The China-U.S. tensions over Taiwan are not new, but recent events have cast a harsher light on the fragility of the situation. Despite attempts at dialogue, like National Security Adviser Jake Sullivan’s visit to Beijing in late August, the Chinese government’s reaction to U.S. arms sales to Taiwan has been swift and severe. 

On September 18, China’s Ministry of Foreign Affairs imposed sanctions on nine U.S. defense companies over a $228 million arms sale, announced by the U.S. State Department on September 16, that involved the return, repair, and reshipment of spare parts for Taiwan. The announcement came just before a U.S. Navy P-8A Poseidon transited the Taiwan Strait on September 17. 

In response, China’s Ministry of Defense doubled down on September 20, warning both Taiwan and the United States that U.S.-made weapons would not safeguard Taiwan’s Democratic Progressive Party (DPP), but would instead directly lead to “self-destruction” – a stark reminder of the increasing hostility and rhetoric surrounding Taiwan’s defense.

The September 16 announcement marks the 16th arms sale to Taiwan under the Biden administration, yet doubts continue to mount over the United States’ true commitment to Taiwan’s security. The Biden administration’s sales have primarily consisted of munitions and sustainment packages delivered in small tranches, failing to address Taiwan’s need for a comprehensive modernization of its military, especially in comparison to China’s rapid space of military modernization.

According to Rupert Hammond-Chambers, the president of the US-Taiwan Business Council, the Biden administration appears to be avoiding more substantial military commitments to Taiwan, reminiscent of pre-Trump era policies that capped the value of arms sales to avoid provoking Beijing. In a press release, Hammond-Chambers warned that “U.S. support for Taiwan’s material force modernization has been waning since 2021. It now sits at its lowest point since 2001, bar the Obama Administration’s 4+ year arms sales freeze from 2011-2015, and it is continuing to fall.”

Recent arms deliveries have also been fraught with problems. A $345 million arms package delivered between November 2023 and March 2024 included unserviceable and expired equipment, some of which was found to be mildewed and water-damaged, according to a report published on September 11 by the Inspector General Office of the U.S. Department of Defense. These revelations undermine the credibility of U.S. commitments to Taiwan and raise serious questions about the effectiveness of these sales in enhancing Taiwan’s defense capabilities.

More advanced and lethal systems, such as F-16Vs, have faced significant delays, adding to a backlog of $20 billion in undelivered military hardware. U.S. officials have attributed these delays to the urgent demands of the war in Ukraine, suggesting that Washington’s priorities lie elsewhere, particularly in Europe, rather than in the Indo-Pacific region. This prioritization was further underscored by the urgent redeployment of the USS Lincoln from the West Pacific to the Arabian Sea in early August, leaving a significant gap in aircraft carrier presence in the region that remains unfilled.

The restrained and fragmented nature of U.S. arms supplies to Taiwan sends mixed signals at a time when Beijing’s military posture is increasingly aggressive. China’s Ministry of Defense has pledged that the People’s Liberation Army (PLA) will continue to intensify its military training and preparations, and will take decisive measures to thwart any attempts at “Taiwan independence” or external interference. China’s actions are not merely rhetorical; they underscore a clear strategy to pressure Taiwan and the United States by both escalating military readiness and undermining the credibility of U.S. security guarantees to Taiwan.

Meanwhile, China appears to be taking calculated steps to marginalize the Taiwan issue in its broader strategic relationship with the U.S., particularly during the sensitive U.S. presidential election cycle. With polls showing a close race between Donald Trump and Kamala Harris, Beijing has publicly maintained a non-interventionist stance, framing the U.S. election as a domestic affair. However, behind the scenes, China is hedging its bets, preparing to navigate both potential outcomes. In the event of a Trump victory, Beijing appears ready to endure economic sacrifices in exchange for strategic leverage, anticipating a transactional approach from a second Trump administration regarding Taiwan. 

Conversely, Beijing is also exploring opportunities to proactively build diplomatic consensus with Harris, should she win, possibly through side discussions with President Joe Biden at the upcoming APEC and G-20 summits in South America this November. Given Harris’ inexperience on foreign policy, China will be aiming to influence her potential administration. 

Meanwhile, Beijing is believed to continue strengthening military and political alignment with Russia, thereby complicating U.S. and allied presence in the Western Pacific, and bringing in a Russian factor into potential Taiwan contingency that has been repeatedly mentioned by the United States and Japan in particular. This strategic positioning serves China’s broader goal of diminishing U.S. influence in the region and enhancing its own sphere of control.

The consequences of this restrained U.S. approach are stark. Taiwan finds itself in a security dilemma, relying on a defense partner whose commitment appears inconsistent, while facing a China that is more emboldened than ever. This imbalance heightens the risk of miscalculations and unintended confrontations in the Taiwan Strait, with potential implications that stretch far beyond the immediate region. 

As the United States continues to navigate its broader geopolitical priorities, Taiwan remains caught in a perilous position, where the gaps in its defense capabilities are increasingly visible. The situation illustrates the broader challenges of managing great power competition in a multipolar world where the stakes are high and the margins for error are dangerously thin. The ongoing tensions are not just a test of military resolve but also of strategic stability in the Indo-Pacific, setting the stage for a potentially transformative period in regional security dynamics.

The U.S. is in the final stages of sending almost $570 million in security assistance to Taiwan — the largest such package to date, and one sure to frustrate China — according to multiple congressional aides and a U.S. official.

The administration will use its fastest tool available to deliver the aid: directly shipping its own stocks, a process it’s heavily relied on to support Ukraine’s self-defense. This $567 million package has already received the Pentagon’s approval and is now awaiting the president’s signature.

As it stands, it would be almost double a package of $345 million sent last year. The president will likely approve the tranche before the fiscal year expires at the end of the month, said one aide and an official, who like others speaking for this story were not permitted to talk to the press and were granted anonymity.

The new package of aid has not been previously reported.

Taiwan is by far the most delicate issue in America’s relationship with China. Beijing maintains the democratically governed island is part of its rightful territory, and won’t rule out military force to one day unite with it. The U.S., meanwhile, is Taiwan’s oldest and largest supplier of military aid.

The impasse often leads to public displays of frustration. At this year’s Shangri-La Dialogue, Asia’s largest defense summit, China’s Minister of National Defense Adm. Dong Jun warned that supporters of Taiwanese “separatists” would be punished — shortly after China’s military held large drills around the island.

And in a briefing this week, a spokesperson for China’s Ministry of Foreign Affairs condemned U.S. military support, arguing it “sends a wrong message to ‘Taiwan independence’ separatist forces.”

Still, at a September defense conference hosted in Beijing, which a top Pentagon official for China attended, members of the People’s Liberation Army were gentler. The month before, U.S. National Security Advisor Jake Sullivan also traveled to China, where he met with senior members of the government and helped schedule a long-sought call between America’s top military leader in the region and his Chinese counterpart.

The security assistance will fund training, stockpiles, anti-armor weapons, air defense and multi-domain awareness, according to a U.S. official, who would not be more specific. It will also include drones, which are key to America and Taiwan’s “asymmetric” strategy to defend the island against China’s much larger military.

The ambiguity is typical for aid to Taiwan, which the U.S. rarely discusses in detail due to its sensitivity. Neither the Pentagon nor the National Security Council would comment for this story, except to say that America maintains the right to support Taiwan’s self-defense, per longstanding government policy.

“We have no comment on this matter. Taiwan will continue to enhance defense capabilities and closely work with the United States so as to actively uphold peace, stability and prosperity across the Taiwan Strait and in the Indo-Pacific region,” a spokesperson for Taiwan’s unofficial embassy in Washington said in a statement.

In an effort to hasten support for Taiwan, Congress gave the administration the authority to send Taiwan up to $1 billion in its own stocks each year — a more direct show of support than previous assistance from arms sales. That said, lawmakers didn’t give the Pentagon an actual budget, and the department has been loathe to send equipment it can’t replace.

After debating a further package of aid last year — one supported by members of the State Department and White House — Secretary of Defense Lloyd Austin paused any further aid to Taiwan without funding.

That money arrived in April, when Congress included $1.9 billion to replenish U.S. stocks sent to countries in the Indo-Pacific. Leaders across the Pentagon have since been planning how to use that funding, most of which will go to Taiwan.

The package now close to approval went through several rounds of revisions, according to multiple officials. The Pentagon initially planned a smaller amount, but in a meeting of different parts of the administration this summer, multiple senior officials said it needed to be far larger — leading to the expanded $567 million figure.

The Pentagon is also now working on a third package of drawdown aid to Taiwan, which the government plans to complete by the end of the administration in January, the U.S. official said.

The April bill featured a further $2 billion in longer-term security aid for the region, $1.4 billion of which went to Taiwan in a separate package approved — though never announced — this summer. The U.S. green-lit the sale of $228 million in repairs and spare parts for military kit this week, adding to the $19 billion in such foreign military sales Taiwan is waiting on for delivery.

A Pentagon watchdog recently published a scathing report on the first round of support last year. It found that shipping issues caused by the American military led to aid arriving in Taiwan later than expected, covered in mold and in some cases expired. Fixing the issues cost the two sides a further $730,000.

“More broadly, the delivery of non-mission-capable items inhibits the [Defense Department’s] ability to achieve established security cooperation goals and may lead to loss of partner confidence in the United States,” the report said.

Ms Jill Li from the public relations division at President Chain Store Corp – one of the largest firms operating convenience stores, including 7-Eleven, in Taiwan – said that previously, its outlets had just one discount rate for two periods.

Last year, the firm added another period with a 20 per cent discount. Stores have since observed an increase in consumer demand, she added.

“On our app, consumers can subscribe to their favourite stores to keep track of the promotions. The system is very popular among office workers, young people and students,” she said. 

LOW WAGES, HIGH PROPERTY PRICES

On average, Mr Lin takes home about US$1,500 a month, a fifth of which goes to his savings.

With the remaining money, he has to support his mother, and pay rent and other expenses.

Latest official data showed that Taiwanese under the age of 30 earned about US$1,300 a month, around three times lower than their peers in South Korea, Hong Kong and Singapore.

Taiwan’s wages have stayed stagnant for the past three decades, observers said.

While Mr Lin hopes to eventually own a place, he fears his dream may not come true. Taiwan’s main city centres are known to be among the least affordable housing markets in the world.

“Based on my current income and the kind of savings that I have, it’s unlikely that I can afford to buy a house,” he said.

He, however, continues to keep his ambition alive.

“I hope that in five to 10 years, my income will grow higher and higher, and I will be able to save up money for a down payment for a house,” he said. 

BEIJING: China’s coast guard said on Sunday it will strengthen its law enforcement activities and carry out regular patrols around a small group of Taiwanese-controlled islands off the Chinese coast as tensions rise over the deaths of two Chinese nationals. Taiwan on Thursday defended the actions of its coast guard after two people on a Chinese speedboat, which got too close to a frontline Taiwanese island, died when their boat overturned while trying to flee a coast guard ship.Two others survived.
Taiwan, which China claims as its own territory, has complained in recent years about Chinese fishing boats and other vessels operating in Taiwan-controlled waters, especially around the Kinmen and Matsu islands which sit a short distance from China’s coast. China has condemned Taiwan’s actions and labelled the incident near Kinmen’s Beiding islet “wicked”.
China’s coast guard said it will strengthen its maritime law enforcement forces and carry out regular patrols and inspections in the waters around Kinmen and Xiamen, one of the Chinese cities Kinmen faces. This is to “further maintain the order of operations in the relevant waters and safeguard the safety of fishermen’s lives and property”, it added. Late on Saturday, China’s Taiwan affairs office said the deaths had caused “strong indignation” in China. It also said that there was no such thing as “restricted” waters.

TAIPEI: Taiwan’s Ministry of National Defence (MND) has said that it has detected 10 Chinese military aircraft and five naval ships around Taiwan in the past 24 hours, till 6 am (local time) on Saturday, Taiwan News reported.
Taiwan’s MND did not reveal whether the Chinese military aircraft crossed into China’s air defence identification zone (ADIZ).Following China’s action, Taiwan sent aircraft and naval ships and deployed air defense missile systems to keep a watch on the Chinese activity.
In a post shared on X, Taiwan’s Ministry of National Defence stated, “10 PLA aircraft and 5 PLAN vessels were detected operating around Taiwan up until 6 a.m. (UTC+8) today. #ROCArmedForces have monitored the situation and employed appropriate forces to respond.”
Since September 2020, China has intensified its use of gray zone tactics by incrementally increasing the number of military aircraft and naval ships operating around Taiwan. Notably, China’s Communist Party considers Taiwan as its territory, despite never having controlled it.
According to Taiwan News report, gray zone tactics are “an effort or series of efforts beyond steady-state deterrence and assurance that attempts to achieve one’s security objectives without resort to direct and sizable use of force.”
It is not the first time China has made such a move. On Friday, Taiwan’s Ministry of National Defence (MND) said that eight Chinese military aircraft and five naval ships were detected operating around Taiwan between 6 am (local time) on Thursday and 6 am (local time) on Friday (local time), Taiwan News reported.
According to Taiwan’s MND, of the eight People’s Liberation Army (PLA) aircraft, two crossed the Taiwan Strait median line in the northeast sector of the country’s air defence identification zone (ADIZ). Furthermore, one PLA aircraft entered the southwest corner of the ADIZ.
In response to China’s action, Taiwan sent aircraft and naval ships and deployed air defence missile systems to keep a watch on the activity of China’s PLA, Taiwan News reported.
“8 PLA aircraft and 5 PLAN vessels were detected operating around Taiwan up until 6 a.m.(UTC+8) today. 3 of the aircraft crossed the median line of the Taiwan Strait and entered Taiwan’s Sw ADIZ. #ROCArmedForces monitored the situation and employed appropriate forces to respond,” Taiwan’s Ministry of National Defence posted on X.
On January 30, Taiwan’s envoy to the United Kingdom Yao Chin-hsiang has urged the United Kingdom and other Western allies to help deter Chinese aggression against Taiwan, Taiwan News reported.
Yao Chin-hsiang made the remarks during a Council on Geostrategy public panel event on January 30. He said that the UK should continue to express concern regarding peace and stability in the Taiwan Strait, oppose any unilateral changes to the status quo and actively take concrete measures to defend the freedom of navigation in the region, Taiwan News reported citing Central News Agency (CNA).
He stressed that if the Taiwan Strait faces a Chinese military blockade, it would have a catastrophic effect on global economic and trade activities and harm China significantly. Taiwan envoy called it essential for the UK and its allies to make it clear to China that it recognises this reality. Yao Chin-hsiang said that Taiwan wants to be a force for good in the world and it has a responsibility to maintain peace and stability in the Taiwan Strait.
Yao stated that Taiwan President-elect Lai Ching-te has said that apart from bolstering national defence, he will seek to engage in cross-strait dialogue based on dignity and equality, according to Taiwan News reported. He spoke about the unprecedented level of China’s interference in the elections conducted in Taiwan.

Kirk Yang from Kirkland Capital says Hon Hai’s shares are “little expensive” as investors have already priced in their expectations for the chipmaker’s EV plans.