China's Coercion Campaign: A Structural Analysis of Economic and Military Pressure

China is executing a deliberate, multi-domain coercion campaign against Taiwan, a coordinated effort to erode sovereignty and test U.S. resolve without triggering full-scale war. The latest phase, dubbed "Justice Mission 2025," is a large-scale military exercise that mobilizes army, navy, air, and rocket units around the island. The drills, conducted by the Eastern Theater Command, are explicitly designed to test combat readiness and practice "blockade and control of key ports and critical areas." This focus on maritime and air dominance signals a shift toward integrated operations aimed at denying foreign access and simulating a comprehensive encirclement.

This military pressure is directly linked to a major diplomatic and economic counter-offensive. In retaliation for the landmark $11.1 billion U.S. arms sale to Taiwan, China has sanctioned 20 U.S. defense firms and 10 executives. The measures, which include freezing assets and banning business with the sanctioned entities, are a clear attempt to deter future arms sales by imposing tangible costs on American companies. This move frames the U.S. support as a provocation that will be met with a "strong response," directly linking the military drills to economic coercion.

The campaign's reach extends to the maritime domain, where the China Coast Guard (CCG) has adopted more assertive tactics. Near Kinmen, CCG operations have shifted from routine single-file incursions to multi-axis converging formations coordinated with joint air-sea patrols. This synchronized pressure, which tests Taiwan's ability to respond to complex maneuvers, is part of a broader strategy to create conditions for isolating offshore islands. Beijing's simultaneous shift in language from a "blockade" to a "quarantine" scenario further illustrates a calculated approach, aiming to justify selective maritime controls under the guise of domestic law enforcement.

Together, these actions form a layered campaign. The military drills demonstrate force and test Taiwan's defenses, the sanctions target the economic and political will of external supporters, and the CCG's assertive operations apply continuous pressure on Taiwan's periphery. The goal is not immediate conquest but to force political concessions by raising the cost of maintaining the status quo, all while operating within a spectrum of coercive actions designed to avoid crossing the threshold into open conflict.

The Strategic Mechanism: Coercion Short of War

China's campaign against Taiwan is a sophisticated exercise in pressure, designed to achieve political objectives without triggering a full-scale war. The core aim is to induce capitulation through a coordinated mix of disruptive military actions, economic sanctions, and information operations. This is not a direct military seizure but a campaign to degrade Taiwan's will and capacity to resist, forcing it to negotiate unification on Beijing's terms. The strategy leverages the PLA's demonstrated capabilities for joint operations, including blockades and precision strikes, to create a credible threat environment while seeking to avoid the high costs and uncertainties of a conventional invasion.

A critical component of this strategy is the use of the China Coast Guard (CCG). By operating as a dual-use force-simultaneously a law-enforcement body and a paramilitary unit-the CCG provides Beijing with a powerful tool for normalizing its jurisdictional claims. Actions are framed as "maritime jurisdiction enforcement" under the "one-China principle," creating a veneer of legality and domestic order. This duality allows Beijing to escalate pressure incrementally, testing Taiwan's resolve and response capabilities without immediately crossing the threshold into a declared military conflict. The CCG's recent shift from single-file incursions to complex, multi-axis converging formations around islands like Kinmen signals a move toward integrated coercive pressure, fixing Taiwan's garrisons while PLA units position for broader deterrence.

This operational shift is mirrored in Beijing's evolving language. The strategic pivot from discussing a comprehensive "blockade" to a more selective "quarantine" suggests a move toward temporary, targeted maritime controls. This terminology aligns with a legal warfare strategy, aiming to impose enforcement authority over Taiwan through domestic PRC law. It reflects a pragmatic recognition that a complete severance of maritime traffic is difficult to achieve and maintain. Instead, the goal is to create conditions of isolation and uncertainty, particularly for Taiwan's outlying islands, to pressure Taipei into concessions. The campaign is a calculated blend of military readiness, legal framing, and psychological pressure, all designed to make the cost of resistance appear greater than the cost of capitulation.

Economic Coercion: The Hidden Pressure

China's strategy toward Taiwan is a calibrated blend of economic pressure and military posturing, designed to force policy recalibrations without triggering open conflict. The recent bans on Taiwan's sugar apples and wax apples in September, following a February suspension of pineapples, exemplify this approach. Beijing justified the restrictions by citing harmful pests found in produce imports, a pretext that mirrors tactics used against other regional neighbors. This pattern of using health and safety inspections to target specific agricultural exports is a low-cost, high-impact tool that directly squeezes Taiwan's dependent farming communities and industries, creating economic pain that can translate into political pressure.

This economic pressure is not new. In 2016, Beijing cut off Chinese tourists to Taiwan by 22 percent, a move that inflicted immediate and severe economic losses on the island's tourism sector. The resulting street protests from business owners underscored the vulnerability of industries built on Chinese demand. While Taiwan's subsequent diversification efforts-like lowering visa requirements for Southeast Asian countries-have helped reduce dependence, the 2016 tourism ban demonstrated the clear link between economic coercion and domestic political fallout, a lesson Beijing has clearly learned and refined.

Viewed through the lens of China's broader regional strategy, this approach is part of a deliberate playbook. As seen in its actions against southern neighbors, Beijing increasingly employs a cycle of armed coercion followed by a charm offensive. The goal is to extract strategic gains-like policy concessions or diplomatic retreats-while stopping short of actions that could provoke a costly regional escalation or U.S. intervention. Against Taiwan, the combination of targeted import bans and intense military drills, such as the record 56-warplane incursion into Taiwan's air defense identification zone, creates a constant, multi-front pressure. It signals capability and resolve while maintaining plausible deniability and keeping the pressure below the threshold for a full-scale conflict.

The effectiveness of this strategy hinges on exploiting structural vulnerabilities. Taiwan's economy remains deeply integrated with China, particularly in tourism and agriculture, making it susceptible to sector-specific sanctions. The calibrated nature of the pressure-economic tools for economic targets, military for strategic signaling-allows Beijing to apply maximum leverage with minimal risk of uncontrollable blowback. Yet, as experience shows, such coercion often provokes nationalist resistance and deepens defense partnerships, making it a tool for short-term pressure rather than a reliable instrument for achieving long-term political objectives.

The Counter-Coercion Response

The coordinated pushback against China's escalating pressure campaign has been a mix of strong diplomatic statements, strategic military signaling, and concrete defense spending. While the responses have raised the political and military stakes, their ultimate effectiveness in deterring Beijing's long-term aims remains uncertain.

The United States has delivered a firm diplomatic rebuke. In response to China's sanctions on 20 defense firms and 10 executives, the State Department strongly objected to Beijing's retaliation, urging it to negotiate with Taiwan rather than impose pressure. This underscores the legal and political commitment to Taiwan's self-defense. Yet President Trump's subsequent comments downplayed the immediate threat, stating he had a great relationship with President Xi and was not worried by the drills. This inconsistent messaging, especially during his second term, introduces a significant element of unpredictability that Beijing may be calculating.

Japan has provided the clearest military signal. Prime Minister Sanae Takaichi stated her country could respond militarily if China were to move to take control of Taiwan by force. This explicit commitment to collective defense, if triggered, would dramatically alter the calculus for Beijing. However, it has also infuriated Beijing, deepening the diplomatic rift between Tokyo and Beijing. The comment is a direct challenge to China's "peaceful reunification" narrative and a clear attempt to deter coercion by raising the potential cost.

Taiwan's response has been the most tangible and structural. In November 2025, the government adopted a $40 billion supplementary defense budget aimed at raising defense spending to 5% of GDP by 2033. This is a direct, multi-year investment in capability, including projects like the 'Taiwan Dome' air defense system. It signals a long-term, national commitment to resilience that cannot be easily reversed.

The bottom line is that the counter-coercion strategy is working on multiple fronts. It has forced a costly response from Beijing, which must now manage a more complex regional dynamic. However, the effectiveness of this containment is limited by the very real vulnerabilities exposed by the drills themselves. The persistent incursions into Taiwan's airspace and the structural weaknesses in Taiwan's military-like its shortage of personnel-show that deterrence is a constant, expensive effort. The coordinated response has raised the bar for Beijing, but it has not yet changed the fundamental strategic equation.

The Calculated Risk: Why This Campaign?

China's latest military drills around Taiwan are not a prelude to war, but a deliberate campaign of short-of-war coercion. The strategic calculus is clear: respond to perceived provocations with a show of force that is serious enough to deter, but calibrated to avoid the catastrophic costs of actual invasion. This approach is a direct reaction to a series of developments that Beijing views as direct challenges to its core interests. The drills, dubbed "Just Mission 2025," were announced just days after a landmark $11.1 billion U.S. arms deal to Taiwan, which included advanced systems like HIMARS. They also follow Beijing's anger over Japanese political statements suggesting Tokyo could respond militarily to a Chinese takeover. As the Eastern Theater Command stated, the exercise serves as a "serious warning to 'Taiwan independence' separatist forces and external interfering forces." This is Beijing's playbook: mobilize its army, navy, air, and rocket units to test combat readiness and blockade key areas, sending a clear message of intent without crossing the threshold into open conflict.

This preference for escalation short of war stems from a sober assessment of the immense risks involved in a full-scale invasion. As strategic analysis outlines, a campaign to conquer Taiwan would be the largest and most complex military operation in history, presenting an "operational nightmare" of beachhead establishment and island-wide conquest. The political gamble is equally daunting, with the Chinese Communist Party facing inevitable casualties at a time of demographic decline and a leadership whose legitimacy is tied to national rejuvenation. The economic fallout would be severe, disrupting vital global shipping lanes and risking international sanctions. Most critically, the presence of nuclear weapons on both sides creates a direct path to escalation that neither side can afford. Therefore, Beijing's doctrine, as stated in its Anti-Secession Law, is to rely on the threat of force only if "possibilities for a peaceful reunification should be completely exhausted." The current campaign is an attempt to exhaust those possibilities through pressure, not direct combat.

The success of this campaign hinges entirely on two fragile pillars: Taiwan's resilience and the credibility of U.S. defense commitments. Beijing's strategy is to test the limits of deterrence by applying economic and political pressure on Taiwan's outlying islands, particularly Kinmen. As one analysis details, the PRC is already escalating its lines of effort there, using coast guard incursions to normalize its jurisdiction and aiming to isolate the islands through a potential quarantine. A successful campaign against Kinmen would be a direct blow to Taiwan's political will and a severe test of U.S. resolve. If Washington is seen as unwilling or unable to intervene amid domestic distractions, it would significantly undermine faith in the U.S. defense commitment, a key objective for Beijing. The bottom line is a high-stakes gamble. China is using its military might to deliver a warning, betting that the costs of escalation are too high for its adversaries to bear. The coming weeks will test whether that calculus holds.

Catalysts and Scenarios: What to Watch

The current campaign is a high-wire act of coercion, and its trajectory hinges on a few critical variables. The primary watchpoint is the China Coast Guard's next move around Kinmen. The PRC has already escalated its tactics, shifting from single-file incursions to multi-axis converging formations coordinated with joint air-sea patrols. The next major step would be to formalize a quarantine around Kinmen, a selective maritime control that denies passage to Taiwanese government ships. This would be a significant escalation within the short-of-war framework, directly targeting the island's economy and sovereignty while maintaining the legal fiction of law enforcement. The success of this maneuver would test Taiwan's resilience and, more importantly, the credibility of external commitments.

The primary catalyst for a major escalation would be a perceived failure of this coercion campaign. If Beijing's efforts to erode Taiwan's will through economic pressure and CCG actions stall, it may resort to more decisive, albeit riskier, military options. The most likely path would be a joint firepower strike campaign or a joint blockade campaign. Such a move would signal that Beijing has exhausted its coercive tools and is now preparing for a more decisive phase, potentially aiming to decapitate Taiwan's command structure or sever its lifelines. This would represent a fundamental shift from pressure to preparation for conflict.

The U.S. response will be the critical variable in either containing this campaign or inadvertently provoking a larger conflict. Washington's actions will be judged by Beijing as a test of its resolve. The administration's ability to coordinate a unified front with Japan and Taiwan is paramount. This includes the potential for new arms sales, like the recent $11.1 billion deal, to bolster Taiwan's defenses, and diplomatic coordination to amplify the economic and reputational costs of PRC aggression. As one analysis notes, the United States and its partners must maximize the economic and reputational costs for the PRC and clearly communicate its will to defend Taiwan. The bottom line is that the coming months will be defined by a race between Beijing's efforts to isolate Kinmen and Washington's efforts to deter it. The outcome will depend on which side can better manage the risks of escalation and sustain the political will to see its strategy through.