China wants more influence over Taiwan, but it may not matter

Some in Taiwan complain that the ties between their island and China have benefited only a handful of major companies and rich individuals — an argument similar to one often made by Americans about the U.S. relationship with China.

Beijing threatened over the weekend to end regular communication with Taiwan unless its new president acknowledges the so-called One China principle. But that threat is unlikely to sway Taipei.

Tsai Ing-wen, who leads the Democratic Progressive Party (DPP), was sworn in as president on May 20, ending eight years of pro-China Nationalist Party (KMT) rule. The mainland government, unhappy that the less Beijing-friendly DPP is taking over, has tried to apply pressure on the island, but things are stacked against Beijing.

Tsai Ing-wen
Getty Images
Tsai Ing-wen

Traditionally, China has held leverage over Taiwan in three key ways: militarily, economically and geopolitically. By far the most effective method is the military threat, but it's a blunt tool of deterrence: In other words, it would be hard for Beijing to threaten Taiwan with missiles without seriously damaging its own global reputation.

"The military has limited ability beyond deterring the nightmare scenario," according to Thomas Vien, an East Asia analyst at geopolitical intelligence firm Stratfor. That "nightmare" for Beijing, he said, would be Taiwan declaring full independence from the mainland.

"But if you over-deploy it, then you end up receiving a lot of costs that are not commensurate with the benefits you get," Vien said, warning of the "big costs internationally" that would follow direct military threats against Taipei.

And beyond that cost calculus, the benefit of military action is unclear: Threats from Beijing are just as likely to strengthen public support for the DPP and other pro-independence voices as they are to quell those sentiments.

Another way that China likes to lean on Taipei is by isolating it from the global community. Only about 20 countries recognize Taiwan as the "Republic of China" — and that list includes Belize, Swaziland and Tuvalu, but does not include the United States, Japan or Australia.

Beijing insists that it is the sole legitimate government of all of China, including Taiwan, and pressures other nations to officially acknowledge it as such. In March, Beijing announced that it "restored" relations with Gambia, proving to Taiwan (after Tsai's January election) that it was willing to whittle away at its international recognition.

Such punitive measures tend not to play well with the Taiwanese electorate. Neither, however, did China's relatively mild attitude toward Taiwan during the recent KMT years. That's all to say that nothing has worked: the proverbial carrot has no apparent benefit, and the stick has limited use.

Economic power

Last is the economic leverage that Beijing holds over Taipei. About 25 percent of Taiwanese April exports went to China, according to Taiwan's Ministry of Finance. By comparison, about 7 percent went to Japan and 12 percent went to the United States.

Although Vien suggested that cutting off Taiwan economically could be the "most effective tool" for influencing Taipei, he added that "China tends to be ham-fisted about the whole thing — it tends to blow up in their face."

Some in Taiwan complain that the economic ties between their island and China have benefited only a handful of major companies and rich individuals — an argument similar to one made by Americans about the U.S. relationship with China. So among Taiwanese, the economic rewards argument may not hold much weight.

Taiwan, additionally, is trying to diversify its economy away from China, looking to deepen its ties with Japan and potentially join the proposed, multinational Trans-Pacific Partnership. That U.S.-led trade bloc has yet to formally address whether it would include China.

As for the threats of cutting off communication unless Tsai formally acknowledges the formulation of the so-called One China principle that Beijing says the KMT agreed to in 1992, that's unlikely to do much.

"I don't necessarily view this as something that will compel the results that they want," Vien said of Beijing's weekend pronouncements, explaining that Tsai has significant political capital tied up in her stance on cross-strait relations. "The way to change her calculus on that is not to say 'We won't talk to you,' but she's still probably not going to go out there and give them their nightmare scenario."