BEIJING (BLOOMBERG) - Xi Jinping's Chinese Communist Party has threatened to invade Taiwan for more than seven decades. Now fears are growing among analysts, officials and investors that it might actually follow through over the next few years, potentially triggering a war with the United States.
In September, People's Liberation Army aircraft repeatedly breached the median line in the Taiwan Strait, eliminating a de facto buffer zone that has kept peace for decades.
The party-run Global Times newspaper has given a picture of what could come, urging China's air force to patrol the skies over Taiwan and "achieve reunification through military means" if it fires any shots. Taiwan announced it would only shoot if attacked.
Despite the saber rattling, China and Taiwan have many reasons to avoid a war that could kill tens of thousands, devastate their economies and potentially lead to a nuclear conflict with the US and its allies.
The overwhelming consensus remains that Beijing will continue efforts to control Taiwan through military threats, diplomatic isolation and economic incentives. Equities in Taiwan have recently hit record highs.
But several forces may push them towards action: President Xi's desire to cement his legacy by gaining "lost" territory, falling support among Taiwan's public for any union with China, the rise of pro-independence forces in Taipei and the US' increasingly hostile relationship with Beijing on everything from Hong Kong to the coronavirus to cutting-edge technology.
"I am increasingly concerned that a major crisis is coming," said Mr Ian Easton, senior director at the Project 2049 Institute who wrote The Chinese Invasion Threat: Taiwan's Defence And American Strategy in Asia.
"It is possible to envision this ending in an all-out invasion attempt and superpower war. The next five to 10 years are going to be dangerous ones. This flash point is fundamentally unstable."
Taiwan will be among the most pressing security issues facing whoever wins the US presidential election on Nov 3. While Taipei has enjoyed a resurgence of bipartisan support in Washington and the Trump administration has made unprecedented overtures, President Donald Trump himself has expressed scepticism about Taiwan's strategic value. Democratic nominee Joe Biden has previously said Congress should decide whether the US should defend Taiwan in any attack.
Analysts such as Mr Easton have gamed out scenarios of a potential Chinese invasion of Taiwan for years, based on military exercises, arms purchases and strategy documents from the major players. Most of them foresee China going for a quick knockout, in which the PLA overwhelms the main island before the US can help out.
On paper, the military balance heavily favours Beijing. China spends about 25 times more on its military than Taiwan, according to estimates from the Stockholm International Peace Research Institute, and has a clear conventional edge on everything from missiles and fighter jets to warships and troop levels - not to mention its nuclear arsenal.
Beijing's optimistic version of events goes something like this: Prior to an invasion, cyber and electronic warfare units would target Taiwan's financial system and key infrastructure, as well as US satellites to reduce notice of impending ballistic missiles. Chinese vessels could also harass ships around Taiwan, restricting vital supplies of fuel and food.
Airstrikes would quickly aim to kill Taiwan's top political and military leaders, while also immobilising local defences. The Chinese military has described some drills as "decapitation" exercises, and satellite imagery shows its training grounds include full-scale replicas of targets such as the Presidential Office Building.
An invasion would follow, with PLA warships and submarines traversing some 130km across the Taiwan Strait. Outlying islands such as Kinmen and Pratas could be quickly subsumed before a fight for the Penghu archipelago, which sits just 50km from Taiwan and is home to bases for all three branches of its military. A PLA win here would provide it with a valuable staging point for a broader attack.
As Chinese ships speed across the strait, thousands of paratroopers would appear above Taiwan's coastlines, looking to penetrate defences, capture strategic buildings and establish beachheads through which the PLA could bring in tens of thousands of soldiers who would secure a decisive victory.
In reality, any invasion is likely to be much riskier. Taiwan has prepared for one for decades, even if lately it has struggled to match China's growing military advantage.
Taiwan's main island has natural defences: Surrounded by rough seas with unpredictable weather, its rugged coastline offers few places with a wide beach suitable for a large ship that could bring in enough troops to subdue its 24 million people. The mountainous terrain is riddled with tunnels designed to keep key leaders alive, and could provide cover for insurgents if China established control.
Taiwan in 2018 unveiled a plan to boost asymmetric capabilities like mobile missile systems that could avoid detection, making it unlikely Beijing could quickly destroy all of its defensive weaponry.
With thousands of surface-to-air missiles and anti-aircraft guns, Taiwan could inflict heavy losses on the Chinese invasion force before it reached the main island.
Taiwan's military has fortified defences around key landing points and regularly conducts drills to repel Chinese forces arriving by sea and from the air.
In July outside of the western port of Taichung, Apache helicopters, F-16s and Taiwan's own domestically developed fighter jets sent plumes of seawater into the sky as they fired offshore while M60 tanks, artillery guns and missile batteries pummelled targets on the beach.
Chinese troops who make it ashore would face roughly 175,000 full-time soldiers and more than one million reservists ready to resist an occupation. Taiwan this week announced it would set up a defence mobilisation agency to ensure they were better prepared for combat, the Taipei Times reported.
Other options for Beijing, such as an indiscriminate bombing campaign that kills hundreds of thousands of civilians, would hurt the Communist Party's ultimate goal of showcasing Taiwan as a prosperous territory with loyal Chinese citizens, Mr Michael Beckley, who has advised the Pentagon and US intelligence communities, wrote in a 2017 paper.
"The PLA clearly would have its hands full just dealing with Taiwan's defenders," he wrote. "Consequently, the United States would only need to tip the scales of the battle to foil a Chinese invasion."
The potential involvement of the US is a key wild card when assessing an invasion scenario. American naval power has long deterred China from any attack, even though the US scrapped its mutual defence treaty with Taiwan in 1979 as a condition for establishing diplomatic ties with Beijing.
The Taiwan Relations Act authorises American weapons sales to "maintain a sufficient self-defence capability".
Failing to intervene could hurt US prestige on scale similar to Britain's failed bid to regain control of the Suez Canal in 1956, Mr Ray Dalio, the billionaire founder of Bridgewater Associates, wrote on Sept 25.
That crisis accelerated the disintegration of the British Empire and signalled the pound's decline as a reserve currency in favour of the US dollar, he said.
"The more of a show the US makes of defending Taiwan, the greater the humiliation of a lost war," he said. "That is concerning because the United States has been making quite a show of defending Taiwan while destiny appears to be bringing that closer to a reality."
China's Anti-Secession Law is vague on what would actually trigger an armed conflict. Its state-run media have warned that any US military deployment to Taiwan would trigger a war - one of several apparent red lines, along with a move for Taipei's government to declare legal independence.
State broadcaster CCTV recently warned "the first battle would be the last battle".
Since the Communist Party's legitimacy is based in part on a pledge to "unify" China, its hold on the country's 1.4 billion people could weaken if it allowed Taiwan to become an independent country. And while any invasion even of outlying islands carries the risks of economic sanctions or a destabilising conflict, threats issued in state-run media allow Beijing to appeal to a domestic audience and deter Taiwan at the same time.
The PLA Air Force released a video in September showing H-6 bombers making a simulated strike on a runway that looked like one at Anderson Air Force Base on Guam, a key staging area for any US support for Taiwan.
The Global Times reported that China's intermediate ballistic missiles such as the DF-26 could take out American bases while its air defences shoot down incoming firepower.
This is a worry for US military planners. A University of Sydney study warned last year that America "no longer enjoys military primacy" over China and that US bases, airstrips and ports in the region "could be rendered useless by precision strikes in the opening hours of a conflict".
"Beijing's strategy isn't just based on undermining Taiwan's resistance, it's also a gamble on how the US will approach the cross-strait issue," Mr Daniel Russel, a former top State Department official under president Barack Obama, said in Taipei on Sept 8.
"The strongest driver of increased Chinese assertiveness is the conviction that the Western system, and the US in particular, is in decay."
In August, China fired four missiles into the South China Sea capable of destroying US bases and aircraft carriers. Since the DF-26 can be armed with both nuclear and conventional warheads, arms-control experts have worried that any signs China was mobilising to fire one could trigger a pre-emptive US strike against Chinese nuclear forces - potentially leading to an uncontrollable conflict.
Whether the world will ever get to that moment largely hinges on political leaders in Beijing and Washington.
Some in the US, like Mr Trump's former national security adviser John Bolton, wanted the administration to do much more to show it would come to Taiwan's aid.
Mr Richard Haass, president of the Council on Foreign Relations, argued last month that the US should explicitly state it would intervene to deter Mr Xi and reassure allies.
"Above all, Xi is motivated by a desire to maintain the CCP's dominance of China's political system," Mr Haass wrote in Foreign Affairs magazine on Sept 2 in a piece co-authored with Mr David Sacks.
"A failed bid to 'reunify' Taiwan with China would put that dominance in peril, and that is a risk Xi is unlikely to take."
China's military said in September that it would defeat Taiwan independence "at all cost."
Mr Ma Xiaoguang, a spokesman for China's Taiwan Affairs Office in Beijing, separately warned that Taiwan President Tsai Ing-wen's pro-independence Democratic Progressive Party was "totally misjudging" the situation.
Taiwanese officials have also said China's military threat is rising, even though Defence Minister Yen De-fa told lawmakers on Sept 29 there's no sign the PLA is amassing troops for an invasion.
"We simply have to be prepared for the worst," said Mr Enoch Wu, a former officer in Taiwan's special forces who is now with the New Frontier Foundation affiliated with Ms Tsai's ruling party. "China is no longer 'biding its time' and no longer trying to win hearts and minds."
Ultimately, Mr Xi would need to order any attack. Last year, he said "peaceful reunification" would be best even though he wouldn't "renounce the use of force". He called Taiwan's integration with China "a must for the great rejuvenation of the Chinese nation in the new era" - a key reason he's used to justify scrapping presidential term limits in becoming China's most powerful leader since Mao Zedong.
While an invasion carries enormous risks for the party, Mr Xi has shown he will take strong action on territorial disputes. He's ignored international condemnation in squashing Hong Kong's pro-democracy camp, militarising contested South China Sea land features and setting up re-education camps for more than a million Muslim Uighurs in Xinjiang.
That record worries analysts like Mr Easton, who wrote the book on China's invasion threat.
"Taiwan fighting by itself could make Beijing pay a terrible price, at least several hundreds of thousands in casualties," he said.
"But that may be a price Xi Jinping is willing to pay. We underestimate the CCP's capacity for radical decision making at our peril."