Taiwan's Nightmare Scenario
China Could Mount a Hybrid Warfare Grey Blockade Strategy to Force the Taiwan Issue Without Invasion
The current prevailing narrative around Taiwan’s security has focused on a full-scale Chinese invasion doomsday scenario. U.S. war games, defense analysts, and Taiwanese military planning have all devoted considerable effort preparing for a possible Normandy-style amphibious assault with thousands of PLA troops storming Taiwan’s beaches to bring it under Beijing’s control.
The truth is that Beijing is unlikely to need to invade at all to drive Taiwan into crisis.
A blockade – less dramatic, less costly, and more politically palatable – may be the real nightmare scenario for Taiwan. Rather than risking a catastrophic war with the United States, China could strangle Taiwan economically, sever its access to energy and food supplies, and force its leadership into submission without ever firing a shot.
It’s a strategy that Beijing is already rehearsing, and one that Taiwan – and its allies – may not have the capacity to counter as readily as a more direct military scenario.
China’s Growing Military Encirclement
In April 2023, China launched a large-scale military drill that simulated a total encirclement of the island, following a meeting between former President Tsai Ing-wen and U.S. Speaker of the House Kevin McCarthy. PLA warships, fighter jets, and missile units conducted ‘joint precision strikes’ and ‘blockade operations’ on imaginary offshore targets in what was effectively a dry run for a real-world scenario.
Just a year later, following the inauguration of Taiwan’s new president, China escalated its exercises once again. This time, the drills were explicitly framed as "seizing power and total control," a thinly veiled threat that a military confrontation was growing ever more likely.
China's encirclement capability, particularly its littoral navy, is now at a level that Taiwan’s military may not be able to effectively counter. The PLA Navy has more than 340 warships, making it the largest naval force in the world by number of ships. By 2025, that number is expected to rise to 400. Littoral craft aren’t the only ships in China’s arsenal, either. The Shandong and Liaoning aircraft carriers, along with a growing fleet of Type 055 destroyers, could establish a near-total blockade within days.
Taiwan, by contrast, has just 26 major warships, most of them aging destroyers and frigates. Its submarine fleet, while modernizing, is still vastly outmatched by China’s 60+ attack submarines. These alone are capable of cutting off Taiwan’s shipping lanes in the first hours of a conflict.
Of course, all parties – including China – know that any amphibious military action is hugely fraught with risk of failure, even given the preponderant imbalance of force favoring China. A full-scale invasion would require China to transport hundreds of thousands of troops across the Taiwan Strait under relentless missile and drone fire. A blockade, on the other hand, would allow China to apply pressure at its own pace – tightening or loosening the noose as needed. And for Xi Jinping, who has surely noted the extraordinary political and economic costs Russia has suffered in Ukraine, the prospect of a lower-risk, high-pressure strategy may be particularly appealing.
The Economic Stranglehold
Taiwan is an island economy with meager native energy generation capacity. It imports 98% of its energy and relies on overseas shipments for 65% of its food supply. Even a relatively weak blockade would place severe strain on basic energy and food provision on the island, sending shockwaves through its economy and quickly testing the resilience of its population.
Beijing has already experimented with limited economic coercion: In 2021, China banned the import of Taiwanese pineapples, grouper fish, and other agricultural products. These moves were strategically designed to punish Taiwan economically while sending a political message. A blockade would take this to a much larger scale.
Amongst the most critical vulnerabilities on imports faced by the Taiwanese government is its heavy reliance on liquefied natural gas (LNG). More than 40% of Taiwan’s electricity comes from LNG, which is transported by sea. Even a limited naval quarantine – combined with cyberattacks and missile threats – could create an energy crisis severe enough to force political concessions from Taipei.
Meanwhile, the global economic consequences of a prolonged blockade would be devastating. Taiwan produces over 60% of the world’s semiconductors and more than 90% of the world’s most advanced microchips. Efforts to spin-up native industries in the United States and Europe for chip manufacture are ongoing, but the machinery and expertise is highly specialized and has long lead-times. In 2025, a blockade would disrupt the supply chains of major American and European tech firms, from Apple, Microsoft and NVIDIA, to OpenAI and Google. This will inevitably trigger a financial crisis far beyond Taiwan’s shores – and give China a boost in the Artificial Intelligence race.
The U.S. Dilemma: How to Break a Blockade?
If China imposes a blockade, the Trump Administration would face an extremely harrowing political decision: How far is the U.S. willing to go to break it?
Naval warfare experts are undivided that breaking a naval blockade is significantly harder than imposing one, barring the initiation of all-out naval hostilities. It would require the U.S. Navy to physically escort Taiwanese cargo ships, which itself would create the very real possibility of direct combat with the PLA. Unlike an outright invasion, where global opinion might side with Taiwan, a blockade would blur the lines of aggression – allowing China to claim that it isn’t launching an attack, but merely exercising "maritime security measures" in its own waters, or protecting its own shipping.
This ambiguity could cause hesitation in Washington and among U.S. allies in Japan and Europe. Would the White House risk a full-scale war with China over a blockade, or would it push Taiwan to negotiate?
The question is not theoretical; during the 1962 Cuban Missile Crisis, the U.S. used a naval blockade to force the Soviet Union to withdraw its nuclear missiles from Cuba. China is of course familiar with this episode and could attempt a similar slow-squeeze strategy – one that forces Taiwan’s leadership to accept “peace talks” under duress.
What Can Taiwan Do?
Taiwan has long planned for an invasion, but its ability to counter a blockade remains far less certain.
Defense commentators have been clear for years that Taiwan must dramatically expand its asymmetric warfare capabilities – investing in more submarines, fast-attack boats, and long-range missile systems capable of challenging China’s naval dominance. Taiwan’s indigenous submarine program is set to deliver its first vessel in 2025 and is a step in this direction. However, with China already operating 60+ attack submarines, the program is candidly insufficient. Coastal defense missile batteries, including the Harpoon missile systems provided by the U.S., are also a critical component of countering a blockade, but equally unable to deter a Chinese blockade outright. The United States has also been quietly working on a "porcupine strategy" which consists of supplying Taiwan with more weapons for the goal of making any Chinese attacks prohibitively costly. The $8 billion weapons package which was recently approved by the U.S. Congress will bolster Taiwan’s defenses, but much of it won’t arrive until 2027 or later, raising concerns that Beijing could act before these reinforcements are in place.
Military deterrence, thus, is only one piece of the puzzle, and given the economic, geographic and population disparities, it is inevitably an incomplete one. Taiwan’s best course is to prioritize strengthening security agreements with regional allies, and not only rely on far-off Western powers that may be hesitant or capricious in providing robust responsive force. The route to achieving security agreements is massive investment in alternative supply routes closer to home, and the resultant economic interest; Western companies and investments can provide a type of protection through deterrence that may be as compelling to Chinese strategists as national-level defense agreements. Over 90% of Taiwan’s energy imports come by sea, and a blockade could sever access to essential fuel: Strengthening economic and military ties with Japan and the Philippines – both of whom could serve as logistical lifelines – is key to countering China’s encirclement strategy. Japan has already hinted at deeper security cooperation with Taiwan, and the Philippines’ expanded U.S. base access agreement provides another potential resupply corridor.
Economic Resilience as a Countermeasure
Taiwan is actively pursuing strategies to fortify its economy against a potential blockade; the key component of this effort is the diversification of trade partnerships. Currently, more than 30% of Taiwan’s exports go to China, a dependency that Beijing could exploit as leverage. The Taiwanese government is looking to reduce its reliance on Chinese markets with the "New Southbound Policy" which encourages businesses to expand instead into Southeast Asia, South Asia, Australia, and New Zealand. Taiwanese trade with ASEAN countries has already surpassed $130 billion annually – a welcome sign of progress in shifting economic ties.
Taiwan is also racing to boost its self-sufficiency in the energy sector by rapidly expanding renewable energy projects, aiming to generate 20% of its electricity from renewables this year. Offshore wind farms, particularly those developed with European partners like Denmark’s Ørsted, are expected to reduce reliance on seaborne energy imports.
To counteract potential food shortages, the government has increased grain stockpiles and invested in high-efficiency urban agriculture. Initiatives such as vertical farming and hydroponic systems in Taipei are small steps toward mitigating food dependency.
Cybersecurity and Supply Chain Defense
Beyond physical trade routes, Taiwan must also continue to fortify its digital infrastructure. In a blockade scenario, China would likely launch coordinated cyberattacks on Taiwan’s financial system, energy grid, and communication networks. Taiwan, already one of the most cyber-attacked countries in the world, is increasing investments in AI-driven threat detection and network hardening to safeguard critical infrastructure.
By combining military preparedness, economic diversification, and digital resilience, Taiwan is already working to close any potential gaps that a Chinese blockade could exploit; however, time is not on its side. If Beijing moves before these defenses are fully in place, Taiwan’s ability to withstand prolonged economic and military pressure may be severely tested.
As China’s naval power grows and Taiwan remains economically vulnerable, the likelihood of a blockade scenario is increasing. It would be a test not only for Taiwan’s resilience but for the entire U.S.-led security order in the Pacific.
Expectation of Western military-political aid in 2025 in the murky waters of a non-violent blockade in international waters may prove to be in vain for Taiwan. Focusing its efforts to create a firewall of local supply chain and investment support from South East and East Asian countries to make a blockade economically unpalatable for China may well achieve what bristling weapons cannot – real deterrence.
References
BBC - China’s military drills simulate Taiwan blockade:
https://www.bbc.com/news/world-asia-china-65413243Reuters - Taiwan military drills in response to potential China blockade:
https://www.reuters.com/world/asia-pacific/taiwan-military-drills-response-china-blockade-2023-07-26/Defense.gov - Taiwan receives largest US arms package:
https://www.defense.gov/News/News-Stories/Article/Article/3578725/taiwan-receives-largest-us-arms-package/The New York Times - China ramps up pressure on Taiwan with warship exercises:
https://www.nytimes.com/2023/04/10/world/asia/taiwan-china-military-drills.htmlForeign Affairs - Xi Jinping’s lessons from Putin’s war in Ukraine:
https://www.foreignaffairs.com/china/xi-jinping-russia-lessons-putinCSIS - How China could blockade Taiwan:
https://features.csis.org/chinapower/china-blockade-taiwan/Atlantic Council - Strengthening Taiwan’s resiliency:
https://www.atlanticcouncil.org/in-depth-research-reports/report/strengthening-taiwans-resiliency/World Trade Organization Center - Taiwan's New Southbound Policy:
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https://www.csis.org/analysis/what-chinas-navy-expansion-means-indo-pacificSouth China Morning Post - Taiwan’s indigenous submarine program:
https://www.scmp.com/news/china/military/article/3221072/taiwan-unveils-first-indigenous-submarine-aiming-counter-chinas-naval-superiorityNikkei Asia - Japan-Taiwan security cooperation deepens:
https://asia.nikkei.com/Politics/International-relations/Taiwan-Japan-talk-security-cooperation-as-China-pressure-mountsThe Diplomat - The Philippines' growing role in Taiwan’s security strategy:
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https://www.moeaboe.gov.tw/ECW/populace/content/Content.aspx?menu_id=10733