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Taiwan’s Place in the Evolving Security Environment of       .      -    616 Serra Mall, Room E301 A Workshop Report by the ..- Stanford, CA 94305-6055 Phone: 650.724.5647 and Security Project    aparc.fsi.stanford.edu/research/us-asia-security-initiative

July 2018

U.S.-Asia Security Initiative Taiwan’s Place in the Evolving Security Environment of East Asia

Workshop Report July 2018 Prepared by Kharis Templeman

The 2017–18 Taiwan Democracy and Security Project workshop was made possible in part by generous and continuing support from the Economic and Cultural Office in San Francisco.

Taiwan Democracy and Security Project U.S.-Asia Security Initiative Walter H. Shorenstein Asia-Pacific Research Center Stanford University

U.S.-Asia Security Initiative Executive Summary

he greatest threat to Taiwan’s contin- at Stanford University’s Shorenstein Asia- ued place among the ’s liberal Pacific Research Center, convened a work- Tdemocracies is today external, not in- shop that examined Taiwan’s place in the ternal. The People’s Republic of (PRC) evolving security environment of East Asia. has always posed an existential threat to the Participants from the , Taiwan, regime on Taiwan, but its growing econom- and elsewhere in Asia were experts on a wide ic influence, rapid military modernization, array of economic, diplomatic, and security increasingly assertive maritime claims, and topics. The discussions at the workshop were newly aggressive diplomatic efforts to isolate intended to place Taiwan’s security challeng- Taiwan from international bodies have accel- es in a broader regional context, to consider erated in recent years. Put simply, Taiwan’s possible obstacles to and opportunities for long-term future as a democracy and de facto greater multilateral cooperation on security independent is jeopardized by China’s issues, and to devise a set of recommenda- rise. tions for steps that Taiwan and its friends and partners could take to enhance regional secu- The PRC’s growing power presents diffi- rity relationships. cult security challenges for most of the coun- tries in the Indo-Pacific , not just for REPORT HIGHLIGHTS Taiwan. But these challenges are rarely con- sidered from a multilateral perspective. Most Negative attitudes toward the PRC regime U.S. analyses of security issues in the Western are hardening in the United States. The Pacific tend instead to focus on bilateral or past two years have coincided with a sea trilateral (U.S.-China- X) relation- change in U.S. elite attitudes toward China ships. This pattern is especially common in across many domains. Within diplomatic, mil- discussions of Taiwan’s security, where the itary, business, and academic circles, a large emphasis is on cross-Strait and U.S.-Taiwan majority now view China’s economic, politi- relations to the neglect of Taiwan’s other re- cal, and military trajectories and behavior in gional and global partnerships. much less positive terms than even five years With this context in mind, in 2018 ago. This shift in attitudes extends across the the Taiwan Democracy and Security Project, partisan divide. This pattern is increasingly a part of the U.S.-Asia Security Initiative evident in Congress, where concern about 4

China’s rise is now one of the few issue areas still remaining under a threshold that would on which Republicans and Democrats share trigger a response from the United States and similar views. other nations. Taiwan has little leverage to re- spond to PRC actions on its own. The Trump administration’s response to the challenges posed by the PRC has focused too Taiwan remains an important partner for the heavily on military posture, and not enough United States in the Western Pacific, and the on other elements of American power and U.S. commitment to Taiwan’s security has influence. The National Security Strategy implications for its other partners and al- and National Defense Strategy both desig- lies in the region. Particularly in the face of nate China as a strategic competitor, and Chinese efforts to undermine U.S. influence U.S. Pacific Command has been renamed in Asia, Taiwan has an important symbolic “U.S. Indo-Pacific Command” to make more role to play. A strong U.S. relationship with explicit that America’s competition with the Taiwan sends a powerful signal to other allies PRC now spans both the Indian and Pacific and partners, including , South , Oceans. But while the current administration and the nations of , that the has adopted a more forceful military posture United States remains willing to bear costs in in the region to reassure allies and partners, order to counter growing Chinese power. Any it has also pursued strategies in other do- weakening of America’s long-standing policy mains that have weakened the U.S. position, embodied in the of 1979 including withdrawing from the Trans-Pacific (which stipulates any effort to determine Partnership (TPP), imposing tariffs against the future of Taiwan by other than peaceful allies as well as against the PRC, and taking a means is to be regarded as threat to the peace skeptical view even of bilateral trade agree- and security of the Western Pacific area and ments. The latest federal budget has also put of grave concern to the United States) would the United States on a path of ever-greater have negative consequences for Taiwan, the fiscal risk and reinforced concerns among United States, and the stability of the entire many in the region that U.S. nation- Indo-Pacific Region. al power is in long-term decline. Taiwan is currently vulnerable to PRC pres- The PRC will continue to increase pressure sure and needs to strengthen its resolve to on Taiwan absent a stronger U.S. and inter- take appropriate actions as well as its resil- national response. China’s stance toward ience in the face of an increasingly aggressive Taiwan changed as soon as President Tsai China. Taiwan’s economy is more depen- Ing-wen took office in 2016 and refused to dent on the PRC than that of any other coun- endorse the “1992 Consensus.” Especially try in the world. Its military no longer holds since the Communist Party’s 19th Congress a qualitative advantage over the People’s in November 2017, has pursued poli- Liberation Army (PLA), and its open and cies that shrink Taiwan’s domestic and inter- democratic political system appears vulner- national space. They have more aggressively able to Chinese influence operations and to employed United Front tactics to win allies in both subtle and direct efforts to weaken trust Taiwan and isolate Tsai and the Democratic in government institutions. Nevertheless, Progressive Party (DPP); used both policy car- Taiwan could realistically pursue policies and rots and sticks in an attempt to shape Taiwan’s make investments over the next few years economy in ways that work to Beijing’s ben- that significantly strengthen its military, eco- efit; and ratcheted up military exercises near nomic, and political resilience, and these nec- the island. Each of these steps mimics the essary measures should be encouraged and “salami-slicing” tactics that Beijing has em- supported by the United States. ployed elsewhere to increase pressure while 5

RECOMMENDATIONS FOR with Taiwan in forums such as Asia-Pacific THE UNITED STATES: Economic Cooperation (APEC, in which Taiwan is already a member) and to include Enhance U.S.-Taiwan cooperation across Taiwan in other multilateral conversations multiple arenas. Taiwan’s security envi- and negotiations, including, potentially, the ronment continues to grow more precarious Comprehensive and Progressive Agreement in the face of a rapidly modernizing PLA. The for Trans-Pacific Partnership (CPTPP or “TPP- United States should continue to enhance 11”). and deepen high-payoff exchanges between Consider a “tit-for-tat” approach to respond the U.S. and Taiwan armed forces. In addition, to Beijing’s “salami-slicing” tactics against restarting a process of regular arms sales Taiwan. Beijing will continue to take steps will allow Taiwan military planners to better that further isolate Taiwan in internation- match resources with strategic goals. al arenas, threaten its security, damage its Consider negotiating bilateral trade and in- economy, and undercut its democratically vestment treaties with Taiwan. Under the elected leadership. All of these actions are Trump administration, trade deficits have changes to the relationship that existed be- become a political lightning rod in America’s fore President Tsai Ing-wen took office, and, relations with most of its allies and partners taken together, challenge the credibility of around the world. Both Taiwan and the United U.S. statements about opposing “unilater- States could, however, benefit from entering al changes to the status quo.” Furthermore, into reciprocal tax and investment treaties because Taiwan has limited means to oppose that are politically less sensitive. Progress on Beijing’s actions, these steps will continue issues like these would signal to the region the absent a firm U.S. response. The Trump ad- deepening of U.S. cooperation with Taiwan, ministration should therefore consider taking including the use of non-military elements steps that impose costs on the PRC and ex- of U.S. power to improve Taiwan’s economic plicitly link these to actions that Beijing takes position and to bolster it against the ongoing in its ongoing efforts to undermine Taiwan’s threats posed by the PRC’s coercive actions. interests.

Look for ways for the United States to support RECOMMENDATIONS FOR TAIWAN: Taiwan’s New Southbound Policy. The New Southbound Policy (NSP) offers considerable Taiwan needs to take advantage of opportu- promise over the long term to lessen Taiwan’s nities to be a responsible partner and good reliance on ’s economy and citizen in the region. Taiwanese firms have to address a strategic vulnerability. Taiwan often taken actions in the region that are at shares many of the same strategic concerns odds with Taiwan’s national interests and that ASEAN member countries have about create ill will with neighbors and partners. the PRC, from China’s employment of ag- For instance, Taiwanese firms have been gressive tactics in pursuing maritime claims caught violating sanctions against North in the East and South China Seas, to the tar- Korea, Taiwanese fishing fleets are known geted use of investments and economic ties for illegally fishing in the territorial waters to expand its influence and to further its polit- of ASEAN states, and migrant workers from ical goals. Thus, strengthening economic and Southeast Asia routinely face violations of people-to-people ties between Taiwan and their labor rights when they come to Taiwan Southeast Asia is a sensible way to counteract for work. In addition, local political and com- the strategic isolation that Beijing seeks to munity leaders in Southeast Asia, when criti- impose on Taiwan. The United States should cizing Chinese business practices, usually do encourage ASEAN member states to engage 6

not differentiate between Taiwanese and PRC need to do so in a manner that significantly firms. The NSP could be enhanced with an ex- increases the risks and the costs that China’s plicit communications strategy to rebrand decision-makers in the Communist Party Taiwanese firms and help to establish a rep- leadership would face when contemplating utation for high standard enterprise practices unification by force. that distinguish Taiwan from the PRC. Consider renouncing some of Taiwan’s sov- Taiwan’s security strategy and military re- ereignty claims in the . The form plans must adapt to current realities PRC’s expansive claims to most of the South and future trends. Taiwan’s armed forc- China Sea (SCS) are ultimately based on his- es cannot match the scope, depth, and pace torical claims of the Republic of China (ROC)— of the PLA’s modernization. They no longer that is, of the current Taiwanese state. Taiwan enjoy the resource base that once made this a should distance itself from these claims, ac- feasible strategy. Yet Taiwan’s political lead- cept the core principles of the United Nations ers and military planners have not sufficiently Convention on the Law of the Sea (UNCLOS) adapted to this new reality. Instead, they con- and the Permanent Court of Arbitration 2016 tinue to prioritize advanced, expensive equip- rulings regarding the SCS, and maintain only ment to fight a traditional conflict rather than a territorial claim to Itu Aba. This would fur- asymmetric capabilities that would raise un- ther isolate the PRC in the region and allow certainty in Beijing about the cost and likeli- Taiwan’s position to be more easily recon- hood of success of any coercive military ac- ciled with those of other disputants. Such a tions taken against Taiwan. Taiwan’s national step would also be consistent with the U.S. security team needs to strengthen the resil- position on the SCS, thereby allying Taiwan ience of the island’s economy, infrastructure, with a possible emerging consensus about government, military, and society in the face how to resolve competing claims. of growing pressure from Beijing, and they Session I: U.S. Alliances and the Political and Military Situation in the Western Pacific

he workshop began with a discussion 4. maintaining an unrivaled innovation base of America’s perspectives on security that supports U.S. security needs trends in East Asia. Several participants T Participants emphasized that the lan- noted the striking difference in tone between guage in these strategy documents reflect- the first National Security Strategy (NSS) and ed a broad, bipartisan hardening of opinions National Defense Strategy (NDS) issued by about China’s current behavior and future the Trump administration and those issued intentions, and a firm intent to counter and by the Obama, George W. Bush, and Clinton place into proper context the PRC’s growing administrations. The NSS puts competition economic and military power. Among diplo- between states, rather than international ter- matic and foreign policy practitioners, the in- rorism, at the center of U.S. security strategy, ternational business community, and elected and both reports name China and as officials in the United States, negative views of “revisionist powers” that want to “shape a the U.S.-China relationship have become in- world antithetical to U.S. values. . . .” China, in creasingly common. One speaker noted that particular, is mentioned frequently as a “stra- if Hillary Clinton (rather than Donald Trump) tegic competitor” everywhere in the world, had become president, the NSS would still and an adversarial state that seeks to replace have focused much more than the Obama the United States as the dominant power in administration had on the challenges that the Indo-Pacific region. In response to this China poses to U.S. security interests. That is, strategic challenge, the NDS names four - concerns in the United States about China’s jectives with respect to China: rising global influence are now bipartisan and 1. maintaining a favorable regional balance have been growing for some time. Far fewer of power in the Indo-Pacific region Americans are willing to defend as accept- able Chinese behavior in the world today or 2. defending allies from aggression and co- to argue that the current state of the relation- ercion ship is working to the benefit of U.S. national 3. ensuring that common domains, in par- or of Asia’s overall regional and global inter- ticular the South and East China Seas, re- ests. main open and free to all The implications of this shift in attitudes in Washington, DC, are important for U.S. 8

partners and allies in the Indo-Pacific region. very active in trying to convince President Notwithstanding possible developments on Trump of the high costs of any military action the Korean , the Trump adminis- on the Korean Peninsula and—with apparent tration is looking across the region to bolster success—to explore options for greater diplo- U.S. military presence, increase forward de- matic engagement with . ployed capabilities, strengthen partnerships, Among all the U.S. allies and partners and build new networks of aligned states. in the region, perhaps none has more to gain Nevertheless, several participants expressed from the shift in attitudes in Washington than concern that the Trump administration is put- does Taiwan. On this topic, there were sever- ting too much emphasis on military dimen- al points of agreement. First, China’s rise as a sions versus other diplomatic, economic, and strategic competitor to the United States in cultural pillars. In the U.S.-Japan relationship, the region poses a grave threat to the long- this concern is manifested by Japanese worry term security of Taiwan and its survival as a over Trump’s language on trade and with- and de facto independent drawal from the Trans-Pacific Partnership. state. Second, Beijing’s long-term goal re- Japanese prime minister Abe has invested mains to be the weakening of U.S.-Taiwan much time building a personal relationship bonds, so that unification becomes all but with Trump in an attempt to persuade him to inevitable should China’s power continue to modify his trade policies with Japan. In the grow as the American presence in the region U.S.- relationship, this concern is and its capacity to deter PRC threats begins directed toward the administration’s rhetoric to wane. Third, the cross-Strait relationship about military options to eliminate the threat has deteriorated considerably since the 2016 of a nuclear North Korea. As such, Republic of elections brought President Tsai Ing-wen and Korea (ROK) president Moon Jae-in has been

: Gi-Wook Shin (left, standing), director of Shorenstein Asia-Paci c Research Center, makes opening remarks at the workshop. 9

a DPP majority into office. Beijing has ramped bilateral economic relationship, possibly up pressure on the Taiwanese political lead- through a bilateral free trade agreement, or if ership and people via incremental tactics, that proves too difficult in the current politi- including by increasing military patrols near cal environment in Washington, then perhaps Taiwanese airspace, blocking Taiwan’s par- beginning with a bilateral investment agree- ticipation in international forums, poaching ment and tax treaty. The United States could or coercing diplomatic allies, diversifying also explore ways to be supportive of the Tsai and intensifying its United Front operations administration’s New Southbound Policy, in Taiwan’s domestic politics, and increasing whose central aims are to increase economic efforts to attract Taiwanese with special skills links with Southeast Asia and reduce Taiwan’s to jobs in mainland China. Finally, these ac- economic dependence on the PRC. A fourth— tions present a problem not just for Taiwan and critical—step has to be taken by Taiwan. but also, increasingly, for the credibility of the It must be willing to make the necessary eco- United States. If the American commitment nomic investments and sacrifices to increase to Taiwan is seen to diminish in the face of its own military preparedness, to improve the Chinese pressure, it will start to erode confi- training and morale of its men and women in dence in relations with Taiwan and also with uniform, and to ensure that its armed forces other U.S. partnerships and alliances in the are fully committed to the defense of Taiwan region. and will prove resilient in the face of PRC co- ercion. Participants had several suggestions for how U.S.-Taiwan relations might most ef- One point of debate was the suggestion fectively be strengthened to counteract the that the United States link its Taiwan policy current PRC strategy. One obvious step is for closely to other aspects of the U.S.-China rela- the United States to reestablish a regularized tionship, including questions about the bilat- process for approving arms sales that would eral trade imbalance or cooperation on North complement Taiwan’s own long-term de- Korea. President Trump himself seemed to fense strategy. The willingness of the United consider this kind of approach to Taiwan, but States to do this helps increase the resolve of his administration has recently backed away the Taiwan people and provides an important from linking issues across different issue signal of American commitment to Taiwan’s areas. There was disagreement among partic- defense. A second step is to increase high-lev- ipants about whether Taiwan policy should in el diplomatic and military exchanges, which fact stand apart from other U.S. interests and for decades have been limited in deference partnerships in the region: one person noted to Chinese sensitivities. The Taiwan Travel that the Obama administration scrupulously Act, signed by President Trump into law sev- avoided bringing Taiwan into broader discus- eral weeks after this workshop, is consistent sions, which did not actually deter PRC be- with this recommendation. Third, the United havior that was at odds with both Taiwanese States could commit itself to enhancing the and American interests. Session II: Trade and Economic Relations in the Western Pacific

he discussion in this workshop panel by contrast, participants were generally quite covered trade and economic relations concerned about the Trump administration’s Tin East and Southeast Asia, and began use of punitive trade measures at the same with a consideration of how China’s rise and time that the United States is also seeking newly ambitious regional economic initiatives closer security ties and greater burden-shar- are affecting the long-term strategic picture ing from these same states. The absence of in the region. any apparent coherent linking of security and economic policies was a major concern Most participants acknowledged that throughout the discussion. the Trump administration’s trade policy to- ward the region to date has represented a This worry stems in part from China’s major paradigm shift. Rather than advocating own increasingly ambitious attempts to cre- for regional trade agreements such as the TPP ate alternative economic institutions and or the Regional Comprehensive Economic initiatives that would provide considerable Partnership (RCEP) and viewing these as short-run benefits to most other countries competing visions of how to set the trade in the region, while also binding the re- architecture for decades to come, President gion’s economies more closely to its own. Trump’s approach has been instead to focus Two are particularly noteworthy: the Asian on bilateral relationships, and in particular to Infrastructure Investment Bank (AIIB) and emphasize trade deficits, aggressive use of the Belt and Road Initiative (BRI). The AIIB, enforcement tools for trade agreements, and announced in 2013, has turned out to be a even a rethink of World Trade Organization rather conventional multilateral investment (WTO) rules. This approach has gained the bank. The AIIB obtained considerable buy- most credence with respect to China itself. in from other countries—it had fifty-sev- The American business community, which en founding members—and appears to be has in the past served as the great champi- evolving toward a collective institution that on of free trade and investment, is now much generally will follow global best practices in less sanguine about China’s practices. Many lending and operations, due to the influence believe that it is time to take a harder line of the European members on the board. Thus, against Beijing’s trade policies. With respect it poses little threat to the current region- to America’s allies and partners in the region, al economic order, and is instead, in fact, 12

cooperating with other multilateral banks to concessions, and widespread corruption in fund projects already underway. Overall, it projects. Ruling elites in these countries want appears to be turning into a “run-of-the-mill” to have high-profile development projects development bank, and participants were in that can start immediately and that they can agreement that, at the current time, the AIIB tout as significant accomplishments. In other does not pose a significant challenge to exist- words, these leaders often place a high value ing multilateral institutions. on BRI resources that support their political rhetoric, no matter how adverse the long- The Belt and Road Initiative, by contrast, term consequences might be for accepting has been much less well defined, and so as- BRI projects on terms that favor mostly (or sessing its significance is much more difficult. only) the PRC. PRC motivations behind the BRI actually ap- pear to be economic first, with military and Nevertheless, there was some debate strategic interests as important secondary among the participants about how seriously political considerations. After decades of do- to view the economic challenge that the BRI mestic investment, the PRC finds itself with poses to U.S. interests in the region. One par- big excesses in infrastructure and building ticipant pointed out that most BRI projects capacity. Beijing utilizes the BRI to redirect were likely to be unprofitable for many years, if otherwise idle domestic assets—including not forever, and that the United States should unemployed PRC citizens—overseas. China view this initiative as more likely to become a also has a key political rationale: to present long-term liability for China than a pathway BRI as the PRC’s ongoing effort to play a cen- to sustained economic and political power tral role on the world stage. It also reinforces and influence. Another noted that the United the narrative that is a leader who States is not properly postured or equipped is restoring China to its “rightful place in the to try to counter or compete directly with sun,” and it holds special appeal to Party and Chinese-led infrastructure projects in the re- military leaders who want to reduce U.S. influ- gion, even if it made strategic sense to devel- ence in the region. op a head-on response to the BRI. However, others also noted that the U.S. military has One participant noted that the BRI is as become concerned about the PRC’s objective much a public relations campaign as an “influ- of increasing its ability to project power in the ence through development” plan. There is no region, particularly through control of strate- registry of BRI projects, nor is there any con- gic assets such as , roads, and railways crete blueprint for constructing cross-border included in the BRI. infrastructure according to a rational plan. Double-counting of projects is rampant and The discussion also included consid- memoranda of understanding (MOU) are eration of Taiwan’s New Southbound Policy often issued multiple times for the same ob- (NSP) in the larger context of the PRC’s jectives. Nevertheless, Beijing has been very ambitious trade and economic infrastruc- skillful in fostering a narrative that the BRI ture projects in the region. The NSP is actu- is the only serious approach to large-scale ally the fourth iteration of a policy initiated infrastructure construction in , under President Lee Teng-hui in the Southeast Asia, and . The prom- to strengthen Taiwan’s engagement with ise of infrastructure development that con- the people and economies of Southeast Asia. tributes directly to economic development The primary rationale for the NSP is to diver- is especially attractive to leaders in the Indo- sify Taiwan’s own economy and trade away Pacific region, despite concerns about likely from its current situation of overdependence “debt traps” that come with a huge influx of on the Chinese mainland. But the NSP also migrant labor brought in from the PRC, land has a sound economic foundation: ASEAN 13

: Robert Sutter (George Washington University) presents the lunch keynote address, “Will the Trump Administration Support Taiwan Despite China’s Objections?”

countries are likely to have the fastest grow- Several participants noted opportunities ing economies in the Indo-Pacific region over for Taiwan in the current trade and economic the next two decades, so it now also makes environment that should be more effectively economic sense to relocate to Southeast Asia pursued as part of the NSP. One suggestion much of the manufacturing that Taiwanese was to work hard to establish a reputation for firms had initially moved to mainland China. Taiwanese firms and business leaders as more Taiwan also hosts a large number of migrant ethical and law-abiding than those from the workers from Southeast Asia, and within PRC. At the moment, most Southeast Asians Taiwanese society, there are a significant do not differentiate between the two, with number of cross-national marriages that have the result that Taiwanese-owned companies strengthened demographic connections with sometimes get targeted in protests aimed the region. Among the elements of particular against PRC provocations, for instance, in the emphasis in this version of the NSP are peo- South China Sea. ple-to-people ties: increasing the numbers Finally, this panel featured a lively dis- of students from Southeast Asia studying in cussion about whether cross-border econom- Taiwan, strengthening international coop- ic interactions should always be assumed to eration between NGOs and other non-state be positive-sum relationships, or whether the actors, and ramping up tourism and academic strategic element to trade actually has a ze- exchanges. ro-sum element to it. Participants mentioned 14

several examples in which PRC-led compe- reducing the flow of tourists to South Korea tition to build infrastructure was producing after agreed to host the U.S. military’s clear benefits to the region as a whole. But in Terminal High Altitude Area Defense (THAAD) the Taiwanese case, at least one participant missile system on its sovereign territory; was much more wary of the benefits of eco- blocking exports of rare earth metals to Japan nomic integration with mainland China, not- due to differences in policies; ing that Beijing has repeatedly demonstrat- and halting the purchase of Filipino bananas ed a willingness to use economic leverage to after a spat over rival claims to Scarborough impose costs on countries in retaliation for Shoal in the South China Sea. Taiwan is even strategic behavior it perceives as contrary to more vulnerable to this type of punitive eco- its interests. Examples of this kind of puni- nomic coercion. tive behavior from Beijing include drastically Session III: Maritime Issues in the South and East China Seas

his session focused first on Chinese has played an increasingly central role in the policies, strategies, and goals in the PRC’s evolving efforts to achieve its ultimate TSouth China Sea (SCS). As summarized goals in the SCS. Maritime tactics have in- from the discussion, the PRC’s long-term ob- cluded increasing the number of PRC fishing jectives are: fleet and maritime patrols in territorially dis- puted as well as sovereign waters, and using • to achieve and maintain sole operational non-lethal means to establish and maintain a control over the SCS presence on the land features in the SCS and • by doing so, to acquire unrestricted to deny this presence to other claimants. double access to the Pacific and Indian Thus, it is no longer enough to focus on Oceans the PLA Navy as the main actor in this region. • to generate a fait accompli of PRC military The PRC military has three separate compo- and economic primacy in the Indo-Pacific nents, each of which has its own sea force: region • the PLA, which includes the Navy • to preempt threats to the PRC’s territorial • the People’s Armed Police (PAP), which integrity oversees the PRC Coast Guard • and finally, to make further progress to- • the People’s Armed Forces Maritime ward the eventual political absorption of Militia (PAFMM), which nominally con- Taiwan sists of security units responsible for Given long-standing U.S. superiority in overseeing PRC fishing fleets “hard power” in the region, the PRC has pur- All three forces cooperate in training, sued a kind of asymmetric power strategy but also in real-world operations and in de- to advance toward these long-term objec- velopment of maritime doctrine. The PAFMM tives. The so-called Chinese maritime militia is developing into a full-time, robust maritime 16

force that claims civilian identity, but which and lighter than conventional U.S. Navy - is actually composed of elite military units ships into the region—or, as one participant that do not engage in fishing but instead are put it, to “Gulliverize” the U.S. security pres- involved in intelligence gathering and escort ence. Another option is for the United States protection details. While the PAFMM “fishing to focus on closer cooperation, including joint fleet” moniker is known to be a cover, these patrols, with the other claimants in the South types of intentionally deceptive PRC practic- China Sea, which would, in effect, backstop es complicate the calculus of foreign militar- their claims with American military power. ies operating in proximity and throughout the Here the problem is that the United States, region. following UNCLOS, does not take a position on most of the territorial claims made by other There was general agreement among states in the region. An additional approach the participants that the response of the would be for a consortium of partner states United States to these PRC tactics has not (the United States, Japan, , , been very effective to date. The U.S. Navy has and possibly several European countries) to conducted freedom of navigation operations provide maritime security assistance to coun- (FONOPs) as a way to challenge excessive tries vulnerable to the PRC’s coercive tactics. maritime claims of the PRC and other states in the region, and it continues to execute There were also some creative ideas these without significant interference from raised about how to leverage the Taiwanese PLA Navy and coast guard vessels. But while (ROC) claim in the South China Sea, and FONOPs demonstrate a lack of absolute con- Taiwan’s effective control of the largest trol over the South China Sea, they have done land feature, Itu Aba. Taiwan has already nothing to deter the construction of artificial made some subtle moves away from the islands and the intimidation of foreign civilian eleven-dash line on which the PRC claim is ships and large-scale Chinese fishing activi- ultimately based. One participant noted that ties and oil exploration in both contested and after the arbitral court decision in July 2016, previously uncontested waters. In practice, the Tsai administration has no longer defend- the PRC has succeeded in seizing territory ed the eleven-dash line as an appropriate and strengthening their sustained presence boundary for the ROC’s sovereign territory, in the South China Sea at relatively low cost, and has instead focused on the land features creating the maritime equivalent of “facts on themselves. Taiwan could further isolate the the ground.” PRC position by renouncing claims except for Itu Aba, declaring that all other claimants in Among participants, the more contro- the region should follow the same principles versial question was what to do about it. The that Taiwan does, and asserting that neither PRC has pursued an asymmetric strategy in China, nor any other country, should exclu- the SCS to great effect. Beijing has managed sively control the SCS. Participants differed, to make significant headway toward its long- however, on whether Taiwan should accept term objectives both by not directly challeng- the arbitral court finding that Itu Aba is a rock ing U.S. hard power and also by punishing or that does not generate a two-hundred-nauti- coercing several of the other territorial claim- cal-mile exclusive economic zone. Such a po- ants in the region. One possible response to sition, by implication, would also reduce the counter China’s use of “maritime militia” craft standing of extensive PRC claims in the South might be to introduce vessels that are smaller China Sea. Session IV: Taiwan’s Key Asia Relations

his session provided an opportunity for and it should focus on bilateral agreements Taiwan-based experts to offer their own and international organizations that do not Tviews of the challenges and opportuni- require sovereignty as a condition for partici- ties in Taiwan’s bilateral relationships with pation. By and large, this was the foreign poli- other countries in the region. The existential cy strategy adopted by the Ma administration. question facing Taiwan is how to handle its The second approach, the “Global relations with the PRC. Taiwan’s foreign pol- Engagement” school, seeks as its paramount icy community, including members from both objective a balance between relations with the current Tsai Ing-wen and the previous the PRC and relations with the rest of the Ma Ying-jeou administrations, can be char- world. In this view, it is both desirable and acterized as embodying one of two basic ap- possible for Taiwan to develop strong, mean- proaches to this problem. ingful ties with a broad set of other countries The first approach, the “China First” around the world, whether or not Beijing ap- school, views Taiwan’s foreign policy interests proves. Advocates of this school argue that as best served by seeking accommodation and Taiwan should invest much of its diplomatic building trust with the PRC, and then “going resources in strengthening contacts (wheth- to the world through China.” In this view, only er unofficial or not) with like-minded coun- with PRC acquiescence can Taiwan strength- tries that share similar values. The DPP and en its own unofficial relations with the rest of Tsai Ing-wen have favored this approach. the region and the world, and win meaningful Among the key non-PRC foreign re- participation in international organizations lations for Taiwan are the United States, such as the World Health Assembly (WHA) Japan, South Korea, the ASEAN states, India, and International Civil Aviation Organization Australia, and New Zealand. Of these relation- (ICAO). To this end, Taiwan should avoid for- ships, the ones that offer the greatest oppor- eign policy activities that antagonize Beijing, tunities to deepen cooperation are India and 18

the members of ASEAN. On Taiwan-ASEAN re- self-imposed. For instance, there is an acute lations, there was some disagreement among shortage of people in Taiwan who have real the participants about how much the New expertise in the politics, economics, or so- Southbound Policy would ultimately benefit cieties and cultural customs of this region, Taiwan’s interests. The Taiwanese partici- and there are few Taiwanese who speak a pants emphasized the quantity of resources Southeast Asian language. (The United States, devoted to this policy, and specifically the op- , and Japan have traditionally been the portunities in “softer” areas such as scientific main focus of regional experts.) In addition, and health policy cooperation that leverage Taiwan’s main interactions with the people of Taiwan’s expertise to the benefit of Southeast Southeast Asia have been through its enter- Asian countries. Some of these exchanges are prises and fishing fleets. Unfortunately, these already taking place through NGO networks, have also been the sectors in which labor which in Taiwan are already relatively strong. abuses and the violation of environmental regulations have often created negative per- Nevertheless, Taiwan still faces serious ceptions of Taiwan among Southeast Asians obstacles to sustained, long-term engage- and damaged its relations with those nations. ment with Southeast Asia, some of them

: At the third panel, Yeong-Kang (left) addresses Taiwan’s role in maritime security. Session V: Cross-Strait Relations

his session focused on recent develop- • restricting tourism (though Beijing even- ments in cross-Strait relations and the tually reversed this step) overall challenges that the PRC poses T • resuming efforts to block Taiwan’s par- to Taiwan’s long-term security, including ticipation in international arenas, such Taiwan’s relations with the United States. as the World Health Organization (WHO), All three components of the trilateral re- World Health Assembly (WHA), and the lationship have experienced leadership tran- International Civil Aviation Organization sitions in the last two years. In Taiwan, the elec- (ICAO) tion of Tsai Ing-wen and the DPP has ushered • encouraging several of Taiwan’s remain- in a new government toward which Beijing is ing formal diplomatic allies, including the inherently suspicious. Unlike the KMT, Tsai re- Gambia and Panama, to switch recogni- fused to endorse the “1992 Consensus,” and tion to the PRC from the ROC the alternative interpretations she proposed were all rejected by Beijing as insufficiently • unilaterally announcing the activation of consistent with the “One-China” principle. additional civilian air routes near the cen- After her inauguration, Beijing’s response ter of the without consulting was to increase pressure on the Tsai admin- Taiwan authorities, in contrast to discus- istration by: sions Beijing had with Taipei during the Ma era • suspending the semi-formal cross-Strait dialogues established under Ma Ying- • increasing military patrols and exercises jeou near Taiwan-controlled airspace and ter- ritorial seas • stepping up United Front activities against Taiwan, such as favoring meetings There was some uncertainty among the with local KMT-led governments while participants about whether Beijing’s Taiwan excluding DPP-led ones policy would change significantly after the 20

: Ambassador Karl Eikenberry (left) chaired the third session, which looked at security issues in the South and East China Seas.

end of the National People’s Congress in military budget by 20 percent by 2025, but March 2018, but the general consensus was this increase will not affect the basic picture that Xi would still lead on Taiwan policymak- of a highly resource-constrained military fac- ing, and that the direction of policy set short- ing a rapidly modernizing adversary across ly after Tsai’s inauguration was unlikely to the Strait. Finally, the Taiwanese military has change dramatically. struggled for several years to implement a transition to an all-volunteer force (AVF). The Beijing’s response to the Tsai adminis- end of conscription has been repeatedly de- tration poses serious challenges to Taiwan. layed because the military has consistently A particular worry raised during discussions fallen far short of its recruitment targets, leav- was Taiwan’s own military readiness, which ing it without sufficient personnel. Recruiting has stagnated over the past two decades young people to pursue a career in the military while the PRC’s military modernization pro- continues to be a major challenge to Taiwan’s gram has surged forward. The share of state long-term security planning. resources allocated to the military has de- clined significantly since the 1990s, and this The third part of the trilateral relation- decline has been driven mostly by shifts in ship is the United States, which under the domestic politics. Taiwan’s defense spending Trump administration has maintained the trends stand out even when compared to peer same basic outlines of policy toward Taiwan states such as Singapore and South Korea. It that were established in the 1970s and now spends significantly less than either as a . One participant noted that the prin- share of total , despite cipal U.S. policymakers from that time would facing an existential threat from the PRC. The be surprised to learn that we are still discuss- Tsai administration has proposed raising the ing U.S.-Taiwan relations today, forty years 21

after the United States switched diplomatic Several participants recognized the recognition to the PRC, a time when Taiwan’s complexity of the challenges posed when transition to democracy and its maturation seeking to develop a robust strategy that into an important player in the world econo- would provide Taiwan with an adequate de- my were unanticipated. After a rocky start, the terrent against PRC aggression. The answer Trump administration’s policy toward Taiwan is not simply a military one. Taiwan no longer has settled into the familiar contours of past has the resource base to continue to compete administrations. However, in recent months with the size and quality of the PRC’s military it has taken modest actions to demonstrate forces. Therefore, it urgently needs to reeval- greater support for the Tsai administration uate how best to use those limited resources and to push back against Beijing’s pressure to maximize the costs it can impose on main- tactics. Participants expected this trend to land China should Beijing engage in hostili- continue. Beijing’s hardline posture toward ties against the island state. the Tsai government has led to increasing One way in which the United States could sympathy in the U.S. Congress. That, in turn, aid and support Taiwan’s long-term plan- has led to official, albeit thus far - ning would be to re-establish regular arms ic, actions in support of Taiwan, such as the sales, avoiding the practice of selling them passage of the Taiwan Travel Act. In addition, in “packages” that are offered and approved pro-Taiwan officials have taken positions in on an ad hoc basis, because there is never a the Trump administration and are likely to “good” time in the U.S.-China relationship to approve additional steps that demonstrate announce an arms sale. The personnel and re- America’s support for Taiwan, such as using cruitment problems are a more serious long- the recently passed Taiwan Travel Act to term challenge that will require a significant send higher-level officials to visit the ROC. cultural change in the armed forces and their Nevertheless, the fundamental objectives connection to Taiwanese society in order to that determine U.S. policy toward Taiwan re- be fully and effectively addressed. main unchanged: the United States wants to see cross-Strait stability maintained. Workshop Agenda: Taiwan’s Place in the Evolving Security Environment of East Asia

March 5–6, 2018 Stanford University

MONDAY, MARCH 5 9:30 a.m.–9:45 a.m. Opening Remarks Gi-wook Shin, Director, Shorenstein Asia-Pacific Research Center (APARC) Larry Diamond, Senior Research Fellow, Center on Democracy, Development, and the Rule of Law (CDDRL) Karl Eikenberry, Director, U.S.-Asia Security Initiative, APARC 9:45 a.m.–11:30 a.m. Panel I—Assessment of U.S. Alliances and the Political and Military Situation in the Western Pacific Chair: Tom Fingar (APARC, Stanford) • Overview of Military Trends and U.S. Strategy in the Region. Karl Eikenberry (APARC, Stanford) • U.S.-Taiwan Relations. Robert Wang (Center for Strategic and International Studies) • U.S.-Japan Relations. TJ Pempel (UC Berkeley) • U.S.-Korea Relations. Kathleen Stephens (APARC, Stanford)

11:30 a.m.–1:00 p.m. Lunch—Keynote Speech: “Will the Trump Administration Support Taiwan Despite China’s Objections?” Robert Sutter (George Washington University) 24

1:15 p.m.–3:00 p.m. Panel II—Trade and Economic Relations in the Western Pacific Chair: Phillip Lipscy (APARC, Stanford) • The Future of Trade Policy in the Asia-Pacific. Barbara Weisel (former assistant U.S. trade representative for Southeast Asia and the Pacific) • China’s International Institution-Building. Amy Searight (Center for Strategic and International Studies) • Taiwan’s New Southbound Policy. Russell Hsiao (Global Taiwan Institute)

3:15 p.m.–5:00 p.m. Panel III—Maritime Security Issues: The South and East China Seas Chair: Karl Eikenberry (APARC, Stanford) • Interpreting Chinese Maritime Strategy in the South China Sea. Donald K. Emmerson (APARC, Stanford) • China’s Maritime Militia. Andrew Erickson (Naval War College) • Evolution of U.S. Policy: FONOPS and Beyond. Dale Rielage (, U.S. Navy) • Taiwan’s Role in Maritime Security Issues. Yeong-Kang Chen, (Admiral [Ret.], ROC Navy)

7:00 p.m.–8:00 p.m. Keynote speech, via videoconference: “China’s Sharp Power: Taking Taiwan as an Example” Yi-feng Tao (Senior Advisor to the National Security Council, Republic of China [Taiwan])

TUESDAY, MARCH 6 9:30 a.m.–11:15 a.m. Panel IV—Taiwan’s Key Asian Relations Chair: Kharis Templeman (APARC, Stanford) • A Taiwanese Perspective on Asian Relations. Lai I-chung (Prospect Foundation) • The Security Context in the Korean Peninsula and Its Implications for Taiwan. Yeh-chung Lu (National Chengchi University) • The New South-bound Policy and Taiwan’s Living Space in the Regional Political- Economic Contexts. Jiann-fa Yan (Chien Hsin University of Science and Technology)

1:15 p.m.–2:30 p.m. Panel V—Cross-Strait Relations Chair: Larry Diamond (CDDRL, Stanford) • The Domestic Politics of Security in Taiwan. Kharis Templeman (APARC, Stanford) • Beijing’s Taiwan Policy after the 19th Party Congress. Alice Miller (Hoover Institution) • U.S. Role in the Trilateral Relationship. Raymond Burghardt (former chairman, American Institute in Taiwan) Workshop Participants

Raymond F. Burghardt, Jr. Former Chairman of the American Institute in Taiwan (AIT)

Yeong-Kang Chen Admiral (Retired), Fifth of the Republic of China Navy (ROCN)

Larry Diamond Senior Fellow, Freeman Spogli Institute for International Studies Senior Fellow, Hoover Institution

Karl W. Eikenberry Director, U.S.-Asia Security Initiative, Walter H. Shorenstein Asia-Pacific Research Center Director, Taiwan Democracy and Security Project, U.S.-Asia Security Initiative Oksenberg-Rohlen Fellow, Walter H. Shorenstein Asia-Pacific Research Center Professor of the Practice, Freeman Spogli Institute for International Studies, Stanford University General (Retired), U.S. Army and Former Ambassador to Afghanistan

Donald K. Emmerson Director, Southeast Asia Program, Walter H. Shorenstein APARC Senior Fellow, Freeman Spogli Institute for International Studies (Emeritus)

Andrew S. Erickson Professor of Strategy, China Maritime Studies Institute, U.S. Naval War College

Thomas Fingar Shorenstein APARC Fellow, Walter H. Shorenstein Asia-Pacific Research Center, Stanford University 26

Russell Hsaio Executive Director, Global Taiwan Institute Editor-in-Chief, Global Taiwan Brief

Kuo-Chun Executive Officer, Department of Policy Planning, Mainland Affairs Council, Republic of China

Patrick Laboon Administrative Assistant, Walter H. Shorenstein Asia-Pacific Research Center, Stanford University

I-Chung Lai President, Prospect Foundation Executive Director of the International Affairs Committee, Taichung City Government, Republic of China

Phillip Y. Lipscy Thomas Rohlen Center Fellow, Freeman Spogli Institute for International Studies Assistant Professor of Political Science, Stanford University

Yeh-Chung Lu Associate Professor, Department of Diplomacy and Former Director of the International Master’s Program in International Studies (IMPIS), National Cheng- University (NCCU), Taipei, Taiwan

Alice Lyman Miller Research Fellow, Hoover Institution Lecturer, Center for , Stanford University

T.J. Pempel Jack M. Forcey Professor of Political Science, Department of Political Science, University of California at Berkeley

Dale Rielage Captain, U.S. Navy Director, Intelligence and Information Operations, U.S. Pacific Fleet

Amy Searight Senior Adviser and Director, Southeast Asia Program, Center for Strategic and International Studies, Washington, D.C.

Gi-Wook Shin Director, Walter H. Shorenstein Asia-Pacific Research Center, Stanford University Director, Korea Program, Walter H. Shorenstein Asia-Pacific Research Center The Tong Yang Korea Foundation and Korea Stanford Alumni Chair of Korean Studies Senior Fellow, Freeman Spogli Institute for International Studies Professor, Department of Sociology at Stanford University 27

Kathleen Stephens William J. Perry Fellow in the Korea Program, Walter H. Shorenstein Asia-Pacific Research Center, Stanford University Former U.S. Ambassador to the Republic of Korea Senior Foreign Service Officer (Retired), U.S. Department of State

Robert Sutter Professor of Practice, Elliott School of International Affairs, George Washington University

Kharis Templeman Project Manager, Taiwan Democracy and Security Project in the U.S.-Asia Security Initiative Social Science Research Scholar, Walter H. Shorenstein Asia-Pacific Research Center, Stanford University

Robert S. Wang Senior Associate, Center for Strategic and International Studies, Washington, D.C. Senior Foreign Service Officer (Retired), U.S. Department of State

Barbara Weisel Managing Director, Rock Creek Global Advisors Former Assistant U.S. Trade Representative for Southeast Asia and the Pacific

Yi-Feng Tao Senior Advisor to the Taiwan National Security Council, Republic of China

Jiann-Fa Yan Professor, Department of Business Administration, Chien-Shin University, Taipei, Taiwan Vice President, Taiwan Foundation for Democracy

Belinda A. Yeomans Associate Director, U.S.-Asia Security Initiative, Walter H. Shorenstein Asia-Pacific Research Center, Freeman Spogli Institute for International Studies, Stanford University

Workshop Rapporteurs

Julie Jia Yuan Gu M.A. Candidate, International Policy Studies, Stanford University

Alicia Hu B.A. Candidate, International Relations, Stanford University                     .

Taiwan’s Place in the Evolving Security Environment of East Asia       .      -    616 Serra Mall, Room E301 A Workshop Report by the ..- Stanford, CA 94305-6055 Phone: 650.724.5647 Taiwan Democracy and Security Project    aparc.fsi.stanford.edu/research/us-asia-security-initiative

July 2018

U.S.-Asia Security Initiative