Tag Archive for: Taiwan

Anticipating what Trump wants, Taiwan puts money in America first

Taiwan’s President Lai Ching-te must have been on his toes. The island’s trade and defence policy has snapped into a new direction since US President Donald Trump took office in January.

The government was almost certainly behind a deft move by the country’s giant semiconductor company, TSMC, to set up three production facilities in the United States. Also, Lai’s administration has stepped up plans to import the kinds of US products that would catch Trump’s eye. It’s pushing for a hefty rise in defence spending, too.

Anyone would think that Taiwan had done its homework and was ready for the new US administration. Or maybe it’s just faster on its feet than most. Senior Taiwanese officials have been carefully studying Trump’s agenda and looking for items they can enthusiastically support and that advance Taiwan’s interests.

Take TSMC’s announcement in early March that it was sinking US$100 billion into the US to build the chip plants, along with a research and development centre, bringing its total pledged investments in the US to US$165 billion. This came after Trump accused Taiwan of stealing the US’s chip business on the campaign trail and threatened a 100 percent tariff on chips.

In Taiwan, there was an uproar. Many Taiwanese believe TSMC, which makes at least 80 percent of the world’s most advanced chips in Taiwan, is a ‘silicon shield’. They see it as crucial for Taiwan’s geopolitical protection as it gives foreign countries an incentive to protect the country. There were worries that if Lai went along with Trump’s push to reclaim the world’s chip industry for the US, the silicon shield would be weakened.

But Lai understood that, if he appeared to be obstructing Trump’s agenda, diplomatically isolated Taiwan might be discarded. Had Trump not won the US election, TSMC probably would not have announced such a large investment. But the gamble paid off. On the day of the announcement of the deal, Trump appeared happy.

‘I would say it came off as an extraordinary success,’ Chris Miller, author of Chip War and a world expert on the semiconductor industry said at a seminar in Taipei in late March.

‘TSMC managed to put itself in a position of a partnership with the new administration,’ Miller said. ‘All these are wins for TSMC and wins for the U.S.-Taiwan relationship as well.’

‘I don’t think the TSMC announcement solves every issue. But it does put the relationship on a much stronger footing.’

Taiwan’s chip industry is unlikely to see significant changes in the next five years. Building plants in America is a sluggish process. Many experts also reckon TSMC is born of a unique industrial and cultural ecosystem in Taiwan that will be extremely hard to uproot and duplicate in the US.

Lai’s moves don’t stop with chips. He also has plans to buy natural gas from Alaska, announced as early as February. Taiwan historically has one of the strongest environmental movements in Asia and most Taiwanese are highly conscientious about conservation. But Lai and his officials noted Trump’s plans to expand the oil and gas industry.

They also noted Trump believes trade deficits are a threat to the US economy. Lai and his team pragmatically hope the procurements will help reduce the US’s deficit with Taiwan, which in 2024 was its sixth largest, and that this will also help with Taiwan’s energy security.

Currently Australia, Qatar and the US are the three largest suppliers of natural gas to Taiwan, with the US supplying 10 percent. When the Alaskan deal eventuates, it’s highly likely that Taiwan will prefer to reduce imports from Qatar, as it will be unwilling to alienate Australia for strategic reasons.

Then, Lai also moved quickly with plans to buy US agricultural products. Taiwan’s foreign minister announced in late March that Taiwan would send a procurement mission to the US this September. Lai has also promised to push the defence budget to more than 3 percent of GDP this year, up from the planned 2.45 percent.

Of course, Lai’s battle is far from over. The Trump administration is highly unlikely to be content with that level of defence spending and will push Taiwan to spend 5 percent or even 8 percent of its GDP on defending itself. And on 2 April, Trump announced a new wave of tariffs in the US’s most aggressive trade action in nearly a century. Among them was a 32 percent tariff on goods from Taiwan, exempting semiconductors. Outraged Taiwanese officials are protesting. Miller says he expects much more friction and a lot of ‘hard-elbowed’ diplomacy between Taiwan and the US for the next four years.

But Taiwan notably proposes no retaliatory tariffs. Lai is obviously still focused on good relations with Trump.

These early moves say a lot about Lai’s leadership style. He and his independence-minded Democratic Progressive Party have revealed a strong pragmatic streak. Lai has also shown he is able to put himself in the minds of Trump and his supporters and anticipate what pleases them.

TSMC’s $100 billion bet: strengthening ties or weakening Taiwan’s leverage?

Taiwanese chipmaking giant TSMC’s plan to build a plant in the United States looks like a move made at the behest of local officials to solidify US support for Taiwan.

However, it may eventually lessen commitment from Washington since it is a step toward US domestic production of semiconductors, reducing reliance on Taiwanese supply. The US’s friends, particularly Japan and South Korea, may make similar moves as they have much the same incentive as Taiwan to strengthen relations with Washington.

For Taiwan, semiconductors have long been more than an economic asset; they have been a strategic shield. The island’s role as the world’s most advanced chip producer has created an unspoken security guarantee, as its survival matters to the global economy. But as TSMC shifts production to the US, that shield may begin to weaken.

Taiwanese officials understand that economic entanglement with the US strengthens political ties. TSMC’s US$100 billion investment is an effort to deepen those ties and ensure that Taiwan remains indispensable to Washington. The goal is clear: by embedding Taiwan into the US economy, its security will become a priority.

Yet shifting production overseas brings unintended consequences. The more the US secures its own chip supply, the less dependent it becomes on Taiwan. Over time, Washington may feel less compelled to maintain a strong military commitment to the island. The very move intended to guarantee US support could ultimately make Taiwan more expendable.

The transactional nature of US foreign policy under President Donald Trump highlights the risks of Taiwan’s strategy. The US has shown that its commitments are not always permanent. When allies are no longer seen as essential, support can fade. Ukraine has witnessed the limits of US backing.

For the US, TSMC’s investment aligns perfectly with economic nationalism and the push for supply chain security. Bringing semiconductor production home reduces the risks that geopolitical instability presents. It also fits neatly into the broader US-China rivalry, as Washington seeks to curb Beijing’s access to advanced chip technology. But in securing its own position, the US may inadvertently erode Taiwan’s leverage.

Taiwan is not alone in using economic diplomacy to bolster security ties. Japan and South Korea are watching closely, knowing that integrating their industries with the US strengthens their alliances. Both nations are making their own semiconductor investments in the US, mirroring Taiwan’s strategy.

For these allies, the calculation is the same: a deeper economic footprint in the US may translate into stronger security commitments, but the longer-term consequences remain uncertain. If Washington’s dependence on Asian chipmakers diminishes, will its military presence in the region follow suit?

Beijing sees TSMC’s move as both a challenge and an opportunity. On one hand, it accelerates China’s race to achieve semiconductor self-sufficiency. China has already invested billions in its domestic chip industry, knowing that reliance on foreign technology is a vulnerability. If the US and its allies shift production away from Taiwan, China may step up its technological ambitions, or act before Taiwan’s strategic value declines further.

On the other hand, any reduction in reliance on Taiwanese chips makes a US military intervention in a Taiwan conflict less certain. The more the US secures its semiconductor supply, the less important Taiwan becomes to its strategic interests. This shift could embolden China to take a more aggressive stance in the region.

TSMC’s expansion into the US reflects Taiwan’s effort to safeguard its future by deepening ties with its most powerful ally. But this strategy carries risks. Taiwan’s greatest asset, its dominance in semiconductor manufacturing, has made it a linchpin of global stability. As that capability is distributed across multiple locations, Taiwan’s strategic leverage may erode.

Taiwan is making itself indispensable to the US economy in the hope that this translates into an ironclad security commitment. But history has shown that alliances built on economic necessity are not always stronger. As the US moves toward greater self-sufficiency, Taiwan must navigate an increasingly complex geopolitical landscape where economic influence alone may not be enough to ensure its security.

The world is shifting, and Taiwan’s bet on economic diplomacy is a high-stakes gamble. The outcome will shape not just Taiwan’s future, but the broader balance of power in the Indo-Pacific.

To counter China’s coercion of Taiwan, we must track it better

The threat of a Chinese military invasion of Taiwan dominates global discussion about the Taiwan Strait. Far less attention is paid to what is already happening—Beijing is slowly squeezing Taiwan into submission without firing a shot.

Instead of launching a full-blown attack, China is ramping up a full spectrum of coercion: political meddling, economic pressure, information operations, legal manoeuvres, cyberattacks and diplomatic isolation, all conducted within the pressure cooker of constant military threats. The goal? Wear Taiwan down bit by bit until it has no choice but to give in to Beijing’s demand for unification.

ASPI has launched State of the Strait, a weekly Substack that keeps track of all the ways China is putting the squeeze on Taiwan. The international community can’t afford to ignore China’s evolving tactics. These coercive strategies don’t just increase tensions; they create a serious risk of miscalculation that could spiral into a larger conflict. That’s why it’s important to keep a close watch on these developments. By tracking China’s actions, policymakers can better understand where the red lines are, strengthen deterrence efforts and help Taiwan remain a resilient democracy.

Chinese President Xi Jinping’s approach is clear: he’d rather pressure Taiwan into submission over time than launch an all-out invasion. In late 2024, US intelligence reported that while Beijing is still committed to taking control of Taiwan, it’s hesitant to start a direct war. China’s coercion tactics are carefully calibrated to stay just below the threshold of outright war, creating a new normal that benefits the Chinese Communist Party while avoiding an immediate international crisis, reflecting Sun Tzu’s principle of ‘subduing the enemy without fighting’.

Taiwan’s fall would have devastating consequences. A war over Taiwan could cost the global economy up to $10 trillion—far more than the economic damage caused by the war in Ukraine or the Covid-19 pandemic. Even without an actual war, ongoing tensions could cause financial chaos, with global markets taking a hit and a potential $358 billion trade disruption if China were to block imports from G7 nations. If China manages to annex Taiwan without starting a war, this would also send a dangerous message to authoritarian regimes everywhere that democracies aren’t willing to stand up against territorial expansion.

While other think tanks and intelligence analysts do a great job covering China’s military and paramilitary moves, there’s no widely trusted platform that tracks the full range of coercion tactics in one place. That’s where State of the Strait comes in. By compiling and analysing data on all aspects of China’s coercive strategy—not just military actions—it fills a crucial gap and gives a more complete picture of what’s happening.

One example of coercion is when countries engage with Taiwan in ways deemed unacceptable, Beijing typically responds with strong rhetoric in official statements designed to deter further interaction. As the graph below shows, in 2024, Beijing’s most common grievance (representing 48 percent of observations) was foreign governments ‘violating China’s One-China principle’—a broad category that encompassed any action perceived as recognising Taiwan as distinct or autonomous, even if it fell short of full diplomatic recognition. Another 22 percent of criticisms stemmed from foreign officials meeting with Taiwanese counterparts, reflecting former president Tsai Ing-wen’s increased participation in international security forums.

What are China’s reasons for criticising countries engaging with Taiwan in 2024? (Source: ASPI’s State of the Strait Database.)

In another form of coercion, Beijing consistently and deliberately revokes the tariff-free status of Taiwanese exports as a means of leverage and punishment, as indicated in the graph below. Taiwan’s Mainland Affairs Council, which is responsible for cross-strait relations policy, has characterised this form of coercion as ‘economic oppression’. In 2024 alone, China imposed trade restrictions on 169 Taiwanese exports, primarily through the removal of tariff-free status; the only exception was polycarbonate, which faced anti-dumping tariffs. Machinery and parts constituted the largest category of Taiwanese exports, followed by plastics.

China lifted its ban on the import of wendan pomelos, a type of citrus fruit from Taiwan, in 2024. That occurred two weeks before the Mid-Autumn Festival (2 September), but the ban was reinstated a week after the holiday (25 September), along with bans on 33 other Taiwanese imports. The pomelo symbolises prosperity and good fortune in Chinese culture and is often given as a gift during festival times.

On which Taiwanese exports did China put new trade restrictions in 2024? (Source: ASPI’s State of the Strait Database)

This is only data on two coercion tactics from one year. In future, ASPI intends to expand State of the Strait by developing a searchable public database and assessment platform. That interactive tool will visualise coercion data across domains and years, distil key insights and help policymakers track long-term trends with greater clarity.

The goal is simple: to help decision-makers and the public understand how China is ramping up the pressure, how close we are to a tipping point, and how these tactics are affecting Taiwan’s government, society, and decision-making. Over time, State of the Strait will become an essential resource for tracking China’s tactics and shaping the strategies to counter them.

China’s shadow fleet threatens Indo-Pacific communications

China is using increasingly sophisticated grey-zone tactics against subsea cables in the waters around Taiwan, using a shadow-fleet playbook that could be expanded across the Indo-Pacific.

On 25 February, Taiwan’s coast guard detained the Hong Tai 58 after a subsea cable was cut in the Taiwan Strait. The vessel was registered to Togo but crewed entirely by Chinese nationals. It had Chinese characters on its hull and operated under multiple identities with conflicting markings, documentation and tracking data. In another incident in early January, the Shunxing 39—a Chinese-owned vessel flagged under both Cameroon and Tanzania—was implicated in damaging a section of the Trans-Pacific Express subsea cable, an important telecommunications link between Taiwan and the United States.

While China has targeted Taiwan’s undersea cables for years as part of its grey-zone operations, it has subtly shifted tactics. Previously, vessels involved in suspected acts of sabotage were registered to China. Now, they are increasingly operating under foreign flags, forming a shadow fleet. This strategy resembles Russia’s subsea cable tactics in the Baltic Sea.

States such as North Korea and Iran often use shadow fleets—ageing vessels registered under flags of convenience—to get around sanctions, to trade or transport illegal or prohibited goods, or to undertake illegal fishing. The vessels are operated through intricate corporate structures, with shell companies established in one country, management based in another and vessels registered elsewhere again, providing states with deniability. They use deceptive tactics including manipulating identification systems, turning off tracking systems and changing names and flags. If caught, vessels can be easily abandoned and their legal entities dissolved, rendering traditional countermeasures such as sanctions largely ineffective.

Since its invasion of Ukraine, Russia has relied on a large shadow fleet, not only to evade oil sanctions but also to conduct a campaign of hybrid warfare against NATO—including allegedly damaging European subsea cables and critical infrastructure. For example, in December, Finnish authorities seized the Eagle S after it allegedly damaged five subsea cables. The tanker was flagged under the Cook Islands but operated by a Dubai-based company with Indian management. Moscow denied any involvement, pointing to the vessel’s non-Russian links.

China has also surfaced in Russia’s operations. In November, the Chinese-flagged Yi Peng 3—which had departed from a Russian port—was suspected of severing two undersea cables, one linking Lithuania to Sweden and another connecting Germany to Finland. In 2023, the NewNew Polar Bear, a Chinese-flagged but Russian-crewed vessel, was responsible for damaging Baltic subsea cables and a gas pipeline. China admitted the vessel was responsible for the damage, but claimed it was accidental.

These cases highlight the value of shadow fleets as tools of hybrid warfare. Subsea cables are notoriously susceptible to accidental and environmental damage. Proving intent to sabotage and holding parties accountable is very difficult.

Despite this, NATO has been working to expose and deter Russia’s hybrid warfare tactics.

Taiwan has taken note. In January, it blacklisted 52 Chinese-owned vessels suspected of operating as its shadow fleet registered in countries such as Cameroon, Tanzania, Mongolia, Togo and Sierra Leone. Following the recent cable-cutting incidents, Taiwanese authorities publicised detailed evidence—including vessel ownership, flag state and tracking system manipulation details—to pre-empt China’s denial. They have also been tracking and boarding suspicious vessels. Taiwan recently raised the alarm about a Russian-flagged vessel lurking for weeks over a subsea cable, recognising the growing coordination between China and Russia in hybrid warfare operations.

While Taiwan has borne the brunt of these efforts so far, China is unlikely to be overly concerned about deniability over future subsea cable sabotage affecting Taiwan. After all, Beijing’s primary goal is to exert pressure on the island, not conceal its intentions.

However, what happens in the Taiwan Strait will not stay in the Taiwan Strait. China’s shadow-fleet tactics are likely to expand across the Indo-Pacific, where maintaining a level of deniability would be beneficial. China already deploys grey-zone tactics in the region, from intimidation of vessels in the South China Sea and targeted incursions in disputed territorial waters, to strategic infrastructure investments that create leverage over its neighbours. Targeting subsea cable infrastructure is another tactic in Beijing’s coercion toolkit—one that targets connectivity while maintaining plausible deniability and operating in the grey-zones of international law and accountability.

The Indo-Pacific—with its vast maritime distances, congested shipping lanes and uneven surveillance capabilities—is fertile ground for such operations. Frequent accidental cable damage and existing territorial disputes may further complicate attribution and response. The region’s economic ties with China would make coordinating any responses even harder.

From filing patents on subsea cutting technology to unveiling a powerful new deep-sea cable cutting device, China’s clearly gearing up to expand its subsea cable operations. As Taiwan works to protect its critical infrastructure, the rest of the Indo-Pacific should enhance regional cooperation and reassess existing deterrence strategies.

If recent incidents in the Baltic Sea and around Taiwan are any indication, disruptions in the Indo-Pacific are not a question of if, but when. The most effective counter to Beijing’s shadow-fleet operations is exposure through public attribution and communication. After all, a vessel cutting cables near a state’s shores may well be flying a neighbour’s flag but taking its orders from Beijing.

Awful optics: political fighting in Taiwan stalls part of defence budget rise

Political fighting in Taiwan is delaying some of an increase in defence spending and creating an appearance of lack of national resolve that can only damage the island’s relationship with the Trump administration.

The main opposition parties support the policy of President Lai Ching-te to lift spending from roughly 2.45 percent of GDP to more than 3 percent, but recently they’ve been unable to resist playing politics with the defence budget in the legislature.

Since Donald Trump has demanded that the United States’ European allies lift defence spending to 5 percent of GDP, and since Taiwan would be the frontline state in a war with China, the US is unlikely to find 3 percent at all sufficient.

Elbridge Colby, Trump’s nominee to become under secretary of defense for policy, said at his Senate confirmation hearing on 4 March that Taiwan should be spending 10 percent of its GDP ‘or at least something in that ballpark.’

The upper echelons of Taiwan’s ruling Democratic Progressive Party say they’ve understood the signal from Trump and are happy to spend cash on more weaponry. ‘We got that message and we’ll be more than happy to talk about strengthening our defence capability,’ former Taiwanese president Tsai Ing-wen told The Times.

The problem is that Taiwan’s legislature usually needs to approve major US weaponry purchases and government plans for indigenous defence capability development. But the legislature is dominated by parties that are soft on China.

Lai Ching-te was elected last year with around 40 percent of the vote, giving him control of the executive branch of government. But in concurrent legislative elections his independence-minded DPP narrowly lost its majority in the 113-seat parliament to the Kuomintang and its smaller ally, the Taiwan People’s Party.

The government and legislature have since been at loggerheads. Lai has done little to reach out and compromise, while the KMT and TPP have frequently been obstructive. Without providing evidence, the DPP says Beijing is behind their obstructions, while opposition lawmakers say Lai is too dictatorial.

There have been many brawls in the legislative chamber (real brawls, with punching, pushing and shoving) and protests in the streets. The executive branch has rejected bills passed by the legislature and sent them back to parliament for reconsideration. Taiwan’s constitutional court, an important democratic institution, had the sole power of legislative review and could act as an arbitrator. But because of one bill rammed through parliament by the opposition, the court has been temporarily paralysed.

The most worrying development came at the end of January when, hours after Trump’s inauguration. lawmakers voted to slash and freeze parts of Taiwan’s defence spending for 2025. Lawmakers cut 60 percent of the defence ministry’s publicity budget, crucial for recruitment. They also froze half the submarine program budget, 30 percent of military operations expenditure and funding for a drone industrial park.

Alexander Huang, director of the KMT’s International Affairs Department, says opposition lawmakers have cut about 1.3 percent of Lai’s proposed defence budget of NT$647 billion (AU$30.8 billion), which was originally 6.6 percent bigger than last year’s. After the cut, the rise is 5.2 percent, amid 2025 inflation expected to be about 2.0 percent. Huang notes that the frozen funds will be released once relevant government agencies give reports to the legislature, and parliamentarians are satisfied that defence projects are efficient and progressing.

Still, as far as optics go, the damage has been done. At Colby’s hearing, two US senators criticised the Taiwanese legislature’s efforts to cut defence spending. Republican senator Dan Sullivan accused the KMT of ‘playing a dangerous game’ while Colby himself found it profoundly disturbing.

For at least the past two decades, many US policymakers have pushed Taiwan to spend 3 percent of its GDP on defence, but it never reached this target. When Tsai Ing-wen took office in 2016, defence spending was just 1.82 percent of GDP, though she raised it to 2.17 percent in 2023. For many years, the budget was also not used as effectively as it could have been. For instance, until last year, conscription was only four months long, and the training was widely criticised for not being serious, looking more like a summer camp.

Lai this year plans to pass an additional special budget to push defence spending from 2.45 percent to more than 3 percent of GDP. The additional budget, which will likely be spent on US weaponry to demonstrate Taiwan’s resolve to Trump, will still need legislative approval. While mainstream KMT and TPP officials support increased defence spending, some in the opposition who are more pro-Beijing will probably object.

The blow-up between Trump and Ukrainian leader Volodymyr Zelenskyy is driving anti-Americanism in some quarters in Taiwan, especially with pro-China KMT politicians. Fu Kun-chi, the KMT’s legislative caucus whip, who has close ties with Beijing officials, pointed to the way Trump publicly scolded Zelenskyy and said Lai could be next in line.

‘Do we really have to spend 10 percent of Taiwan’s GDP or NT$2.86 trillion, on the military? Can the Taiwanese people shoulder this?” he said, according to the Chinese-language United Daily News.

Political scientists also predict it will be nearly impossible to push Taiwan’s defence budget to 8 percent or even 5 percent in the short term.

The KMT’s Huang, who is also a respected military analyst, noted that Taiwan’s overall government budget spending normally stands at about 12 percent to 13 percent of its GDP, meaning that 8 percent of GDP would amount to about two-thirds of Taiwan’s current government spending.

Huang added that it will be difficult for politicians across Taiwan’s political spectrum, including those in the DPP, to win votes if they propose higher spending and higher taxes.

Andrew Yang, a former KMT deputy defence minister, described a defence spending goal of 5 percent of GDP as ‘mission impossible.’

Well-connected Yang said some influential people in Washington were concerned about Taiwan’s political divisions. Yang said it was most important for Taiwan to convince Washington that the two sides had reached a consensus on defence so that the executive branch and legislative branch could focus on allocating resources. But while Taiwan mostly has the resolve to defend itself, all the squabbling will make this difficult.

I, too, got a few things wrong

I agree with Will Leben, who wrote in The Strategist about his mistakes, that an important element of being a commentator is being accountable and taking responsibility for things you got wrong.

In that spirit, I’ve taken up his challenge and have thought back on what I got wrong in a long, long career.

I haven’t chosen easy examples, which are almost a form of self-congratulation. I didn’t think Russian President Vladimir Putin would order the invasion of Ukraine in 2022 because it was not in Russia’s interests. I stand by that. Or that the United States and its coalition of the willing should invade Iraq in 2003 with flimsy evidence. These are good reminders that international relations is not about just rationality.

So, my first mistake is one of tactics. I was wrong to believe that Australia should have tried to repair its relationship with China in 2020. After China imposed trade restrictions, it was better for Australia to hold its position and show that it could weather China’s economic coercion. I stand by my view that the relationship should never have been allowed to get that bad. But once it was, it was the right call to hold firm to show China, other countries and, crucially, the Australian public that Australia had the strength and resilience to survive and even thrive.

The situation would’ve been different had China imposed trade restrictions on iron ore rather than lobsters and red wine—that would have been mutually assured destruction of both economies’ growth. (And on this, we should be watching when China’s African sources of iron ore come on line.) But in the actual situation, affected industries were right to find other markets, showing China that its tactics were counterproductive.

My second is a failure of communication. I’m on the record saying that Australia should not go to war with China in defence of Taiwan. That sounds more definite than anyone can be, given the range of scenarios that might lead to a contingency in the Taiwan Strait. I stated it better when I said Taiwan should not rely on Australia to come to its defence. I regret that I bought into narratives focussing on military options and end games rather than how we can support Taiwan right now.

The starting point for any Taiwan discussion should be the welfare of the Taiwanese people. I worry that some who say they are pro-Taiwan are just raring for a fight and aren’t thinking about the catastrophe this would bring for Taiwan, one of the places I love most on earth. I don’t think they have Taiwan’s best interests at heart.

Being a friend means talking frankly with Taiwanese contacts about risk and the importance of avoiding all-out war. Many in Taiwan understandably want independence. There’s a danger that after 80 years Taiwan sees China as all bluster and bluff and underestimates China’s resolve. I can’t overstate how unwise it would be to take reckless action assuming that Taiwan can rely on external support.

Taiwan’s strategy must remain the same—preserve the status quo and maintain maximum space—in the hope that better options may emerge. I’m a status quo-ist because anything else would be a calamity for Taiwan. But that doesn’t mean acquiescence.

Friends of Taiwan should counter narratives presenting Taiwan as a Chinese province by explaining its history and diversity. I try to explain this in terms of decolonisation. Taiwan is less like Catalonia and more like the Philippines, handed between empires with a distinct identity from a myriad of heritages. Nowhere on earth is quite like it.

My third failure is one of courage. I’m conscious that I have never written anything about Israel or Palestine in all my decades as an international affairs commentator.

The glib answer is that I’m not a Middle East expert. And that’s true. Some people I studied with in Boston have dedicated their entire careers to the Israel-Palestine conflict. They can talk about 1967-this and 1948-that at a level of detail I don’t pretend to understand. As one conflict resolution expert described it to me: ‘you either do Israel-Palestine, or you do everything else’. I chose everything else.

But that’s not the whole answer. I’m happy to do media spots about the NATO Summit, not because I know today’s battlefield details in Ukraine but because I understand conflict concepts such as victory, best alternative and zone of possible agreement.

With Israel and Palestine, the divisiveness of the topic stops me. Whatever I say, I’ll be hated. And I don’t like being hated. This is not something I like about myself.

But if we all stop ourselves, we end up with a shouting match between the absolutely convinced. We lose the opportunity for civil debate that actually changes minds, builds empathy and tries to find solutions. That means understanding both Israel’s sense of insecurity and the hopelessness of Palestinian dispossession. It means taking international law and humanitarian law seriously, whoever breaches it.

So I’ve decided I’ll do something I have never done before. I will speak out, if anyone will publish me. In a decade’s time, I don’t want to regret that I missed an opportunity to be a voice.

States vulnerable to foreign aggression embrace the cloud: lessons from Taiwan

Taiwan is among nations pioneering the adoption of hyperscale cloud services to achieve national digital resilience.

The island faces two major digital threats: digital isolation, in which international connectivity is intentionally severed or significantly degraded (for instance, if all submarine cables are cut), and digital disruption, in which local infrastructure, such as data centres, is inoperable.

To counter this, Taipei is shifting critical public systems and government data to global cloud platforms, and turning global cloud providers Microsoft, Google, and Amazon into partners in national resilience. But this reliance on foreign tech giants raises questions about sustained sovereignty in times of crisis.

Taiwan has learned from Ukraine’s digital survival before and right after Russia’s full-scale invasion in 2022. When threats to Ukraine’s physical and digital critical infrastructure escalated, the government in Kyiv rushed through amendments to its data protection law, permitting government data to be stored on public cloud platforms. This amendment allowed Ukraine to shift critical data and services to cloud infrastructure across Europe. So essential government functions, public services and important private sector functions remained available even when its local physical infrastructure was under siege.

Building on these insights, Taiwan in 2023 launched a four-year, NT1.34 billion ($65.7 million) plan to transition 18 critical civilian government information systems to the cloud in 2023. This includes services such as national health insurance, vehicle management and border control systems. The effort is intended to ensure continuity of essential digital services during disasters and emergencies and to enable swift operational recovery in the case of outages.

According to a press release, this involves ‘cryptographic splitting and data backup mechanisms’. Although details are scarce, the Taiwanese government is presumably distributing encrypted backups of critical national data offshore stored across various cloud providers and retaining exclusive access to the decryption key. As part of this effort, former minister of the Ministry of Digital Affairs Audrey Tang suggested Taiwan would conduct contingency drills that would involve rerouting operations to alternative locations, such as Japan or Australia.

While hyperscale cloud services offer resilience against cyber and physical threats, they prompt questions around data sovereignty and personal data protection: how can a government keep control over data and services managed through foreign commercial infrastructure? How can privacy laws be enforced when data is outside of a nation’s physical jurisdiction?

Taiwan has taken a pragmatic approach, allowing data-holding entities to use foreign cloud infrastructure as long as they can strictly adhere to Taiwan’s privacy requirements. For instance, in 2023 the Financial Supervisory Commission amended its rules to allow the financial industry to use foreign cloud platforms for some operations, provided they met information security regulations, particularly regarding de-identification processes and personal data protection.

Cloud providers are acutely aware of contentions around digital sovereignty and have responded by offering ‘sovereign hyperscale cloud’ solutions. These involve security controls specifically implemented to meet local regulations and requirements, such as restricting data access and management to security-cleared local personnel operating from their national jurisdiction. The Australian Department of Defence is one enterprise that intends to implement sovereign hyperscale cloud, alongside sovereign cloud from domestic cloud providers as part of its cloud strategy. The willingness of global hyperscale cloud providers to adapt their offerings reflects their increasing role in national security.

In Taiwan, the Ministry of Digital Affairs is taking advantage of this adaptability. They have worked to bring the three major cloud providers (Google, AWS, Microsoft) into Taiwan and are actively encouraging them to build local partnerships with the satellite communication vendors to create locally resilient systems that can switch to satellite communications during emergencies and prioritise essential data transmission. These measures are particularly important for a country that imports 98 percent of its energy and faces regular challenges from natural disasters, such as earthquakes and typhoons, as well as military and hybrid threats. By establishing redundant systems through cloud and satellite infrastructure, Taiwan can maintain critical government functions even when local systems are compromised.

Cloud providers face operational risks when supporting nations vulnerable to aggression. When AWS and Azure took over the hosting of Ukraine’s critical systems and data, their cloud infrastructure became a target of state and non-state cyberattacks. Yet this exposure provides valuable cyber threat intelligence, which is then used to improve security products, benefitting other customers.

The deepening integration of technology in national security and digital resilience introduces new dynamics to the relationship between states and global technology providers. These companies are no longer just technology providers; they are custodians of critical national assets. This shift demands a mature framework of collaboration: one that considers tech companies as potentially essential partners in national resilience, including as part of the digital supply chain. This inherently comes with mutual commitments centred around trust, accountability, oversight and responsibility that are sustainable during times of crisis.

Taiwan’s integration of hyperscale cloud into their national resilience strategy shows how nations can leverage leading global technological capabilities while maintaining oversight over their critical systems and sensitive data. This model may well define strategic autonomy in an age where digital resilience depends on foreign-provider infrastructure.

Still not confident enough: China isn’t likely to move on Taiwan in 2025

Despite China’s rapid military improvements, it’s unlikely to use large-scale force against Taiwan in 2025. The Chinese leadership’s concerns over the quality of military command, economic weakening, uncertain social stability and effects of the Trump administration will likely forestall any large scale military manoeuvre.

However, China will continue to ramp up pressure against Taiwan across 2025.

On 6 January, the United States’ new defense secretary, Pete Hegseth, told the Senate Armed Services Committee he believed a Chinese Communist Party fait accompli invasion of Taiwan was the pacing risk scenario for the Department of Defense. He reminded the committee that ‘Xi Jinping has openly expressed his intention to annex Taiwan to mainland China’ and ‘has told his military to be prepared to use force to achieve such an outcome by 2027’.

Like its successes in artificial intelligence, improvements in China’s military should not be underestimated. In several areas, China’s military is now reaching standards typical of the US military. China’s navy is transforming rapidly and by the end of 2025 is expected to have 395 ships, including three operational aircraft carriers. China is also improving its amphibious fleet, acquiring assault ships that can carry large numbers of landing craft, troops, fixed wing drones, armored vehicles and helicopters. In early 2025, there were reports of China building special barges that would support Taiwan landings.

China’s military now has the largest aviation force in the region, with new fighters and stealth aircraft that expand its ability to operate farther from its shores. It is also increasing its inventory of nuclear weapons and now has the world’s leading arsenal of hypersonic missiles. The army has increased the number of troops along the Taiwan Strait and improved its firepower, mobility, and rapid strike capabilities.

Throughout 2024, China’s military and coast guard continued to exercise Taiwan invasion and blockade scenarios. In May, following the inauguration of Taiwanese President Lai Ching-te, Beijing launched large-scale military exercises, surrounding Taiwan within two days. In October, it undertook a second series of drills, taking just one day to implement a mock blockade or quarantine of Taiwan. In December, China staged its largest show of force in decades, showing the world how it could repel a foreign force approaching Taiwan.

The military has dramatically improved its ability to conduct a blockade or invasion, but Beijing will still have doubts. During the release of the 2024 China Military Power Report, senior Pentagon officials said, ‘despite its rapid progress, the force has not yet demonstrated the type and scale of sophisticated urban warfare or long-distance logistic capabilities that would likely be required for operations against Taiwan’. A lack of combat experience is a significant imposition for a force wanting to undertake complicated operations across the Taiwan Strait. Exercising will only get you so far.

Serious questions have also been asked about China’s officer corps and their ability to ‘judge situations, understand higher authorities’ intentions, make operational decisions, deploy troops, and deal with unexpected situations’. Corruption also remains an endemic issue, with China’s military experiencing a new wave of corruption-related scandals over the past two years that has led to the removal of two defence ministers and a high-ranking member of China’s Central Military Commission.

Domestic factors will also influence any decision to use military force. China is facing adverse demographic trends, including an aging population and low birth rates. There are other internal struggles, such as a trend of rising violence, following a string of indiscriminate mass attacks throughout 2024.

China is also seeking to manage a faltering economy, worsened by ballooning local government debt, a loss of investor confidence and the gradual collapse of its real estate sector. Beijing has struggled to stimulate domestic consumption, relying on its growing share of global exports to drive the economy. Researchers at Rhodium Group estimated that China’s GDP was only 2.4 to 2.8 percent higher in 2024 than a year earlier, well below official claim of  5.0 percent growth.

China’s trade surplus reached a new high of nearly US$1trillion in 2024. Beijing will be wary of the impact of a potential trade war with the United States. It will want to strengthen its trade relationships with other partners to reinforce its economy. China has already sought to recalibrate ties with Japan, India and Australia, while doubling down on its engagement with the Global South. Within this context, China will want to perform a careful balancing act over Taiwan. It will not want to damage international relationships by taking unnecessarily aggressive military actions.

Amid the problems, the leadership nonetheless probably has growing confidence that, if called upon, the military will be able to ‘resolve the Taiwan issue’. However, Xi probably hasn’t yet decided to use force against Taiwan.

2027 almost certainly remains a short-term goal for military modernisation, not a date for a Taiwan invasion. Concerns over the economy and social stability will remain as key priorities for China’s leadership.

Xi will also want to carefully assess the Trump administration’s resolve on the Taiwan issue. Trump has hinted at a more transactional approach to Taiwan, suggesting it contribute more to its own security while still supporting Taipei’s right to self-defence. Trump is already threatening tariffs on Taiwan’s semiconductors.

In 2025, China’s military will continue to undertake exercises around Taiwan as part of a broader coercion campaign against Taipei. However, the likelihood of large-scale use of force against Taiwan in 2025 remains low.

Wary of cable sabotage, Taiwan looks to satellites as back-ups

Taiwan is paying attention to seabed risks. It’s suffered undersea cable breaks and it has noted deliberate attacks on such communications lines under the Baltic Sea.

Its response is to build a robust and redundant national system for switching wholly to satellite communications if it must.

All that stands between Taiwan and a near-total internet blackout are 15 undersea cables. In early January, one off Taiwan’s north coast suffered mysterious damage. Taiwan suspected a Chinese-owned ship was responsible. Luckily, the data connections the cable was carrying were immediately rerouted and restored.

The island was not so lucky two years earlier when subsea cables near the outlying Matsu archipelago were cut by two Chinese vessels, perhaps accidentally. Around 14,000 Matsu residents spent more than 50 days with cripplingly slow internet before Taiwan was able to repair the connections.

Elon Musk’s SpaceX, having helped Ukraine, at first seemed like an obvious possible partner for Taiwan. Taiwanese officials even held exploratory talks with the company in 2019. But in early 2022, these talks broke down. SpaceX wanted full ownership of its Taiwanese venture, as it does for such operations in other countries. The government wanted a domestic entity to have at least 50 percent ownership to prevent China from pressuring SpaceX or Musk to withdraw services from Taiwan during a conflict.

Musk also made comments that Taiwan perceived to be pro-Beijing, which soured officials’ feelings. In 2023, he described the rambunctious democracy as an ‘integral part of China’ and suggested the US military was preventing the two sides unifying. As a result, Taiwanese officials are now even leery of relying on Starshield, a business unit of SpaceX in development designed to provide satellite constellations to the US military.

After the dropping the SpaceX project, Taiwan’s digital affairs ministry in 2023 hatched a plan to produce other low earth orbit and medium earth orbit satellite constellations. The program calls for Taiwan to build roughly 700 satellite receivers across the island that will function as hotspots. The plan calls for participation of several satellite providers, both commercial and governmental, to avoid having a single point of failure. ‘The more layers you have, the more resilience you have,’ said Sheu Jyh-shyang, an expert from Taiwan’s Institute for National Defense and Security Research.

As part of this plan, Taiwan’s Chunghwa Telecom, which is one-third owned by the Taiwanese government, signed a deal with London-based Eutelsat OneWeb in 2023 for services from satellites in low Earth orbit. The service began in October. However, the signals were accessed through ground stations in Japan, Thailand and Guam, as Taiwan’s 700 planned receiving stations had not been completed. Chunghwa also signed a deal last August with Luxembourg-based SES to add its medium-orbit satellite services to Taiwan’s space-based communications.

But then, in December, Taiwan’s science and technology minister, Wu Cheng-wen, told foreign reporters that OneWeb’s capacity was too small for the country’s needs. This was hardly surprising: OneWeb’s satellites number in the hundreds, whereas Starlink has more than 6000.

Wu said Taiwan had begun talks with Amazon subsidiary Project Kuiper. This is one of the few ventures that can potentially rival Starlink. Project Kuiper is intended eventually to have more than 3000 satellites in low earth orbit.

However, satellite constellations’ capacity will still be far behind the service offered by Taiwan’s undersea cables, says Sheu. So they will serve as an emergency backup, Sheu says. The project aims to keep government and society working even if all subsea cables are unusable, he says.

The back-up satellite systems would provide internet access for only critical services: government agencies, the military, hospitals and financial institutions. Taiwan would use social media to send messages to the international community about its plight, Sheu says, but the internet would not be used for public entertainment.

Taiwan has pledged almost US$10 billion towards space industry development over the next several years. This includes plans to launch the first of two government-developed indigenous communications satellites by 2026. Taiwan must also develop its own launch rockets. Otherwise, its defence will always be at the mercy of foreign countries, as they will have the final say on Taiwanese satellite launches. Wu said that the government wanted to pick a site in southeast Taiwan for a launch pad and that launches were expected within five years.

In the meantime, the government has come up with interim measures. In October, it unveiled an indigenously developed balloon that acts as a high-altitude communications platform. It can give ground network coverage within 11km and stay airborne for two weeks. Wu describes this as an ‘intermediate solution’ to help quickly restore communications if infrastructure is destroyed in case of natural disasters or ‘other events’.

In January, the defence ministry said it would step up surveillance of areas where subsea cables were located. The navy plans to detect and monitor vessels that are loitering or otherwise engaging in suspicious activities.

Limited quarantine is China’s likely first move in subduing Taiwan

The West had better think carefully about how it would handle China imposing a nominally civil quarantine on Taiwan, because that’s the tactic that increasingly looks like an opening move for Beijing in taking control of the island.

A quarantine, imposing limited controls on access to the island, offered strong advantages for China even before Taiwan said in October that a blockade, surrounding it with forces to cut off all access, would be an act of war. Taiwan’s statement means China is even more likely to choose quarantine as a first step.

This use of the word ‘quarantine’ was coined in an important Center for Strategic and International Studies report last year. The authors foresaw that the Chinese government might ban only certain types of goods from entering Taiwan, or it could forbid ships from using a certain port. The measures would be enforced by nominally non-military forces, such as the China Coastguard.

Conceivably, China could see whether it could get away once with a quarantine action, then, noting success in asserting its authority, do it again and gradually tighten restrictions until they turned into a blockade—salami slicing, as it does in so many areas of international affairs.

First among the inherent advantages of quarantine for Beijing is that, unlike more warlike action, it brings no commitment to go all the way, to conquer or be defeated. It would raise no great expectation among the highly nationalist Chinese people of imminent conquest of Taiwan. So if the measure met stiff resistance, the Chinese Communist Party could back away from it, declaring that some civil administrative objective had been achieved.

Yet forcing it to back down would be difficult for Taiwan and its friends, which is another advantage of the quarantine tactic. They would have to escalate with warships and possibly armed force to stop a China Coast Guard ship from intercepting a freighter, for example. This would put Taiwan and the West in the unfortunate position of looking like the initiators of military conflict. On the other hand, if Taiwan and the West did nothing, and intimidated shipping companies mostly went along with the quarantine, China’s narrative that it had control over Taiwan would be strengthened.

Taiwanese Minister of National Defence Wellington Koo said in October that Taiwan would consider a blockade an act of war and would respond on a war footing after massive Chinese military drills were held near the island.

A quarantine would probably cause little or no disruption to China’s own trade, whereas the risk of military confrontation in a blockade could frighten ship owners into avoiding the Taiwan Strait and Chinese ports near it. This would severely affect China’s economy: most shipments that pass through the Taiwan Strait are Chinese imports and exports

A quarantine would probably involve no dramatic announcements from Beijing. Instead, China could claim it merely needed to expand customs procedures in the Taiwan Strait and surrounding waters where China believes it has jurisdiction. This might involve the Chinese coast guard carrying out inspections of ships and boarding non-Chinese vessels to inspect their paperwork. Vessels that refuse to comply could be forced to turn back or even be hit with water cannons. The coast guard could then restrict vital imports that enter Taiwan, such as energy products. This could cripple the Taiwanese economy and have the effect of shattering the Taiwanese people’s morale and willingness to resist Beijing.

Throughout 2024, China’s coast guard increased intrusive patrols in waters around Taiwan’s outlying Kinmen archipelago, which is close to China.

In a possible early sign of a quarantine tactic, China’s coast guard in February 2024 intercepted a Taiwanese sight-seeing ferry that was sailing around Kinmen’s main island during a period when cross-strait tensions were running high. Chinese coast guard officers boarded the Taiwanese boat and asked to inspect the documentation of the crew, before disembarking a while later. Then, in mid-May, the Chinese state media outlet China Daily said, ‘In the future, this ‘Kinmen model’ of law enforcement inspections can also be applied to Matsu and Penghu islands, and even the entire Taiwan Strait.’

Among the difficult options for Taiwanese and Western response might be beefing up of Taiwan’s own coast guard, which is vastly smaller than China’s, and training it to respond to such tactics.

The US could also impose financial sanctions on China if it imposed a quarantine and persuade other democracies to join in. In doing so, the West would be hitting back at China using tactics that, like China’s quarantine, fall short of war. This might also meet the incoming Trump administration’s goal of weakening China, which it views as an economic competitor.

Whatever the response will be, plans are needed. Quarantine is so attractive a measure for China that Taiwan and its friends must be prepared.