China is engaged in information warfare across multiple sectors of Taiwan and plans a takeover of the self-ruled island through political coercion and cyber spying influence operations, with military force a key option, according to two new think tank reports.

China’s military is playing a central role behind aggressive activities that seek what Chinese President Xi Jinping has called the “complete reunification” of Taiwan as a historic mission the Chinese Communist Party, states a report by analysts from the intelligence contractor Booz Allen Hamilton. The report warns that a Chinese takeover of Taiwan either through cyber and influence operation or full-scale military action poses an “unacceptable risk” to global security.

“The total isolation or annexation of Taiwan would constitute a significant erosion of U.S. influence and trust in its ability to balance power in the Indo-Pacific and elsewhere,” the report said.

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Separately, a report by the American Enterprise Institute warns that China is capable of taking Taiwan without a war using strategic coercive activities.

“The U.S. and its allies must certainly prepare for the possibility of a PRC invasion, but they must also prepare for alternative PRC hybrid warfare and coercion strategies,” the AEI report states.

Dan Blumenthal, one of the authors of the AEI report, said: “The combination of a shipping inspection regime, physical and cyberattacks on critical infrastructure and an economic boycott of an island would sow chaos and discontent among the population who would demand a more ‘peaceful’ leader.” 

The 60-page Booz Allen report provides the most detailed open-source intelligence assessment of China’s plans and capabilities for indirect  means in its efforts to take control of the island, including the increasing use of artificial intelligence to subvert Taiwan’s government and public discourse. The report said Gen. Charles Brown Jr., chairman of the Joint Chiefs of Staff, reflecting Pentagon intelligence assessment when he noted, “I do think that Xi Jinping doesn’t actually want to take Taiwan by force. He will try to use other ways to do this.”

Growing Chinese military power has not given Beijing confidence for a successful Taiwan invasion or blockade, the report says, citing a 2023 CIA assessment. Logistics problems and Taiwan defenses remain key obstacles to an easy military takeover.

Also, the ruling Chinese Communist Party fears that a loss in what would likely become an international war would further undermine the party’s legitimacy.

“Ultimately, a failure to win a war with Taiwan would likely be catastrophic for the CCP and its internal narratives of legitimacy,” the report said.

Be prepared

The report urges U.S. government and private sector leaders to identify and counter Chinese initiatives through better strategic preparedness to ensure that actions do not escalate into a shooting war.  Both sectors need to “deploy behavior anomaly detection and internal honeypots to identify PRC living-off-the-land tactics resistant to signature matching” against Chinese cyber warfare activities.

“Living off the land” is a cyber security term that described how the Chinese government-linked cyber group called Volt Typhoon penetrated critical U.S. infrastructures using resident software in target networks. Chinese cyber warfare capabilities range from covert efforts to prompt Taiwan’s increasing dependency on digital infrastructure to disrupting critical infrastructure through cyberattacks.

China is “is developing cyber capabilities designed to deter, manage escalation, or potentially defeat the U.S. in scenarios like a conflict over Taiwan,” the report said.

The report said military artificial intelligence systems remain a significant challenge for Beijing due to a shortage of technology personnel and a lack of advanced semiconductors.

Still, the report states that China is using AI to improve missile effectiveness and accuracy to minimize civilian damage. Smart missiles powered with AI could minimize post-invasion reconstruction and limit the kind of global backlash like that sparked by indiscriminate Russian artillery attacks in Ukraine, the report said.

The information wars

Chinese strategists believe information warfare is a critical new battlefield where Beijing can defeat U.S. conventional military power through asymmetric advantages.

Over the long term, Beijing’s strategy also seeks to undermine international opposition to its designs on Taiwan through military intimidation, economic coercion and political warfare, the report said.

In the United States, the Chinese government is using influence operations and information manipulation campaigns in an effort to discredit U.S. leaders and to portray the United States as a destabilizing force or unreliable partner in international affairs.

“Concurrently, its cyber espionage focuses on collecting sensitive U.S.-Taiwan policy intelligence from key U.S. government members in Congress and the executive branch, plausibly seeking leverage points to subtly sway policies affecting Taipei-Washington ties, among other topic areas,” the report said.

A key target is for China is degrading Taiwan’s dominance in semiconductor manufacturing.

Taiwan has used its “silicon shield” — its status as a global semiconductor manufacturing superpower — as a strategic deterrent. But that dominance is under threat as the United States and other nations seek to reduce reliance on Taiwan microchips, the report said

A weakening of Taiwan’s semiconductor industry could increase Chinese coercion against Taiwan, the report said.

‘National rejuvenation’

China “is pursuing integration to achieve the ‘national rejuvenation of China,’ a revanchist vision of restoring its status as a globally dominant power that is economically prosperous, militarily strong, culturally rich and politically influential,” the report said.

The Booz Allen report said tensions increased since 2022 as a result of the People’s Liberation Army holding large-scale live fire, restricting diplomatic dialogue and “massively” increasing cyber targeting of Taiwanese organizations.

Militarily, the PLA has set 2027 for key modernization goals for forces to defeat U.S. intervention in a Taiwan attack, the report said. However, the report also assesses that China is not likely to conduct a sequence of aggressive moves on a fixed timetable. Instead, Chinese military and political strategists have adopted a matrix of intertwined strategies aimed at long-term goal of taking control.

The link between Chinese cyber activities and a future war is included in a “what if” scenario contained in the report.

China’s relentless AI cyber and influence operations are meant to create deep internal divisions in Taiwan and convince the island’s leaders the United States would not intervene to help. A future crisis could then grow into a conflict where China invades Taiwan preceded by crippling cyberattacks on military networks and civilian infrastructure while spreading disinformation and blocking communications.

Simultaneously, Chinese military hackers attack critical U.S. infrastructure and weapons systems, delaying American intervention.

“Facing a demoralized and disorganized Taiwanese military without immediate robust U.S. support, the PRC easily prevails,” the report said.

Shifting alliances

While conventional war is not seen as imminent, the report states that the total isolation or annexation of Taiwan by Beijing would result in major shift in alliances and economic dependencies in Asia, as regional states come under Chinese influence or control.

“In the face of these daunting consequences, the U.S. government and commercial sectors must forge determined, strategic plans, especially in the cyber realm,” the report said.

Taiwan’s national security system is under attack from China using intelligence operations, cyber operations and psychological warfare that seeks to destabilize the country domestically and globally. Since the early 2010s, a Chinese hacker group called Tropic Trooper has tried to gain access to classified and sensitive Taiwan military networks, the report said.

The AEI report by seven specialists states that U.S. and regional allies and partners lack a clear strategy for defending Taiwan and discussions focused almost exclusively on deterring a Chinese invasion.

Strategic debates “have largely ignored the likelier scenario, elements of which are already underway: a PRC coercion campaign that remains far short of invasion but nevertheless brings Taiwan under Beijing’s control,” the AIE report said. “The U.S. and its partners must step back from the narrowing focus on a single dangerous scenario to reevaluate the full threat the PRC poses and develop a coherent set of strategies to defeat all aspects of that threat.”

The report, produced together with the Washington-based Institute for the Study of War, said the U.S. and allied governments need to understand and counter China’s use of “short-of-war” coercive strategies to take control of the island.

China through its coercive action could force Taipei to join a cross-strait peace commission that the report warns would give Beijing control over the Taiwan government and population under the guise of open dialogue.

The report “reveals that Taiwan and the U.S. remain unprepared to deter or prevent a concerted multiyear coercion campaign intended to result in Taiwan’s capitulation and eventual annexation.”

There is also a danger that China will launch a far more intense campaign of coercion against Taiwan than the one currently underway.

This report, “From Coercion to Capitulation: How China Can Take Taiwan Without a War,” was written by Dan Blumenthal, Frederick W. Kagan, Jonathan Baumel, Cindy Chen, Francis de Beixedon, Logan Rank,and Alexis Turek.

The Booz Allen report is titled, “How to Succeed at Annexation Without Really Fighting: The PRC’s Taiwan Cyber Strategy Explained.” Authors were not identified.