Elections create particularly perilous conditions, including the period of time immediately following the election and before the installation of the new president in Taiwan. In this interim, there is a fear that President Chen may use his remaining days in office to make declarations that are contrary to the status quo. Curiously, the 2008 Olympics may embolden Taipei to push for greater independence, since the PRC will be hesitant to act in a way that will damage its image to the outside world.

Similarly, the expanding military capabilities of the People’s Liberation Army (PLA) and the People’s Liberation Army Navy (PLAN) have increased the risk of possible conflict in the Taiwan Strait. Chinese defense spending, though difficult to measure due to the PRC’s lack of transparency, is extraordinary. Estimates from the Office of the Secretary of Defense include an average defense budget growth of 11.8 percent per annum for the period 1996 to 2006. Earlier this year, the PRC announced an impressive 17.8 percent budget increase for its military forces. Estimates of PRC defense spending range from US$45 billion as reported by the PRC to US$125 billion if one includes “expenses for strategic forces, foreign acquisitions, military-related research and development, and China’s paramilitary forces.”

There is also little doubt that the PRC military forces are closing the quality gap between China and the United States. China’s rapidly expanding capabilities, especially in cruise missiles, submarines, and Short Range Ballistic Missiles (SRBMs), have certainly led to speculations as to the future plans for such forces. In fact, the 2006 Quadrennial Defense Review from the US Department of Defense cited China as having the “potential to compete militarily with the United States and field disruptive military technologies that could over time offset traditional US military advantages absent US counter strategies.” Recent anti-satellite tests in which the PRC destroyed an aging satellite are examples of the PRC’s emerging capabilities that could threaten US abilitiy to prevail in a potential military conflict with China.

Despite the difference between capability and intent, the expanding presence of PRC forces increases the opportunity for a miscalculation that could result in military conflict. Additionally, although the PLAN is smaller in number than the US Navy, the proximity to China of any military conflict over Taiwan would limit, at least initially, the number of US forces available to respond. Finally, enhanced military capabilities would make the option of armed conflict credible for Beijing. Approval of a referendum in Taiwan may not require military action by the PRC, but the growing capabilities of the PLA and PLAN would give the Chinese leadership greater confidence to act militarily if it so chooses.

The second factor that may increase the risk of military involvement for the United States is the Taiwanese push for independence as a result of a growing Taiwanese identity—that is, more and more citizens consider themselves “Taiwanese” rather than “Chinese.” Since the relocation to Taiwan after the revolution in 1949, a greater majority of Taiwanese citizens have begun to feel increasingly removed from their “Chinese” identity. Unlike Hong Kong under temporary British rule, where the population still viewed themselves as ethnically Chinese, demographic studies show that 60 percent of Taiwanese view themselves as uniquely “Taiwanese.” The development of this trend may also increase the voice for de jure independence, and therefore threaten the unstable cross-strait peace.

Finally, there has been remarkably little in the way of coordinated effort to reduce barriers preventing a more effective relationship among Washington, Taipei, and Beijing. Official relations between Taiwan and Beijing are currently forestalled by Taiwan’s refusal to acknowledge the “one China” principle, while US-PRC relations are plagued by the ambiguities in US policies and many contrarian voices in Congress. Although Washington and Beijing recently announced an agreement to establish a long overdue military hotline and plans to further enhance military to military relations and dialogues, these efforts still remain in their early stages.

A Real Road to China

To reduce the possibility of conflict, the United States should define and clarify its statements, creating a reliable set of actions and preditable reactions. Such clarity may even create the impetus for dialogue between Taiwan and the PRC, thereby circumventing the use of arms to reach a resolution. The United States can also limit potentially provocative moves by the Taiwanese government by attaching defined consequences to undesired actions. US officials do not wish to tell the Taiwanese government how to manage its elections, nor do they have a desire to dictate internal dialogue. However, they have failed to communicate that independence-seeking referenda will have clear and undesirable consequences, such as a US modification of the Taiwan Relations Act.

The United States should also press for a specific timeline and process for reunification, or at least a process that creates a dialogue to that end. This would be a controversial move, but it was explored by Beijing in the 1990s, and, at minimum, it would set a theoretical limit to US military requirements. Unfortunately, Taipei has few reasons to accept a timeline, as it currently has a desirable level of sovereignty. Adopting a timeline would entail its own risks—including possible provocation of the Taiwanese government toward more aggressive attempts for independence.

However, the changing dynamics of the situation will soon make adherence to the “one China” principle and the growing clarion call for genuine, de jure Taiwanese independence irreconcilable. As difficult as it is, US policymakers should adopt a new strategy that accounts for these new dynamics. Additionally, a timeline for reunification may show Taiwan the futility of movements toward independence and provide the PRC with a clearer understanding of US commitment so as to forestall military intervention.

Finally, a number of policy choices exist that can further reduce the potential for conflict between the United States and China. The United States must devise a strategic plan and message that holistically examine the complex dynamics of its relationship with China. The United States cannot merely focus on any one element of the relationship—be it human rights, trade imbalance, intellectual property, environmental impact, or regional enmities. Instead, Washington must create a set of comprehensive diplomatic, economic, and military policies that enables the peaceful development of China and its integration into key organizations as an international stakeholder.