Sun, Oct 06, 2024 page1

• Beijing could wage economic war, report says

  ECONOMIC DEFENSE: Researchers recommend Taiwan diversify its energy imports, move businesses away from China and develop new markets

  • AP, WASHINGTON
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  US military officials and analysts have for years warned of possible armed attacks or blockades by China on Taiwan, but a report released on Friday has raised a red flag about possible nonmilitary tactics that could be used effectively against Taiwan.

  Beijing could wage an economic and cyberwar to force a surrender from Taiwan without the direct use of military power, the Foundation for Defense of Democracies (FDD), a Washington-based research institute, said in the report.

  Such a likely, but overlooked, scenario poses a challenge for the US, Taiwan’s biggest ally, it said, suggesting that Washington make preparations for how best to respond.

  

  Taiwanese flags are seen at the Ministry of National Defence of Taiwan in Taipei on December 26, 2022.

  Photo: Reuters

  FDD researchers teamed up with banking and finance experts in Taiwan over two days earlier this year to simulate likely nonmilitary moves by Beijing, such as disinformation campaigns and cyberattacks on infrastructure.

  The exercise was the first of its kind and sought to fill an analytical gap, the think tank said.

  “Modern globalization has created more economic connections that China can exploit to achieve coercive aims,” the report said. “Technological innovation created even more digital connections, offering more possibilities for coercion, including through the targeting of critical infrastructure.”

  Beijing has vowed to take Taiwan, by force if necessary, although Chinese President Xi Jinping (習近平) has promised to make “utmost efforts” to do so peacefully.

  Tensions have flared in the Taiwan Strait since 2016 when Beijing began to increase diplomatic and military pressure on the nation, prompting the US to step up its support.

  Washington, which is obligated under US law to provide Taipei with sufficient military hardware for its defense, has said that it is in the US interest to keep peace in the Strait and to stand with democracies such as Taiwan to maintain the rules-based world order.

  Beijing has demanded the US stay out of Taiwan, saying that it is a purely domestic affair.

  US President Joe Biden has indicated he would send troops to defend Taiwan in case of an armed attack from China, but the US government has yet to formulate a plan to respond to nonmilitary tactics, giving Beijing flexibility in working to undermine Taiwan without triggering an outright response from Washington that a military invasion would, the FDD researchers said.

  Taiwan’s foreign and defense ministries had no immediate comment on the report.

  With an estimated 1 million Taiwanese living and working in China, economic ties have grown ever closer, which has made the possibility of economic coercion, boycotts and military blockades an even bigger threat.

  In the simulation exercises, the experts from the US and Taiwan studied possible moves by Beijing such as conducting psychological wars to erode public trust, banning imports of Taiwanese products or raising tariffs on them, short-selling Taiwanese stocks, freezing bank transfers across the Strait, cutting fiber optic cables, and targeting energy imports and storage.

  Recommendations include that Taiwan diversify its energy imports, relocate businesses away from China, develop new markets, and build alliances and partnerships. The report suggested that the US develop a playbook of options to counter China and improve coordination with allies.

  The Taiwan Academy of Banking and Finance, which worked with the FDD on the simulation exercises, has said that Taiwan must bolster its financial resilience.

  “China could destabilize Taiwan’s financial system to incite social unrest as a precursor to invasion,” the report said.

  Russell Hsiao (蕭良其), executive director of the Washington-based Global Taiwan Institute, said Beijing has already been ramping up nonmilitary measures against Taiwan and that such efforts are expected to intensify in the coming months and years.

  “It behooves the United States and Taiwan to work with allies and like-minded partners to strengthen our collective resilience to China’s weaponization of economic interdependence,” he said.
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