Beijing’s Strategic Dilemma on Cross-Strait Relations

U.S. House Speaker Nancy Pelosi’s controversial stop in Taiwan during her Indo-Pacific trip in early August has sparked the worst crisis in the Taiwan Strait since 1995-96. While the issues regarding China’s ongoing harsh responses and trilateral tensions have been brought to the center of public attention, Pelosi’s Taiwan visit itself hit Beijing’s bottom line of the “one China principle.” Her trip to Taiwan, despite repeated warnings from the Chinese government, manifests the increasing difficulty the People’s Republic of China (PRC) is having in seizing the initiative on cross-strait relations.

Beijing’s Dilemma in Stabilizing Cross-Strait Relations Under Xi Jinping and Tsai Ing-wen

Since 2016, when Tsai Ing-wen of the Democratic Progressive Party was inaugurated as the Republic of China (ROC) president, the long-standing tacit agreement between the Chinese Communist Party (CCP) and Kuomintang (KMT) during the Ma Ying-jeou administration (2008-2016) vanished, given the DPP’s ideological tendency toward Taiwan independence. Beijing attempted to address this through an unyielding demand that Tsai make a commitment to the “1992 consensus” as the sole prerequisite to engaging in cross-strait dialogues. However, Tsai did not respond positively in her inaugural address, sowing the seeds for the tensions between the two sides.

As a compromise outcome after the meeting of two semi-official representatives between the PRC and ROC, the “1992 consensus” has been a contentious topic in cross-strait relations. As Beijing and Taipei never signed official documentation but merely reached an oral understanding, this vague consensus is difficult to legally effect as a constraint on either side’s behavior in the cross-strait relationship. Taiwan, then under the first term of President Lee Teng-hui (1988-1996), was still a transitional regime in 1992, which means this consensus was not endorsed by either public opinion or other opposition parties such as the DPP. This explains why the Tsai administration only “respected the historical fact” of the 1992 talks, but never mentioned recognizing “one China” in its formal statements on the matter.

Diplomat Brief Weekly Newsletter N Get briefed on the story of the week, and developing stories to watch across the Asia-Pacific. Get the Newsletter

Another dispute centers on the interpretation of the “1992 consensus.” In the KMT’s view, the PRC and ROC have respective interpretations of “one China” in order to shelve their political differences. On the other side, Beijing insisted on its definition that the meaning of “one China” refers to the PRC as the sole legitimate government with sovereignty over the province of Taiwan. To some degree, the CCP accepted a different understanding of this term with the Ma Ying-jeou administration, as cross-strait relations entered the most stable period under the guarantee of the “One China principle.”

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

In 2014, as the DPP emerged reenergized from the Sunflower Movement, a reversal of the dominance in Taiwanese politics rang alarms in Beijing on the future of the ties between the two sides. Additionally, driven by domestic politics, the KMT gradually took an ambiguous stance on cross-strait relations, and considered climbing out of its conventional image as “pro-China.” For example, the KMT replaced its presidential candidate Hung Hsiu-chu, who advocated “one China with same interpretation,” with Eric Chu ahead of the 2016 election. Even then, the party failed to turn around its fading fortunes in the subsequent general and legislative elections.

Consequently, Beijing tended to be more tough and impatient in coping with DPP authorities. In spite of Xi’s offering of the “One Country, Two Systems” formula for eventual reunification with Taiwan, which was highlighted in a recently released white paper, he never openly abandoned the use of force and even shifted emphasis to employing non-peaceful means. According to a report released by the Taipei-based Institute for National Defense and Security Research, the Chinese air force flew over 380 sorties that entered in or near the island’s air defense identification zone on a record 91 days from January to November 2021, in a show of force.

Furthermore, China’s state propaganda incited nationalist sentiments, creating an environment hostile toward Taipei. In December 2017, a poll released by Phoenix TV, a partially state-owned television network based in Hong Kong, showing that 93 percent of respondents believed the Chinese government should achieve national reunification by non-peaceful means.

The PRC’s sequence of drastic measures has had perverse effects. Domestically, Beijing’s further suppression of Hong Kong’s autonomy after the local protest against the extradition bill sparked international outcry and aggravated the antipathy of the Taiwanese people toward the Chinese government. An opinion survey announced by Taiwan’s Mainland Affairs Council indicated that 79 percent of the public disapproved of mainland China’s notion of “One Country, Two Systems.”

Diplomatically, notwithstanding the end of the “diplomatic truce” that left Taipei with only 14 official partners, more democracies began increasing their engagements with Taiwan. Countries that had formerly played a neutral role on cross-strait issues started emphasizing their common values with Taiwan by setting up semi-official agencies or sending congressional delegations to meet with the ROC leadership. In July 2021, Lithuania became the first European Union member to set up a “Representative Office” in the name of Taiwan, which strained ties between Beijing and Vilnius. In this context, Pelosi’s trip to Taiwan marked the culmination of the Western world’s expression of dissatisfaction with the Beijing authorities through solidarity with Taipei.

How Pelosi’s Trip to Taiwan Embarrassed Xi

The escalation across the strait triggered by Pelosi’s visit to Taiwan was never part of the CCP’s ideal plans for this key and sensitive period in 2022. In the face of the upcoming 20th Party Congress in November, the highest priority for President Xi Jinping is to stabilize the regime and dispel public doubts about his capacity for state governance by boosting economic growth and maintaining a peaceful external environment, especially when facing the domestic opposition to his controversial action of canceling the PRC president’s term limits.

As of 2022, Xi’s strategies on both domestic and foreign affairs have backfired. Beijing’s adherence to the zero-COVID policy toward local outbreaks has heavily weighed on the Chinese economy, as the latest official data registered an annualized GDP growth rate of just 0.4 percent, contracting 2.6 percent compared with the first quarter – the worst quarterly performance since 2020, when the first outbreak occurred in Wuhan.

Diplomatically, China has shaken off the pragmatic attitude of the Deng Xiaoping era and adopted an increasingly aggressive strategy in foreign affairs, placing Beijing’s diplomatic ties with the Western world at the lowest point in decades. In recent years, the growing divergence between China and the United States in trade, political institutions, and security has turned into a comprehensive competition that impeded Beijing’s ambitious blueprint to replace Washington as the leading power in East Asia.

Taiwan is another crucial issue for the CCP. For decades, successive party leaders have considered achieving reunification with Taiwan as asupreme goal that will seal their place in Chinese history, and Xi is no exception. Since 2013, the Xi administration has viewed addressing the Taiwan issue as the ultimate test to accomplish the goal of “Chinese national rejuvenation.”

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

In that context, Pelosi’s meeting with the ROC leadership put Xi in an embarrassing position, especially coming after a two-hour long teleconference between Xi and President Joe Biden on July 28 in which the two leaders reported a consensus on “opposition to unilateral changes to the status quo by either side” across the Taiwan Strait. But rather than canceling the trip, the Biden administration delinked the congressional delegation’s visit to Taiwan from the position of the U.S. government, creating the illusion of Pelosi’s itinerary as a personal visit. While the White House reaffirmed its commitment not to “support Taiwan independence,” it highlighted the coequal relations between the executive and legislative branch in acquiescing to Pelosi’s Taiwan trip.

On the flip side, the contrast between China’s bellicose diplomatic parlance before the trip and its relatively moderate reactions afterward provoked public discontent with the government’s supposed weakness in the face of this moment of “national humiliation.” Practically, not only did Beijing fail to prevent the U.S. congressional delegation’s aircraft from landing in Taipei, but its package of countermeasures against the DPP authorities did not see the People’s Liberation Army (PLA) move as a “last resort” on national reunification, as many Chinese had expected.

Economically, China’s Customs Administration announced a temporary suspension of exports of natural sand to Taiwan and banned more than 2,000 of about 3,200 food products from being imported from the island. Despite the heavy impact on Taiwan’s agriculture and fishing sectors, Beijing’s economic coercion notably left alone Taiwan’s most valuable export, semiconductors, of which mainland China’s demand accounts for 60 percent of the global market.

Militarily, Beijing’s expanded live-fire drills in the water and airspace surrounding Taiwan would not seem to trigger a full-scale war in East Asia. The PLA launched 11 Dongfeng ballistic missiles into the six larger zones encircling the island, with four of the missiles reportedly flying over Taipei. Still, in comparison with the Third Taiwan Strait Crisis, this time the two armies maintained restraint and avoided armed conflict. The military operation, while unprecedented in scale, remained under Beijing’s control, letting the government limit risks while appeasing the hawks within the party and ordinary people filled with nationalist sentiment.

Whether Xi can achieve the desired political outcome at the 20th Party Congress depends on how he responds to Pelosi’s visit to Taiwan. In a scenario where Xi adopts measures seen as either too severe or too weak, it would raise questions about his capacity to deal with Washington and Taipei, two of the most significant factors in Chinese foreign policy. Hence, Pelosi’s trip to Taiwan has placed Xi in an awkward position.

Beijing’s Taiwan Policy Has Failed to Stabilize Cross-Strait Relations

It goes without saying that the political deadlock in cross-strait ties is a combination of factors: Taipei’s reliance on the Western democracies as a shield in Taiwan Strait affairs and Beijing’s fossilized framework that refuses to promote mutual understanding with parties on the other side of the political spectrum. The DPP’s increasingly dominant role in Taiwanese politics has overshadowed the conventional communication bridges built up by the CCP and KMT in recent decades. At the same time, the Taiwan issue has been inevitably internationalized, alongside the China-U.S. tensions and Hong Kong protests, making it even more complicated and harder for Beijing to reach an effective solution.

Breaking the ice on the Taiwan Strait hinges on Beijing’s political wisdom in curbing Washington and other Western states’ influence on Taiwan and reconstructing a communication channel with the Taipei authorities. Xi can only achieve his ultimate goal of being an extraordinary leader by thinking outside the box and putting forward a bright and innovative strategy on Taiwan’s future, as Deng Xiaoping did in 1980 when he proposed the “one country, two systems” policy instead of the old insistence on “liberating Taiwan.”