China’s use of gray-zone tactics against Taiwan, an approach meant to weaken Taiwan’s resolve through persistent low-level aggression, is now encountering unexpected resistance. While Beijing’s strategy aimed to push Taiwan closer to unification, its methods—economic pressure, military drills, cyber tactics, and diplomatic isolation—are instead intensifying Taiwan’s resolve to maintain independence. Here’s how China’s approach has backfired and what Washington and Taipei can do to counter the threats effectively.
Gray-zone warfare
China’s “gray-zone” warfare refers to coercive actions that fall short of open conflict. These include military provocations, economic sanctions, and cyberattacks, all of which apply pressure on Taiwan without technically crossing into war. The frequency of Chinese military exercises around Taiwan has significantly increased, and People’s Liberation Army (PLA) aircraft now routinely breach Taiwan’s air defense identification zone, a boundary designed to keep airspace secure. Beijing’s moves are part of a broader campaign to undermine Taiwan’s political stability by increasing the strain on Taiwan’s government and defense forces.
On the economic front, Beijing has targeted Taiwanese businesses with tariffs and regulatory pressures, aiming to sow discontent within Taiwan’s population by hitting industries that lean politically against Chinese interests. Politically, China has pressured countries worldwide to withdraw support for Taiwan, isolating it diplomatically. A recent example is the small nation of Nauru, which severed its ties with Taiwan in favor of China. This shift attempts to normalize the narrative that Taiwan is part of China, undermining Taiwan’s global standing and deterring international recognition.
Gray-zone tactics’ unintended consequences: A Taiwanese backlash
Contrary to China’s expectations, its gray-zone campaign is reinforcing, rather than eroding, Taiwan’s determination to stay separate from Beijing. China’s persistent military presence has raised Taiwanese concerns about Beijing’s aggressive stance and highlighted the possibility of military conflict. Instead of creating fear, China’s campaign is boosting public resolve in Taiwan, particularly after witnessing Beijing’s suppression of democracy in Hong Kong. A striking 2024 poll from National Chengchi University found that only 7% of Taiwanese citizens support unification, half the rate seen just six years ago.
Taiwan’s government has responded by increasing defense budgets, extending mandatory military service, and building up missile and drone programs. Inspired in part by Ukraine’s resilience against Russia, Taiwan’s population has come to see independence as something worth defending, rather than conceding under pressure. Taiwan’s firms are also adapting: many have started to pivot away from China as a primary trade partner, with investments in China dropping to just 11% of Taiwan’s foreign direct investments in 2023, down from 43% in 2016.
Economic independence: Taiwan’s resilience strategy
China’s economic pressure campaigns were meant to show Taiwan the costs of resisting unification, yet they have accelerated Taiwan’s economic diversification. Beijing has imposed tariffs on hundreds of Taiwanese goods, pressuring industries that might advocate for closer ties to China. But in response, Taiwanese firms are building supply chains outside of China, with Taiwan’s high-tech industries increasingly aligning with U.S. interests, strengthening Taiwan’s resilience against China’s economic tactics. Ironically, China remains dependent on Taiwanese technology, making it vulnerable if Taiwan restricts key technology exports.
Strengthening defense without stretching resources
Taiwan faces a dilemma in responding to China’s military incursions. Every time Taiwan scrambles jets to respond to PLA incursions or follows Chinese naval vessels, it depletes Taiwan’s defense resources and burdens its military. While these responses show resolve, Taiwan risks exhausting resources needed to withstand a full-scale blockade or invasion.
To address this, experts suggest that Taiwan streamline its defense priorities. Rather than matching China plane-for-plane or tank-for-tank, Taiwan should invest in more cost-effective defenses like uncrewed drones, mine systems, and missile capabilities. These assets can protect Taiwan with minimal drain on its resources, giving it a strategic edge against China’s larger forces.
The U.S. response
For the United States, Taiwan’s independence is vital for stability in the Indo-Pacific. To counter China’s gray-zone tactics, the U.S. can help raise the cost of Beijing’s coercion by providing additional military aid to Taiwan, increasing joint military drills, and deploying advanced capabilities in the region. These demonstrations of strength would challenge China’s attempts to dominate the Taiwan Strait and reassure Taiwanese citizens of the U.S. commitment.
Moreover, the U.S. should make it clear that economic consequences await China for continued gray-zone aggression. By threatening restrictions on high-tech exports or broader sanctions, Washington could pressure Beijing to reconsider its approach. China’s dependence on imported technologies for its industrial base makes these levers particularly effective. The message to Beijing would be clear: further aggression against Taiwan risks strategic losses that outweigh any potential gain from gray-zone tactics.
The road ahead
Though China’s gray-zone tactics have not succeeded in breaking Taiwan’s resolve, Taipei cannot ignore them. Instead, it should continue investing in robust cybersecurity to safeguard against disinformation and cyberattacks, diversifying trade partners to reduce economic vulnerabilities, and preparing for a long-term standoff. While the gray-zone strategy might not pose an immediate existential threat, each act of aggression tightens the knot of mutual hostility, making military conflict increasingly likely.
To avoid direct confrontation, Washington and Taipei can focus on fortifying Taiwan’s defenses, advancing strategic partnerships, and building a narrative of unity against coercion. As Taiwan strengthens its independence and resilience, China may ultimately recognize that aggression is not a sustainable path to unification.
Conclusion
China’s gray-zone approach to Taiwan has unexpectedly backfired, strengthening Taiwan’s identity and determination to resist unification. As Beijing continues its campaign, it may soon find that the harder it pushes, the more resilient Taiwan becomes. With Taiwan fortifying its defenses and the United States deepening its commitment to Taiwanese security, China’s gray-zone tactics may ultimately prove self-defeating, driving Taiwan further from Beijing’s reach.
As tensions simmer, both Taiwan and the U.S. face the challenge of turning gray-zone threats into opportunities for resilience. By preparing for escalation without provoking open conflict, they can ensure Taiwan’s security and keep the region balanced against coercion, even as China’s ambitions persist.
