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The following speech was delivered on 18 September 2019 at a conference in London that was co-hosted by INDSR and the Lau China Institute of King’s College London. The conference theme was: “Living with Constant Uncertainty: Across the Taiwan Strait and Europe in a Time of Radical Change.” A More Assertive Beijing And A More Persuasive Taipei Delivered by Dr Cheng-yi Lin, Chief Executive Officer Institute for National Defense and Security Research Professor Kerry Brown, Ambassador David Lin, Distinguished Scholars and Experts, Ladies and Gentlemen, Good evening! I am deeply honored to witness the cooperation project between INDSR Taiwan and Lau China Institute of King’s College on co-hosting this evening panel dealing with so many difficult issues under the shadow of constant uncertainty. I will not speak about the lingering issue of Brexit, but will share with you my humble observations of the complex relationships between Taiwan and mainland China. I will start from the development in the PRC particularly under President Xi Jinping and then followed by Taiwan’s perspectives under the Tsai Ing-wen administration. China As A Fragile Superpower With Self-confidence On The Outside, But Insecure Inside After amending the Constitution to abandon the Chinese presidential term limits in March 2018 and almost at the moment of the peak of his powers, Xi Jinping found himself surrounded by a series of challenges from the US-China trade war, the Chinese economic slowdown, and a political awakening of the Hong Kong people urging direct elections of Chief Executive and Legislative Council members. As a core leader, Xi Jinping replaced Deng Xiaoping’s national strategy “hide one's capacities and bide one's time” with a more assertive strategy to truly make a difference. There are not any successors-in-waiting inside the Chinese Communist Party. The anti-corruption campaign, military reform, and the Belt and Road Initiative have given Xi an image of the only leader able to bring China back to great national rejuvenation. In the area of foreign affairs, the PRC leaders have channeled their efforts to consolidate Chinese influences in UN specialized agencies, including secretary generals of ICAO, ITU, FAO, and UNIDO, who are all Chinese nationals, reshape the power structure and the international order, not to mention the creation of BRI and AIIB multilateral financial institution. President Xi Jinping not only declared an Air Defense Identification Zone (ADIZ) in the East China Sea in 2013 but also turned several banks and reefs into artificial islands in the South China Sea. Xi Jinping has demonstrated China’s power projection capabilities through long-distance maritime expeditions into the Pacific Ocean and the Indian Ocean, not to mention regular circumnavigation of Taiwan to deter any possible US intentions in a Taiwan Strait scenario. While China is becoming a political and military peer competitor of the US, Beijing is less confident in responding to challenges from Taiwan and Hong Kong, and less tolerant of the civil rights and democratic movement in these two territories. With more than one million protestors taking to the streets in Hong Kong, Xi Jinping has been taken by surprise and caught in a dilemma of decision-making in crisis management. Beijing is also waiting anxiously for the final outcomes of presidential and parliamentary elections in January 2020 in Taiwan. The most challenging development for Xi is not from Taiwan or Hong Kong, but from Donald Trump. The US–PRC trade disputes and technology competition have slowed down Chinese annual economic growth rate, [prompted] flights in foreign investments, and undercut the foundation of Xi Jinping’s leadership. President Xi summoned a least two meetings on controlling risks at the Central Party School in January and September 2019. In January, Xi Jinping cautioned participants that China faces seven major risks, i.e., politics, ideology, economy, science and technology, society, the external environment, and Party building. On September 3, 2019, Xi Jinping encouraged party officials to “maintain a fighting spirit and to strengthen the ability to struggle,” and called for determination to “fight and overcome any risk or challenge that endangers the CPC leadership and the socialist system, harms China's sovereignty, security, and development interests.” Taiwan As A Little Giant, Insecure Outside But Self-confident Inside In the eyes of security advisors of the Trump administration, the PRC is a “revisionist power” and a “strategic competitor” which is “gaining veto authority over other nations’ economic, diplomatic, and security decisions.” Taiwan is certainly on the top of the list of nations. Chinese political and military threats against Taiwan have never disappeared, including the PLA’s amphibious invasion of Quemoy Island in October 1949, two offshore Islands crises through bombarding Quemoy Island in 1954 and 1958 when Prime Ministers Winston Churchill and Harold McMillan were in their offices. The last sea battles between Taiwan and China were in 1965 and then followed 30 years of cold peace without a military confrontation until the Taiwan Missile Crisis in 1995-96 erupted during Lee Teng-hui’s presidency, the Clinton administration in the US, and when John Major was Prime Minister in the United Kingdom. Through demonstration of Carrier-Battle Group Diplomacy, President Eisenhower and Clinton sent a clear signal that any disputes between Taipei and Beijing can only be solved through peaceful means. Starting from 2017, Beijing has been significantly stepping up its operational tempo with long-range strategic bomber and Su-30 fighter jet flights operating in waters and airs to the east Taiwan, sending Taiwan, Japan and the US a warning signal of Chinese anti-access and area denial (A2AD) military capabilities. Even more alarming, China intentionally sent its fighter jets crossing over the median line in March 2019. When President Xi Jinping has employed a harder and bigger stick to intimidate Taiwan, Beijing has attracted a greater support [for Taiwan] from the Trump administration through legislations like the National Defense Authorization Act and the Taiwan Travel Act; US arms sales of US$13 billion in 2017-2019, including 66 F-16V fighter jets; and US military ships regularly making routine transits in waters of the Taiwan Strait. Although [Taiwan] President Tsai has encountered a series of Beijing’s military intimidations, political manipulations and diplomatic isolation, she has exercised the principle of prudence through a policy of “4-Nos.” Taiwan as a responsible stakeholder in East Asia, Tsai’s “pledges [of not rocking the boat] will not change, and [her] goodwill [to Beijing] will not change. But [she] will not bow to [Chinese] pressure, and [she] will of course not revert to the old path of [military and diplomatic] confrontation.” President Tsai Ing-wen also has indicated her willingness to meet with President Xi as long as it is conducted on an equal footing and with no political preconditions. Distinct from that of the PRC under Xi Jinping, Tsai has espoused the idea of sharing the experiences of Taiwan’s democracy with other like-minded countries, serving itself as a beacon for other freedom-seekers in Hong Kong. In contrast to Chinese BRI, the DPP government has adopted a New Southbound Policy which does not simply focus on economic interests or government-to-government relations, but places emphasis on a people-centered and non-governmental approach, cultivation of young talents and institutional building. Taiwan’s New Southbound Policy and the US Indo-Pacific strategy have overlapping interests in building the region in a network of Digital Connectivity and Cybersecurity Partnership. In terms of national defense, President Tsai is devoted to giving Taiwan a credible defense capability by increasing the national defense budget, in the 2018 Taiwan fiscal year, to NT$320 billion (US$10.6 billion), amounting to 16.1% of the total government budget. In 2020, Taiwan’s defense spending will reach NT$358 billion (US$11.8 billion). The Legislative Yuan (the Taiwan Parliament) is deliberating a bill to create a special reserve fund that can be used for major military procurements such as new F-16 fighter jets from the US. To respond to aggressive Chinese cyber operations against Taiwan, President Tsai created the Information and Electronic Warfare Command in 2017. The only national level think tank on defense and national security, INDSR, entered its full implementation in 2018. Taiwan cannot compete with the PRC in military hard power, however, Taiwan can exercise asymmetrical security thinking in dealing with its giant neighbor. The Tsai administration has launched its protests not only about Chinese reckless military actions but also Beijing’s dollar diplomacy of taking away seven of Taiwan’s diplomatic allies including Sao Tome and Principe (December 2016), Panama (June 2017), Dominican Republic (May 2018), Burkina Faso (May 2018), El Salvador (August 2018), the Solomon Islands (September 2019), and Kiribati (September 2019). Taiwan is not adopting a tit-for-tat diplomatic retaliation but is increasing its annual foreign affairs operations budgets. Beijing has also pressured Nigeria, Jordan, Ecuador, Bahrain, United Arab Emirates, Fiji, and Papua New Guinea to force Taiwan to rename its representative offices (replacing “Republic of China” or “Taiwan” with “Taipei”), not to mention OTHER multi-national enterprises such as Zara, Marriott, Qantas, and Delta Air Lines were also forced to correct information on their websites listing Taiwan as a country. In exercising its sharp power, President Xi has adopted a differentiated policy toward the DPP and the KMT. It has selectively received only the groups in Taiwan that it recognizes as supporting the Chinese one-China principle. It has reduced tourists and students’ travel to Taiwan while providing abundant resources to entice people from Taiwan. Starting from August 1st this year, Beijing even stopped issuing individual travel permits to Chinese travelers for Taiwan.

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