The Third Taiwan Strait Crisis: The Forgotten Showdown Between China and America

USS Nimitz during RIMPAC 2012. Wikimedia Commons/U.S. Navy

It made Asia what it is today.

Twenty-one years ago this week, as Taiwanese were readying to hold their country’s first direct presidential election later in March, China flexed its military muscles by holding a series of military exercises and firing missiles within thirty-five miles off the ports of Keelung and Kaohsiung, causing a panic in Taiwan and prompted U.S. President William J. Clinton to deploy a carrier battle group to international waters near Taiwan.

The Third Taiwan Strait Crisis, as the events came to be known, disrupted naval shipping and commercial air traffic, causing harm to Taiwan’s economy. Amid fears of a possible invasion—fuelled by planned People’s Liberation Army (PLA) exercises simulating an amphibious assault and live-fire exercises near the outlying island of Penghu—Taiwanese scrambled to reserve seats on flights to North America.

In the end, crisis was averted, likely due to the U.S. intervention, and Beijing’s efforts to coerce the Taiwanese backfired: Lee Teng-hui, the candidate from the ruling Kuomintang (KMT) whom China suspected had pro-independence inclinations, was elected with a majority instead of the expected mere plurality. According to historians, China’s military threat gave Lee a 5% boost in the March 23 election, the first indication, perhaps, that coercion, rather than cow the Taiwanese into submission, was a counterproductive policy.

Besides exacerbating momentum toward a more Taiwan-centric sentiment across the fledging democracy, Beijing’s military maneuvers (which had begun a year prior in response to President Lee’s visit to the U.S.) likely also convinced Washington of the necessity of providing Taiwan with more means to defend itself as part of its policy under the Taiwan Relations Act of 1979, passed in response to the establishment of official diplomatic relations between the United States and the People’s Republic of China (PRC).

While many historians argue that the mass killings surrounding the 2-28 Incident of 1947 by KMT forces constituted the “birth certificate” of Taiwan as a distinct nation, it could also be argue that the Missile Crisis of 1995–96 represented a breaking point in the Taiwan Strait, when Beijing’s belligerence made it clear it would not countenance the wishes of the Taiwanese to continue down the road of democratization after nearly four decades of authoritarian rule. Years before it became fashionable to do so, China’s actions made it clear that the “one country, two systems” framework, formulated by paramount leader Deng Xiaoping in the early 1980s to handmaiden the reunification of Hong Kong, Macau and eventually unification with Taiwan—was seriously flawed.

Learning from its overreaction and humbled by the U.S. naval deployment, Beijing did not resort to similar intimidation as Taiwanese continued to exercise their democratic right. It even showed self-restraint when, for the first time in 2000, a candidate from the pro-independence Democratic Progressive Party (DPP) was elected in 2000 and re-elected in 2004. Beijing’s rhetoric remained harshly opposed to Taiwan independence, but it had learned that coercion by military means was counterproductive. Instead, Beijing shifted its strategy, and for the next decade and a half it instead attempted to win the hearts and minds of the Taiwanese through economic interdependence, a process that deepened under President Chen Shui-bian of the DPP and accelerated by leaps and bounds under his successor, Ma Ying-jeou of the KMT (2008–16).

Nevertheless, the injury to Chinese pride in 1996, as well as the display of overwhelming U.S. military capability during the Gulf War of 1991, convinced Beijing of the need to modernize its military. The result was an intensive program of double-digit investment, foreign acquisitions (primarily from Russia and the Ukraine) and indigenous resourcing to turn the PLA into a force capable of imposing Beijing’s will within its immediate neighborhood and, eventually, beyond. China’s embracing of an anti-access/area-denial (A2/AD) strategy, supported by the means to enforce such a plan, was a direct response to the humiliation it suffered in 1996 at the hands of what it regarded as a “foreign intervention.”

Thus, a direct line can be drawn between the Third Taiwan Strait Crisis and China’s current efforts to displace the U.S. as the hegemon in the Asia-Pacific. The repercussions of this national trauma reverberate through time and are inarguably part of Beijing’s rationale for creating a new naval architecture all the way to the South China Sea, which it is busy militarizing, and beyond into the West Pacific.

Twenty-one years on, memories of the Crisis—and perhaps the lessons learned from it—appear to have faded. Ask ordinary Taiwanese what happened twenty-one years ago this month, and most will be unable to answer. For most people in Taiwan, therefore, the reality of military force and its implications are now an abstract concept. This partly explains why, despite the existential threat they face, the Taiwanese have not been willing to support spending on national defense that is commensurate with the nature of the external challenge.