Will the Israel-Hamas conflict embolden China in the Taiwan Strait?

Beijing's response to the Israel-Hamas war has implications for China's strategic thinking towards Iran and the Middle East and, most importantly, towards Taiwan. With the US supplying wars in Ukraine and Israel, will China be emboldened to pursue more aggressive moves in the Strait? 

Following the unprecedented, surprise attack by Hamas on Israel on 7 October 2023, many nations around the world were unequivocal in condemning the Hamas terrorist attack. China took a different approach. At first, Beijing remained neutral, urging “relevant parties to remain calm, exercise restraint, and immediately end hostilities.” 

However, China has not condemned Hamas, and on 14 October, during a phone conversation, China’s Foreign Minister Wang Yi told Saudi Foreign Minister Prince Faisal bin Farhan that Beijing “opposes and condemns acts that harm civilians,” but pointed out that “Israel’s actions have gone beyond the scope of self-defense.”

China, BRI, and the Middle East

China has for some time been trying to position itself as a global leader in order to extend its global geopolitical influence. Beijing has extensive and critical diplomatic, trade, and arms ties with countries in the Middle East, as part of its Belt and Road Initiative, which means it is having to walk a cautious line in order to protect its ambitious expansion plans in the region.

For example, total Chinese investments in Saudi Arabia and the UAE so far total $56.28 billion and $40.81 billion, respectively. China has also been Iran’s largest trading partner for a decade and in 2021 agreed to invest $400 billion in the state over the next 25 years – Iran, of course, is a supporter of Hamas and an ally of both China and Russia. In March, China helped to broker a conciliation between regional rivals Iran and Saudi Arabia – the latter relies heavily on China for assistance with its digital transformation strategy.

Having been shut out of Western markets for decades, Iran has turned to China, which has offered Tehran generous credit lines in exchange of exports of oil at lower-than-market prices. Iran is known to finance Hamas, as well as Hezbollah in Lebanon and the Houthis in Yemen.  

In September, China also invited Syrian President Bashar al-Assad to visit and agreed to increase trade with Syria. Between 2012 and 2022, China’s trade with the Arab League countries exceeded $300 billion and its investment reached $23 billion.

Conversely, trade between China and Israel has increased significantly over the last 20 years. China is Israel’s second-largest trading partner (after the US) – total trade was up 11.6% year-on-year in 2022 to $24.45 billion. Technology and electronics imports from China accounted for a significant share of Israel’s trade with China, and for Chinese investments in Israel.

Notably, the Shanghai International Port Group was recently granted a 25-year franchise to operate a new automated container port in Haifa – representing a significant transport hub for Israel and China throughout the region, and into Europe. Inaugurated in September 2021 the port can handle 1.86 million units annually.

The impact of Israel-Hamas on the Taiwan Strait

As China carefully navigates its way through the Israel-Hamas crisis, another significant aspect is Taiwan. On 12 October 2023, the Taiwan National Defense Minister Chiu Kuo-cheng released a statement stating that Taiwan has set up a task force to monitor the situation in Israel. Taipei fears that China is hoping the US gets drawn into the crisis in the Middle East and takes its eyes off the ball in the Taiwan Strait.

Taiwan regularly sets up task forces to learn from global events, noting that “with intelligence, many countermeasures can be made. A war can even be avoided.” As a result, Taiwan’s military has been monitoring Chinese military activities in recent weeks, and seeks to learn lessons from Hamas’ surprise attack on Israel and the latter’s lack of intelligence prior to the attack.

Many analysts in Taiwan have also cast doubt on Taiwan’s ability to rapidly mobilize the 300,000 reservists that Israel has within a short period of time. While Taiwan has 2.2 million reservists, many also doubt that it would be able to arm them quickly enough with the right equipment – should China make any military moves on the island.

Notably, on 19 October, US diplomat and Chair of the American Institute in Taiwan, Laura Rosenberger, stressed that the situation in Israel would not influence the $345 million military aid package to Taiwan agreed in July. The historic agreement will see $50 billion in arms sales to Taiwan, on top of the $345 million military aid package, and will draw on the US’s own stockpiles for the first time.

Bipartisan US support for Taiwan

Rosenberger stressed that Washington would continue to support Taiwan’s self-defense capabilities, stating at a press conference on 19 October: “The Biden administration will continue to work hard to deepen and expand the U.S.-Taiwan partnership, which at the same time is the US Congress’s top priority with bipartisan support.” The US wants to learn lessons from Russia’s invasion of Ukraine, where military and economic support for Kyiv was reactive rather than proactive.

Pamir considers that China will advocate for and possibly participate in humanitarian aid for the Gazan populace as its Arab equities far outweigh those of its Israeli relations. Any disruption to the flow of energy sources would be detrimental to China’s staggering economic recovery efforts.

Taiwan remains on high alert, and the US needs to ensure that it does not spread its resources too thinly. Of course, Russia may also see these events as an opportunity to bolster its position in the war with Ukraine.

Pamir provides intelligence and strategic advisory services to companies doing business in China, and with Chinese companies. Our experience and on the ground, local, intelligence enables US organizations to seek out emerging opportunities, while pre-empting, assessing, and mitigating risks. To find out more contact us today.