Summits are by definition occasions of high politics and drama, so it comes as little surprise that the 15 November meeting between US President Joe Biden and Chinese President Xi Jinping generated immense global interest. It was a useful meeting: Biden and Xi agreed to restart military-to-military communications, curb the deadly opioid fentanyl, fight climate change and discuss risks associated with artificial intelligence. But it was also something less than a reset of a relationship that has been deteriorating for several years and that will remain typified by competition more than anything else for the foreseeable future.

Both leaders came to San Francisco hoping the four-hour meeting (held alongside the APEC forum) would place a floor (to use Biden’s favourite image) under what is the defining bilateral relationship of this era. But it’s worth noting that their motives differed fundamentally. Biden wanted to reduce tensions, since the last thing he needs is another diplomatic or, worse, military crisis at a time when an overstretched United States is contending with Russian aggression against Ukraine in Europe and the after-effects of Hamas’s 7 October terrorist attack in Israel.

Biden, a year away from the 2024 presidential election, also needed to show he could be tough on China, both to parry Republican attacks and to show that he was focused on issues that are touching American lives. In this regard, he successfully pushed China to pledge to do more to rein in its exports of the chemical precursors that cartels in Mexico use to manufacture fentanyl.

Xi, for his part, came to California somewhat weakened, owing to the Chinese economy’s underperformance. Following years of excessive state intervention since Xi came to power a decade ago, youth unemployment is high, exports and foreign direct investment are down, and debt is a major issue. The last thing Xi and China’s economy need are more US export controls, sanctions and tariffs.

What did not change as a result of the conversation was the status of the most contentious issue dividing the US and China: Taiwan. For the past half-century the two governments have finessed the issue, essentially agreeing to disagree over the ultimate relationship between the island and the People’s Republic. Xi sees unification as central to his country’s future and to his own legacy; the US sees protecting Taiwan from coercion as central to America’s standing with its allies in the region and the fate of a rules-based international order. It’s likely that tensions stemming from these contrasting agendas will periodically spike in the future as in the past.

One piece of good news in this context was the agreement to re-establish military-to-military communications, which China cut off in the wake of House Speaker Nancy Pelosi’s trip to Taiwan in August 2022. This is welcome in principle because it reduces the chances of an incident involving US and Chinese aircraft or ships, which operate in close proximity to one another on a daily basis. But whether this channel could be relied upon if an incident occurred, and, if so, to what effect, remains an open question.

The summit appeared to produce the promise of enhanced US–China cooperation on climate change and on regulating the use of AI. What will matter, though, is whether the spirit of that promise ultimately translates into meaningful concrete action.

The summit didn’t appear to bridge Chinese and American differences over the world’s two major ongoing conflicts. China is very much in Russia’s corner, while the US is in Ukraine’s, and China (unlike the US) has distanced itself from Israel in the wake of the 7 October attack, refusing to condemn Hamas and calling for an unconditional ceasefire.

Despite these differences, the two governments don’t appear to be on a collision course in either region. China has held off on arming Russia, and it has a stake in not seeing conflict in the Middle East escalate to a point that jeopardises its ability to import Iranian oil. Xi also wants to avoid a scenario where mounting geopolitical differences over either of these crises provide a pretext for the US to take additional steps that would add to China’s economic difficulties.

But it remains to be seen whether such calculations on Xi’s part will lead China to exercise restraint in the South China Sea, where it has been applying increasing pressure against the Philippines, a long-standing American ally. And the summit provided no reason to believe that China is prepared to use its influence to rein in the nuclear and missile programs of North Korea.

Over seven decades, the modern US–China relationship has evolved significantly. Early on, there was no relationship to speak of, and the US found itself in an armed confrontation with China during the Korean War. That was followed two decades later by a period of strategic cooperation against the Soviet Union, and then to boost trade and investment as a joint priority once the Cold War ended. But economic ties have become a source of friction in recent years, and as China became increasingly assertive, the two countries found themselves increasingly at odds over just about everything, from regional and global issues to human rights.

The San Francisco summit didn’t alter this reality. US–China relations remain an issue to be managed, not a problem to be solved. Expecting anything else from the summit was to expect too much. The world’s most important bilateral relationship continues to be a highly competitive one, and the challenge remains what it was prior to the summit: to ensure that competition doesn’t preclude selective cooperation or give way to conflict.

On Monday, Terry Gou announced his intention to stand as a candidate in Taiwan’s 2024 presidential election. He joins Vice President Lai Ching-te from the ruling Democratic Progressive Party (DPP), Hou You-yi from the Kuomintang (KMT) and Ke Wen-je from the Taiwan People’s Party (TPP). Gou is the billionaire founder of Foxconn, the huge contract electronics manufacturer that produces iPhones and numerous other consumer electronics products.

Gou is using his financial resources to run as an independent, although he has well-established links to the opposition KMT and sought its nomination as a presidential candidate in the 2020 and upcoming elections. As an independent, he needs 290,000 signatures on a petition by 14 November to be on the ballot.

Gou’s pitch is that his business success means he can manage Beijing and strengthen Taiwan’s economy. He claims to be pragmatic and non-ideological (in a veiled criticism of the Taiwan identity politics of the DPP), and he has put forward headline goals such as overtaking Singapore’s per capita GDP. He also makes appeals to the sea goddess Matsu for Taiwan’s peace and prosperity.

There may be enough voter fatigue with the DPP, frustration with a slowing economy and disaffection with the other candidates for Gou to generate campaign momentum using his financial resources. He has no party machinery, but his previous tilts at presidential runs mean he isn’t starting from zero. There has also been speculation that he’s playing a longer game for political influence.

In practice, however, he is offering a similar socially conservative, pro-business message to the KMT’s Hou and the TPP’s Ke. He is likely to divide that constituency even more than it already is, in a first-past-the-post voting system.

He is also entering the race as Lai’s campaign is warming up. Lai visited Paraguay in August, and had stopovers in New York and San Francisco to meet with US officials and the Taiwanese American community. It gave Taiwan’s voters a chance to envisage Lai as president. He conducted an interview with Bloomberg in which he committed to continuing the disciplined foreign and cross-strait policy of President Tsai Ing-wen. Lai’s campaign has so far been without major upsets. His party is united behind him, and he is seeing a bump in polling—one poll has him now over 40% and his rivals drifting further behind.

The usual caveats apply as in any election. Mistakes and crises could yet derail Lai’s campaign. But it’s hard to see Gou’s entry into the race as anything other than making Lai’s run easier.

More broadly, Gou inevitably represents a passing era for Taiwan’s place in the modern global economy. In his business, he brought together Chinese labour, Taiwanese capital and American consumers. Rural workers in China entered the urban wage-labour market mobilised by Taiwanese capital and manufacturing know-how to assemble US-designed products at the lowest cost and for the highest profit in vast Taiwanese-owned factories to satiate American demand for the newest electronic devices.

In domestic politics, Taiwan’s place in this global political economic configuration worked most effectively during the presidency of the KMT’s Ma Ying-jeou from 2008 to 2016. Ma, personally committed to a Chinese identity for Taiwan and accommodating of Taiwanese business leaders, was for a time able articulate a vision for Taiwan between China’s economic boom and America’s corporate and consumer power.

But Ma’s presidency ended rancorously and, as is now clear, the world in which Gou prospered is coming to an end. Chinese Communist Party ideology under Xi Jinping has hardened inexorably and China’s economic model, in which Foxconn has a part, is no longer working. A new vocabulary of security, resilience and strategic competition is shaping politics in Taiwan as elsewhere.

The emerging era has been an easier pivot for the DPP. Tsai has repurposed the party’s sometimes emotive Taiwan-centric politics into a cool-headed argument for Taiwan’s security and democratic resilience in the face of Beijing’s military threats and total policy intransigence.

For Beijing, if the new era means the DPP is starting to look like Taiwan’s natural party of government at the national level, it is an ideological crisis and tactical dilemma.

Beijing has defined the DPP as a party of separatists colluding with foreign forces to prevent unification against the will of the Taiwanese people and what it calls ‘the tide of history’. That argument could work ideologically, though not empirically, if a more Beijing-oriented government came back into power and Beijing could claim that the Tsai presidency was a deviation from the norm. But a win for Lai and a third DPP presidential term would pose a fundamental challenge to the logic of the CCP’s Taiwan ideology.

Under his totalising leadership, it becomes a crisis for Xi, along with the economy, the management of the pandemic and a growing list of other issues.

Tactically, Beijing has already constrained its room to manoeuvre by escalating its threatening military activity in the Taiwan Strait over the past several years. De-escalation is politically impossible, but further escalation becomes more dangerous from a threat baseline that Beijing sets ever higher.

Australia has been sharpening its policy around the concept of deterrence but habitually pursues rigid formulations to address Taiwan’s situation. The government makes rote statements calling for ‘no unilateral change in the status quo’ to manage its cross-strait relations policy.

The post-Tsai era may require more flexibility and dynamism from Canberra to respond to a less stable Taiwan Strait.

In a world where two countries can disagree but not come to blows, Prime Minister Anthony Albanese told the Shangri-La Dialogue in Singapore this year, a central concept is ‘the word of the moment: “guardrails”’.

‘Now, I’m a former minister for infrastructure,’ he continued, ‘so I confess that when I hear “guardrails”, my mind goes straight to the safety barriers on the side of major roads.’

No one wants to go to war over Taiwan, so it makes sense to erect safety barriers if they help avert war. But are guardrails the way to go for Australia on Taiwan?

For the US and China, perhaps. When huge warships and fragile aircraft are at risk of collision, buffers and guardrails can only help. Even so, China’s leadership doesn’t regard guardrails as helpful.

For Beijing it’s not a question of safety barriers along the road but of the road itself. Former foreign minister Qin Gang told the National People’s Congress in March that if the US heads down ‘the wrong path’, then ‘no amount of guardrails can prevent derailing’. Whatever guardrails are in place, ‘there will surely be conflict and confrontation,’ he said.

This talk of taking the wrong road is old-style Mao-speak signalling that President Xi Jinping has struck out on a new and more correct path than the rest of us, and that those taking other roads are heading for trouble, guardrails or not.

In Australia’s case, what guardrails are we talking about in relation to Taiwan?

Under the 1972 mutual recognition agreement, Australia recognised the People’s Republic of China as the sole legal government of China, broke diplomatic relations with Taiwan, and acknowledged the PRC position that Taiwan is a province of China. Australia also tacitly endorsed the US–China Shanghai communiqué of February 1972, which declared that any incorporation of Taiwan into the PRC should not involve an act of war. And, from January 1973 onward, Australia maintained unofficial contacts with Taiwan promoting economic, educational and cultural interests.

If those are our guardrails, then there’s little to worry about. None has been breached in the past 50 years and no Australian government is likely to breach them in the future.

The problem is that Beijing has struck out on a different road and left us guessing where the new guardrails are. It’s all very well for Australia to stick to the main road and uphold the status quo on Taiwan, but Beijing is bent on disrupting the wider regional status quo by shunting the US out of the western Pacific and undermining the security guarantees that come with that. If Beijing gets its way, the status quo on Taiwan is finished too.

As a result, China is tightening its limits of tolerance for what Australia can and can’t do with Taiwan in ways that bear little relation to our 1972 agreement, erecting new guardrails that narrow the policy space for managing relations with Taiwan.

Sticking to our road metaphor, there was a time when Canberra could drive relations with Taiwan on cruise control, simply adhering to agreed precedents for visits, trade negotiations, cultural and educational exchanges, and so on, within the guardrails set by the terms of the 1972 agreement.

No longer. Managing Taiwan relations under Xi’s coercive gaze is like driving down a generous dual carriageway from Sydney to Canberra and finding it reduced to two lanes at Liverpool, then one at Goulburn, and finally a single lane shared with oncoming traffic around Lake George. What else can one do but pull over and hope for the best?

That’s where we are now with Taiwan. Talks on a bilateral trade agreement have stalled. New Zealand and Singapore have trade agreements with Taiwan; Australia doesn’t, even though Taiwan is as important to the Australian economy as it is to Singapore’s and far more important to Australia than to New Zealand. Taiwan is Australia’s fourth largest export partner and the only one of our top 10 export partners with which we don’t have a bilateral free-trade agreement. And, as Rowan Callick reminds us, Australia is desperately trying to diversify its supply chains ‘with rule-of-law jurisdictions that abound in strong business prospects’ to reduce dependence on China. On every count, Taiwan is the most obvious candidate for Australia’s next trade agreement. So why isn’t that happening? Guardrails.

Australia is also reluctant to endorse Taiwan’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the CPTPP. Japan has publicly come out in support of Taiwan’s application, and Tokyo’s formal agreements with Beijing are all but identical to Canberra’s. Why not welcome Taiwan’s membership? Guardrails again.

Taiwan has the world’s most advanced technology in some of the most dynamic industries in the global economy, and yet Australian universities are reluctant to collaborate in teaching, research and development with their counterparts in Taiwan. Why? Guardrails.

China is laying phantom guardrails to direct us where it wants us to go while leaving us guessing where they are. Guardrails you can’t see are instruments of passive-aggressive coercive control. We have laws against that kind of coercive control in Australian domestic life. We need to call it out in our relations with China.

Albanese had more to say on this subject in his Shangri-La speech. Guardrails are necessary, he said, but hardly sufficient. We also need rules. That means nothing less than a rules-based order, embracing principles and ideals along with workable, meaningful and adaptable practices for advancing international relations and security and, one could add, for trade and research collaboration. Those rules include transparency.

Failure to move forward with trade talks, CPTPP entry and university collaborations signals to Beijing not that we are sticking to the rules or to formal agreements—we are already—but that underhanded economic coercion works to limit Australia’s scope for policy initiatives that are perfectly consistent with agreed rules and contracts.

Over the long term, signalling submission to coercion is likely to prove more costly than pushing the guardrails back to where they belong, marking out agreed rules, principles and contracts, and reopening legitimate space for economic, educational and cultural initiatives with Taiwan.

We live in a world where geopolitical stability relies largely on deterrence. But how can we prove that deterrence works?

Consider the ongoing war in Europe. Beginning in December 2021, US President Joe Biden warned Russian President Vladimir Putin that Russia would face severe new sanctions if he invaded Ukraine, to no avail. Then, when the United States and its European allies thwarted Russia’s plans by providing arms to Ukraine, Putin brandished the nuclear option. But Western aid continued unabated.

Did deterrence fail or succeed? Answering this question poses a challenge because it requires assessing what would have occurred absent the threat. It is hard to prove a negative. If I put a sign on my front door saying, ‘No Elephants’, and there are no elephants in my house, did I deter them? It depends on the likelihood of literate elephants entering in the first place.

The Ukraine war demonstrates how risk reduction is not always an either/or choice, but often a matter of degree. Perhaps Putin, counting on a flimsy Western alliance, believed the sanctions would fail. But he has so far refrained from striking supply lines in NATO countries. And while the West, for its part, has continued to arm Ukraine despite Putin’s nuclear sabre-rattling, it has been reluctant to provide longer-range missile systems or modern warplanes.

Credibility is essential for deterrence to work: threatening a maximum response to defend a minor interest strains credulity. This is particularly true when a nuclear power promises to extend its umbrella to defend a distant country.

During the Cold War, the US and the USSR credibly extended their nuclear deterrence to Western and Eastern Europe, respectively. While some analysts were sceptical that the US would risk New York to defend the isolated enclave of West Berlin, the threat worked, partly because of the American troops stationed there. While the so-called Berlin Brigade was too small to defend against a Soviet invasion, it ensured that a nuclear strike on the city would result in American casualties. (At the same time, US forces in Europe, both nuclear and conventional, weren’t a credible deterrent for Soviet military intervention in Hungary in 1956 or Czechoslovakia in 1968.)

This history is relevant to the current situation in Korea, where North Korea has nuclear weapons and South Korea remains bound by the Nuclear Non-Proliferation Treaty. One recent poll found that more than 70% of South Koreans were in favour of their country developing its own nuclear arsenal. Instead, when South Korean President Yoon Suk-yeol met with Biden in April, they agreed that the US would station a nuclear-armed submarine near the Korean peninsula and deepen consultations with South Korea on nuclear and strategic planning, similar to US engagement with NATO allies during the Cold War.

The credibility of US extended deterrence in this instance, much like in the Berlin example, is reinforced by the presence of 28,500 US troops in South Korea. The two countries are locked in a ‘community of fate’ because North Korea cannot attack South Korea without killing Americans. Forward bases in Japan offer the same guarantee. That’s why former president Donald Trump’s frequent musings about the withdrawal of US troops from places like Japan and South Korea were so damaging.

Trump’s presidency also highlighted the ineffectiveness of nuclear intimidation and bribes. When North Korea successfully tested an intercontinental ballistic missile in 2017, Trump threatened ‘fire and fury like the world has never seen’, to no effect. Next, he tried direct diplomacy. After meeting with North Korean dictator Kim Jong-un in 2018—a long-sought foreign-policy goal for the North—he brashly predicted the swift demise of the country’s nuclear-arms program. To no one’s surprise, North Korea didn’t disarm. As Kim sees it, his reputation and the fate of his family dynasty depend on nuclear weapons.

The case of Taiwan, which China regards as its territory, shows how changing circumstances can test tried-and-true deterrence strategies. When President Richard Nixon and Chairman Mao Zedong met in 1972 to restore relations between the US and China, they didn’t see eye to eye on Taiwan’s status. Ultimately, the two sides designed a formula to postpone the matter: the US would recognise ‘one China’, the People’s Republic on the mainland, but only acknowledge that people on both sides of the Taiwan Strait were Chinese. The US provided weapons to Taiwan in accordance with the Taiwan Relations Act but didn’t recognise it as a sovereign country.

For many years, the US refused to say whether it would defend Taiwan. When I visited Beijing as a Pentagon official in Bill Clinton’s administration, my hosts asked if our countries would go to war over Taiwan. I replied that no one could know, noting that even though Secretary of State Dean Acheson failed to include South Korea in America’s defence perimeter in his 12 January 1950 speech, the US entered the Korean War only six months later. Relying on what the deterrence theorist Thomas Schelling called ‘the threat that leaves something to chance’, I warned the Chinese against testing us.

What some call a policy of ‘strategic ambiguity’ might better be described as ‘double deterrence’, designed not only to prevent China from using force against the island but also to dissuade Taiwan from declaring de jure independence. Now some analysts worry that this strategy is eroding as China’s military might grows and US lawmakers visit Taiwan in greater numbers. On four separate occasions, Biden has stated that the US would defend Taiwan, only for the White House to follow up each time with a statement reaffirming adherence to the one-China policy. In this context, steering a path that avoids projecting weakness or provoking escalation will be decisive for avoiding all-out war.

History reminds us that assessing a deterrent’s success can be difficult. There are some factors, like credibility, that are crucial to achieving the desired outcomes. But as dilemmas of deterrence continue to evolve and multiply, studying the strategy’s limits is equally important for finding an approach that works.

Taiwanese voters went to the polls on 26 November in what are called ‘9-in-1’ elections for thousands of local councillors, county heads and city mayors. The results give a sense of the mood of the electorate and party dynamics ahead of the presidential and legislative elections to be held in January 2024.

This year, the Democratic Progressive Party, which has a legislative majority and holds the presidency with Tsai Ing-wen, had a bad night. The DPP actually gained local council seats overall, but of the 22 county heads and city mayors, the DPP won only five, with 13 going to the opposition Kuomintang, two to independents, one to the Taiwan People’s Party. Chiayi county is to be re-run after the death of a candidate during the campaign. The outcome was enough for Tsai to resign as party chair, as has been the practice in Taiwan following a party’s poor electoral showing.

The contest for the mayorship of the capital Taipei was among the notable campaigns. It was won by Chiang Wan-an, who is the illegitimate great-grandson of Chiang Kai-shek. His family story recalls the lurid elite politics of mid-20th-century Republican China. His grandmother, Chang Yaruo, had an affair with Chiang Ching-kuo, Chiang Kai-shek’s son and later president of Taiwan, and in 1942 gave birth to twin boys, Hsiao-chi and Hsiao-yen, who is Chiang Wan-an’s father. Chang Yaruo died suspiciously at the age of 29 when the boys were five months old. They fled with Yaruo’s family to Taiwan in 1949 with the KMT exodus and became successful members of the KMT elite in the authoritarian period under Chiang Kai-shek and Chiang Ching-kuo. Chiang Hsiao-yen was foreign minister in the 1990s and publicly claimed his identity as Chiang Ching-kuo’s son in the 2000s, making his son Wan-an one of the heirs to the Chiang name.

Chiang Wan-an was elected to the national legislature in 2016 when he was just 38, and his family story added frisson to his Taipei mayoral campaign. He addressed it directly on a number of occasions. In a podcast, he spoke about his legacy in personal terms, as a story he learned about in his teens having been subject to years of hurtful schoolyard gossip, and said that his name was his alone. But during the campaign, he also visited a park with former KMT president Ma Ying-jeou to pay respects to a statue of Chiang Kai-shek.

Chiang Wan-an did not campaign as heir to Chiang Kai-shek, however, and his own story embodies Taiwan’s development as a modern democracy as it negotiates its difficult past under authoritarian rule and its republican history. He has benefited from his family’s political capital, as the DPP frequently pointed out, but he himself is a thoroughly modern politician. He is a corporate lawyer, with a US degree, married to Shih Fang-gen, an information technology professional, and they have two young children with another on the way. His campaign emphasised building Taipei into an investment-friendly international city that acknowledged its indigenous heritage, had better childcare access and had improved traffic management.

The DPP candidate in the Taipei mayoral election was Chen Shih-chung, the former health minister who led Taiwan’s response to the Covid-19 pandemic. Taipei has been an unhappy city for the DPP since the 1990s, and despite Chen’s personal approval ratings as health minister, his loss showed that the party misjudged the political dividend coming out of Covid.

The 9-in-1 election results dispel somewhat the aura that Tsai had taken on as she has strengthened Taiwan’s international position through the pandemic and skilfully capitalised on changing US and European sentiment towards China under President Xi Jinping. Her international legacy as a consequential president of Taiwan is assured, but the Taiwanese electorate is unforgiving. Under the constitution, she is limited to two terms, and the election results probably weaken her authority within the DPP to shape its 2024 presidential campaign and manage the party’s factions. It places vice president and sometime rival Lai Ching-teh in a good position to be the 2024 DPP candidate, despite his relative lack of international experience.

For the opposition KMT, the good showing is a morale booster after a difficult period for the party in which it was unable to find an election-winning formula because it was bogged down in internal disputes between modernisers and a deeply conservative old guard. Chiang Wan-an’s win in Taipei points to generational change and a political style that could work for the party, but he is many years away from national politics. The mayor of New Taipei, former police officer Hou Yu-ih, who was comfortably re-elected, is probably the party’s frontrunner for a presidential run.

And as China struggles with its pandemic response, domestic protests, economic indicators and the hard loyalist politics that emerged from the 20th Chinese Communist Party congress, the results for the KMT could ease the pressure in cross-strait relations, at least in the short term. Cooler heads in the CCP system might be able to attenuate the leadership’s fixation on Tsai and the ‘separatists’—who account for the vast majority of the Taiwanese population—and argue that the KMT remains a viable political force that the CCP can deal with, so moving Taiwan down China’s list of crises.

But Taiwanese politics is never not dynamic. While a win for the KMT in the 2024 presidential election is very possible, the DPP has its own equivalent to Chiang Wan-an. Enoch Wu is a young, US-educated former financier and Taiwanese special forces soldier who is the son of former dissident and academic Wu Nai-teh. Wu has built an international media profile through his promotion of civic defence via his NGO Forward Alliance and has announced his intention to run for Chiang Wan-an’s vacated legislative seat.

These two young political figures highlight the genuine political contest in Taiwan’s democracy and how its democratic politics mediate cross-strait relations and Taiwan’s international position. The Taiwanese never quite respond to China in ways that international observers expect, and its domestic politics and history are usually the missing data points in international analyses.