Fast Market Research recommends "Taiwan Defence & Security Report Q1 2014" from Business Monitor International, now available

[ClickPress, Thu Jan 16 2014] China's establishment of an Air Defence Identification Zone (ADIZ) in November 2013 is likely to have a significant impact on Taiwan's defence and security policy moving into 2014. Overlapping the disputed Senkaku/Daioyu islands, claimed by Taiwan, China and Japan, the ADIZ will increase geopolitical risks in the East China Sea region, placing the Taiwanese Government in a dilemma. On the one hand Taiwan is actively seeking to improve relations with China; a strong and forceful reaction to the ADIZ could derail progress made on this front. However the creation of the ADIZ represents a clear encroachment upon parts of Taiwan's claimed sovereignty. A weak reaction could inadvertently legitimise China's move. Chinese aggression is likely to prompt Taiwan to turn to the US as a counter-balance to Beijing. Given that Beijing presents Taipei's greatest security threat, and the United States is the only country capable of balancing China, Taipei's security and defence ties with Washington are obviously pivotal. Consequently it is no surprise that over the course of the last quarter a number of defence contracts and deliveries have been signed between both parties.

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Compared to the United States and Japan, Taiwan's reaction to China's declaration of the ADIZ was relatively mild. President Ma is looking to advance his 'East China Sea' peace initiative, and therefore only went as far as saying that China's ADIZ had 'nothing to do with Taiwan's territory or airspace'. He also ordered Taiwanese airliners to submit their flight plan to Chinese authorities before entering the ADIZ, as requested by Beijing. In contrast, Tokyo and Seoul instructed their aircraft to ignore the ADIZ, while the US has flown 'unaccompanied' military aircraft through the zone on a daily basis.

China's recent advances threaten President Ma's proposed East China Sea Peace Initiative (ECSPI). The ECSPI looks to shelve territorial and maritime disputes, and instead work towards the joint exploration of contested areas. In a report released by Taiwan's legislature in December, fears were raised that China may also look to make advances in the South China Sea, thereby fundamentally challenging the United States' claim to be the prevailing power in the South/East Asia region.

BMI currently views territorial and maritime disputes in the South and East China Sea region as one of the world's greatest geopolitical risks. While large-scale armed conflict seems highly unlikely, Beijing's declaration of an ADIZ greatly increases the risk of an 'incident', arising out of miscalculation and miscommunication, which could prompt a rapid security spiral. As one of the parties most affected by China's ADIZ, such an incident could no doubt involve Taiwan. An incident could take the form of a commercial airliner being forced to make an emergency landing or being shot down. It may even lead to military skirmishes.

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