Cross-Strait Relations in the Lai Era


Cross-Strait Relations in the Lai Era

Jun 21, 2024 6 min read
Michael Cunningham

Research Fellow, China, Asian Studies Center

Michael is a Research Fellow in The Heritage Foundation’s Asian Studies Center.
Taiwan's new President Lai Ching-te gives a speech at his inauguration ceremony on May 20, 2024 in Taipei, Taiwan. Annabelle Chih / Getty Images

Key Takeaways

On May 20, Lai Ching-te formally took office as Taiwan’s new president. Three days later, Beijing responded with major military drills.

Beijing’s concerns are already playing out: Mr. Lai’s inaugural address contained elements China viewed as escalatory.

Though tensions will likely increase through 2025, China will probably again err on the side of restraint in 2027 when President Xi seeks a fourth term.

On May 20, Lai Ching-te formally took office as Taiwan’s new president. Three days later, Beijing responded with major military drills that encircled the island, heightening global concern about one of the world’s most explosive military flashpoints.

Of the three candidates that vied for the presidency, Mr. Lai was Beijing’s least favorite, due to his history of pro-independence advocacy and China’s longstanding distrust of his Democratic Progressive Party (DPP). Ahead of the election, Chinese Communist Party (CCP) officials called him a “separatist” and “trouble-maker” and equated a vote for Mr. Lai to a vote for war.

But despite the military exercises and limited economic coercion, Beijing’s reaction to Mr. Lai’s victory has so far not matched its rhetoric. The dramatic escalation many expected following the election has yet to materialize. Before Mr. Lai’s inauguration, Beijing agreed to end bans on some Taiwanese agricultural imports and announced a slight relaxation of its prohibition on Chinese tourists visiting Taiwan, both long-standing requests of Taiwan’s government. Even the military drills last month were far less provocative than those that followed former U.S. House Speaker Nancy Pelosi’s visit to Taiwan in 2022.

Behind Beijing’s Response

Observers were surprised by China’s muted response to Mr. Lai’s election in January, especially given how aggressive it had become in dealing with his more moderate predecessor, Tsai Ing-wen, also of the DPP. With Ms. Tsai, tensions did not escalate immediately, though; they developed gradually in the months and years following her inauguration. Beijing took its time both to get a feel for her administration’s temperament and to convince Taiwan’s voters that friction in the relationship was due to her words and actions, not China’s.

>>> The U.S. Needs a Secure Taiwan, Not Just Its Semiconductors

Last month’s military exercises notwithstanding, Beijing has exhibited similar caution with regards to the new Lai administration. With Mr. Lai, three additional considerations have also helped lessen the intensity of its response.

First, contrary to conventional wisdom, China was generally pleased with the results of January’s election. While Beijing would have liked for one of the opposition candidates to win the presidency, it knew that was not likely after the two opposition parties failed to create a joint ticket in November. And as it happened, no candidate secured an outright majority; Mr. Lai garnered only 40 percent of the popular vote, which is far short of a popular mandate and roughly in line with the performance of the loser of the previous election in 2020.

Meanwhile, the DPP lost its legislative majority, making the Kuomintang (KMT)—the least problematic party from Beijing’s perspective due to its consistent opposition to formal independence—the largest in the legislature. It was the best outcome Beijing could have reasonably hoped for and was taken as evidence that the political winds no longer favor the DPP.

Second, the KMT’s electoral success also provides Beijing with useful partners for dialogue. China’s government is unwilling to hold official talks with DPP officials, given their party’s formally pro-independence charter. The KMT, on the other hand, acknowledges the “1992 Consensus,” a vague formulation stating that both sides of the Taiwan Strait belong to one China but each side maintains its own interpretation of what that means. Beijing insists on this consensus as the basis for cross-Strait dialogue, and the KMT’s leading position in the legislature now enables the two sides to resume some level of talks despite Taiwan’s presidency remaining in the hands of the DPP.

Third, China fears excessive escalation could lead to a war it is not prepared to fight, and it believes this risk is more acute now that President Lai is in power. Beijing views Mr. Lai as a determined separatist and expects him to frequently speak or act in ways deemed provocative in China. The Chinese leadership will feel compelled to react to these incidents both to placate domestic nationalists and to deter and delegitimize the DPP. By reducing tensions ahead of the inauguration, Beijing gave itself space to act without veering dangerously close to armed conflict.

Beijing’s concerns are already playing out: Mr. Lai’s inaugural address contained elements China viewed as escalatory, including an unequivocal statement that Taiwan and China are not subordinate to one another, language that Beijing views as a “two-country theory.” This language shocked Beijing—every previous DPP president had used their inaugural address to reassure China. The military exercises in late May were largely a reaction to this rhetoric. That Beijing named the exercises “Joint Sword-2024A” indicates that it expects to launch at least one other “Joint Sword” exercise this year, which will almost certainly be timed to respond to a perceived provocation by Mr. Lai’s government.

Calm Before the Storm?

It is likely only a matter of time before tensions begin to reescalate to the levels experienced when Ms. Tsai was president. Beijing deeply distrusts the DPP, especially the party’s radical faction that Mr. Lai represents. Though President Lai has pledged to follow Ms. Tsai’s moderate policies, her approach did little to placate Beijing. Mr. Lai lacks the constitutional authority to declare independence even if he wanted to do so, but Beijing is still wary he will move in that direction. The CCP views his rhetoric, the DPP’s diplomatic outreach to the United States and other countries and its efforts to promote a Taiwanese cultural identity through de-Sinicization as “salami slicing” aimed at gradually bringing about formal independence.

Additionally, regardless of President Lai’s performance, Beijing will likely find reasons to antagonize him. It believes taking the economic and military pressure off Taiwan would risk legitimizing his governance and helping him win reelection in 2028. To prevent this outcome, China will do its best to make Mr. Lai appear ineffective, incompetent or dangerous. Beijing believes this approach has been effective so far, and it is unlikely to change course.

Silver Linings

At the same time, there are reasons to believe cross-Strait tensions during the Lai presidency may not deteriorate as precipitously as many previously feared. First, as noted, Beijing appears confident that Taiwan’s political winds no longer favor the DPP. Though it realizes a continued split in the opposition might help President Lai secure reelection in 2028, the DPP’s loss of legislative control gives China cause for optimism. Beijing’s interest in maintaining dialogue with KMT lawmakers will likely result in some limited concessions as it seeks to bolster the party’s credibility, a marked improvement over the single-minded effort to delegitimize an entire DPP-run government the past eight years.

>>> The American Case for Taiwan

Second, although there is little chance Beijing will agree to formal dialogue with a DPP administration, its official narratives about Mr. Lai’s election were less provocative than most expected. In addition, President Xi Jinping’s dovish message to Taiwan’s former president Ma Ying-jeou (2008-2016) during Mr. Ma’s visit to Beijing in April seemed to both convey a friendly message to Taiwan’s public and to set the tone in China for a less belligerent approach to the island. With the exception of the inaugural address, Mr. Lai has also exercised considerable caution with regards to Beijing.

Finally, China faces a complicated domestic and international environment in the coming years. To limit the number of potential crises it may face, the CCP will likely exercise caution around the Taiwan issue until some of the more immediate threats are diffused. Pressing concerns include its deepening economic challenges, an ongoing spate of purges in senior government and military posts and confrontations with the U.S. and the Philippines in the South China Sea. While Taiwan is a long-term challenge that neither side expects to resolve in the coming years, these other issues are lurking landmines that could detonate at a moment’s notice.

China is also likely to remain cautious in the leadup to the U.S. presidential election in November. If the vote results in a change of White House occupants, Beijing’s heightened caution may persist until after the January 2025 inauguration.

Though tensions will likely increase through 2025, China will probably again err on the side of restraint in 2027 when President Xi seeks a fourth term as CCP general secretary. Although Mr. Xi faces no serious challenges to his position, he is unlikely to allow tensions to get out of control ahead of the party congress. The one exception would be if Beijing felt its claim over Taiwan had been seriously challenged, in which case the party’s need to preserve legitimacy could make it even more likely to intervene, even if it meant risking a destructive war.

This piece originally appeared in Geopolitical Intelligence Services Reports Online