China's Stance on Taiwan: Unlikely blockade or imminent invasion?

Within the context of Russia’s full-scale invasion of Ukraine, many political observers are saying that China is watching the situation closely and taking notes for its own ambitions in the South China Sea. Amidst speculation about a potential Chinese invasion or blockade of Taiwan by the end of this year, RANGE forecasters believe there is only a 2% chance of this scenario materializing. This figure has steadily dwindled from single-digit percentages since the question was first posed in July. Prominent forecasters “Tilu” and “Polly” argue that the robust U.S. military presence in and around Taiwan acts as a deterrent. A similar view is held by forecaster “hiimalex”, who says they:

[…] do not believe there is a chance of a full-scale blockade while there is still a Russian conflict going on. China is involved with the conflict and they would not split their resources at this time especially with the heavy U.S. naval presence that is constantly around Taiwan.

Furthermore, RANGE forecaster “DRumberg” suggests that while a Chinese attack on Taiwan remains a possibility, it is unlikely to occur before the next U.S. election. The views of our forecasters highlight that the issue of Taiwanese sovereignty is inherently linked to U.S. military dominance in the region.

What does the future of U.S. military dominance in Asia look like?

Let’s look at another question related to Chinese military capabilities: On October 27, 2022, RANGE asked forecasters whether China would replace the U.S. as the most dominant military power in Asia by the end of 2024. The consensus among 136 forecasts (as of September 20, 2023) remains remarkably low, averaging at a mere 7% likelihood. Many forecasters point to the significant disparity in military spending between the U.S. and China as a primary reason for their skepticism. RANGE forecaster "BK" supports this argument by presenting a graphic illustrating the colossal U.S. military budget, which is effectively equivalent to the budgets of the next 10 countries combined. He therefore assigns only a 1% probability to China overtaking the U.S. in military dominance. Notably, forecaster "HelloHeidbrink" notes that while China has announced substantial investments in military modernization, such advancements are not anticipated until 2027. The question of budgets and economic strength thus plays a major role regarding any Chinese military ambitions.

RANGE forecasters have also given us some insights on the topic of EU and U.S. trade with China. But first, let’s look at the facts: In 2021, China emerged as the third-largest partner for EU exports of goods (10.2%) and the largest partner for EU imports of goods (22.4%). Germany led EU goods exports to China, while the Netherlands stood as the largest importer of goods from China. Nevertheless, the EU’s trade deficit with China expanded by over a third in 2021. Eurostat data reveals that imports from China to the EU surged by more than a fifth, reaching 472 billion euros ($522 billion) compared to 2020. This widened the EU’s trade deficit with China to 249 billion euros. Remarkably, EU exports to China grew by 10%, a rate exceeding that to other non-EU countries.

The evolving geopolitical landscape also plays a pivotal role. Russia's emergence as a hostile, militarily aggressive power in Europe, aligning itself with Beijing, prompts complex questions regarding the West's response. This underscores the intricate interplay between geopolitical interests and economics and trade, which have long been at the forefront of U.S.-China and EU-China considerations.

Given these factors, RANGE posed the question of whether US and EU trade with China would increase from its 2022 levels by the end of 2023. Forecasts on this matter exhibit greater ambiguity, with an average 62% chance that trade will increase and a 38% chance that it will not. Forecaster "StevenPH" initially held a 55% probability that trade would increase, citing the potential for a political will to decrease economic dependence on China amidst Russia's war against Ukraine. However, he later updated his forecast to 75%, citing the post-Covid recovery of the U.S. and EU and the resultant surge in demand for imports.

When we look at the detailed analysis, we can see that the forecast distribution has a relatively even spread. As it is expected, we see a bigger cluster around the higher probabilities, given the overall forecast-average of 62%. However, we do not see clusters around the extremes, which would indicate strong convictions about the issue of trade relations with China, but we rather observe more nuanced assessments by our forecasters.

In conclusion, we can say that China's future in terms of military capabilities and trade relations with the EU and U.S. remains subject to a diverse range of perspectives. As the world continues to grapple with evolving geopolitical dynamics and economic considerations, RANGE forecasters offer valuable insights into the possible trajectories for China's role on the global stage.

What do you think?

Try your hand at forecasting the future of China by logging in or signing up as a forecaster on RANGE at rangeforecasting.org. The three questions discussed in this blog post are currently live under the China category.

RANGE (Rethinking Assumptions in a New Geostrategic Environment) is a crowdsourced forecasting platform run by the Bertelsmann Foundation and Bertelsmann Stiftung focused on geopolitics and the transatlantic relationship. To learn more visit RANGE's about page.

About the author: Kalum Rock is part of the Europe’s Future program at the Bertelsmann Stiftung in Berlin. He is currently a student of European Governance at the University of North Carolina, Chapel Hill and Humboldt-Universität zu Berlin, pursuing a Master’s degree in Transatlantic Relations. He holds an undergraduate degree in Political Science and Philosophy from Friedrich-Alexander-Universität Erlangen-Nürnberg in Germany.