Australian political leaders and strategic thinkers have, rightly, dedicated considerable attention to Hong Kong and Xinjiang in recent months. It’s time to expand the discussion to another self-declared ‘core interest’ of the Chinese Communist Party: Taiwan.

Like Australia, Taiwan is an island, a democracy, and has a population of almost 25 million. What happens to Taiwan over the next decade is fundamentally important to Australia. It will shape the extent to which the Indo-Pacific preserves space for middle-sized democracies, as well as the credibility of US alliances and whether the regional balance of power is favourable to our interests.

Recent ^[1] debate ^[2] in Australia has focused on how we ought to respond to an unprovoked Chinese attack against Taiwan. Important as that may be, it is a hypothetical and circumstance-dependent question we hope we never have to answer.

The more salient question, which Australian governments will be forced to confront over the next decade, is how Australia should approach Taiwan issues during peacetime, as cross-strait tensions rise and Taiwan’s security outlook becomes increasingly challenging.

At the very least, there’s every indication that Taiwan will come under immense pressure from the CCP. Beijing is using economic statecraft ^[3] to limit Taiwan’s political options and making a concerted effort to try to peel away Taiwan’s few remaining diplomatic allies, a list that includes Palau, Nauru and the Marshall Islands. Campaigning in the lead-up to Taiwan’s presidential election on 11 January 2020 has been marred by the CCP’s disinformation campaign ^[4] and influence operations ^[5].

Political positions are hardening in Taiwan and China. Public opinion polls in Taiwan suggest an ever more independent political identity, especially among younger Taiwanese. The increasingly authoritarian nature of the CCP, its response to the Hong Kong protests, and Hong Kong’s recent election results render it highly implausible that the Taiwanese people would embrace a version of ‘one country, two systems’. Peaceful reunification with the consent of Taiwanese people therefore appears unlikely. Instead, trends in both Taiwan and China suggest a worsening cross-strait relationship over the next decade.

Against this backdrop, Taiwan will feature more prominently in Australia’s alliance with the United States and relationship with China. The CCP will continue to pressure Australia to limit our relationship with Taipei and our support for Taiwan’s participation in international forums. Meanwhile, Republicans and Democrats alike are adopting a tougher line on China ^[6], such as the Senate’s unanimous passage ^[7] of the Hong Kong ‘Human Rights and Democracy’ bill last week. Moreover, Washington has recently taken a range ^[8] of important steps ^[9] to support Taiwan.

With peaceful reunification unlikely, Taiwan’s future will be shaped in part by the military balance across the Taiwan Strait. There’s no question that from the US perspective, the costs and risks of defending Taiwan are rising quickly ^[10].

Yet, even as the military balance erodes, the US and Taiwan have the capacity to continue to convince the CCP’s leaders that the costs and risks outweigh the benefits of using a military option. Canberra’s public positioning over Taiwan, insofar as it shapes Beijing’s judgements on whether we would add our forces to, and provide real estate for, a US-led operation, is a small but not insubstantial factor in how the CCP’s top leaders assess the merits of a military move against Taiwan.

Even in the event of domestic political pressures in China or Taiwan, the CCP will likely be hesitant about initiating a conflict in which victory would be far from assured. As Michael Shoebridge and Rod Lyon wrote earlier this year ^[11], ‘a swift, cheap and decisive Chinese victory would … be unlikely’.

Despite the strategic significance of Taiwan, it has received precious little attention in the Australian national discussion. The 2016 defence white paper ^[12] mentions Taiwan just once, on a map showing Australia’s top 10 trading partners. The 2017 foreign policy white paper ^[13] also mentions Taiwan only once, in a broad statement of Australian concerns over the ‘potential for the use of force or coercion in the East China Sea and Taiwan Strait’.

As a starting point, several issues deserve broader debate. First, should Australia take steps to help bolster Taiwan’s political links and economic resilience? One option, raised by Shoebridge ^[14], is to establish ‘direct working contacts between Australian and Taiwanese defence and national security agency officials’. Another is to revisit the idea of a free trade agreement with Taiwan, our sixth-largest ^[15] merchandise export market in 2018, a proposal that was turfed ^[16] in 2017–18 in response to pressure from the CCP. After all, New Zealand has a free trade deal ^[17] with Taiwan (albeit signed in more benign circumstances in 2013).

Second, and relatedly, how much should Australian governments be constrained by the CCP’s inevitable objections to Taiwan-related actions it dislikes? A prime minister and foreign minister who have rightly spoken out on Hong Kong and Xinjiang could make appropriately calibrated statements on Taiwan issues.

Third, how should Australia manage the United States’ growing interest in our political orientation towards Taiwan and military real estate? Given the rapid improvements in the range and precision of PLA Rocket Force missiles, from an American perspective, operating refuelling and maritime patrol aircraft from bases in northern Australia during a Taiwan contingency would disperse US forces and thereby complicate PLA planning.

We have a lot that the US wants on Taiwan. This dynamic strengthens our bargaining position in the alliance and should spur efforts to shape US policy and manage divergent expectations for planning and collaboration during peacetime.

The best strategic future for Australia—absent peaceful resolution acceptable to both sides—is that Taiwan remains both democratic and inside the ‘one China’ framework. How much we are prepared to do to contribute to that outcome is an open question, but one that deserves far more attention.