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61. The Factors That Matter: A Formula for Understanding China’s Use of Force Calculus Over Taiwan

Author:
Lyle Morris
Publication Date:
07-2026
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
As the United States and China enter a prolonged period of instability and tension, how and under what circumstances China may use force, or, alternatively, be deterred from using force, has become of crucial importance to U.S. policymakers seeking to avoid conflict with the People’s Republic of China (PRC). While the United States can draw on its experience gauging threats and making difficult strategic calculations during the Cold War rivalry with the Soviet Union, the emerging strategic rivalry with China is still in its early stages. The question of how to deter conflict with the PRC will be an increasingly important factor in the strategic calculations in Beijing and Washington, especially in times of heightened instability and crisis between the two powers. This, in turn, raises enormous and complex questions for U.S. policy regarding U.S.-China strategic stability, U.S.-China crisis management, and strategic and conventional deterrence vis-à-vis China. In spite of this emergent challenge, critical gaps remain in the Western understanding of PRC deterrence concepts. Most importantly, and most urgently, there is little understanding of how or why China may be deterred from resorting to military force in the event of a serious confrontation with the United States. To address these critical gaps, this paper explores China’s approach to deterrence in the military and diplomatic domain, in order to inform U.S. understanding of how it might deter China in a crisis or conflict. In particular, this paper introduces a set of key variables that matter most to China’s leadership in contemplating using force to “reunify” Taiwan with mainland China. This study develops a methodological formula that can be used by policy-makers and academics interested in understanding what has deterred Chinese leaders from using force against Taiwan, and what might cause China to change its calculus.
Topic:
Diplomacy, Military Affairs, Deterrence, Regional Security, and Use of Force
Political Geography:
China, Taiwan, and Asia

62. From Growth to Visibility: Bureaucratic Incentives After China's Cadre Evaluation Reforms

Author:
Zhuoran Li
Publication Date:
07-2026
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
President Xi Jinping has spent more than a decade trying to reform the incentive system of China's bureaucracy, especially the incentives for local governments. Xi launched sweeping reforms of the cadre evaluation system—reducing the emphasis on GDP growth, expanding performance assessments to include social welfare and environmental protection metrics, and strengthening inspections of policy implementation. These reforms were intended to shift bureaucratic incentives away from short-term political performance and toward more balanced governance. Yet a different pattern has emerged. Local governments, especially at the level of township and county, have increasingly devoted resources to highly visible "spotlight projects" (亮点工程) designed to attract the attention of higher-level leaders in municipalities and provinces. This outcome is not a failure of implementation but an unintended consequence of Xi's reforms. By broadening evaluation criteria while tightening fiscal and administrative constraints, the reforms changed how local officials compete for promotion. Instead of maximizing GDP growth, officials increasingly compete by producing politically visible success stories that signal competence and alignment with central priorities. Because these projects also enhance the political standing of provincial and municipal leaders, they are reinforced by complementary incentives at multiple levels of the bureaucracy. The result is not the disappearance of performative governance, but its transformation.
Topic:
Governance, Rural, Economic Development, Bureaucracy, and Local Government
Political Geography:
China and Asia

63. Europe’s “Wake-Up Call”

Author:
Philippe Le Corre
Publication Date:
07-2026
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
The European Union's relationship with China is undergoing a transformation. While the EU remains committed to economic engagement, it is increasingly prioritizing economic security, industrial resilience, and technological sovereignty over market access. This shift reflects mounting concerns over widening trade imbalances, China's state-supported industrial expansion, growing dependence on Chinese critical minerals and green technologies, and the erosion of Europe's manufacturing base. This paper argues that the EU and China will go through a very tense period over trade, but that Europe’s lasting competitiveness will depend on addressing structural challenges—including productivity, innovation, energy costs, investment, and industrial coordination—that predate the current deterioration in EU-China relations. Ultimately, China's growing economic influence has become not only an external challenge but a catalyst for Europe's reassessment of its own economic model and long-term industrial strategy.
Topic:
Industrial Policy, Bilateral Relations, European Union, Innovation, Trade, and Economic Security
Political Geography:
China, Europe, and Asia

64. Strategic Shift in China's Primary Aluminum Industry

Author:
Landon Thomas
Publication Date:
05-2026
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
In late 2024, the Chinese government surprised global markets by rescinding export tax rebates for steel, copper, and – most notably – aluminum products. Seen by many as a proactive step to diffuse trade tensions with its major trading partners, this paper argues that the policy speaks to a broader strategy on the part of the Chinese government. Namely, to incentivize aluminum producers to focus less on exports and more on supplying fast growing sectors such as photovoltaics and electric vehicles, both of which rely heavily on aluminum inputs. Although aluminum exports have declined modestly since the policy’s implementation, it remains unclear whether increased domestic absorption will ultimately translate into greater productivity and efficiency gains across the sector.
Topic:
Industrial Policy, Economy, Tax Systems, Trade Policy, Industry, and Aluminum
Political Geography:
China and Asia

65. Implementing Effective U.S.-China Economic Engagement Channels

Author:
Brendan Kelly and Scott Shaw
Publication Date:
05-2026
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
As the state of U.S.-China relations has undergone significant fluctuations over the past decade, so has the structure and frequency of economic engagements between the two countries. The number and scale of such dialogues came under heavy criticism from Republican and Democratic China hawks alike—with one notable critic famously tying the rise of U.S.-China dialogues to the rise of the U.S. trade deficit with China. Some of this criticism misses the mark, however, and underestimates the value of select, well-conceived communication channels. A valid question is whether these dialogues lost the forest for the trees. U.S. officials consistently struggled to move the needle on big trade and investment issues, absent large carrots and sticks, such as WTO accession or significant tariffs. The U.S. government needs to exercise discipline in ensuring that dialogue mechanisms advance U.S. national interests and are not used by China to distract from or delay meaningful progress on core issues. Washington must also be clear-eyed that such dialogues or engagements will likely not “change China” or spur big policy and structural changes. Yet it is equally problematic that from the early stages of the pandemic in 2020 through mid-2023, the governments of the world’s two largest economies, with the world’s most complex trading relationship, had almost no engagement on economic and commercial issues. Just as national security experts emphasize the importance of U.S.-China military-to-military communications to mitigate misunderstandings and security crises, sustained channels for commercial and financial dialogues are critical for managing economic frictions. It is therefore remarkable that for multiple years the two sides lacked any such mechanisms to address commercial, financial and other economic issues. In its last year and a half, the Biden administration broadly addressed these areas through its Economic, Financial and Commercial Issues Working Groups, alongside technical consultations on issues such as export control enforcement, trade secrets, and anti-money laundering. These channels, with select cabinet-level meetings, enabled the U.S. to pursue “competitive actions”—such as export controls, tariffs, and sanctions—while maintaining a largely stable relationship. The Biden administration struggled, however, to make significant progress on the broader obstacles facing U.S. firms and exports in China, even as it was able to resolve certain company-specific issues and defuse some tensions arising from policy misunderstandings. After a sharp deterioration in bilateral economic ties in spring 2025—with tariffs essentially reaching trade embargo levels and export controls shutting down production lines in each economy—the second Trump administration has arrived at a tentative equilibrium with China on trade and technology issues. The Trump administration has an opportunity to strengthen this equilibrium, mitigate volatility, and advance U.S. interests by rebuilding and institutionalizing selective channels on key economic and technology issues. The goal should not be to return to the previous broad dialogue architecture, but rather to establish narrow mechanisms that support U.S. de-risking, reinforce policy discipline, and, with modest expectations, derive economic benefits for the U.S. from the relationship. Cabinet-level relationships with China’s top economic decisionmakers—that also address bureaucratic mismatches and silos in the two systems—are of utmost importance as the leadership dynamics and policy agendas of both governments continue to evolve. Communication mechanisms on macroeconomic, financial sector, and commercial issues have been essential—and as economic and national security issues have moved to the foreground, channels to discuss sanctions, export controls, and investment issues have become necessary as well. The Boards of Trade and Investment proposed by the two governments in recent discussions could serve as an organizing structure for most of these channels, depending on their participants and agenda. This paper reviews the historical evolution of U.S.-China economic dialogues and the key lessons learned—to suggest targeted areas where ongoing communications under these mechanisms can be most important, how these should be structured, and how to make U.S. economic statecraft toward China most effective. We appreciate the insightful inputs and comments on the paper from Craig Allen, Wendy Cutler and Paul Haenle.
Topic:
International Relations, Diplomacy, Economics, Bilateral Relations, Macroeconomics, Trade, Donald Trump, and Dialogue
Political Geography:
China, Asia, North America, and United States of America

66. National Security Without Consensus: Taiwan’s Domestic Politics Through 2028

Author:
Simona Grano
Publication Date:
06-2026
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
In the past year, President Lai Ching-te’s administration has faced growing domestic political fragmentation alongside intensifying external pressure. Lai’s announcement of a substantial increase in Taiwan’s defense budget, including discussion of enhanced missile defense capabilities, was blocked repeatedly in the Legislative Yuan by the Kuomintang (KMT) and Taiwan People’s Party (TPP), highlighting deep divisions over security policy and relations with China. At the end of March 2026, Taiwan’s ruling and opposition parties finally agreed to allow the special defense budget to enter legislative review, though each party presented its own version.1 Taiwan’s Legislative Yuan finally passed a watered-down version of the special defense budget bill on May 8. While many observers frame expanded defense spending as a necessary response to rising external threats, resistance by the opposition reflects a set of politically salient concerns. Among segments of the electorate aligned with the KMT, skepticism persists regarding the effectiveness of increased spending in altering the cross-Strait military balance, frustration over the prolonged freeze in official dialogue with Beijing, and uncertainty linked to U.S. policy — ranging from delays in arms deliveries to broader questions surrounding strategic ambiguity and economic-security trade-offs. In this complicated context, President Lai launched a series of “Ten Talks” from June to August 2025, hoping to use national unity, defense, and identity to build public support for a more robust defense posture. However, rising parliamentary fragmentation and partisan polarization, heightened by the KMT’s shift in leadership and the election of Cheng Li-wun, have so far undercut the government’s ability to finance and implement major defense initiatives (including the proposed multi-layer T-Dome). Such domestic dynamics will play a central role in influencing Taiwan’s domestic and external strategy from now until the 2028 elections. Against this backdrop, the People’s Liberation Army decided to launch a large-scale joint exercise “Justice Mission–2025” on December 29, 2025, mobilizing forces and encircling Taiwan in one of the most wide-ranging displays of force so far employed by the People’s Liberation Army (PLA). The drills took place in the aftermath of Trump’s decision to allow a major arms sale to Taiwan and after the explicit Japanese statements linking a Taiwan contingency to Japan’s own security and survival. Beijing views such developments as external “intrusions” into internal matters with the potential to accelerate the ‘internationalization’ of the Taiwan issue. Together, these dynamics illustrate how China’s growing reliance on military pressure overlaps with Taiwan’s internal political constraints, reinforcing Beijing’s narrative that China’s military pressure is necessary and justified (in view of the external developments), while simultaneously undermining its claim that Taiwan remains a purely internal matter. This paper argues that Taiwan’s greatest security risk has shifted from threat awareness to political coordination, with domestic fragmentation now constituting the primary bottleneck to defense and security policies ahead of 2028.
Topic:
Defense Policy, National Security, Elections, Domestic Politics, and Political Parties
Political Geography:
China, Taiwan, and Asia

67. Seeking Agency in Uncertainty: Asian Middle Powers and the Fragmenting Global Order

Author:
Farwa Aamer and Emma Chanlett-Avery
Publication Date:
04-2026
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
The concept of middle powers is not new. What is new, however, is the speed, coordination, and strategic intent with which middle powers, across Asia and the West, are recalibrating their foreign policies. This acceleration reflects growing uncertainty in the global system: the perceived drift and unpredictability of U.S. leadership under the Trump 2.0 administration, intensifying strategic competition between the United States and China, and the fragmentation of the post–Cold War order. Countries increasingly find themselves navigating between two systemic pressures: avoiding entrapment in great power rivalries and safeguarding national autonomy, economic resilience, and security interests. In this emerging order, resistant to simple bipolar or multipolar labels, middle powers are neither passive balancers nor quiet bystanders. They are actively constructing a dense network of partnerships, pursuing selective alignments, and diversifying strategic dependencies. Rather than choosing sides, many are hedging to secure national interests: deepening security ties with Washington while sustaining economic engagement with Beijing, expanding mini-lateral frameworks, and strengthening cross-regional linkages that reduce overreliance on any single pole of power. The growing emphasis on economic security, supply chain resilience, technological cooperation, and defense interoperability reflects a broader shift from ideological alignment to pragmatic, interest-driven statecraft. This paper revisits the concept of Asian middle power diplomacy and assesses the forces driving today’s intensified hedging behavior. It examines why urgency around partnerships and alliance diversification has increased, not only among key Asian middle powers themselves but also in their expanding engagement with actors such as the Gulf states, Canada, the United Kingdom, and the European Union. Through select country-by-country analysis, the paper evaluates how leading middle powers, in both Asia and beyond, are redefining strategic autonomy, which partnerships warrant close attention, and how these evolving alignments are reshaping the contours of the global order. Finally, it assesses the implications of a more assertive, networked middle power landscape for the United States, and what a strengthened middle power layering means for the future architecture of international politics.
Topic:
Foreign Policy, Engagement, International Order, Hedging, and Middle Powers
Political Geography:
China, Asia, and United States of America

68. Positioning the KMT in the U.S.–China–Taiwan Triangle: Cheng Li-wun’s Early Tenure

Author:
Meghan Morris and Sheng-wen Cheng
Publication Date:
04-2026
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
In March 2026, Kuomintang (KMT) chair Cheng Li-wun (鄭麗文) accepted an invitation from Chinese President Xi Jinping to visit China from April 7–12—the first such visit by a sitting KMT chair since 2016. The visit presents both challenges and opportunities for Cheng, who is seeking greater dialogue and stability with China. It also comes just weeks before a scheduled major summit between President Trump and Xi in May and introduces new variables for all three leaders. For Xi, the symbolism of him and Cheng possibly meeting face-to-face to “mend fences” could portray an image of cross-Strait unity that could strengthen Xi’s hand in discussions with Trump. For Cheng, a successful China trip could bolster her political standing among the KMT base in Taiwan, but could also alienate opposition Democratic Progressive Party (DPP) voters and swing voters, who may view Cheng as “selling out” Taiwan’s sovereignty in pursuit of easing tensions with mainland China. Finally, for Trump, the visit could complicate Washington’s relations with China. Trump will have to walk an even more delicate tightrope of signaling the United States’ enduring “One China” policy with Xi, while responding to the inevitable message from Xi that cross-Straits are “stabilizing” and that the United States should not intervene in the “internal matters of China.” Given this context, this paper seeks to examine the rise of Cheng Li-wun in Taiwanese politics and implications for her domestic, international, and cross-Strait agenda. We argue that while Cheng’s victory as KMT chair signals symbolic change, it has yet to translate into institutional renewal or political legitimacy. Her early appointments of KMT vice chairs suggest continuity rather than transformation—raising questions about whether the KMT is broadening or narrowing appeal within a younger electoral base. It also contends that Cheng’s rhetoric on China and the United States—calling for deeper alignment and accommodation with Beijing while simultaneously casting doubt on the value of Taiwan’s security ties with Washington—positions Cheng to potentially alter the trajectory of cross-Strait ties if the KMT achieves a majority victory in the 2028 presidential elections.
Topic:
Foreign Policy, Diplomacy, National Security, and Domestic Politics
Political Geography:
China, Taiwan, and United States of America

69. China’s Property Rebalancing: The Long Road to a New Development Model

Author:
Lizzi C. Lee and David Zhang
Publication Date:
05-2026
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
China’s property downturn is now in its fifth year, impairing household, developer, and local government balance sheets. Since peaking in 2021, property investment has nearly halved, dragging on fixed-asset investment, weakening related employment, and exerting a sustained drag on broader economic growth. Beijing’s response has prioritized risk containment over a return to debt-fueled property stimulus. This is captured by the “new property development model,” a long-term blueprint to turn real estate from a growth engine into a source of baseline construction demand and a more socially oriented housing system. Policymakers are currently trapped in a “dual mandate”: stabilizing the property market in the short term while pursuing a longer-term shift toward a smaller, less speculative, and more affordable housing system. In the near term, however, falling property values erode household wealth and weaken confidence, complicating Beijing’s broader consumption-rebalancing goals. The structural transition is complicated by local fiscal constraints. Revenue from selling land-use rights dropped by over 50% between 2021 and 2025, yet local governments face financial obligations to subsidize housing demand and fund the construction of new affordable housing. The most probable trajectory is a tightly managed, prolonged correction, with a true market bottom deferred. As the sector structurally downsizes, its drag on GDP should gradually fade, a cost Beijing likely sees as worth bearing in order to lock in a smaller role for property in the economy. The economy faces the severe downside risk of a deflationary spiral driven by wealth and job destruction. Further declines in home prices would deepen the hit to household balance sheets, while the property downturn is already inflicting significant job losses across construction and related sectors. China’s current transition blueprint lacks mechanisms to fully absorb this structural unemployment and balance-sheet degradation. Any definitive signs of an uncontrolled deflationary spiral would likely force Beijing to deploy stronger market rescue operations.
Topic:
Development, Government, Economy, Investment, Unemployment, and Property Market
Political Geography:
China and Asia

70. China’s Strategy in the Ukraine War and the Shaping of a Post-Conflict Order

Author:
Pierre Andrieu
Publication Date:
03-2026
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
Despite ongoing peace talks spearheaded by U.S. President Donald Trump, Russia’s war of aggression against Ukraine continues with seemingly no end in sight. While China might not play a primary role in peace negotiations, it nonetheless has an important stake in the outcome of the conflict. This paper seeks to assess Beijing’s calculus and potential role in brokering peace in the Ukraine conflict within the context of great power diplomacy among Moscow, Washington, Kyiv, and Brussels. Faced with Russia’s unrelenting military campaign, Washington, Brussels and Beijing have each adopted distinct positions on the war. The United States, as the key peace broker, continues to shift its policies to accommodate competing peace deal demands from Kyiv and Moscow. Meanwhile, the EU is increasingly aligning itself with Ukraine’s position, while China promotes neutral diplomatic initiatives that merely amplify a pro-Russian stance. Because China’s initiatives largely align with Russia’s position on the war, they have done little to realistically support ceasefire efforts. Rather, they are designed to portray Beijing as a principled international actor committed to peace and non-escalation. At the same time, these positions have not prevented China from establishing significant and highly pragmatic relations with Kyiv, particularly in trade and commerce. Politically, however, China’s stance has distanced Beijing from Kyiv’s key objectives regarding the terms and conditions of a ceasefire. Accordingly, this article seeks to answer the following questions: What are China’s intentions toward Ukraine amid an ongoing stalemate in peace negotiations? And how are China’s diplomatic proposals being received in capitals around the world?
Topic:
Foreign Policy, Diplomacy, Negotiation, Armed Conflict, and Russia-Ukraine War
Political Geography:
Russia, China, Europe, Ukraine, and Asia