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As of the 13th of Jan. 2024, Taiwan has elected a new president, Lai Ching-te, a member of the Democratic Progressive Party (DPP) nationalist party. Despite Taiwan being a relatively small country, who is only recognized as an independent state by 13 countries, its elections will have global ramifications. Chinese claims over the strait of Taiwan are nothing new, however, having a new president who has been dubbed as a “trouble maker” by Xi Jinping could act as the initial spark of a new war in 2024.

Military, Economic, or a Hybrid War

Recently, the People’s Republic of China (PRC) has intensified its assertive language concerning the situation in the Cross-Straits of Taiwan. Chinese President Xi Jinping has explicitly expressed the Chinese Communist Party’s (CCP) close monitoring of the elections in Taiwan. During a meeting with U.S. President Biden in Nov. 2023, Xi emphasized that the election of the DPP in Taiwan would complicate the prospects of “peaceful unification” and asserted that Beijing would enhance “military, economic, and diplomatic deterrence” against Taiwan.


Despite an increasing number of military activities in the Taiwan Strait over the past year and the ongoing expansion of the People’s Liberation Army, the PRC has maintained relatively low engagement in offensive armed conflicts for a global power. Notably, the aftermath of the Russian invasion of Ukraine has caught Chinese attention. In the Sep. 2022 summit of the Shanghai Cooperation Organisation, Xi expressed apprehension about Putin’s actions and Russia’s increasing isolation from the international community. The cautious approach of Chinese companies in refraining from violating export controls for Russia and avoiding the supply of lethal weapons indicates the PRC’s awareness of potential Western sanctions that could impact its trade-dependent economy.


Consequently, while the election of the DPP’s affiliated president in Taiwan may heighten the risk of a military confrontation in the Cross-Straits region, it remains uncertain whether such a confrontation would escalate into a full-blown war. However, this does not mean that the probability of a war is completely diminished because although it is more rational to avoid armed escalations, political leaders don’t usually follow a rational path.


Additionally, the escalating tensions between Beijing and Washington, exacerbated by Taiwan’s expressions of independence, could heighten the risk of war. The potential for conflict over Taiwan also exists if China sees that U.S.-Taiwan relations pose a significant threat to its “national unity”. Historical observations reveal that military escalations in the Taiwan Strait often coincide with strengthening ties between the U.S. and Taiwan.


For instance, the Taiwan Crisis of 1995-1996 unfolded after former Taiwanese President Lee Teng Hui’s visit to the U.S., where he engaged with numerous US congressmen and delivered a speech at Cornell University. The recent spike in tension, marked by Nancy Pelosi’s visit to Taiwan, follows a similar pattern in this recurring cycle. In the case of war, U.S. intervention would then be a probability leading to global security, political, and economic ramifications which might even exceed those of the Russo-Ukrainian war.


Miliary intervention is not the only resort for Beijing. Alternatively, China might consider an alternative approach involving economic coercion, specifically by increasing Taiwan’s economic reliance on the mainland. President Xi could potentially target Taiwan’s New Southbound Policy (NSP), which aims to enhance economic and social collaborations with South Asian and ASEAN countries.


Currently, Taiwan maintains a positive trade balance only in its relations with ASEAN states and China. As the NSP involves partnerships with countries like Vietnam, Indonesia, and Malaysia, which may seek to avoid tensions with the PRC, it remains plausible that China could obstruct NSP trade, creating hurdles for those seeking partnerships with Taiwan. This would constitute a more “peaceful” approach for Beijing in its aim to stop Taiwanese independence. Alternatively, Beijing might deploy both military and economic capabilities which might lead to a “hybrid war”.


Finally, Lai is expected to follow his predecessor’s path which aimed at keeping the status-quo. Additionally, given the DPP losing its majority in parliament, it is also expected for the new Taiwanese leadership to opt for a “less radical” approach. These factors coupled with President Lai’s words, that he was not planning to declare independence should he be elected President, the possibility of war is not the only possible outcome, allowing us to consider a more optimistic outlook of Cross Strait Relations.


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