From the onset, however, Beijing proved unwilling to accept such an ambiguous stance. Xi Jinping put Tsai on the spot by explicitly demanding that she clarify her position on cross-Strait relations by declaring adherence to the so-called 1992 Consensus—an understanding reached between two agencies affiliated with the Chinese and Taiwanese governments in November 1992 that expressed a mutual commitment to the one-China principle. The 1992 Consensus has never been recognized as official policy by either government, and the DPP leadership has repeatedly contested its validity in the past. Tsai herself had on earlier occasions claimed that the 1992 Consensus “does not exist,” but during the election campaign and since she was elected president she has studiously avoided taking a clear stance on this subject. In her long-awaited inaugural address on May 20, 2016, Tsai merely stated that she “respects” the 1992 meetings as a “historical fact,” while continuously referring to Taiwan as a “country” (she has since, on another occasion, described Taiwan as “a sovereign, independent country”).

Chinese officials and state media responded harshly to Tsai’s inauguration speech, referring to it as an “incomplete exam paper” and demanding that “Taiwan’s new leadership must complete their currently incomplete response” on the 1992 Consensus, but Tsai has repeatedly refused to alter her stance on the issue. Within a month of her inauguration, the Taiwan Affairs Bureau—Beijing’s primary authority devoted to relations with Taipei—announced that it had suspended the official cross-Strait communication mechanism that provided for regular contact between the two governments, due to Tsai’s refusal to recognize the one-China principle enshrined in the 1992 Consensus. To date, all formal bilateral contacts between China and Taiwan remain suspended, with even Track II dialogue forums ruled out by Beijing.

Most analysts of cross-Strait relations have so far assumed that the Chinese leadership will refrain from making overly provocative and threatening moves absent a substantial policy change in Taipei in the direction of de jure Taiwanese independence. There have been signs, however, that Xi Jinping and his government are no longer satisfied with simply maintaining the status quo of cross-Strait relations indefinitely. Since he became China’s president in 2013, Xi has introduced various changes into cross-Strait policy, most notably pushing Taiwan to conclude the comprehensive trade agreements that triggered the public backlash of the Sunflower Movement. Xi appears to have become impatient about reintegrating Taiwan. In October 2013, he had already stated that the underlying cross-Strait political differences “cannot be passed down from generation to generation,” which was widely interpreted as an indication that he would want to pursue concrete steps towards unification during his tenure. China’s new military strategy, published in May 2015, addresses the Taiwan issue by declaring, “Reunification is an inevitable trend in the course of national rejuvenation.”

These and other official proclamations indicate that Xi regards reunification not as an abstract, remote goal for the distant future, but a more proximate objective that cannot be postponed indefinitely. Xi’s apparent impatience on the issue of unification stands in stark contrast to the vocal resistance to this idea among the vast majority of Taiwanese, particularly the younger generation. A nationwide opinion poll conducted in late May 2016 found that two-thirds of those polled in Taiwan—and more than 80 percent of respondents in the 20–29 age bracket—opposed the prospect of an eventual unification with China, while only 18.5 percent were in favor. The Chinese government is clearly conscious of the need to sway the Taiwanese public in its favor, as evidenced by Xi’s willingness to organize the historic meeting with Ma in November of 2015. The summit meeting was meant to boost Ma’s flagging KMT in the polls, but it ended up drawing a very ambivalent reaction from the Taiwanese public.

 

WITH THE prospects of improved cross-Strait ties appearing more distant than ever in the wake of the DPP’s electoral victory, Beijing began to tighten the screws on Taiwan and on Tsai Ing-wen’s administration long before Donald Trump picked up the phone in early December to embark on an apparent realignment of Washington’s Taiwan policy. Ever since the Third Taiwan Strait Crisis, in 1995–96, the balance of power between both sides of the strait has shifted dramatically in favor of Beijing. Twenty years ago, the Chinese economy was three and a half times bigger than Taiwan’s—today, by contrast, Taiwan’s GDP is less than 5 percent the size of China’s. In terms of military strength, the balance sheet looks even bleaker for Taipei. Beijing now has a large and growing range of levers available to apply crippling pressure on Taipei. Following Tsai’s election victory, it began to subtly undermine Taiwan in the international arena.

On the lowest rung in Beijing’s catalogue of punitive measures is the ability to create a more challenging diplomatic environment for Taipei and to further curtail its access to important international forums and agreements. By early 2016, the number of states that maintain official diplomatic relations with Taiwan had gradually dwindled to a mere twenty-two—each of them small and susceptible to Beijing’s economic pressure. In March, China officially resumed diplomatic relations with Gambia, which had formally recognized Taiwan until 2013, when it chose to break off relations with Taipei. As part of a tacit agreement with the Ma administration, Beijing had initially refused to establish formal ties of its own with the West African nation despite Gambia’s diplomatic overtures. But with Ma gone, the Chinese leadership no longer felt bound by the agreement. In late December, Beijing poached another one of Taiwan’s diplomatic allies, as São Tomé and Príncipe chose to sever ties with Taipei. China’s attrition of Taiwan’s diplomatic allies is likely to continue, with several Central American countries and the Vatican seen as likely candidates for hostile takeovers in the near future.

China has also used its influence to prevent Taiwan from being invited to important international gatherings—a particularly problematic scenario at a time when Taipei is keen to take part in regional integration projects and is trying to conclude free-trade agreements with a number of countries that do not formally recognize it (at present, Taiwan only has such agreements with Singapore and New Zealand). Beijing angered Taipei in early May, when a senior Chinese official cast doubt on Taiwan’s prospects of retaining its observer status at the World Health Organization if cross-Strait relations were to deteriorate further. Previously, in April, a Taiwanese delegation was forced to leave a meeting of the Organization for Economic Cooperation and Development Steel Committee in Brussels following Chinese official complaints—the first such incident since Taiwan joined the committee as an observer in 2005. More recently, Chinese pressure prevented the International Civil Aviation Organization from inviting Taiwan to its annual assembly, which it had been able to attend in previous years, and Taiwan was also barred from sending an official delegation to the UN climate-change conference, as it had in 2015. Additional sovereignty concerns arose in Taiwan when Beijing pressured several countries, including Kenya, Malaysia, Cambodia and Armenia, to deport dozens of Taiwanese passport holders suspected of being members of telecoms fraud schemes to mainland China, ignoring Taipei’s efforts to have them repatriated to Taiwan. These moves were condemned by Taiwan’s parliament as having “seriously infringed upon . . . the nation’s sovereignty.”

Beyond these diplomatic pressure points, China—which is Taiwan’s largest trading partner—can resort to a multitude of economic levers to apply further pressure on Taipei. One of the first steps Beijing took in reaction to Tsai’s election victory was to impose restrictions on the number of Chinese tourists allowed to travel to Taiwan—a measure of both symbolic and economic significance. Tourism accounts for approximately 4–5 percent of Taiwan’s GDP, and residents of mainland China, Hong Kong and Macau make up more than half of all visitors to the island. Prior to 2008, no more than three hundred thousand mainland Chinese visited Taiwan every year, but since then their number has rapidly surged to about four million per year, in addition to 1.5 million visitors from Hong Kong and Macau. The newly imposed restrictions, however, have caused the number of Taiwan-bound mainland Chinese tourists to drop by nearly 30 percent, and Beijing announced that their number would be further reduced to less than 2 million per year. The economic cost of a suspension of tourist visits from the mainland is a substantial but tolerable burden for Taiwan—although it has already stirred up political resistance, as thousands of workers in the island’s tourism industry took to the streets in September to protest against Tsai’s policies. A much more potent weapon in Beijing’s arsenal would be to impose restrictions on Taiwanese business activity in China, considering that key sectors of Taiwanese manufacturing (such as microchip production) are heavily reliant on the mainland. While China’s own economy would suffer from such measures—Taiwan is currently the mainland’s seventh-largest trading partner—Beijing would find it far easier than Taipei to stomach the cost of such a move.

In the context of a potential heightening of China’s economic pressure on Taiwan, one of the DPP’s core election promises—energy reform, including a commitment to phase out nuclear power by 2025—raises questions about the future of the island’s strategic energy security. To date, the DPP has said relatively little about how it plans to replace the energy volumes lost when the nuclear power stations are decommissioned. The proposals made so far include a fivefold growth of renewables (with a focus on the large-scale development of offshore wind farms in the contested Taiwan Strait), a push to increase energy efficiency, a reduction of the power reserves ratio, and a focus on developing a smart grid, which is a prerequisite for the efficient use of renewable energy on a large scale. Besides the likelihood that a potential deficit in indigenous energy generation will have to be compensated by additional external energy supplies along vulnerable sea routes, the reliance on smart grids could also increase the exposure of Taiwan’s critical energy infrastructure to Chinese cyberattacks. At present, Taiwan is already the most frequent target of Chinese cyberattacks, not least since it is considered a “test bed” for subsequent cyber campaigns against targets in the United States.