In mid-October of 2017, 2,000 party leaders gathered while President Xi shared his plans to push mainland China towards “great rejuvenation”. Xi’s vision includes reclaiming control of “greater China”, which consists of Xinjiang, Tibet, Hong Kong and Taiwan.
In Xi’s report, he stated, “We [China] have the resolve, the confidence, and the ability to defeat separatist attempts for ‘Taiwan independence’ in any form. We will never allow anyone, any organization, or any political party, at any time or in any form, to separate any part of Chinese territory from China!”
In alignment with President Xi’s 50-year vision, the Chinese government has been managing various aspects of life outside mainland China to achieve the One-China goal. This includes increasing the PRC’s economic footprint among poorer nations, meddling in Taiwan’s elections and interfering with the day-to-day lives of civilians in Hong Kong.
Smaller nations and how the PRC influences their diplomatic stance
Mainland China exerts control over Pacific nations and territories in multiple ways. All of the methods capitalize on the PRC’s current economic supremacy to carve a dominant footprint throughout the Pacific and beyond, ensuring China’s future as a global power.
Solomon Islands is one of 17 countries that recognize Taiwan’s independence. The Pacific nation now has until mid-September 2019 to decide whether to continue its diplomatic relations with Taiwan, a decision with significant economic implications.
Mainland China is increasing foreign aid investments in the Pacific region, in the form of concessional loans and traditional grants. The conditions that the PRC places on the aid create a strong incentive for smaller economies to sever ties with Taiwan.
As second US President John Adams once famously said, “There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.” The PRC appears to have opted for the latter.
Conditions China places on aid offers
According to a study by AidData, between 2000 and 2014, mainland China gave $75 billion in foreign aid, while lending another $275 billion. The $75 billion in aid came in the form of traditional grants and concessional lending. Concessional loans include a 25% or greater grant or gift element. For comparison, during this same period, the US gave $424 billion in aid.
Unlike many Western nations, “China doesn’t ask for good governance as a precondition“ for loans, such as a commitment to women’s rights or battling corruption. Instead, the conditions attached to mainland China’s aid tend to be economic, raising concerns about possible exploitation of finance-hungry nations in pursuit of the One-China goal.
These conditions often include century-long leases on project sites and equally long leases or holds on local land as collateral. Furthermore, mainland China typically demands that a Chinese company be awarded local infrastructure projects, rather than allowing for open bidding.
For instance, a port on the southern coast of Sri Lanka became a territory controlled by mainland China after Sri Lanka struggled to repay financing obligations. Xi Hua News, the state run press agency of mainland China, released this tweet about the transaction:
In March 2013, local residents of the Micronesian island of Yap posted an online petition, hoping to terminate a major Chinese tourism investment covering 38 square miles of the island. The project included a land lease of 99 years, with an automatic renewal for another hundred years after the initial lease expires.
More recently, mainland China promised Papua New Guinea USD $3.5 billion for a new road network. Meanwhile, Fiji now owes mainland China half a billion dollars, while Tonga owes $160 million – one-third of its GDP – to the PRC powerhouse.
Effects of PRC foreign aid policies on China and Taiwan relations
The Pacific has one of the highest concentrations in the world of Taiwan’s allies. As mainland China increases its economic influence in the region, many worry that these small states will have no option but to sever ties with Taiwan.
Such a change in alliances would significantly impact the already tense relationship between Taiwan and mainland China. In response to this threat, Taiwan President Tsai Ing-wen has accused China of “dollar diplomacy” – buying allies to promote the goal of One-China reunification.
What happens to countries that refuse to comply with China’s terms?
After Palau refused to sever diplomatic ties with Taiwan, the country was removed from mainland China’s Approved Destination Status list. This government-controlled list specifies the countries to which state-run travel agencies are permitted to sell travel tours and packages.
Following the removal of Palau from the list, a report from the South Pacific Tourism Organisation stated that Chinese tourism to Palau dropped by 22.7% between the third and fourth quarters of 2017. The word “Palau” has also been blocked as an internet search term in the PRC, according to a Palau-based Chinese Businessman.
Military conflict concerns
While continuing to exert wide-ranging influence through the power of debt, mainland China has not ruled out the sword as an option to gain control over Taiwan. Although Xi and other PRC officials have publicly announced their desire for peaceful reunification with Taiwan, they have never renounced the use of military force.
Nevertheless, President Tsai Ing-wen continues to oppose mainland China’s One-China policy, releasing this tweet in response to the ongoing Hong Kong protests.
How the US fits into the picture of China-Taiwan tensions
Complicating the global response to increasingly worrisome China and Taiwan relations, the US has long practiced “strategic ambiguity” in its relations with the two governments.
In spite of officially ending diplomatic relations with Taiwan in 1979, the US has maintained substantial informal ties with the state, working within the framework of the Taiwan Relations Act and the Six Assurances.
US-related developments under the Trump Administration
When then-President-elect Donald Trump spoke with Tsai Ing-wen in late December 2016, he became the first US president or president-elect to directly interact with a Taiwanese ruler since 1979. Fifteen months after this widely publicized phone conversation, the US Congress passed the Taiwan Travel Act in March 2018. The act allows for high-level US officials to travel to Taiwan, and vice versa.
More recently, in early June of this year, an “Indo-Pacific Strategy Report” released by the US Department of Defense outlined the nation’s desire to strengthen partnerships with democracies in the Asia-Pacific region – one of which is Taiwan. The report states,
“As democracies in the Indo-Pacific, Singapore, Taiwan, New Zealand, and Mongolia are reliable, capable, and natural partners of the United States. All four countries contribute to U.S. missions around the world and are actively taking steps to uphold a free and open international order.”
This combination of actions and language supporting Taiwan’s sovereignty, and undermining the One-China policy, has drawn sharp criticism from Beijing.
Around the time when the Defense Report was issued, the US received a new arms sales request from Taiwan for tanks, missiles and air defense systems valued at over USD $2 billion. As of July 8, 2019, the US State Department has approved the sale, although US law requires that the department send formal notification to Congress before the deal can be finalized.
Once again, mainland China has taken notice. In response to the proposed arms deal, Chinese foreign ministry spokesman Geng Shuang warned, “We urge the U.S. to fully understand the high sensitivity and serious harm of the issue of arms sales to Taiwan and abide by the one-China principle.” Upon learning of the State Department’s tentative approval of the sale, he added that the action “grossly interferes in China’s internal affairs and undermines China’s sovereignty and security interests”.
It is possible that the arms sales request represents, at least in part, an attempt by Taiwanese officials to capitalize on pro-independence signals from the Trump administration. Nevertheless, fears surrounding Taiwan’s vulnerability and dependence on foreign powers for protection are prevalent among Taiwanese people.
In a survey conducted by Taiwan National Security research in 2019, 69.6% of Taiwan residents did not believe that the Taiwan military could defend the state in the event of a military attack from mainland China.
The triangle of US, China and Taiwan relations will likely grow even more uneasy over the next year. As Taiwan’s 2020 elections approach, the US has offered assistance in countering any Chinese meddling.
According to Randall Schriver, US Assistant Secretary of Defense for Asian and Pacific Security Affairs, mainland China is expected to attempt to “…undermine democracy in Taiwan by meddling in its elections.” Schriver added that it would be “…well-expected that we [the US] would want to see Taiwan be able to preserve its status, free from coercion.”