Taiwan will increase military spending in 2018, though at a lower level than requested by its armed forces. Taipei wants to reinforce its defenses at a time when risks of conflicts in East Asia, especially on the Korean Peninsula, are high and mainland China’s rearmament continues unabated.

Beijing sees the island as a rebel province and has often threatened to take it back by force if needed. But the changing political landscape on the mainland could play a role in slowing down the current militarization of the Taiwan Strait.

Military mismatch

In her National Day speech on Tuesday, Taiwanese President Tsai Ing-wen said the country’s military reform was focused on enhancing cybersecurity and intelligence capacities, improving armed forces’ capabilities to launch joint operations, and developing an indigenous military industry, particularly for fighter jets and submarines.

Taiwan will spend US$10.8 billion for its defense in 2018, a 1.9% increase compared with this year’s figures, according to the budget drafted by its Ministry of National Defense. This means it will miss the target of bringing defense spending from 2% of gross domestic product at present to 3% next year, which was announced by Defense Minister Feng Shih-kuan in March.

But the current mismatch in favor of the Chinese People’s Liberation Army (PLA) is so stark that an extra 1% of GDP for the reinforcement of the Taiwanese military would likely make little difference in case of a conflict across the Taiwan Strait.

The mainland’s military budget grew at an average of 8.5% per year from 2007 to 2016, according to the US Department of Defense. Officially, the Chinese defense budget for 2017 stands at $148.3 billion. Taipei itself recognizes that it cannot match Beijing’s military power. In the 2017 Quadrennial Military Review, released in March, the Taiwanese Defense Ministry emphasizes that the PLA possesses the capability to impose a blockade on the island and that about 1,500 Chinese missiles are aimed at it.

Further, Taipei is concerned about Beijing’s growing ability to conduct naval operations across the Taiwan Strait and project power beyond the so-called first-island chain and up to the second-island chain.

China’s political evolution

Taiwan can close the military gap with the mainland only with the backing of the United States. To do that, the alliance between Taipei and Washington should go beyond the former’s acquisition of arms from US defense contractors. In strict military terms, Taiwanese and US armed forces should improve interoperability and their capabilities to carry out joint initiatives.

It seems the US is moving in the direction of strengthening military exchanges with Taiwan. In its version of the National Defense Authorization Act for 2018, which will have to be harmonized with the bill passed by the House of Representatives, the US Senate authorizes joint exercises between Taiwanese and US armed forces, mutual military port calls and the Pentagon’s contribution to building up Taipei’s indigenous undersea warfare capacities if certain conditions are met.

At this juncture, however, the evolution of the political situation in mainland China could help Taipei more than military assistance from Washington. In her National Day address, Tsai called for the creation of “new models of cross-Strait interaction”, which was an implicit rejection of the 1992 Consensus between the Kuomintang and Communist China – that there is one China, even though each side has a different view of what that means.

Tsai, who is leader of the pro-independence Democratic Progressive Party, has so far refused to commit to the one-China principle. Since she rose to power last year, replacing pro-Beijing Ma Ying-jeou of the KMT, relations between Taiwan and mainland China have worsened.

Against this backdrop, it is unlikely that cross-Strait tensions will be reduced any time soon. But Taiwanese Premier Lai Ching-te pointed out on October 6 that there was no signal of a possible conflict between Taipei and Beijing at the moment. Lai added that the main concern for both Taiwan and the mainland was the stability of the region, menaced by the current confrontation between the US and North Korea.

Beijing is experiencing a phase of political and economic transition. If next week’s 19th Congress of the Chinese Communist Party sanctions President Xi Jinping’s quest for structural reforms, Beijing will be keen to maintain a peaceful status quo across the Taiwn Strait. Indeed, external stability has always been a prerequisite for internal development in the eyes of Chinese leaders.

Thus Chinese domestic dynamics could favor the freeze of the cross-Strait drama. This could give the two parties breathing space to try to rebuild decent relations, allowing Taiwan to reconsider its future budget priorities and abandon an arms race with the mainland that it cannot win.