China could wage economic war against Taiwan to force its capitulation, report says

WASHINGTON (AP) U.S. military officials and analysts have been warning for years of possible armed attacks or blockades by China on Taiwan, but a report released Friday sounded the alarm over possible nonmilitary tactics which could be used effectively against the autonomous government. island.

Beijing could wage economic and cyber warfare to force Taiwan to surrender without directly resorting to military power, the Foundation for Defense of Democracies, a Washington-based research institute, said in the report. Such a likely but neglected scenario, he believes, poses a challenge for the United States, the island's biggest ally, and suggests Washington prepare for how best to respond.

FDD researchers teamed up with banking and financial experts in Taiwan for two days earlier this year to simulate possible non-military actions by Beijing, such as disinformation campaigns and cyberattacks on infrastructure. The exercise is the first of its kind and seeks to fill an analytical gap, the FDD said.

Modern globalization has created more economic connections that China can exploit to achieve coercive goals,” the report said. Technological innovation has created even more digital connections, providing more opportunities for coercion, including targeting critical infrastructure .

Beijing has promised to take Taiwan, by force if necessary, although Chinese President Xi Jinping has promised to make every effort to do so peacefully. Taiwan separated from the mainland in 1949 during a civil war when the defeated Nationalist government fled to the island.

Tensions have flared across the Taiwan Strait since 2016, when Beijing began increasing diplomatic and military pressure on the island, prompting the United States to increase its support. Washington, which is required by U.S. law to provide Taipei with sufficient military equipment for its defense, has argued that it is in the U.S. interest to maintain peace across the strait and stand with democracies such as Taiwan to maintain a rules-based global order. .

Beijing has asked the United States to stay out of Taiwan, arguing that it is a purely internal matter.

President Joe Biden has indicated he will send troops to defend Taiwan in the event of an armed attack from China, but the US government has not yet formulated a plan to respond to non-military tactics, giving Beijing the flexibility to work to undermine Taiwan without starting a war. Washington said a military invasion would be an outright response, FDD researchers said.

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

With around a million Taiwanese living and working in China, economic ties are growing closer. This makes the possibility of economic coercion, boycotts and military blockades even more threatening.

In the simulation exercises, experts from the United States and Taiwan studied possible actions by Beijing, such as waging psychological warfare to erode public trust, banning imports of Taiwanese goods or raising tariffs on those – this, 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 its businesses outside the mainland, develop new markets and form alliances and partnerships. The report suggests that the United States develop a playbook of options to counter China and improve coordination with its allies.

The Taiwan Academy of Banking and Finance, which worked with the FDD on the simulation exercises, argued that Taiwan needs to strengthen its financial resilience.

China could destabilize Taiwan's financial system to incite social unrest, a precursor to an invasion, the report said.

Russell Hsiao, executive director of the Washington-based Global Taiwan Institute, said Beijing had already stepped up its non-military measures against Taiwan and those efforts were expected to intensify in the coming months and years.

It is incumbent on the United States and Taiwan to work with our like-minded allies and partners to strengthen our collective resilience in the face of China's weaponization of economic interdependence, Hsiao said.

AP writers Fatima Hussein in Washington and Christopher Bodeen in Taipei contributed to this report.