Hudson Institute

A Big-Picture Defense of Taiwan and a Free and Open Indo-Pacific

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John P. Walters and Taiwanese President Elect William Lai in Taipei, Taiwan.
John P. Walters and Taiwanese President-elect William Lai in Taipei, Taiwan.

In late January, a delegation from Hudson Institute visited Taiwan to congratulate the island’s new democratically elected leaders and exchange views on our common struggle against the Chinese Communist Party—the world’s most dangerous Marxist-Leninist tyranny. 

We saw a strong sense of Taiwanese identity and national pride in having conducted a peaceful democratic election. We also saw a growing economy with technological superiority, especially in advanced semiconductors. And we met with a leadership working to counter the intimidation, subversion, and aggression of the Chinese Communist regime.

The Taiwanese are no more willing to come under the dominion of a large, aggressive neighbor than Ukrainians are. They understand the aggressive ambitions of Xi Jinping and the longstanding CCP goal of complete political control over Taiwan. They have seen the CCP shred its commitment to the political autonomy of Hong Kong and its willingness to apply its police-state tactics against those standing up for freedom there. Although Taiwan has declined to declare itself an independent state, the Taiwanese people are unwilling to compromise or forgo their de facto independence. 

If the CCP attacks, they are prepared to fight. Taiwan currently has 247,000 active-duty service members and nearly as many reservists. Earlier this year, in response to increasingly bellicose talk and aggressive action from China, Taiwan introduced a one-year term of compulsory military service for 18-year-olds. Taiwan’s military is modern and capable. Yet the task of deterring a CCP attack is daunting, and Taiwan cannot do it alone. 

In today’s “hard-power” reality, protecting Taiwan is one of the crucial tasks to deter the global ambitions of Xi Jinping. The Taiwanese deserve a stronger US and allied commitment than “strategic ambiguity,” a path for security that cannot be reduced to “surrender or die,” and a strategy that counters China’s salami slicing—the tactic of small, steady, aggressive advances. A genuine defense of Taiwan and the deterrence of Xi Jinping’s expansionist project requires a comprehensive strategy that includes and goes well beyond the too-narrow goal of defeating the initial invasion of Taiwan.

In the early years of the first Cold War, Hudson Institute’s founder, Herman Kahn, insisted on the importance of seeing the big picture. Insight into what this might mean today can begin with the question, What if the current cold war adapted the successful policies of the first Cold War?

There remains debate about the Reagan administration’s maximalist policy of “we win, they lose”— a policy that remained unspoken at the time because many elites believed it to be totally unrealistic and dangerously aggressive.

This is not the place to resolve the ongoing debate about the Reagan administration; but perhaps some personal reflections on the lessons of Ronald Reagan are a suitably humble start, with some elements simplified for clarity.

Reagan believed in hard power and began by rebuilding America’s military. His administration exploited American technological advantages to create a force the Soviets believed they could not overmatch or defeat. Reagan demonstrated military superiority and strengthened deterrence with unilateral and multilateral military exercises in the air, on land, at sea, and in space. The Soviets were presented with military problems they could not solve—and they knew it.

In addition, the Reagan administration weakened the economic strength of the Soviet Union because economic strength is a necessary foundation for military power. A famous target was the Soviet Union’s gas exports. Reagan hampered natural gas exports and, by working with Saudi Arabia, reduced the price of oil and therefore the Soviets’ revenue. The restriction of key technologies, especially computers, hurt the Russian military and the Russian economy. Vast economic espionage by the Soviets did not overcome the damage and even allowed carefully crafted misinformation to harm Russian industry.

Reagan knew that the deep weakness of Russia’s Marxist-Leninist regime was an ideology that put it at war with those it sought to rule. Reagan destabilized the Soviet hold over key satellite nations in Europe and shook the confidence of key members of the Communist Party elite. He spoke to the Russian people and gave voice to their suffering. His war of ideas was the information battleground of the 1980s—it increased the constant risk tyrants faced from the millions they were oppressing.

Finally, Reagan knew the proper response to subversion and expansionism—the salami slicing of the first Cold War—was “rollback.” National security directives made it the policy of the United States to push back on the periphery of the Soviet empire, moving from containment and détente to shrinking Russian influence and taking back vulnerable Soviet conquests. Reagan changed a failed policy of defense into a successful policy of offense. 

These successful Reagan policies offer a model for how the United States can support Taiwan and our Indo-Pacific allies and deter CCP aggression.

Hard Power

The US needs to demonstrate its capacity and the capacities of its allies to prevent a CCP conquest of Taiwan. Capabilities we possess but do not demonstrate or otherwise make credible will not deter the CCP. From strategic defense systems on down, numbers matter. But sheer numbers of personnel and military platforms cannot be the measure of successful policy (as they were not with the Soviets and are not with the Russians in Ukraine). Smarter matters most, and more innovative technologies can be decisive. America’s technological edge can strengthen deterrence and create a warfighting advantage against the Communists.

Regarding the defense of Taiwan and Indo-Pacific allies, the use of more unmanned, networked, and autonomous systems will be a powerful new tool. See, for example, Bryan Clark and Dan Patt’s Hedging Bets: Rethinking Force Design for a Post-Dominance Era. The virtues of such systems are many: They can be produced quickly and at much less cost than legacy systems and therefore in greater numbers. They can be deployed in a strategy that anticipates their attrition. They can be brought to the American arsenal quickly and operate in air, land, sea, undersea, and space. They can vastly complicate the planning for any attack on Taiwan and other allies in the Indo-Pacific. And variants of these systems could be produced independently by technologically sophisticated American allies including Taiwan, Japan, South Korea, Australia, and India.

While the United States has security treaties and agreements in the Indo-Pacific, there is nothing equivalent to the North Atlantic Treaty Organization, and there have been no large exercises among the United States and partners to demonstrate their ability to collectively counter various forms of CCP aggression. In fact, some allies might oppose such exercises as provocations against the CCP. This is a weak deterrence posture where a show of strength would be useful.

To move beyond current limitations, our Indo-Pacific allies have begun improving their defenses. Now they are also moving forward on training together and developing integrated defense plans. This needs to accelerate. The time has come for joint operations and demonstration of that capability and commitment.

Given fears about CCP reactions, full exercises similar to those conducted in the first Cold War may be difficult to arrange. But a good second choice is available: sophisticated war-game simulations. These can include a range of warfighting tools, including cyber weapons, decision-centric strategies, and disruption and dissuasion tactics assisted by machine learning. The results of these simulation efforts can be shared with allies and—selectively—with adversaries.

Economic Power

Only a few years ago, the dominant view was that the economic growth of Communist China would inevitably propel it to become the dominant global superpower. China’s perceived preeminent economic strength would be the foundation of ever greater military power and political dominance of the global order. One key assumption that supported this view was that unlike with the Soviets, America and the West were so extensively tied to the Chinese economy that strategic decoupling was impossible. Democracies were doomed to feed the rise of Communist China even as they declined. As Lenin famously remarked, when the time comes to hang the capitalists, the capitalists will sell us the rope.

Today, China’s economy is teetering if not already in serious decline. There is a growing consensus that the Chinese Communist regime will never enjoy a gross domestic product greater than that of the United States, Europe, and the democracies of the Indo-Pacific. By this metric, speculation about relative Chinese decline is more relevant than a focus on the United States alone. This is why expanding trade, and therefore economic strength, among the democracies should be a top security priority. New trade initiatives need to overcome the flaws and lack of enforcement of the old ones. The United States should consider trade not merely in terms of bilateral agreements but also in strategic terms to unite and defend the democracies.

Likewise adversely looming over China’s future is a demographic implosion resulting from the one-child policy. China is aging rapidly—and without a social safety net in place to care for the elderly or family structures that can make up the gap. Meanwhile, the CCP’s anti-free market practices have investors looking elsewhere—even among China’s own people. The deadliest feature of the CCP’s domestic economic order is the misallocation of capital (and its driver, oligarchic corruption) now visible across the country. Thomas Duesterberg has thoroughly analyzed the economic vulnerabilities of the Chinese Communist system and the ways the United States and its democratic allies can weaken its economic power and influence its behavior.

The strategic decoupling once thought impossible is happening now. What’s more, the argument that America was too dependent on China to decouple ignored the evidence that the CCP began strategic decoupling on its own years ago—perhaps in the mistaken view that China had more than ample resources, including financial capital, of its own. Today, the market forces of capitalism are moving to deny the Marxist-Leninist regime in China the investment capital and loans it increasingly needs. The managers of investment resources in the West now see growing risk in placing the wealth of shareholders in the People’s Republic of China and PRC-related investments. Those managers face personal accountability for failing to properly avoid exposure to excessive risk.

Far from inevitable global domination, the CCP has led China to dangerous shortages of energy, water, and food. The conception of the PRC as a simultaneously wronged nation and unstoppable giant on the global stage is a carefully fashioned false narrative.

America is now building a strategy to undermine the economic foundation of the CCP’s military modernization and its ability to oppress the Chinese people. The scope of the current efforts is broad—from better protecting sensitive military and dual-use technology to stemming investment and capital flows to the PRC to ensuring democracies have access to critical resources and maintain secure supply chains.

Information Power

Amid this economic competition, Chairman Mike Gallagher and the Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party have drawn attention to China’s information warfare.

Comparing Reagan’s engagement with the Soviet Union and America’s current posture toward the Chinese Communist regime, we see Washington’s longstanding failure to call Chinese tyranny by that name—and to encourage the legitimate hopes of the Chinese people. American leadership has unwisely parked an important weapon: the truth.

A variety of experts on the PRC estimate that the CCP regime has to spend more of its resources on internal security than it does even on its military. The CCP has created the world’s most pervasive surveillance state—because it needs just that to maintain control. The CCP aspires to crush the freedom of Hong Kong and Taiwan because both are examples that deeply threaten the regime’s grip on power. They must commit genocide against the Uyghurs because this Muslim people has resisted communist indoctrination in godlessness—and because the Uyghurs reside in a strategically important territory. 

The CCP conducts global information warfare against America and its allies because the example of democracy—even flawed and raucous democracy—is a powerful indictment of the communist system.

American leaders who understand and believe in our democratic principles can put strategic pressure on the CCP by articulating those principles and contrasting them with the injustice suffered by the Chinese people. Public statements, democratic diplomacy, speaking up for dissidents, and speaking directly of the legitimate democratic aspirations within China will be a powerful force. When the Chinese Communist regime seeks to intimidate Taiwan, a direct discussion of the injustice of CCP rule in China will be an effective (and asymmetrical) response. 

Much more, blunt discussion of the Chinese Communist Party’s oppression and kleptocracy will shake the confidence of at least some party members—as happened with the Soviets. This is an old and proven source of superior American power. New technologies can enlist machine learning and artificial intelligence to make truth-telling a transformational strategy.

As in the late 1970s, there is a dangerous overestimation of our adversaries’ power and a misunderstanding of the power of the United States and its democratic allies. This misunderstanding is dangerous in that it creates a false impression of weakness. America is starting to understand the need to change that impression, as Reagan did more than 40 years ago. There is no time to waste.

A corollary of Herman Kahn’s focus on the big picture was his comment that, “sometimes, to solve a problem, you have to make it bigger.” The defense of Taiwan is much bigger than Taiwan. In the broadest sense, it is about the moral and practical superiority of freedom over tyranny. Confidently defending Taiwan and America’s Indo-Pacific allies requires a broader view of the conflict we face—linking key American military, economic, and political sources of power with the confidence to deploy them. The process has begun. Now it needs greater clarity, more resources, and a faster pace.