese people. During President Tsai’s administration, to signal its displeasure that she did not explicitly endorse the 1992 Consensus (a formulation whereby Taiwan agrees that there is one China in the world but asserts that there are different interpretations as to which government is the rightful representative of China), the PRC has persuaded nine countries—Burkina Faso, the Dominican Republic, El Salvador, Honduras, Kiribati, Nicaragua, Panama, Sao Tome and Principe, and the Solomon Islands—to sever diplomatic relations with Taiwan. Beijing also pressures countries to narrow their unofficial relations with Taiwan, which is an even more worrisome development because Taiwan’s most important relationships are with countries that do not formally recognize it. 

China is also blocking Taiwan’s participation in the world’s leading international organizations, which require that members be sovereign states recognized as such by their peers. Without UN membership, Taiwan can only participate in meetings within the UN system when China allows it to do so, and China uses this leverage as a bargaining chip. For instance, after Taiwanese President Ma Ying-jeou endorsed the 1992 Consensus, China allowed Taiwan to participate in meetings of the World Health Assembly from 2009 to 2016 under the name “Chinese Taipei.” In 2013, China allowed Taiwan to attend the International Civil Aviation Organization (ICAO) assembly as a “special guest” of the president of the ICAO Council. When President Tsai declined to endorse the 1992 Consensus, China intervened to ensure that Taiwan would not be allowed to participate in any such meetings. Today, Taiwanese passport holders cannot even visit the United Nations headquarters in New York as tourists due to PRC pressure. 

In recent years, China’s attempts to constrain Taiwan’s international space have intensified. Chinese diplomats interrupted the proceedings of an international meeting on conflict diamonds (the Kimberly Process) in Australia until the hosts forced Taiwan’s delegation to leave.47  Chinese officials in Fiji disrupted Taiwan’s national day reception by attempting to intimidate guests, and, after being confronted, physically assaulting a Taiwanese official.48  China has also put pressure on multinational companies to alter their websites so that Taiwan is not displayed as a country in drop-down menus. 

China has already employed economic coercion against Taiwan and could both expand the scope of such pressure and use it to influence domestic politics in Taiwan. After President Tsai came into office, China placed limits on tourism to Taiwan. In 2021, China banned the import of Taiwanese pineapples (90 percent of Taiwan’s pineapple exports went to China), and subsequently banned Taiwanese wax and sugar apples, grouper, and meat.49  Beijing’s most significant moves to date followed U.S. Speaker of the House Nancy Pelosi’s visit to Taiwan, after which it announced import bans on more than two thousand Taiwanese agricultural products and introduced an export ban on natural sand to Taiwan (a critical input to the manufacture of semiconductors).50  China has also pressured Taiwanese companies operating in the PRC to publicly voice support for the 1992 Consensus and oppose Taiwan independence.51  And China typically targets industries and regions in Taiwan that support the DPP in an attempt to harm the party’s electoral chances. 

China has also regularized military activity in the Taiwan Strait and established a new baseline for its operations. This shift is most starkly visible in the PLA’s near-daily flights through Taiwan’s self-declared air defense identification zone (ADIZ); in 2022, Chinese military aircraft entered this airspace on 268 of 365 days (see figure below). In addition to increasing the frequency of these flights, the PLA has increased their sophistication, including its most advanced fighter jets, nuclear-capable bombers, and early warning aircraft in the patrols. In addition, following Pelosi’s visit to Taiwan, the PLA effectively erased the median line in the Taiwan Strait, an important demarcation that helped the two sides avoid incidents, by operating across that line. During that same period, the PLA fired ballistic missiles around Taiwan (including at least one that flew over the island), operated near Taiwan’s territorial seas, and established a presence of naval vessels closer to Taiwan. These actions have real operational consequences, allowing the PLA to conduct exercises for Taiwan contingencies and test the readiness of Taiwan’s military, shrink the warning time that would be available if it chose to initiate hostilities, and potentially disguise the opening salvo of a conflict as a routine exercise.  

China will look to increase the scope and intensity of its coercive activities aimed at Taiwan. The South China Sea offers an instructive case study and demonstrates that China will seek to take piecemeal actions that cannot be reversed to create a new baseline or “new normal.” These “gray zone” tactics are especially effective against Taiwan because its leaders have fewer options to respond and cannot afford to be seen as escalating cross-strait tensions or causing a crisis; Beijing is able to exploit this asymmetry and act without fear of losing control of escalatory dynamics. In addition, because any one of these actions, taken in isolation, does not pose an existential threat to Taiwan, it is far more difficult for the United States to respond without being seen as fueling tensions. 

One area that China is likely to turn to, with the South China Sea again serving as a precedent, is “lawfare,” or the use of law as a weapon of conflict. China could choose to unilaterally declare that it will not respect Taiwan’s territorial waters or airspace or that it will administer Taiwan’s waters and airspace because, in its view, Taiwan is a part of China and the PRC is the sole legal government of China. It could follow this announcement by sailing ships within twelve nautical miles of Taiwan’s coast and even flying military aircraft over the island of Taiwan. Doing so would force Taiwan’s military to either ignore a blatant violation of its sovereignty, which would deal a significant blow to the Taiwanese government’s credibility, or to fire the first shot and risk being seen as the initiator of a conflict. Particularly worrisome is a scenario in which Beijing requires civilian aircraft and cargo vessels heading for Taiwan to submit to PRC aviation and customs control on the grounds that the PRC has jurisdiction over the waters and airspace surrounding Taiwan. There is already evidence that the PRC could be contemplating such an action: following President Tsai’s meeting with U.S. Speaker of the House Kevin McCarthy in California in April 2023, the PRC announced an inspection operation in the Taiwan Strait and reserved the right to board cargo ships. Though it appears that China did not actually board any ship, this could be the first step in testing such a tactic.52  

The chance of a conflict will rise as Xi Jinping approaches the end of his tenure and the basis of his legitimacy shifts from delivering economic growth to satisfying Chinese nationalism.  

The biggest question going forward is what Xi Jinping’s intentions are vis-à-vis Taiwan and how important he deems the subjugation of Taiwan for his legacy. Although he has not put an explicit timeline on achieving unification with Taiwan and continues to assert a preference for peaceful unification (while keeping open the option to use military force), indicators suggest that he could seek to resolve this issue on his watch. 

Xi has repeatedly linked unification with Taiwan to the “rejuvenation of the Chinese nation,” which he has stated must be achieved by 2049.53  Beijing’s 2022 white paper on Taiwan asserts that achieving unification “is indispensable” and “an essential step” for achieving China’s rejuvenation. The paper continues, “The Taiwan question arose as a result of weakness and chaos in our nation, and it will be resolved as national rejuvenation becomes a reality.”54  Xi’s subsequent report to the Twentieth National Congress of the Communist Party of China notes, “Resolving the Taiwan question and realizing China’s complete reunification is…a natural requirement for realizing the rejuvenation of the Chinese nation.”55  Xi went even further in his March 2023 speech to the National People’s Congress, asserting that achieving unification “is the essence of national rejuvenation.”56  Although Xi is not the first Chinese leader to tie unification with rejuvenation, he is linking the two more explicitly than any of his predecessors. 

Taken at face value, an implicit timeline of 2049 would give the United States ample time to reinforce deterrence and prepare for a potential conflict in the Taiwan Strait, with the goal of heading one off. It would also provide the opportunity for a successor to Xi to emerge who might not be as wedded to this timeline. Given that Xi most likely will not be ruling China in 2049 (he would be ninety-six years old), the question turns to whether he is determined to resolve this on his watch and is working under a tighter timeline. Xi has stated that the Taiwan issue “cannot be passed from generation to generation,” which could mean that he will not hand this off to his successor.57  Xi clearly sees himself as a pivotal leader who should go down in history on par with Mao Zedong. It is unclear, however, what he would point to as his achievements to justify such a claim. Taking Taiwan, something that eluded Mao and Deng, would cement his place in history. Thus, there is a possibility that Xi is growing impatient with the status quo and believes that Taiwan is central to his legacy. That said, windows into Xi’s thinking are far from clear. 

Senior U.S. officials have echoed this line of analysis, indicating that they believe Xi could be determined to bring Taiwan under the PRC’s control in an abbreviated timeline. CIA Director William Burns stated in July 2022 that he “wouldn’t underestimate…Xi’s determination to assert China’s control” over Taiwan and that “the risks of that become higher…the further into this decade that you get.”58  Director of National Intelligence Avril Haines assessed that the threat to Taiwan “is critical or acute between now and 2030.”59  Secretary of State Antony Blinken stated, “What’s changed is this: the decision by the government in Beijing that that status quo is no longer acceptable, that they wanted to speed up the process by which they would pursue reunification.”60  Finally, Admiral John Aquilino, commander of U.S. Indo-Pacific Command (INDOPACOM), noted, “I see actions that give me concern that the timeline is shrinking” and that “this problem is much closer to us than most think.”61  Such assessments could suggest that Xi is focused on achieving progress on Taiwan to mark the hundredth anniversary of the establishment of the PLA or the end of his third term (2027) or fourth term (2032). 

Beyond a desire to build his legacy, Xi could also be driven by the need to rebuild the foundation for the CCP’s political legitimacy. For over four decades, the CCP has enjoyed an implicit social contract with the Chinese people whereby it delivers sustained economic growth and, in exchange, its monopoly on power is not challenged. China’s economy has not contracted since Deng Xiaoping ushered in the period of “reform and opening” in late 1978, with its economy expanding by an average of more than 9 percent annually from 1980 to 2021. Over that period, China’s annual GDP has increased nearly fifty-fold, from $300 billion to $14.9 trillion.62  But China is now confronted with an array of issues, above all an aging and shrinking population and slowing productivity growth. Investing in infrastructure and the property sector, the CCP’s favored tool to prop up economic growth, has run its course. Xi’s policies—principally his turn toward statism, his crackdown on innovative technology companies, his embrace of a zero-COVID policy for three years, his failure to implement much-needed economic reforms, and his assertive foreign policy that has prompted countries to rethink economic ties—have also contributed to China’s economic challenges.63  U.S. policies, above all export controls on advanced technologies, will also make it harder for China to achieve sustained growth. As a result, China is likely entering a long-term economic slowdown. 

As China’s economic growth has slowed under Xi, he has increasingly turned to nationalism to justify the CCP’s monopoly on power. With a further downturn, he could turn to the Taiwan issue to rally support for the CCP and his personal rule. As Xi approaches the end of his tenure and looks toward his legacy, the risk of a conflict over Taiwan will grow. 

• 25

  For instance, President Nixon privately reassured Premier Zhou Enlai, “There is one China, and Taiwan is a part of China. There will be no more statements made—if I can control our bureaucracy—to the effect that the status of Taiwan is undetermined.” White House, Memorandum of Conversation, The National Security Archive, George Washington University, February, 22 1972, https://nsarchive2.gwu.edu/NSAEBB/ NSAEBB106/NZ-1.pdf; see also Romberg, Rein In at the Brink, 19–48; for the full text of the Shanghai Communiqué, see American Institute in Taiwan, “U.S.-PRC Joint Communiqué (1972),” February 28, 1972, https://www.ait.org.tw/u-s-prc-jointcommunique-1972; for the full text of the Normalization Communiqué, see American Institute in Taiwan, “U.S.-PRC Joint Communiqué 1979),” January 1, 1979, https:// www.ait.org.tw/u-s-prc-joint-communique-1979.

• 26U.S. Department of State, “<a href="https://history.state.gov/historicaldocuments/frus1969-76v18/d124">Memorandum of Conversation</a>,” Beijing, October 21, 1975, in <em>Foreign Relations of the United States, 1969–1976</em>, vol. 18, China, 1973–1976, ed. David P. Nickles (Washington, DC: Government Printing Office, 2007). For instance, Mao Zedong privately stated that China could wait one hundred years to settle the question of Taiwan’s status. Deng Xiaoping echoed this statement on June 22, 1984, remarking, “Achieving national unification is the nation’s wish, if not unified in 100 years, then unified in 1,000 years.” For Deng’s remarks in full, see Deng Xiaoping, “One Country, Two Systems,” <em>Selected Works of Deng Xiaoping</em>, vol. 3 (1982–1992) (Beijing: Foreign Languages Press, 1994).
• 27

  Richard C. Bush, At Cross Purposes: U.S.-Taiwan Relations Since 1942 (New York: Routledge, 2015), 85–123.

• 28

  Shelley Rigger, The Tiger Leading the Dragon: How Taiwan Propelled China’s Economic Rise (Lanham, MD: Rowman and Littlefield, 2021).

• 29Government Portal of the Republic of China (Taiwan), “<a href="https://www.taiwan.gov.tw/content_6.php#">Cross-Strait Relations: Fact Focus</a>,” accessed on April 29, 2023.
• 30Bureau of Foreign Trade, “<a href="https://cuswebo.trade.gov.tw/FSCE000F/FSCE000F">Trade Statistics: Introduction—Exports</a>,” Ministry of Economic Affairs, Republic of China (Taiwan), accessed April 22, 2023.
• 31International Monetary Fund, <a href="https://www.imf.org/en/Publications/WEO/weo-database/2022/October">World Economic Outlook Database (for October 2022)</a>, accessed April 23, 2023.
• 32State Council, “<a href="https://english.www.gov.cn/archive/whitepaper/202208/10/content_WS62f34f46c6d02e533532f0ac.html">China Releases White Paper on Taiwan Question, Reunification in New Era</a>,” news release, People’s Republic of China, August 2022 (hereinafter PRC State Council, “Taiwan Question”). A link to download the full text of the white paper, titled “The Taiwan Question and China’s Reunification in the New Era,” is at the end of this news release.
• 33National Chengchi University Election Study Center, “<a href="https://esc.nccu.edu.tw/PageDoc/Detail?fid=7801&id=6963">Taiwan Independence vs. Unification With the Mainland (1994/12–2022/06)</a>,” January 13, 2023.
• 34Timothy Rich and Andi Dahmer, “<a href="https://jamestown.org/program/taiwan-opinion-polling-on-unification-with-china/">Taiwan Opinion Polling on Unification With China</a>,” China Brief 20, no. 18 (October 2020).
• 35Shelley Rigger, Lev Nachman, Chit Wai John Mok, and Nathan Kar Ming Chan, “<a href="https://www.brookings.edu/blog/order-from-chaos/2022/02/07/why-is-unification-so-unpopular-in-taiwan-its-the-prc-political-system-not-just-culture/">Why Is Unification So Unpopular in Taiwan? It’s the PRC Political System, Not Just Culture</a>,” Brookings Institution, February 7, 2022.
• 36Michael R. Pompeo, “<a href="https://2017-2021.state.gov/lifting-self-imposed-restrictions-on-the-u-s-taiwan-relationship/index.html">Lifting Self-Imposed Restrictions on the U.S.-Taiwan Relationship</a>,” press statement, U.S. Department of State, January 9, 2021.
• 37Blanchard, “<a href="https://www.reuters.com/world/asia-pacific/us-should-recognise-taiwan-former-top-diplomat-pompeo-says-2022-03-04/">U.S. Should Recognize Taiwan</a>”; Chung, “<a href="https://www.scmp.com/news/china/diplomacy/article/3185818/former-us-defence-chief-says-one-china-policy-has-outlived-its">Former US Defense Chief Says</a>.”
• 38The bill expressed “the sense of Congress that the United States should resume normal diplomatic relations with Taiwan, negotiate a bilateral free trade agreement with Taiwan, and support Taiwan’s membership in international organizations.” H. Con. Res. 21, 117th Cong. (2021).
• 39Ministry of Foreign Affairs of the People’s Republic of China, “<a href="https://www.fmprc.gov.cn/mfa_eng/wjb_663304/wjbz_663308/activities_663312/202111/t20211101_10435630.html">Wang Yi Meets With U.S. Secretary of State Antony Blinken</a>,” news release, October 31, 2021; Ministry of Foreign Affairs of the People’s Republic of China, “<a href="https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/202208/t20220803_10732397.html">Wang Yi: The U.S. Side’s Act in Bad Faith on the Taiwan Question Will Only Further Bankrupt Its National Credibility</a>,” news release, August 3, 2022.
• 40CCCTV, “<a href="https://english.cctv.com/2021/10/14/ARTIhnkXtmEUFexaeygVPEfw211014.shtml">Spokesperson Slams Taiwan DPP’s ‘de-Sinicization’ History-Distorting Textbook</a>,” October 14, 2021; Katherine Wei, “<a href="https://www.straitstimes.com/asia/east-asia/taiwan-introduces-new-passport-design-to-differentiate-it-from-chinas">Taiwan ‘Playing Little Tricks’ With New Passport Design, Says China</a>,” Straits Times, January 12, 2021.
• 41Ministry of Foreign Affairs, “<a href="https://www.fmprc.gov.cn/mfa_eng/wjb_663304/wjbz_663308/activities_663312/202111/t20211101_10435630.html">Wang Yi Meets With U.S. Secretary of State</a>.”
• 42National Chengchi University Election Study Center, “<a href="https://esc.nccu.edu.tw/PageDoc/Detail?fid=7800&id=6961">Taiwanese/Chinese Identity (1992/06-2022/12)</a>,” accessed April 22, 2023.
• 43Louisa Brooke-Holland, “<a href="https://researchbriefings.files.parliament.uk/documents/CBP-8616/CBP-8616.pdf">Hong Kong: The Joint Declaration</a>,” briefing paper no. 08616, House of Commons Library, United Kingdom, July 5, 2019.
• 44PRC State Council, “<a href="https://english.www.gov.cn/archive/whitepaper/202208/10/content_WS62f34f46c6d02e533532f0ac.html">Taiwan Question</a>.”
• 45Richard C. Bush, “<a href="https://www.brookings.edu/blog/order-from-chaos/2019/01/07/8-key-things-to-notice-from-xi-jinpings-new-year-speech-on-taiwan/">8 Key Things to Notice From Xi Jinping’s New Year Speech on Taiwan</a>,” Brookings Institution, January 7, 2019.
• 46Ben Blanchard, Michael Holden, and Venus Wu, “<a href="https://www.reuters.com/article/us-hongkong-anniversary-china/china-says-sino-british-joint-declaration-on-hong-kong-no-longer-has-meaning-idUSKBN19L…">China Says Sino-British Joint Declaration on Hong Kong No Longer Has Meaning</a>,” Reuters, June 30, 2017.
• 47Robbie Gramer, “<a href="https://foreignpolicy.com/2017/05/02/china-delegation-taiwan-australia-conflict-minerals-meeting-one-china-policy-diplomatic-dispute-kimberley-proces…">Chinese Delegation Blows Up at Anti-Conflict Diamond Meeting to Sideline Taiwan</a>,” <em>Foreign Policy</em>, May 2, 2017.
• 48Javier C. Hernández, “<a href="https://www.nytimes.com/2020/10/19/world/asia/china-taiwan-fiji-fight.html">Latest Clash Between China and Taiwan: A Fistfight in Fiji</a>,” <em>New York Times</em>, October 19, 2020.
• 49Huileng Tan, “<a href="https://www.cnbc.com/2016/09/16/china-holiday-season-starts-but-taiwan-tourism-suffering-amid-one-china-spat.html">China Holiday Season Starts but Taiwan Tourism Suffering Amid One China Spat</a>,” CNBC, September 20, 2016; Nick Aspinwall, “<a href="https://thediplomat.com/2021/03/taiwan-promotes-freedom-pineapples-in-response-to-chinese-import-ban/">Taiwan Promotes ‘Freedom Pineapples’ in Response to Chinese Import Ban</a>,” <em>The Diplomat</em>, March 6, 2021; “<a href="http://www.xinhuanet.com/english/2021-01/27/c_139700988.htm">Chinese Mainland Bars Entry of Meat Products From Taiwan</a>,” Xinhua, January 27, 2021.
• 50Huileng Tan, “<a href="https://www.businessinsider.com/china-bans-thousands-taiwan-food-imports-pelosi-visit-weaponize-trade-2022-8">China Has Banned More Than 2,000 Taiwan Food Imports Amid Pelosi’s Visit as Beijing Steps Up Trade Weaponization</a>,” <em>Business Insider</em>, August 3, 2022; Grace Zhu, “<a href="https://www.wsj.com/livecoverage/nancy-pelosi-taiwan-visit-china-us-tensions/card/china-suspends-natural-sand-exports-to-taiwan-Jcrk4q1MS8AcVryiBagi">China Suspends Natural Sand Exports to Taiwan</a>,” <em>Wall Street Journal</em>, August 2, 2022.
• 51Ben Blanchard, “<a href="https://www.reuters.com/markets/commodities/choose-side-china-tells-taiwan-firms-it-punishes-conglomerate-2021-11-22/">Choose a Side, China Tells Taiwan Firms as It Punishes Conglomerate</a>,” Reuters, November 22, 2022.
• 52Liz Lee and Ben Blanchard, “<a href="https://www.reuters.com/world/asia-pacific/china-inspect-ships-taiwan-strait-taiwan-says-wont-cooperate-2023-04-06/">China to Inspect Ships in Taiwan Strait, Taiwan Says Won’t Cooperate</a>,” Reuters, April 5, 2023.
• 53“<a href="http://www.xinhuanet.com//politics/2014-09/26/c_1112641354.htm">General Secretary Xi Jinping Meets With the Joint Visiting Delegation of Taiwan Peaceful Reunification Group</a>,” Xinhua, September 26, 2014; “<a href="http://www.xinhuanet.com/english/special/2017-11/03/c_136725942.htm">Full Text of Xi Jinping’s Report at 19th CPC National Congress</a>,” Xinhua, October 18, 2017; “<a href="http://www.xinhuanet.com/english/2019-01/02/c_137714898.htm">Xi Says ‘China Must Be, Will Be Reunified,’ As Key Anniversary Marked</a>,” Xinhua, January 2, 2019. In a meeting with a delegation of groups calling for unification with Taiwan in 2014, Xi Jinping “pointed out that national reunification is a historical necessity for the great rejuvenation of the Chinese nation.” In 2019, Xi also stressed that unification was a “must for the great rejuvenation of the Chinese nation.”
• 54PRC State Council, “<a href="https://english.www.gov.cn/archive/whitepaper/202208/10/content_WS62f34f46c6d02e533532f0ac.html">Taiwan Question</a>.”
• 55Xi Jinping, “<a href="https://drive.google.com/file/d/11cnSr-gMAbMv1XF4FzseCIcGL05LhF_k/view">Hold High the Great Banner of Socialism With Chinese Characteristics and Strive in Unity to Build a Modern Socialist Country in All Respects</a>,” report to the Twentieth National Congress of the Communist Party of China, October 16, 2022.
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• 60Antony Blinken, “<a href="https://www.state.gov/secretary-antony-j-blinken-with-peggy-collins-of-bloomberg-news/">Secretary Antony J. Blinken With Peggy Collins of Bloomberg News</a>,” interview by Peggy Collins, Bloomberg News, October 26, 2022.
• 61Senate Committee on Armed Services, <a href="https://www.armed-services.senate.gov/imo/media/doc/22-11_03-10-2022.pdf"><em>Hearing to Receive Testimony on the Posture of United States Indo-Pacific Command and United States Forces Korea</em></a>, 117th Cong. 33 (2022); Senate Committee on Armed Services, <a href="https://www.armed-services.senate.gov/imo/media/doc/21-14_03-23-2021.pdf"><em>To Consider the Nomination of Admiral John C. Aquilino, USN, for Reappointment to the Grade of Admiral and to Be Commander, United States Indo-Pacific Command</em></a>, 117th Cong. 43 (2021).
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Taiwan’s critical role in global supply chains—above all semiconductor production—acts as a brake to hostilities but does not diminish China’s desire to gain control over Taiwan.  

It is difficult to overstate the critical role that Taiwan plays in the global semiconductor market. Taiwanese companies hold a 68 percent market share in the manufacture of semiconductors (see figure below). Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest contract chipmaker and produces around 90 percent of the world’s leading-edge semiconductors.64  No other company can produce chips at scale as sophisticated as the ones TSMC manufactures. These chips provide the computing power for everything from smartphones to weapons and cars, many of which require thousands of chips to function, and form the foundation of military, economic, and geopolitical power.65  

China is highly reliant on chips manufactured in Taiwan, to manufacture products both for export (e.g., iPhones) and for its domestic market. In 2022, China imported $415 billion worth of semiconductors, exceeding its imports of oil.66  China has sought to reduce its reliance on imported semiconductors by building a domestic supply chain and developing globally competitive national semiconductor champions. In 2014, it established a $23 billion Integrated Circuit Industry Investment Fund (also known as the Big Fund). Various subnational governments then created additional sister funds that invested in domestic semiconductor firms, including a $32 billion fund established by the Beijing municipal government.67  The following year, China unveiled Made in China 2025, an ambitious industrial policy that explicitly set a target of reaching 40 percent self-sufficiency in chips by 2020 and 70 percent by 2025. As China plowed money into developing semiconductor expertise, its two largest state-owned semiconductor firms, Tsinghua Unigroup and Semiconductor Manufacturing International Corporation (SMIC), received government support equivalent to more than 30 percent of their annual revenue.68  

These efforts have thus far borne little fruit, and China has failed to produce a serious rival to TSMC. Far from reaching its goal of 70 percent self-sufficiency, China reportedly has a self-sufficiency in semiconductors that is closer to 16 percent.69  Reports of serious corruption in China’s Big Fund have surfaced.70  Tsinghua Unigroup and SMIC, plagued by inefficiencies and high debt, have made limited progress. Further, they are led by former TSMC executives, which demonstrates Beijing’s continued reliance on Taiwanese expertise.71  

China’s dependence on imported chips is a major vulnerability, one exacerbated by U.S. export controls imposed in 2022 that place severe restrictions on the ability of companies (both U.S. and foreign) to sell both advanced chips and the equipment used to manufacture them to China and that bar U.S. persons from providing services to China’s semiconductor firms.72  Despite their best efforts, PRC semiconductor firms remain wholly reliant on foreign technology and equipment, which are almost entirely produced by the United States or its close allies and are covered by these restrictions.  

President Tsai, among others, has referred to Taiwan’s dominance of the semiconductor manufacturing industry as a “silicon shield” that deters China from invading the island.73  Like-minded analysts argue that China is so dependent on Taiwanese chips that it cannot afford a war that would destroy these foundries or render them inoperable, because such an outcome would devastate China’s economy. China’s interest in ensuring that unification can occur at some point in the future, however, trumps such economic considerations. Thus, if Taiwan were to formally declare independence, China would almost certainly attack regardless of the economic fallout, having accepted the enormous cost of an attack. 

Some take the opposite stance, arguing that Taiwan’s dominance of semiconductor manufacturing makes a Chinese assault more likely because if China seizes these foundries, it could immediately solve its domestic chip production problem and even turn this tool against countries like the United States. China’s desire to achieve unification with Taiwan, however, predates the semiconductor industry and should not be ascribed to the latter’s semiconductor prowess. In addition, even if China seized Taiwan, it would be wholly incapable of operating Taiwan’s fabrication facilities (or “fabs” in industry speak). These factories require deep operational expertise, and Taiwan’s engineers would almost certainly flee during a conflict or refuse to work for future Chinese owners. The facilities also need continued access to U.S. and allied technologies and equipment to function, and the United States would presumably refuse to provide any support if China were to gain control over Taiwan. 

The extent to which Taiwan, China, and the United States are integrated through global supply chains and rely on one another for critical inputs in part deters all three parties from acting irresponsibly and gives each a stake in preserving the status quo. At the same time, political considerations will trump economic ones if a Chinese leader believes that peaceful unification is irreversibly drifting out of reach. If Xi or his successor reaches that conclusion and believes that a military operation can succeed, they will likely order the use of force regardless of the dire economic consequences. At the same time, a Chinese leader is unlikely to order an invasion out of the fanciful assumption that doing so is an easy way to solve China’s inability to produce advanced chips. 

In addition to the devastation for the people of Taiwan, a conflict would also trigger a global economic depression and an open-ended era of hostility between the world’s two leading powers.  

Any conflict over Taiwan would devastate the global economy by closing off vital shipping lanes, halting the production and delivery of semiconductors, and likely stopping trade between China and the West. According to one study, a Chinese blockade of Taiwan would cause $2.5 trillion in annual global economic losses by bringing countless supply chains to a halt and forcing them to try to move forward without Taiwanese components.74   

Almost every electronic device contains chips, many of which are made in Taiwan (see figure below). Losing access to these chips would cause global production of smartphones to be at least halved, and the manufacture of everything from computers to cars, weapons, and microwaves would be severely constrained. Many of the biggest U.S. companies, from Apple to General Motors, would struggle to produce anything. Replacing lost Taiwanese capacity would take years. 

Taiwan’s location astride major shipping arteries, principally the South China Sea and East China Sea, would force trade in the region to a standstill while a blockade or attack was ongoing. A conflict over Taiwan would also dramatically increase insurance premiums and shipping costs for commercial carriers and producers. In 2016, the UN Conference on Trade and Development (UNCTAD) estimated that roughly 80 percent of global trade by volume and 70 percent by value is transported by sea. Of that maritime trade, 60 percent passes through Asia, with the South China Sea carrying an estimated one-third of global shipping.75  Another study estimated that $3.4 trillion in trade passed through the South China Sea in 2016; despite significant disruptions to maritime activity associated with COVID-19 between 2020 and 2022, these numbers are still roughly accurate today.76  Approximately 48 percent of the world’s 5,400 operational container ships and 88 percent of the world’s largest ships by tonnage passed through the Taiwan Strait in 2022.77  Most, if not all, of these commercial ships would have to find alternate routes during a conflict, stressing and potentially even breaking global supply chains, with huge ramifications for companies and consumers alike. 

During a conflict in the Taiwan Strait, the United States would presumably heavily sanction China and halt most trade with it, whether or not it decides to intervene militarily on Taiwan’s behalf. U.S.-China trade in goods in 2022 reached a record high of nearly $700 billion, with the United States importing $537 billion of Chinese products.78  As the COVID-19 pandemic revealed, many goods produced in China, in this case personal protective equipment, are difficult to source at scale from other countries. If China were to attack Taiwan, the rupture of U.S.-China trade relations would also severely hurt U.S. businesses and consumers. 

While there is a lively debate on whether the United States and China are already locked in a cold war, a hot war over Taiwan would set off open-ended hostility between the two largest economies in the world and two nuclear-armed powers. It is virtually impossible to imagine Washington and Beijing working together in a meaningful way to address global issues such as public health, climate change, or nonproliferation either during or after a war over Taiwan. In addition, although countries throughout the world do not want to choose between the United States and China, a direct clash between the two countries would increase pressure on third countries to take sides, likely locking in opposing blocs for years or decades. The world after a war between the United States and China would be far poorer, more insecure, and less able to contend with global challenges. 

Taiwan’s dependence on trade with China provides Beijing with leverage over Taipei that could reduce the latter’s options during a crisis. 

Taiwan is highly reliant on international trade to generate economic growth, with trade equaling roughly 103 percent of its annual (nominal) GDP.79  China, as Taiwan’s largest trading partner, is the biggest contributor to Taiwan’s GDP. Semiconductors accounted for 62 percent of the island’s exports to China in 2021, with the total value of those sales reaching $155 billion. In the first half of 2022, China imported $79 billion worth of chips from Taiwan.80  In addition to semiconductors, major Taiwanese exports to China include machinery, plastics, rubbers, and chemical products.  

Beijing could intensify its economic pressure on Taipei to extract concessions or force it to enter political negotiations. If this were to happen, Taiwan would have to choose between its continued autonomy and its economic livelihood, a reality that provides China with leverage over Taiwan. To be sure, a Chinese decision to significantly cut trade with Taiwan would also deal a devastating blow to its own economy given its reliance on Taiwanese semiconductors, but Beijing can presumably afford to be less responsive to its citizens than Taipei. 

China has already employed economic coercion against countries around the world, including Australia, Japan, Lithuania, Norway, and the Philippines, as well as Taiwan. This has included limiting Chinese tourism to Taiwan, increasing port inspections of Taiwanese goods, banning some Taiwanese agricultural and food products, and halting the export of natural sand to Taiwan. China has also pressured Taiwanese companies operating in the PRC to publicly support the 1992 Consensus and oppose Taiwanese independence, in essence asserting that as a precondition of their ability to do business in China. 

At the same time, China has refrained from employing its most powerful economic tools. Instead, it has pursued an economic strategy that has both carrots (incentivizing Taiwanese businesses to invest in the PRC) and sticks (punishing DPP supporters). In doing so, China is seeking to influence Taiwan’s political trajectory by promoting pro-China voices and creating divisions within Taiwan. Thus, even though cross-strait relations have deteriorated since 2016, China has not suspended any of its major economic agreements with Taiwan and has continued to introduce preferential policies for Taiwanese businesses.81  As a result, China has left itself with plenty of levers that it could pull in the future to increase Taiwan’s economic pain. 

U.S. and allied reliance on semiconductors produced in Taiwan raises the stakes for the United States and the West in a conflict.  

Although semiconductors were invented in the United States, the world’s leading chips are designed domestically, and U.S. companies continue to produce specialized tools needed to manufacture semiconductors, the United States lacks the capacity to produce cutting-edge chips, and has seen market share across all types of chips decline substantially. U.S. fabs produced 37 percent of the world’s chips in 1990, but this number fell by nearly two-thirds to 13 percent by 2010.82  The United States relies on semiconductors produced in Taiwan (and to a far lesser extent South Korea) for roughly 90 percent of its supply of highly advanced logic chips.83  Apple’s most advanced semiconductors, which contain billions of transistors, can only be produced in a single building within TSMC’s sprawling campus in Taiwan.84  

In addition to being integral to consumer electronics, chips also power every advanced weapon. U.S. Commerce Secretary Gina Raimondo, for instance, has noted that one Javelin anti-tank missile requires more than 250 chips and warned that at one point semiconductor shortages were hampering the ability of the United States to continue supplying weapons to Ukraine.85  If China were to blockade Taiwan and cut off its international trade, companies that rely on semiconductors manufactured in Taiwan would have their annual revenue reduced by up to $1.6 trillion.86  Many U.S. companies, including defense conglomerates, would need to dramatically dial back production, with serious consequences for U.S. economic and national security. 

Recognizing this vulnerability, in 2022 Congress passed the CHIPS and Science Act, which provides $52 billion to jumpstart domestic semiconductor manufacturing, research and development, and workforce development.87  Since 2020, more than three dozen U.S. companies, including industry giants Intel and Micron Technology, have pledged to invest nearly $200 billion in semiconductor manufacturing in the United States.88  In addition, with significant U.S. encouragement, TSMC committed to building a semiconductor manufacturing facility in Arizona and later tripled its planned investment to $40 billion and added a second facility. As they become operational in 2024 and 2026, TSMC’s Arizona facilities are projected to produce six hundred thousand wafers (the discs that chips are made on) annually, with an estimated end-product value of more than $40 billion.89   

Even if this limited onshoring is successful, the United States will not become self-sufficient in semiconductor manufacturing for decades. TSMC has stated that it has no intention of moving research and development off Taiwan, and its plants in Arizona will need constant connections to Taiwan (e.g., engineers flying back and forth) to operate. Furthermore, TSMC has shown no desire to move its most advanced chipmaking capabilities from Taiwan. It is also unclear how the United States will replicate the ecosystem that Taiwan enjoys, principally hundreds of suppliers of critical inputs a short drive from TSMC’s facilities. The United States will also need to undertake significant statutory, regulatory, and permitting reform if it wants to attract additional investments in semiconductor fabs and address its severe shortage of qualified engineers.90  In short, much more domestic investment in advanced manufacturing capacity will be required to ensure long-run competitive advantages in the U.S. chip sector.91  The United States will remain highly reliant on chips produced in Taiwan for the foreseeable future, which gives it a large stake in deterring a conflict over Taiwan. 

U.S. and allied economic interdependence with China would complicate efforts to resist Chinese aggression against Taiwan and impose costs on Beijing.  

A crucial lesson of the war in Ukraine is that economic interdependence does not prevent conflict and could in fact give the aggressor perceived leverage. Although some European leaders, most prominently former German Chancellor Angela Merkel, believed that close energy ties would restrain Russian President Vladimir Putin by tying Russian economic growth to continued peace in Europe, Putin weaponized this interdependence. Putin concluded that European countries would not impose heavy economic sanctions on Russia because doing so would inflict economic devastation on their economies. Though he miscalculated and European countries chose to impose sanctions at substantial economic cost to themselves, economic interdependence did not deter Putin and could have in fact contributed to his decision to go to war. In addition, while the United States and its European and Asian allies have sanctioned Russia, many countries have remained on the sidelines. 

A similar dynamic could play out over Taiwan, with China calculating that countries are so dependent on access to its market and its manufacturing capacity that they would not impose meaningful sanctions if it invaded Taiwan. Indeed, U.S. allies in the Indo-Pacific such as Australia, Japan, and South Korea count China as their number one trading partner. Europe’s largest economy, Germany, does as well. If a Chinese attack on Taiwan occurs while sanctions against Russia remain in place, countries could conclude that they cannot afford to sanction both China and Russia at the same time and absorb the economic consequences. 

China, however, is not leaving this to chance and is seeking to harden its economy to be less vulnerable to sanctions.92  It is actively pursuing a strategy to make countries more economically reliant on China and to decrease its exposure to the global economy by indigenizing foreign technology and supply chains.93  Recognizing that it is still vulnerable to technological bottlenecks, above all in semiconductors, China’s most recent five-year plan stresses the need to achieve technological self-reliance and gives national security considerations equal weight as economic development.94  The CCP’s 2021 historical resolution touted its commitment to making “self-reliance in science and technology the strategic pillar for the country’s development.”95  

Beyond these strategies and plans, China is taking tangible steps to “sanctions-proof” its economy. In 2020, China introduced an Export Control Law, which provides the basis for China to restrict exports on national security grounds.96  The following year, China introduced an Anti-Foreign Sanctions Law, which establishes a framework to punish foreign companies that comply with sanctions targeting China.97  China presumably hopes that these laws will deter countries from sanctioning China by making clear that it could halt the export of critical commodities such as rare earth minerals in response to export controls placed in the wake of an invasion of Taiwan. China is also promoting use of the renminbi (RMB) for international transactions and trying to reduce its dependence on the U.S. dollar through currency swap agreements and other measures. Further, it is increasing its reserve of essential supplies, such as crude oil and food. 

U.S. and allied economic interdependence with China (or, more accurately, dependence on China), paired with Chinese efforts to promote self-reliance, could prompt Xi to assess that sanctions would hurt the countries doing the sanctioning more than China. As a result, he could conclude that countries will be hesitant to levy draconian sanctions in response to Chinese aggression against Taiwan. If Chinese policies to promote indigenization and reduce reliance on foreign technology prove successful, the prospect of sanctions is less likely to influence Xi’s calculus over time.

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• 65

  Chris Miller, Chip War: The Fight for the World’s Most Critical Technology (New York: Scribner, 2022), 328.

• 66

  General Administration of Customs of the People’s Republic of China, 2022.

• 67Organization for Economic Cooperation and Development (OECD), “<a href="https://doi.org/10.1787/8fe4491d-en">Measuring Distortions in International Markets: The Semiconductor Value Chain</a>,” OECD Trade Policy Paper, no. 234, December 12, 2019, 50.
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• 69Shunsuke Tabeta, “‘<a href="https://asia.nikkei.com/Business/Tech/Semiconductors/Made-in-China-chip-drive-falls-far-short-of-70-self-sufficiency">Made in China’ Chip Drive Falls Far Short of 70% Self-Sufficiency</a>,” Nikkei Asia, October 13, 2021.
• 70Edward White and Qianer Liu, “<a href="https://www.ft.com/content/8358e81b-f4e7-4bad-bc08-19a77035e1b4">China’s Big Fund Corruption Probe Casts Shadow Over Chip Sector</a>,” <em>Financial Times</em>, September 28, 2022.
• 71Alan Crawford, Jarrell Dillard, Helene Fouquet, and Isabel Reynolds, “<a href="https://www.bloomberg.com/news/features/2021-01-25/the-world-is-dangerously-dependent-on-taiwan-for-semiconductors">The World Is Dangerously Dependent on Taiwan for Semiconductors</a>,” Bloomberg, January 25, 2021; Evelyn Cheng, “<a href="https://www.cnbc.com/2022/08/17/china-needs-taiwans-biggest-chipmaker-more-than-the-other-way-around.html">China Needs Taiwan’s Biggest Chipmaker—More Than the Other Way Around</a>,” CNBC, August 19, 2022.
• 72Bureau of Industry and Security, “<a href="https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3158-2022-10-07-bis-press-release-advanced-computing-and-semiconductor-…">Commerce Implements New Export Controls on Advanced Computing and Semiconductor Manufacturing Items to the People’s Republic of China (PRC)</a>,” news release, U.S. Department of Commerce, October 7, 2022.
• 73Tsai Ing-wen, “<a href="https://www.foreignaffairs.com/articles/taiwan/2021-10-05/taiwan-and-fight-democracy">Taiwan and the Fight for Democracy: A Force for Good in the Changing International Order</a>,” <em>Foreign Affairs</em> 111, no. 6 (November/December 2021).
• 74Kathrin Hille and Demetri Sevastopulo, “<a href="https://www.ft.com/content/c0b815f3-fd3e-4807-8de7-6b5f72ea8ae5">US Warns Europe a Conflict Over Taiwan Could Cause Global Economic Shock</a>,” <em>Financial Times</em>, November 10, 2022.
• 75Deniz Barki and Lucy Deleze-Black, eds., <a href="https://unctad.org/system/files/official-document/rmt2016_en.pdf"><em>Review of Maritime Transport, 2016</em></a> (Geneva: United Nations Conference on Trade and Development, 2016).
• 76China Power Project, “<a href="https://chinapower.csis.org/much-trade-transits-south-china-sea/">How Much Trade Transits the South China Sea?</a>,” Center for Strategic and International Studies, last modified January 25, 2021.
• 77Kevin Varley, “<a href="https://www.bloomberg.com/news/articles/2022-08-02/taiwan-tensions-raise-risks-in-one-of-busiest-shipping-lanes#xj4y7vzkg">Taiwan Tensions Raise Risks in One of Busiest Shipping Lanes</a>,” Bloomberg, August 2, 2022.
• 78U.S. Census Bureau, “<a href="https://www.census.gov/foreign-trade/balance/c5700.html">Trade in Goods With China</a>,” accessed April 23, 2023.
• 79CEIC, “<a href="https://www.statista.com/statistics/1266254/taiwan-quarterly-trade-to-gdp-ratio/">Share of International Trade of Goods and Services in Nominal GDP in Taiwan in Selected Quarters From 4th Quarter 2018 to 4th Quarter 2022</a>,” Statista, February 27, 2023.
• 80Zhao Ziwen, “<a href="https://www.scmp.com/economy/china-economy/article/3187890/china-taiwan-trade-and-everything-you-need-know">China-Taiwan Trade, and Everything You Need to Know</a>,” <em>South China Morning Post</em>, August 7, 2022.
• 81Bonny Lin et al., <a href="https://www.rand.org/pubs/research_reports/RRA594-1.html"><em>Competition in the Gray Zone: Countering China’s Coercion Against U.S. Allies and Partners in the Indo-Pacific</em></a> (Santa Monica, CA: RAND Corporation, 2022), 51.
• 82

  Miller, Chip War,177.

• 83Saheli Roy Choudhury, “<a href="https://www.cnbc.com/2021/04/13/semiconductor-shortage-us-tech-companies-and-their-reliance-on-taiwan.html">Tough Road Ahead for U.S. Firms Trying to Cut Reliance on Taiwan Chipmakers</a>,” CNBC, April 13, 2021.
• 84

  Miller, Chip War, xx.

• 85Yuka Hayashi, “<a href="https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-04-27/card/chip-shortage-limits-u-s-s-ability-to-supply-weapons-to-ukraine-commerce-…">Chip Shortage Limits U.S.’s Ability to Supply Weapons to Ukraine, Commerce Secretary Says</a>,” <em>Wall Street Journal</em>, April 27, 2022.
• 86Charlie Vest, Agatha Kratz, and Reva Goujon, “<a href="https://rhg.com/research/taiwan-economic-disruptions/">The Global Economic Disruptions From a Taiwan Conflict</a>,” Rhodium Group, December 14, 2022.
• 87McKinsey and Company, “<a href="https://www.mckinsey.com/industries/public-and-social-sector/our-insights/the-chips-and-science-act-heres-whats-in-it">The CHIPS and Science Act: Here’s What’s in It</a>,” October 4, 2022.
• 88Don Clark and Ana Swanson, “<a href="https://www.nytimes.com/2023/01/01/technology/us-chip-making-china-invest.html">U.S. Pours Money Into Chips, but Even Soaring Spending Has Limits</a>,” <em>New York Times</em>, January 1, 2023.
• 89TSMC, “<a href="https://pr.tsmc.com/english/news/2977">TSMC Announces Updates for TSMC Arizona</a>,” press release, December 6, 2022.
• 90John VerWey, “<a href="https://cset.georgetown.edu/publication/no-permits-no-fabs">No Permits, No Fabs: The Importance of Regulatory Reform for Semiconductor Manufacturing</a>,” Center for Security and Emerging Technology, October 2021; Clark and Swanson, “<a href="https://www.nytimes.com/2023/01/01/technology/us-chip-making-china-invest.html">U.S. Pours Money Into Chips</a>.”
• 91Tim Culpan, “<a href="https://www.bloomberg.com/opinion/articles/2022-12-07/-40-billion-us-semiconductor-plant-won-t-buy-independence#xj4y7vzkg">Sorry, USA, $40 Billion Won’t Buy Chip Independence</a>,” Bloomberg, December 7, 2022.
• 92Zongyuan Zoe Liu, “<a href="https://foreignpolicy.com/2022/06/16/china-economic-war-decoupling-united-states-containment/">China Is Hardening Itself for Economic War</a>,” <em>Foreign Policy</em>, June 16, 2022.
• 93Jude Blanchette and Andrew Polk, “<a href="https://www.csis.org/analysis/dual-circulation-and-chinas-new-hedged-integration-strategy">Dual Circulation and China’s New Hedged Integration Strategy</a>,” Center for Strategic and International Studies, August 24, 2020.
• 94Tai Ming Cheung, Barry Naughton, and Eric Hagt, <a href="https://ucigcc.org/wp-content/uploads/2022/07/Ocea-revised-19-July-2022-1.pdf"><em>China’s Roadmap to Becoming a Science, Technology, and Innovation Great Power in the 2020s and Beyond: Assessing Its Medium- and Long-Term Strategies and Plans</em></a> (La Jolla, CA: UC Institute on Global Conflict and Cooperation, July 2022), 9.
• 95State Council, “<a href="https://english.www.gov.cn/policies/latestreleases/202111/16/content_WS6193a935c6d0df57f98e50b0.html">Full Text: Resolution of the CPC Central Committee on the Major Achievements and Historical Experience of the Party Over the Past Century</a>,” news release, People’s Republic of China, November 16, 2021.
• 96National People’s Congress of the People’s Republic of China, “<a href="http://www.npc.gov.cn/englishnpc/c23934/202112/63aff482fece44a591b45810fa2c25c4.shtml">Export Control Law of the People’s Republic of China</a>,” October 17, 2020.
• 97National People’s Congress of the People’s Republic of China, “<a href="http://www.npc.gov.cn/npc/c30834/202106/d4a714d5813c4ad2ac54a5f0f78a5270.shtml">Anti-Foreign Sanctions Law of the People’s Republic of China</a>,” June 10, 2021.

In addition to having a legal obligation to maintain the capacity to defend Taiwan, the United States has vital strategic reasons for doing so.  

A Chinese assault on Taiwan would gravely undermine an array of U.S. interests and weaken its position in the world’s most economically consequential region. If China were to successfully annex Taiwan, such an outcome would also decisively shift the military balance of power in Asia in China’s favor and make it far more difficult for the United States to defend its treaty allies or prevent a Chinese bid for regional hegemony. 

Taiwan has inherent military value, and thus its fate will in large part determine the U.S. military’s ability to operate in the region. As Assistant Secretary of Defense Ely Ratner noted, “Taiwan is located at a critical node within the first island chain, anchoring a network of U.S. allies and partners—stretching from the Japanese archipelago down to the Philippines and into the South China Sea—that is critical to the region’s security and critical to the defense of vital U.S. interests in the Indo-Pacific” (see figure below).98  With Taiwan outside of its control and U.S. allies and partners arrayed throughout the first island chain, the PLA will struggle to project power far beyond China’s shores. If China were to annex Taiwan and base military assets, such as underwater surveillance devices, submarines, and air defense units on the island, however, it would be able to limit the U.S. military’s operations in the region and in turn its ability to defend its Asian allies.99  U.S. policymakers should therefore understand that it is not only Taiwan’s future at stake but also the future of the first island chain and the ability to preserve U.S. access and influence throughout the Western Pacific. 

What happens in the Taiwan Strait will also have enormous implications for the future of U.S. alliances in the region, which constitute the United States’ most important asymmetric advantage vis-à-vis China. If the United States chose to stand aside in the face of Chinese aggression against Taiwan, U.S. allies would come to question whether they could rely on the United States. Having lost confidence in the U.S. commitment to their security, they would contemplate either accommodating China or hedging against it by growing their militaries or even developing nuclear weapons. Either outcome would result in diminished U.S. influence and increased global instability. The United States, for its part, would feel compelled to take steps to shore up its allies’ confidence, which would likely result in riskier and costlier foreign policy decisions.  

A Chinese attack on Taiwan, regardless of its success, would also trigger a global economic depression by halting production of the vast majority of the world’s most advanced semiconductors. The United States would have to contend with a chip shortage that would force companies across a range of industries to reduce or even halt production. As mentioned, a Chinese blockade of Taiwan that halts all of Taiwan’s international trade would cause $2.5 trillion in annual global economic losses, but this figure does not even take into account the second-order effects of possible sanctions, trade restrictions against China, the unavailability of equipment powered by Taiwanese chips that is critical for e-commerce, entertainment, and logistics, or the potential for military escalation.100  These repercussions would be catastrophic and hard to reverse. 

Politically, Taiwan is one of Asia’s few democratic success stories and, according to one recent study, its freest society.101  Taiwan’s open political system demonstrates to PRC citizens that there is an alternative path of development for a majority ethnically Chinese society. As a result, Xi could well believe that Taiwan’s very existence poses a threat to the CCP. If China were to annex Taiwan by force, its democracy would almost certainly be extinguished, and its twenty-three million people would see their rights severely curtailed. Such a development would shake democracies around the world. 

Taiwan’s fate also has important implications for international order, which have only been magnified by Russia’s invasion of Ukraine. If China were to successfully absorb Taiwan in spite of Taiwanese resistance, it would establish a pattern of authoritarian countries using force to attack democratic neighbors and change borders. The most basic pillar of international relations—that countries cannot use force to alter borders—would be destroyed. 

Deterrence is steadily eroding in the Taiwan Strait and is at risk of failing, increasing the likelihood of Chinese aggression.  

For decades, the United States could assume that U.S. intervention on Taiwan’s behalf would be decisive. U.S. arms provided Taiwan with a qualitative edge over the PLA, which lacked sophisticated weapons. As China prioritized economic development, military modernization took a back seat. The PLA was largely a ground-based force focused on China’s land borders rather than an expeditionary military that could project power over the Taiwan Strait. Thus, during the 1995–96 Taiwan Strait Crisis, the United States sailed two aircraft carrier strike groups toward the Taiwan Strait as a show of force. 

Largely driven by the Taiwan Strait Crisis, as well as the 1999 accidental U.S. bombing of the Chinese embassy in Belgrade, Serbia, China embarked on a comprehensive military modernization campaign, with the aim of developing capabilities that could deter and, if need be, defeat the United States in China’s immediate periphery (often referred to as counter-intervention or anti-access/area-denial capabilities). For Beijing, Washington’s intervention in Kosovo had direct bearing on Taiwan, as it demonstrated that the United States was willing to use military force absent a UN mandate to carve off a piece of a sovereign state.102  Since then, preparing for a conflict in the Taiwan Strait has driven PLA force structure and procurement priorities. 

China’s official defense budget is now $225 billion, nearly doubling since 2013.103  Even that remarkable growth, however, vastly understates the military capability that China has been able to build. China’s published budget omits important categories such as research and development and foreign weapons purchases, and DOD estimates that its actual military-related spending could be up to two times higher than its reported budget.104  Although U.S. defense spending outpaces China’s, DOD has to spread its resources to prepare for a range of contingencies around the world, while China devotes the bulk of its resources to preparing for conflicts on its periphery, above all one over Taiwan. In addition, China’s massive theft of U.S. defense−related intellectual property and dual-use technologies allows it to more cheaply develop new weapons.105  As a result, China has developed an array of capabilities intended to win a war in the Taiwan Strait by delaying or denying U.S. intervention—principally ballistic missiles, submarines, modern air defense units stationed on China’s east coast and reclaimed land in the South China Sea that can range beyond Taiwan, and advanced fighters and long-range bombers. 

As a result of these sustained investments, the PLA Navy (PLAN) is now numerically the largest navy in the world (though the United States continues to exceed it by tonnage), with 340 ships and submarines, and is projected to add another 100 ships to its fleet by 2030. The PLA Air Force and PLAN Aviation together constitute the largest aviation force in the Indo-Pacific, with more than 2,800 total aircraft, and they are rapidly catching up to Western air forces in terms of capability, according to DOD.106  The PLA has one thousand short-range ballistic missiles and six hundred medium-range ballistic missiles in its arsenal and is expected to use these missiles early in a conflict to destroy Taiwan’s military bases and critical infrastructure.107  The PLA is also improving its ability to undertake complex joint operations, conducting more frequent and realistic island-seizure exercises, and placing greater emphasis on developing information operations (e.g., cyberspace, space-based, and electronic warfare), all of which are geared toward giving it a viable option to use force against Taiwan.108  These capabilities are intended to challenge the U.S. ability to effectively operate from its fixed bases in the Western Pacific and raise the costs of a U.S. intervention on behalf of Taiwan. 

In addition to its growing conventional capabilities, China is rapidly improving and expanding its nuclear arsenal, perhaps convinced that if it can stalemate the United States at the nuclear level, then it can keep a war over Taiwan limited to conventional weapons, where it believes it will soon be able to prevail.109  DOD assesses that China will more than triple its nuclear arsenal by the end of this decade, from 400 operational nuclear warheads in 2022 to 1,500 by 2035.110  According to U.S. Strategic Command, China already has more land-based intercontinental-range missile launchers than the United States.111  In 2022, Admiral Charles Richard, then commander of U.S. Strategic Command, acknowledged that the PRC could use the nuclear threat during a conflict over Taiwan, stating that they “will likely use nuclear coercion to their advantage in the future.”112   

The war in Ukraine has almost certainly validated China’s growing emphasis on having a strong nuclear arsenal: President Biden argued that direct U.S. intervention on Ukraine’s side, by pitting two nuclear-armed powers against one another, would result in World War III. Throughout the conflict, the United States and its partners have refrained from providing Ukraine with certain capabilities out of fear that Putin could respond by using nuclear weapons. Xi could hope to deter direct U.S. intervention on Taiwan’s behalf through nuclear saber-rattling. 

The United States can no longer assume that its direct intervention would be decisive. In addition, as Beijing continues to move the balance of power in the Taiwan Strait in its favor, its cost-benefit calculus is likely shifting. This raises the prospect that at the current trajectory, Beijing will at some point conclude that it could deter Washington from intervening on Taiwan’s behalf or hold off the United States should it choose to come to Taiwan’s defense. 

• 98<em>The Future of U.S. Policy on Taiwan, Before the Senate Comm. on Foreign Relations</em>, 117th Cong. (2021) (<a href="https://www.foreign.senate.gov/imo/media/doc/120821_Ratner_Testimony1.pdf">testimony of Ely Ratner</a>, assistant secretary of defense for Indo-Pacific security affairs, U.S. Department of Defense).
• 99Brendan Rittenhouse Green and Caitlin Talmadge, “<a href="https://www.foreignaffairs.com/articles/china/2022-06-16/consequences-conquest-taiwan-indo-pacific">The Consequences of Conquest: Why Indo-Pacific Power Hinges on Taiwan</a>,” Foreign Affairs 101, no. 4 (July/August 2022).
• 100Hille and Sevastopulo, “<a href="https://www.ft.com/content/c0b815f3-fd3e-4807-8de7-6b5f72ea8ae5">US Warns Europe</a>”; Charlie Vest, Agatha Kratz, and Reva Goujon, “<a href="https://rhg.com/research/taiwan-economic-disruptions/">The Global Economic Disruptions from a Taiwan Conflict</a>,” Rhodium Group, December 14, 2022.
• 101

  Ian Vásquez, Fred McMahon, Ryan Murphy, and Guillermina Sutter Schneider, The Human Freedom Index 2022: A Global Measurement of Personal, Civil, and Economic Freedom (Washington, DC, and Vancouver: Cato Institute and Fraser Institute, 2022), https://www.fraserinstitute.org/sites/default/files/human-freedom-index-2022.pdf.

• 102<em>PLA Operational Concepts and Centers of Gravity in a Taiwan Conflict, Before the U.S.-China Economic and Security Review Commission</em>, 117th Cong. (2021) (<a href="https://www.uscc.gov/sites/default/files/2021-02/Lonnie_Henley_Testimony.pdf">testimony of Lonnie Henley</a>, professional lecturer, George Washington University).
• 103China Power Project, “<a href="https://chinapower.csis.org/military-spending/">What Does China Really Spend on Its Military?</a>,” Center for Strategic and International Studies, last modified June 29, 2022.
• 104U.S. Department of Defense, <a href="https://media.defense.gov/2021/Nov/03/2002885874/-1/-1/0/2021-CMPR-FINAL.PDF"><em>Military and Security Developments Involving the People’s Republic of China, 2021: Annual Report to Congress</em></a> (Washington, DC: Office of the Secretary of Defense, 2021), 142. For more on this, see Nan Tian and Fei Su, <a href="https://www.sipri.org/sites/default/files/2021-01/2101_sipri_report_a_new_estimate_of_chinas_military_expenditure.pdf"><em>A New Estimate of China’s Military Expenditure</em></a> (Solna, Sweden: Stockholm International Peace Research Institute, 2021).
• 105Lisa Ferdinando, “<a href="https://www.defense.gov/News/News-Stories/Article/Article/1557188/dod-officials-chinese-actions-threaten-us-technological-industrial-base/">DoD Officials: Chinese Actions Threaten U.S. Technological, Industrial Base</a>,” news release, U.S. Department of Defense, June 21, 2018; Jeffrey B. Jones, “<a href="https://www.belfercenter.org/publication/confronting-chinas-efforts-steal-defense-information">Confronting China’s Efforts to Steal Defense Information</a>,” Belfer Center for Science and International Affairs, May 2020.
• 106U.S. Department of Defense, <a href="https://media.defense.gov/2022/Nov/29/2003122279/-1/-1/1/2022-MILITARY-AND-SECURITY-DEVELOPMENTS-INVOLVING-THE-PEOPLES-REPUBLIC%02OF-CHINA.PDF"><em>Military and Security Developments Involving the People’s Republic of China, 2022</em></a> (Washington, DC: Office of the Secretary of Defense, 2022).
• 107U.S. Department of Defense, <a href="https://media.defense.gov/2022/Nov/29/2003122279/-1/-1/1/2022-MILITARY-AND-SECURITY-DEVELOPMENTS-INVOLVING-THE-PEOPLES-REPUBLIC%02OF-CHINA.PDF"><em>Military and Security Developments</em></a>, 2022, 49.
• 108U.S. Department of Defense, <a href="https://media.defense.gov/2022/Nov/29/2003122279/-1/-1/1/2022-MILITARY-AND-SECURITY-DEVELOPMENTS-INVOLVING-THE-PEOPLES-REPUBLIC%02OF-CHINA.PDF"><em>Military and Security Developments, 2022</em></a>.
• 109For more on this, see Abraham Denmark and Caitlin Talmadge, “<a href="https://www.foreignaffairs.com/china/why-china-wants-more-and-better-nukes">Why China Wants More and Better Nukes</a>,” <em>Foreign Affairs</em>, November 19, 2021.
• 110U.S. Department of Defense, <a href="https://media.defense.gov/2022/Nov/29/2003122279/-1/-1/1/2022-MILITARY-AND-SECURITY-DEVELOPMENTS-INVOLVING-THE-PEOPLES-REPUBLIC%02OF-CHINA.PDF"><em>Military and Security Developments, 2022</em></a>.
• 111Michael R. Gordon, “<a href="https://www.wsj.com/articles/china-has-more-icbm-launchers-than-u-s-american-military-reports-11675779463">China Has More ICBM Launchers Than U.S., American Military Reports</a>,” <em>Wall Street Journal</em>, February 7, 2023.
• 112Senate Armed Forces Subcommittee on Strategic Forces, <a href="https://www.armed-services.senate.gov/imo/media/doc/22-37_05-04-2022.pdf"><em>Hearing to Receive Testimony on the Nuclear Weapons Council</em></a>, 117th Cong. 11 (2022).