Good news has been scarce in world affairs this year. So it's worth pointing out one conflict zone where the worst-case scenario hasn't occurred: the protracted standoff between China and Taiwan.
Just over a week ago, Taiwan held free and fair elections. China's least favorite candidate won, but Beijing's reaction was unexpectedly subdued.
Chinese officials repeated their long-standing promise that Taiwan will one day be absorbed into China. They warned Taiwan's newly elected president, Lai Ching-te, against moving toward a formal declaration of independence. And they resumed air and naval combat patrols along the “middle line” between Taiwan and the mainland.
That response barely qualifies as saber rattling by recent standards, and was much less than many China watchers had expected.
“It was a dog that didn't bark,” said Jude Blanchette of the Center for Strategic and International Studies in Washington.
President-elect Lai, a Harvard-trained doctor, was also remarkably restrained.
“As president, I have an important responsibility to maintain peace and stability in the Taiwan Strait,” he said in his victory speech. He added that he has no intention of declaring independence because the island is already autonomous in practice.
The United States also played a role, offering guarantees to both sides.
When reporters asked President Biden for his reaction to the election, he responded with just five words directed at Chinese President Xi Jinping: “We do not support independence.” Meanwhile, an American delegation visited Taipei to reaffirm the American position that Taiwan's status cannot be changed without the consent of the people of Taiwan.
There is no guarantee that this calm will last. Xi and other Chinese communist leaders are still committed to extending Beijing's sovereignty to Taiwan. After watching China extinguish democracy in Hong Kong, Lai and a growing majority of Taiwan's people intend to avoid that outcome.
But for the moment, all sides have taken a step away from military conflict. There is a simple reason for this: the costs of war would be too high, even for China.
This month, Bloomberg Economics estimated the economic impact of a Chinese invasion of Taiwan and concluded that it would trigger a massive global recession. By those estimates, a war would shrink China's economy by nearly 17%, the U.S. economy by nearly 7%, and the world economy by about 10%.
If China were to impose an economic blockade on Taiwan (a step short of a shooting war), that could backfire for Beijing. A one-year lockdown would shrink China's economy by nearly 9% and the U.S. economy by about 3%, according to Bloomberg estimates.
In any case, California, which trades more with China and Taiwan than any other state, would take a disproportionate hit. Technology companies like Apple and Intel depend on Taiwan for advanced semiconductors and China for manufacturing. California's agricultural sector depends on China and Taiwan as two of its main export markets.
China watchers say Xi's top priority is to restore his country's faltering economy to the rapid growth it enjoyed in the years before the COVID-19 pandemic. China reported last week that its economy grew 5.2% last year. Many economists believe that figure is artificially inflated: it does not appear to reflect China's challenges in youth unemployment, deflation and the collapse of the housing bubble.
“Their internal economic problems affect how they approach Taiwan,” said Bonnie Glaser, a China scholar at the German Marshall Fund. “Xi Jinping appreciates the fragile stability that has been achieved in the relationship between the United States and China. A crisis over Taiwan would alter that.”
One more factor: Xi does not seem confident that the corruption-plagued Chinese military will succeed in a major crisis.
“All of those factors have led them to recognize that there are very real risks in using force against Taiwan,” he said.
That doesn't mean the standoff over the Taiwan Strait is over. The status quo is working reasonably well for Taiwan and the United States, but it still doesn't work for the Chinese Communist Party, which considers the island a renegade province.
“Chinese military pressure is going to continue,” Glaser predicted. “The only question is, at what level?”
Meanwhile, he added, China will continue to exert economic and political pressure on the island, using carrots and sticks to reward China-friendly figures and punish critics.
Last year, China abruptly blocked imports of Taiwanese mangoes, which are mainly grown in southern Taiwan, a stronghold of Lai's Democratic Progressive Party.
One of Beijing's goals will be to widen fissures in Taiwan's government. Lai won the presidency with only 40% of the vote and his pro-independence party lost its majority in parliament; If Lai wants to increase defense spending, he will need the support of other parties.
Blanchette said China is focusing on “gray zone” measures, actions that fall short of military strikes or blockades that would provoke a reaction from the United States. Ban mangoes, for example.
“The goal is to create situations in which the United States is unable to respond, to convince Taiwan that it is alone and that its American support is very limited,” he explained. The challenge for the United States is to find ways to stop such movements.
That's a recipe for more years of tension and instability. But a look at the world map shows that kicking the can down the road is often better than starting another war.
