With Chinese aircraft provocatively crossing the center line of the Taiwan Strait around Christmas (possibly in response to the US defense bill), it is useful to examine China’s military posture.This is the deployment of Chinese troops in the eastern and southern theaters, as DoD 2022 Assessment.
resource: Ministry of Defense,Military and Security Developments Involving the People’s Republic of China, 2022 (November 2022).
resource: Ministry of Defense,Military and Security Developments Involving the People’s Republic of China, 2022 (November 2022).
In other words, China’s military posture in the region adjacent to Taiwan – if not prepared for an imminent attack – is certainly not entirely friendly. DoD forecasts (Introduction):
The PLA will likely continue to increase military pressure—a combination of diplomatic, informational, and economic pressure—in an attempt to force Taiwan toward reunification.
While this is not an out-of-the-box forecast, I have to say that I don’t understand the rationale for the rational actor model unless the moves are for domestic consumption. Increased uncertainty will not only hurt Taiwan’s economy, it will not help China’s — this is a terrible shape – anyone.Perhaps this is simply the idea of dragging down Taiwan’s economy by forcing increased defense spending and triggering capital flight, which will eventually bring the Taiwanese to their knees (see discussion from this August). I doubt that this approach will be successful – though I have no particular knowledge of the views of the Chinese Communist Party or the Taiwanese government. (Taiwan’s reported foreign exchange reserves rose in November after falling in September following Pelosi’s visit. QoQ growth was 1.83% in Q3, so positive year-to-date.)
Below is Taiwan Caldara- Iacoviella GPR Indexto November (so omit The PLA Air Force’s massive airstrike three days ago).
resource: Caldara-Iakovilla (2022).
Presumably, December’s GPR will be raised in light of the airstrikes and Taiwan’s extension of compulsory military service from 4 months to a year (announced today).
