Beijing's dilemma if DPP wins Taiwan presidential election: what level of response?

As Beijing braces for a possible victory by another independence-leaning president in Taiwan's January 13 election, it faces a fundamental dilemma: how to show its grave displeasure at what it sees as a dangerous drift towards Taiwanese national sovereignty without tipping the region into war.

Each time Beijing has decided a "red line" is crossed, it has upped the ante. It has tried bluster, threats, missiles, fighter jets, charm offensives, temporary blockades, trade restrictions and cyber campaigns.

In less than two weeks its nemesis, the independence-leaning incumbent Democratic Progressive Party led by William Lai Ching-te faces off against the Beijing-leaning opposition Kuomintang's Hou Yu-ih and the smaller centre-left Taiwan People's Party led by Ko Wen-je. Beijing strongly favours the KMT, even as it watches Taiwanese popular opinion increasingly oppose reunification.

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"They don't have many carrots. Hong Kong in 2019, crushing that, it means that [for many in Taiwan and the US] the one-country, two systems is just a dead letter," said Raymond Kuo, director of the Rand Corporation's Taiwan Initiative. "So we're really looking at sticks. But any time the Chinese try to use a stick it just increases support for the DPP and, more broadly, it drives Taiwanese self-identification.

"It just backfires on Beijing."

An obvious response would be for Beijing to repeat what it did after US Representative Nancy Pelosi, then the speaker of the House, visited Taipei in August 2022 - only more so. At that time, it sent military aircraft and ships across the unofficial median line separating Taiwan from mainland China, fired missiles over the self-governing island, staged a temporary embargo that rattled commercial shipping and launched projectiles into Japan's exclusive economic zone.

In an apparent effort to tip voting towards the KMT, 12 Chinese fighter jets and several suspected surveillance balloons crossed the median line in recent days while a naval formation, led by the aircraft carrier Shandong, sailed through the Taiwan Strait, Taiwan's defence ministry said.

But Beijing may expand its playbook.

"I don't see a lot of value in China doing the same thing again," said Bonnie Glaser, managing director of the German Marshall Fund of the United States. "Could they do it? Yes, it gives them another opportunity to hone their skills. But China gets more bang for the buck if it does something different."

In that vein, Beijing could briefly seize or cut off supply routes to small Taiwanese islands a few miles from the mainland or amass troops in nearby Fujian.

While this would further showcase its military might, appeal to Chinese hardliners and give pause to Japan and the Philippines, it risks pushing regional allies further into the US camp. And it could get out of hand if something goes wrong.

"We could see just a fundamental miscalculation post-January," said Michael Hunzeker, associate professor at George Mason University in Virginia, "which is scary."

Furthermore, a large-scale troop exercise in Fujian could benefit US intelligence, which knew more about Moscow's intentions than many Russian officers did before the February 2022 invasion of Ukraine.

Grey zone tactics - the use of non-military moves to strong-arm adversaries - are another option, including cutting internet cables to Taiwan's outer islands - some blamed Beijing when Matsu island lost service in February - or stepping up drone overflights.

In August 2022, China flew commercial drones over the Quemoy archipelago, also known as Kinmen, with footage showing two bewildered-looking Taiwanese soldiers appearing to throw rocks at the craft. The humiliation prompted Taipei to change its rules of engagement, allowing soldiers to fire first at overhead incursions, which happened a few days later.

Grey zone options tend to offer deniability, and drone flights over Taiwan's main island would be less provocative than a Chinese jet fighter.

Also an option for Beijing are various punitive social and economic measures, including suspending parts of their Economic Cooperation Framework Agreement signed in 2010 during the last KMT government. In the first nine months of 2023, mainland China accounted for 35.3 per cent of Taiwan's exports.

After Pelosi's visit, Beijing announced "disciplinary" sanctions against two Taiwanese foundations and blocked imports of Taiwanese fruit and fish products, biscuits and pastries, citing environmental, pesticide residue and Covid-19 concerns.

The use of economic sanctions diminishes the risk of a military miscalculation, squeezes producer groups able to pressure Taiwanese politicians and highlights the might of China's massive economy.

But it also risks fuelling Beijing's reputation as an economic bully, and a response from the Group of Seven nations. A more effective blow to Taiwan's economy would involve blocking Taiwanese semiconductor imports, but this could hurt the mainland more than Taipei. Beijing already faces high-end US export bans on technology with potential military applications.

Mainland China has made a multi-decade effort to contain Taiwan, and its tools have expanded along with its wealth, military prowess and diplomatic clout. Those have helped reduce the number of countries that recognise Taiwan diplomatically and block Taiwan's participation in international entities such as the World Health Organization. But its size and assertiveness have also engendered more resistance.

Another Beijing option: quarantine commercial ships headed for Taiwan, something it has hinted at doing.

In April, in the build-up to then-US House speaker Kevin McCarthy's meeting with Taiwanese President Tsai Ing-wen in California, China's Fujian provincial maritime administration announced plans to inspect cargo ships during a three-day "special joint patrol" of the Taiwan Strait, though it stopped short of boarding any.

"This really got people's attention," said Glaser.

"They could decide to randomly force shipping to go to a port in mainland China before docking in Taiwan. It's a good way to assert soft sovereignty. It would be very disruptive. It would obviously cause insurance rates to spike for shipping. And it would wreak havoc with supply chains."

The area is highly vulnerable to such pressure tactics, with some 90 per cent of Taiwan's trade passing through its four main ports and approximately one-third of global trade transiting through the South China Sea.

"It's not a blockade, which would be an act of war, but it would send a signal," said a former intelligence official with extensive East Asia experience. "It would put Lai on notice to operate carefully."

It would also showcase an increasingly adept China, while the use of coastguard vessels would support its argument that Beijing is only policing its sovereign territory. Beijing now has the world's largest coastguard as its South China Sea ambitions expand.

But this could provoke anger among China's major global trading partners, making Beijing appear less trustworthy at a time when the swooning Chinese economy needs foreign investment.

Analysts stress that each of these options can be used in various combinations and calibrated in intensity.

Some US experts involved in "Track 2" dialogues - meetings of current and former officials and analysts that allow each side to communicate informally - said they doubted Beijing has decided how to respond to any DPP victory. But ministries have likely offered up a menu of options to "punish" Taiwan "separatists" should the election go against mainland China's interests, they added.

In early December, Taiwanese intelligence authorities reported that senior officials from various agencies, including China's defence ministry and the Taiwan Affairs Office, had met to "coordinate" Beijing's efforts to influence Taiwan's elections.

Another option for Beijing would be to do relatively little and play the long game. China's military might is growing rapidly, democracies can be fickle and some US Republican hardliners have recently questioned coming to Taiwan's defence at all.

But Beijing does not have a long track record of standing down over perceived slights.

"Invariably there's an aspect of China's behaviour that remains blunt force trauma," said Rupert Hammond-Chambers, president of the Washington-based US-Taiwan Business Council. "But China is also constantly adjusting certain aspects of the pressure they place on Taiwan."

A recent example saw Beijing exploit Taiwanese fears that Washington only cared about semiconductors and would not come to Taipei's defence if invaded. Polling showed a 10 percentage point drop in America's standing after it declined to directly defend Ukraine, which is not a Nato member.

"China hammered at that, that the US only wants to take your crown jewels," said Hammond-Chambers. "There was more thought behind that, more long term. I don't like it, but it's clever."

China also may expect US cooperation after the summit between presidents Xi Jinping and Joe Biden in California in November. When Lai made a US "stopover" in August, he kept a low profile, did not meet with lawmakers and avoided any provocative statements under pressure from the White House.

But Beijing may not appreciate the US distinction between pre-election neutrality and post-election support for any winner, analysts said.

Beijing views Taiwan as a breakaway province, to be reunited eventually with the mainland, by force if necessary. Few countries, including the US, recognise the self-governing island as an independent state. But Washington is legally bound to support Taiwan's military defence capability and has backed its expanded presence in global health, crime prevention and aviation - objectives Beijing opposes.

Though the DPP's Lai leads in the polls, his election is hardly guaranteed, even after his two rivals failed to forge a unified front. The DPP has suffered corruption scandals, and Taiwan has not voted in the same party three times consecutively since its first democratic election in 1996.

China can also take some solace in the expected strong opposition results in Taiwan's parliament, the Legislative Yuan, a check on DPP power.

"So if I were the Chinese, instead of trying the heavy hand," said Michael Fonte, director of the DPP's US mission, "they would want to work that lever before they start anything beyond that."

Beijing also may opt to stand down until it takes stock of the new president. "It's not the election. It's what he might say afterward," said a source close to the Chinese government.

A longer-term complication, analysts say, would see the KMT win, only to pursue a more independence-leaning course in line with voter sentiment - undercutting Beijing's belief that the DPP is solely responsible over shifting Taiwanese sentiment.

A poll in September found that 48.9 per cent of Taiwanese favoured formal independence, with less than 27 per cent in support of maintaining the status quo.

"Maybe in the long run, a DPP victory in 2024 isn't the worst outcome," said Hunzeker. "The worst outcome could be if KMT wins the election in 2024 and Beijing concludes, we can't even rely on the KMT."

Hunzeker added that November's Biden-Xi summit hopefully established some limits on how far the mainland will go in reacting to the Taiwan election.

"I cannot even venture a guess where that threshold is, but my guess is neither can Chinese planners," he said. "No one knows exactly when we turn from a very reasonable assessment of the scenario to an unreasonable running for the exits. And that can happen quickly."

This article originally appeared on the South China Morning Post (SCMP).

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