Taiwan Strait Military Drills Intensify — Structural Reasons Why the

📡 THE SIGNAL — What Happened

Why it matters: The large-scale military exercises in the Taiwan Strait in early 2026 are not merely acts of intimidation but an manifestation of structural escalation intertwined with the domestic politics, military industries, and alliance realignments of both the US and China, bringing the risk of accidental conflict to its highest level since the Cold War.

• Military Developments — The Chinese People's Liberation Army (PLA) conducted its largest-ever integrated military exercises in the Taiwan Strait and surrounding waters from January to March 2026. Participating forces are estimated at over 150,000 personnel, with three aircraft carrier strike groups, including the aircraft carrier "Fujian," deployed.
• Military Developments — The U.S. Navy forward-deployed the USS Ronald Reagan Carrier Strike Group, part of the 7th Fleet, to the Philippine Sea, strengthening joint patrol activities with Japan and Australia. Freedom of navigation operations in the international waters of the Taiwan Strait increased from twice a month to once a week.
• Diplomacy — The U.S. approved a new arms sales package to Taiwan in February 2026 (estimated total value of $2.8 billion), including additional Harpoon anti-ship missiles, unmanned surface vessels, and early warning radar systems.
• Diplomacy — China's Ministry of Foreign Affairs condemned the U.S. arms sale as "a grave interference in China's internal affairs" and hinted at the temporary recall of its ambassador to the U.S. It demanded the issue be raised at the UN Security Council as a violation of the "One China" principle under the Taiwan Relations Act.
• Economy — Following the intensification of tensions in the Taiwan Strait, Taiwan Semiconductor Manufacturing Company (TSMC) stock prices fell by 12% in February. The geopolitical risk premium for the semiconductor supply chain has begun to be priced into the market.
• Economy — China tightened rare earth export controls, expanding export licensing for antimony and tungsten in addition to gallium and germanium. Supply constraints for the U.S. defense industry became apparent.
• Alliance Relations — Japan accelerated the strengthening of its defense capabilities in the Nansei Islands. Missile units were deployed to Yonaguni Island and Ishigaki Island, and the defense budget for fiscal year 2026 reached 2.4% of GDP.
• Alliance Relations — The Philippines issued a joint statement interpreting the scope of the U.S.-Philippines Mutual Defense Treaty to cover the entire South China Sea. Operations began at four new bases under EDCA (Enhanced Defense Cooperation Agreement).
• Technology — China conducted "marine survey" activities near submarine cables around Taiwan in January 2026. With 95% of Taiwan's internet connectivity relying on submarine cables, the risk of information blockade as a gray zone tactic has emerged.
• Domestic Politics — Ahead of the Third Plenary Session of the 21st Central Committee of the Communist Party of China (Sanaka Zenkai) in autumn 2026, the Xi Jinping leadership intensified rhetoric linking "Taiwan unification" to the Party's legitimacy. The military exercises also serve as a political signal for domestic audiences.
• Domestic Politics — With the 2026 U.S. midterm elections approaching, both Republican and Democratic parties are competing on a "tough on China" stance. Bipartisan support for Taiwan aid bills has reached 78%, making a "hawkish-only" approach to China policy a political reality.
• International Organizations — The International Monetary Fund (IMF) published an economic simulation of a Taiwan Strait contingency. A full naval blockade scenario estimates a global GDP contraction of up to 10%, a shock significantly exceeding the 2008 financial crisis.

The current tensions in the Taiwan Strait did not suddenly emerge in 2026. Their structural roots lie at the intersection of at least four historical trends.

First, there is the structural transformation of U.S.-China relations after the Cold War. Since Nixon's visit to China in 1972, U.S.-China relations have been managed on the basis of "strategic ambiguity." The U.S. maintained unofficial relations with Taiwan while articulating a "One China" policy, and China pursued pragmatism, prioritizing economic growth while reserving the option of unification by force. This equilibrium functioned for about 50 years but began to rapidly collapse from the late 2010s. The turning point was the U.S.-China trade war in 2018, where the exchange of tariffs was not merely a trade dispute but the overt manifestation of a struggle for hegemony in the international order.

Second, there is the culmination of China's military modernization. Over the past two decades, the People's Liberation Army has pursued modernization based on an "anti-access/area denial (A2/AD)" strategy, with a Taiwan contingency as its primary scenario. As of 2025, the number of Chinese naval vessels exceeds 370, surpassing the U.S. Navy's approximately 290 in sheer numbers. With the deployment of Dongfeng-21D and Dongfeng-26 ballistic missiles (the so-called "carrier killers"), the mass production of J-20 stealth fighters, and the operationalization of the electromagnetic catapult-equipped aircraft carrier "Fujian," commissioned in 2025, the PLA is assessed to have acquired, for the first time, the "capability to militarily control the Taiwan Strait and prevent U.S. military intervention for a certain period." This shift in the military balance has created a perception among the Chinese leadership that a "window of opportunity" is open.

Third, there is Taiwan's own identity transformation. Following democratization since the 1990s, the identity of "Taiwanese" has dramatically strengthened in Taiwan. In a 2024 public opinion poll, the percentage of respondents identifying as "Taiwanese" reached 67%, while those identifying as "Chinese" dropped to a mere 2.4%. This irreversible identity transformation has virtually eliminated the feasibility of China's official goal of "peaceful unification." Behind the Xi Jinping leadership's intensification of military pressure lies an urgency that unification becomes more difficult with the passage of time.

Fourth, there is the rise of semiconductor geopolitics. The fact that TSMC manufactures approximately 90% of the world's advanced semiconductors (7nm and below) has propelled Taiwan to the center of international politics as a "silicon shield." For the U.S., defending Taiwan means not only upholding democratic ideals but also protecting the foundation of AI, military technology, and economic competitiveness. For China, the "unification" of Taiwan means fundamentally overturning Western technological hegemony. The concentration of semiconductors as a strategic resource has elevated the geopolitical importance of the Taiwan Strait to a level comparable to Cold War-era Berlin.

The essence of the current tension is that these four trends are simultaneously reaching a critical point in 2026. Both the U.S. and China are pushed into a situation where they "cannot back down" domestically, military capability asymmetry is shrinking, and even though Taiwan itself does not seek "status quo change," the definition of the "status quo" itself is being contested. This is a 21st-century version of the classic "Thucydides Trap"—a structural conflict between an existing hegemon and a rising power—and it raises questions about how effectively nuclear weapons and economic interdependence will function as deterrents.

The delta: The qualitative change in military exercises in the Taiwan Strait in early 2026 indicates that China is shifting from conventional "intimidating exercises" to "combat readiness exercises." While past exercises were reactive and political messages in response to specific events (such as a Taiwanese president's visit to the U.S.), current exercises primarily aim to demonstrate joint operational capabilities and improve troop readiness. The simultaneous deployment of three aircraft carriers, simulation of naval blockade scenarios, and integrated use of cyber and electronic warfare capabilities signify that the PLA is transforming a "Taiwan contingency" from a theoretical plan into a viable operation. In response, the U.S. and its allies are also gradually shifting their approach from deterrence to "denial deterrence"—convincing China that military action will not succeed—establishing a "spiral of conflict" structure where both sides' military postures reactively escalate.