Targeting Taiwan: Beijing’s Playbook for Economic and Cyber Warfare
Oct 4, 2024
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Craig Singleton, an expert on the CCP threat, is joined by RADM (Ret.) Mark Montgomery, a cyber warfare specialist, Ti-Chen Chen from the Taiwan Academy of Banking and Finance, and Ben Jensen, a strategic analyst. They delve into China's economic and cyber warfare tactics against Taiwan, emphasizing the need for resilience strategies. Key discussions include the importance of financial security, Taiwan's energy vulnerabilities, and effective partnerships with the U.S. and allies to counter CCP coercion. The episode offers crucial insights into collective defense in a precarious geopolitical climate.
The Chinese Communist Party seeks to reintegrate Taiwan through economic coercion and cyber warfare rather than traditional military invasion.
A whole-of-society strategy is vital for Taiwan's national security, requiring engagement from all sectors, including finance and civilians.
Strengthening financial resilience and international collaboration among allies are essential for Taiwan to resist external economic and cyber threats.
Deep dives
Cyber-Enabled Economic Warfare Unpacked
The discussion centers around a recent tabletop exercise that explores the concept of cyber-enabled economic warfare, particularly in the context of Taiwan and its interactions with the Chinese Communist Party (CCP). This exercise diverges from conventional military scenarios, focusing instead on how cyber threats and economic coercion can be used as strategic tools against Taiwan. The aim is to understand the potential impacts of such warfare and devise strategies to enhance Taiwan’s resilience against these attacks. The panel emphasizes the necessity of preparing for non-military threats, which can significantly alter the geopolitical landscape.
Taiwan's Whole-of-Society Approach
The concept of a whole-of-society strategy in Taiwan is discussed as a crucial step in fortifying national security. This approach recognizes that defense is not solely the responsibility of the military but requires the participation and commitment of all citizens and institutions. By involving various sectors, including finance and private entities, Taiwan aims to build a comprehensive resilience against potential threats. This mindset shift reflects a growing understanding that collective preparation is essential to withstand economic and cyber coercion.
The Costs of Reunification Tactics
The panelists analyze the notion that the CCP's reunification objective may be achieved through cost-effective strategies focused on disruption rather than outright military confrontation. Instead of a traditional military invasion, the emphasis is on persistent, low-level attacks that aim to undermine Taiwanese confidence and sovereignty through psychological warfare and economic pressure. This discussion raises concerns about China's potential tactics, which could involve a blend of economic coercion and cyber attacks that might gradually erode Taiwan’s social and institutional resilience. The strategic flexibility of these tactics allows China to adapt to responses from Taiwan and its allies.
Financial Resilience and Key Vulnerabilities
The importance of financial resilience is underscored as a critical element in Taiwan's defense strategy, especially in light of cyber and economic threats. The exercise reveals that scenarios involving international trade disruptions could lead to significant financial panic and capital flight, destabilizing Taiwan's economy. Recommendations include enhancing contingency funding and liquidity arrangements to mitigate the impact of a financial crisis. The discussion highlights how proactive measures in the financial sector can strengthen Taiwan's overall resilience against both economic and cyber threats.
Engagement with Global Partners and Allies
The panel emphasizes the necessity of collaboration among global allies in building systemic resilience against Chinese aggression. Strategies that involve Japan and other regional partners are discussed, focusing on energy security and economic resilience as pivotal components of Taiwan’s defense. The establishment of collective action frameworks is seen as crucial for imposing costs on Beijing and ensuring a united front. By coordinating efforts and sharing resources, these partnerships can enhance deterrence and response capabilities, ultimately strengthening Taiwan's position in the face of external pressures.
The Chinese Communist Party (CCP) aims to “reintegrate Taiwan,” effectively stripping the Taiwanese people of their de facto independence. Achieving this takeover with minimal military action and limited long-term damage to Taiwan’s infrastructure and economy would offer the CCP substantial economic, diplomatic, and military advantages. A well-executed, well-resourced, and well-timed cyber-enabled economic coercion campaign could provide the CCP with such an opportunity.
To explore these threats, a delegation of FDD experts recently visited Taiwan to conduct war games and tabletop exercises (TTXs). These simulations were designed to evaluate the most salient and dangerous threat scenarios posed by the CCP to the Taiwanese people. The TTX involved 20 participants, primarily from Taiwanese banking and finance sectors, who simulated the roles of senior policymakers in Taiwan, the United States, and China. They assessed the most likely and perilous actions the CCP could take to isolate and coerce Taiwan short of outright war
The TTX produced several key recommendations to enhance economic, cyber, and societal resilience, and offered insights into how the United States and its allies can support Taiwan in its struggle for autonomy. To discuss these findings, FDD’s Craig Singleton and RADM (Ret.)Mark Montgomery are joined by Ti-Chen Chen of the Taiwan Academy of Banking and Finance and Ben Jensen of the Center for Strategic and International Studies. Lili Pike of Foreign Policy will moderate the discussion and FDD Founder and President Cliff May, who headed the delegation to Taiwan, will deliver introductory remarks.
