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The author, a former graduate student at the University of Michigan, reviews deterrence theory in this long-standing case of the United States and China. Those who are not specialists in the field will find this analysis particularly interesting. —Ed.

American Deterrence in the Taiwan Straits

“The real test for governments is recognizing when to assure and when to deter.”

How does a nation deter a possible attack on an ally while, at the same time, preventing the ally from escalating the conflict, thus, drawing the defender into a war with the challenger? The United States has been forced to address this issue for decades in East Asia, and not only on the Korean Peninsula. American deterrence efforts over the years have arguably been tested more severely and with over a longer period of time in the Taiwan Straits than in any other place on earth.

Given the fact that Beijing has twice openly challenged Washington over the status of Taiwan, however, can the policy be viewed as a success? Have American deterrence efforts in the area actually served to increase tensions over the past half century? And finally, what are the prospects for Taiwan and continued American protection, given the seemingly inevitable ascension of China to great power status?

This paper seeks not only to examine those questions, but also to look beyond traditional deterrence theory by examining cognitive processes that may make the practice of deterrence a more challenging endeavor in practice than in theory.

Deterrence theory has been at the center of U.S. foreign policy since the end of World War II, but has been used by nations for centuries before becoming a formal theory studied by political scientists.

Deterrence theory can be defined as “a policy that seeks to persuade an adversary, through the threat of military retaliation, that the costs of using military force will outweigh the benefits.” It can be used as a means of protecting ones own territory or as a means of protecting the territory of a third party, known as extended deterrence. Extended deterrence refers to a situation in which one state (a defender of the status quo) attempts to protect an ally from a military attack by a third party (a challenger to the status quo) through the threatened use of military retaliation.1

Credibility is the central tenet of extended deterrence theory. The threat by a defender must be seen as credible by the challenger in order to be effective. The credibility of a defender’s threats is based on two criteria: capability and resolve. The defender must show that it not only has the military capability to back up its threats, but also that it has the resolve, or will, to use that military capability.

There are three presumptions within deterrence theory that may lead to problems with its implementation in “real world” diplomacy.

First, it is assumed that a state is represented by a single decision-maker (the unitary actor model). Possible conflicts within the executive branch (between the president and a cabinet secretary, for example), between the executive and the legislature or even within the bureaucracy itself, are not taken into account. Second, the unitary actor is assumed to be rational. That is, he (or she) weighs the possible risks and rewards associated with every possible option and chooses the option with the highest expected utility. In a unitary actor model this may hold true. In the real world, however, the primary decision maker may have to balance conflicts within his (or her) administration and may, thus, be forced to chose a less-than-optimal course of action.2

Finally, deterrence theory assumes complete information on the part of both the defender and the challenger. Motives and intentions, then, can be easily and unambiguously delivered to the opposing side by signaling.3The signals sent can be in the form of public or private statements, the movement or build-up of military forces or a combination thereof. Whatever the option(s) chosen for signaling, it is assumed that the receiver of the message interprets the signal as it was intended by the deliverer. That is, the receiver is expected to understand precisely what the deliverer is intending to communicate.

Rational choice and expected utility theories (which deterrence theory is based on) do not take into account various cognitive processes, which may hinder the effective communication between the defender and a challenger. Therefore, at times they fail to successfully predict the actions of a challenger. These assumptions make it much easier to practice deterrence from a theoretical standpoint than is actually the case in real world diplomacy, where various extraneous forces may work to undo the best laid plans of the most clever politicians.

Political scientists have attempted to strengthen deterrence theory by recognizing certain cognitive pressures that may have an effect on actor’s choices. These “third and fourth waves” of deterrence theory take into account misperceptions and biases that affect decision-making.4 Prospect theory is included in the fourth wave. The theory posits that individuals evaluate outcomes with respect to deviations from a reference point rather than with respect to net asset levels (as expected utility theory does), that their identification of this reference point is a critical variable, that they give more weight to losses than to comparable gains, and that they are, generally, risk adverse with respect to gains and risk acceptant with respect to losses.5

Theorists in the field are divided on the effectiveness of deterrence theory. Some, such as Robert Jervis, Richard Ned Lebow and Janice Stein are pessimistic about its effectiveness, while others such as Eli Lieberman, Paul Huth and D. Scott Bennett (all of whose work have contributed to this paper) are more optimistic. Scholars are also divided, however, over prospect theory’s possible effectiveness due, primarily to its incomplete nature.6

One area of contention between some proponents of deterrence theory and its detractors, which this paper seeks to address, is what constitutes successful deterrence. For it to be considered a true success must there be no escalation to armed conflict? Does the fact that a challenger, while still willing to confront a defender, is forced to convert or moderate his (her) objectives constitute deterrence success?

While this paper primarily argues in favor of deterrence theory, it also seeks to show its limitations by observing, through the same studies mentioned above, difficulties in its implementation when used in real world diplomacy.

In 1949, Communist Chinese forces completed a successful military campaign for control over all of Mainland China. The Nationalist forces pitted against them were forced to flee to the island of Formosa located some 100 miles from the Chinese coast, leaving them temporarily out of the reach of the Communists.

The Nationalists were also able to retain control over various small islands along the Chinese coast, most notably, Quemoy and Matsu, but also including less prominent islands (these include the Tachen Island chain located farther north, as well as Yikiang) with even less economic or military significance. It should be noted that, while the position of Formosa vis a vis China had historically been rather fluid, the offshore islands had always been under the control of the mainland government.

From their positions on Quemoy and Matsu (located two and nine miles from the coast, respectively), the Nationalists were able to impose a blockade of the Chinese ports of Amoy and Foochow. The offshore islands also offered the Nationalists a staging area from where to launch raids on the mainland. For these two reasons, as well as the symbolic significance which the loss of these islands represented, Beijing was determined to complete the civil war by retaking all of the island groups (including Formosa)

U.S. policy initially was to accept the defeat of Nationalist forces. President Truman’s administration believed that it was only a matter of time (perhaps only months) before the Communists would be able to launch an amphibious attack, which the Nationalists would be unable to counter.

In order to understand the shift in U.S. policy toward Taiwan a look at the new U.S. policy of containment is necessary. Events leading up to the first crisis in 1954-55 go a long way in explaining, not only Washington’s unwavering support for Taiwan, but also the rather rigid, uncompromising policy of containment practiced by Washington throughout the Cold War.

Communist advances were numerous during the late 1940’s and early 50’s. West Berlin7 was under constant pressure from Moscow, Czechoslovakia8 had fallen to Communist forces in 1948, Iran9 was feeling almost constant pressure from the Soviet Union and, in 1950, China10 had fallen to Communist forces after a long civil war. North Korea’s attack on South Korea11 on June 25, 1950, proved to be the proverbial straw for Washington, which was unwilling to see another state fall into Communist hands. The Cold War quickly became a zero-sum game, whereby any gain by one side was deemed an absolute loss to the other.

It is important to understand the mind-set of world leaders during this time period. Statesmen were very much influenced by events in Munich in 1938.12 This watershed event and its terrible ramifications would influence U.S. foreign policy throughout the Cold War and, even today, helps shape America’s world-view.

John Foster Dulles George F. Kennan

If George Kennan13 was the architect of America’s policy of containment, it was John Foster Dulles14 who refined (some would say militarized) it. Under Dulles, the “domino theory” came into vogue. This theory posits that if one state falls into Communist hands the result would be a chain reaction whereby neighboring states would succumb one by one to “red forces.” The theory perhaps became most famous, or infamous, during the war in Vietnam, but was actually formally articulated before that to justify deeper American involvement in East Asia in the early 1950’s. The possible loss of Taiwan, in was argued, would lead to the eventual loss of Japan or even the Philippines, the two most important states for America in the area (it was the same reasoning which was eventually used to justify U.S. protection of the small island chains of Quemoy and Matsu, during both crises, later in the decade).This formula created a rigidity in U.S. foreign policy, resulting in a very real set of problems for Washington during both the crisis in 1954-55 and again in 1958, where a possible negotiated settlement with the Communists (possibly with the offshore islands reverting to mainland control, but with Taiwan retaining its independence) became next to impossible. Washington came to believe that, in order to keep its extended deterrence policy effective, no loss of territory to the Communists was acceptable. The United States thus found itself in the unenviable position of defending two small, extremely vulnerable islands with no economic or military significance, located just miles from the Chinese coast.

Western losses, mentioned above, during the early years of the Cold War were real enough. Prospect theory posits that an actor operating from a “domain of loss” will be more willing to accept risks in order to avoid further losses. This was certainly true of Washington which decided to draw a line in the sand, announcing that it would defend any nation under Communist threat.15 To drive home U.S. resolve, Dulles instituted a policy of “massive retaliation”16 which stipulated that nuclear weapons could (and would) be used anywhere that U.S., or allied, forces were attacked. In fact Washington issued a not so veiled warning to Beijing during the crisis in 1955, that a Communist attack on the offshore islands would be met with a tactical nuclear strike on Chinese coastal positions. Whether the policy would have been implemented will, thankfully, have to remain a historical debate. However, the very fact the policy existed shows the lengths to which the United States was willing to go in order to protect itself from further losses.

The Nationalists were also operating from a position of loss (much more so than Washington) and were willing to take many risks in its standoff with the mainland between 1950-54. This included a blockade of two Chinese ports and coastal attacks on Chinese forces from bases on Quemoy and Matsu.

Communist China, on the other hand, was operating from a domain of gain. Prospect theory posits that an actor will be less willing to take risks under such circumstances because he (she) will be unwilling to jeopardize that which he (she) already possesses. Theirs, then, was a cautious policy. The Chinese were more concerned about retaining control over the mainland. They were not willing to risk a major war for a few small islands, when a loss in that war could have meant the loss of control over what had already been won through years of struggle. This cautious policy was very apparent throughout both crises in the 1950’s.

In order to understand prospect theory it is necessary to understand its central tenet, which is that an actors domain (and, by extension, his actions) is shaped by where he perceives the reference point.17 An actor will assimilate a gain immediately, whereas a loss will take longer to become incorporated into an actors reference point. Thus, the Communists, upon ejecting the Nationalists from the mainland, immediately moved their reference point to reflect the new realities. The Nationalists, who had lost control over the mainland, were not as quick to change their reference point. Indeed, it would be years before there was even a tacit acknowledgement from Taipei of a permanent change in the geopolitical realities.

It could be argued that Beijing was operating from a “basement of fear” during the 1950’s with regards to its own territory. This insecurity was, in part, brought about by strong statements from Washington clearly viewed as provocative by the People’s Republic of China (PRC). Thus, for example, when Walter Robertson, the Assistant Secretary of State for Far Eastern Affairs was asked the following question during a 1954 Congressional hearing: “Did I correctly understand you to say that there is to be kept alive a constant threat of military action vis a vis Red China in the hope that, at some future point, there will be an internal breakdown?” Robertson replied: “Yes sir, that is my conception.”18

The United States, on the other hand, did not see caution, but rather an aggressive nation willing to use military force to achieve its objectives. America was, in fact, predisposed to believe this due to American perceptions of the Communist threat world-wide as stated above.

(Robert Jervis, in Psychology and Deterrence, writes that predisposition’s constitute the most important unmotivated influence on perceptions.)

A close second, which actors also use to make sense of complicated or fast-developing information is “availability.”19 This is the use of the most readily available information (such as a recent event) to make an comprehensive evaluation of events. It is a short cut to rational decision making, which can lead an actor to choose a less than optimal course of action. In this case, American policy makers used the Korean War to argue the case of China’s aggressive nature, ignoring any facts, which may have contradicted their argument.20

The Chinese were, in fact, demonized by many inside and outside of the administration. McCarthyism had suppressed virtually all objective discussion on China. Under the prevailing political atmosphere it became extremely difficult to support a conciliatory stance toward “Red China.” “Demonization” became a useful tool during the 1950’s for hawks within the U.S. government who wished for closer ties between Taipei and Washington.

A “motivated bias”21 was used by both the Nationalists in Taipei and the hawks in Washington to bolster the argument for closer ties between the two nations by strengthening the Mutual Defense Assistance Agreement signed in 1951 (a formal defense treaty was eventually signed in 1954).

The prevailing attitude toward Communism in general, and to the potential danger posed by the Communists in China in particular, meant that any meaningful dialog on the possible longer term ramifications of such a move would not be forthcoming. These conditions, put together, serve to show how domestic pressures and cognitive biases can combine to lead an actor to choose a less than optimal course of action.

Relations between Washington and Taipei grew progressively closer between 1950-54. As stated above, the PRC’s intervention in Korea gallivanted the negative perception that existed in the United States toward Communist China. In the minds of policy makers in the Washington, there were now two Communist threats, each needing to be contained.

On June 27, 1950, Truman ordered the U.S. 7th Fleet into the Taiwan Straits to protect Taiwan (and by extension U.S. forces in Korea) from, what appeared to be, imminent invasion from the mainland and in February 1951, as stated above, a Mutual Defense Assistance Agreement was signed between the U.S. and Taiwan. The U.S., then fighting a war in Korea, did not wish to widen the conflict with China (fearing the possible entry of the Soviet Union on behalf of its ally) and, thus, had to balance between deterring the PRC, which it did by moving military forces into the area and signing a defense agreement with Taiwan, while at the same time, keeping Chiang Kai Shek, the leader of the Nationalist forces on Taiwan (and somewhat of a loose cannon) reigned in. The latter objective was accomplished by stipulating in the defense treaty that American assistance would only extend to internal security matters and legitimate self-defense.

Washington, thus, began a long policy of supporting its ally while, at the same time, exerting pressure on Taiwan to refrain from using that support as leverage in a possible attack on the mainland. It was a balancing act, which proved, for the most part, successful primarily because of Taiwan’s almost total dependence on American aid for its survival. Dependence bred pragmatism.

U.S. policy toward Taiwan and the Pescadores was unambiguous. On August 17, 1954, when Eisenhower was asked what would happen if China did attack Taiwan with force, his answer left little room for doubt about U.S. resolve. “I would assume that what would happen is this: any invasion of Taiwan would have to run over the 7th Fleet.”22

American policy toward the offshore islands was less clear cut for several reasons. While Eisenhower and Dulles favored a stronger statement regarding these islands, there were others in the administration and in Congress, who saw long-term protection of the islands as an untenable position. Three other reasons for Washington’s ambiguity were a lack of support from the American public (which was still feeling the effects of the Korean War), a definite lack of support from its allies (particularly the United Kingdom), and the fact that ambiguity served a useful purpose, leaving the Nationalists guessing as to just what scenario would lead to U.S. intervention (it was thought that keeping the Nationalists guessing regarding the U.S. defense commitment would be the best way of preventing Taipei from, either launching an attack of their own, or, more likely, provoking the mainland into a confrontation whereby the United States would then be forced into active intervention).

This ambiguity, though, left some maneuvering room for the PRC. Given the conflicting signals emanating from Washington, Beijing felt the need to test U.S. resolve and decided to initiate a limited probe23 beginning with a raid on Quemoy on August 26, and a sustained artillery bombardment of the same island beginning on September 3, 1954.

On December 1, 1954, a Mutual Defense Treaty was signed between Washington and Taipei. However, during the press conference announcing the treaty, when Dulles was asked whether the treaty extended America’s security garnet to the offshore islands his answer did little to send a definitive signal to Beijing. “The position of the offshore islands is unaffected by the treaty. Their status is neither promoted by the treaty nor is it demoted by the treaty.”24 Since no one seemed to know exactly what that status was, including China, there was no reason for them to deescalate the crisis.

Because the bombardment continued into the New Year with no sign of letting up, Washington felt that additional steps needed to be taken to signal U.S. resolve. On January 24, Eisenhower called on Congress to authorize him to use force in the defense of Taiwan. Five days later Congress passed the Formosa Resolution, authorizing the president “to employ the armed forces of the United States as he deems necessary for the specific purpose of securing and protecting Formosa…this authority to include the securing and protection of such related positions and territories of that area now in friendly hands.”25 During this week-long period, the United States also moved three aircraft carriers into the Taiwan Straits and two squadrons of F-86 Sabers (nuclear capable) to bases in Taiwan.

Finally, as a means of clarifying U.S. commitments in the area, Washington issued a statement declaring that it would not aid Taiwan in defending islands farther north of Matsu (including the Tachen islands and Yikiang). This was done against the wishes of two members of the Joint Chiefs of Staff on the grounds that it would damage the credibility of U.S. deterrence (which did not happen). Had the same policy been implemented for Quemoy and Matsu the crisis in 1958 may well have been averted.

By the end of February the Tachen, Yikiang and Nanchi Shan Islands were in the hands of the PRC, the bombardment of Quemoy and Matsu continued, however. The Chinese, though, had been careful not to escalate the violence around Quemoy or Matsu. Beijing was still unsure as to what response to expect from the United States in the event of an attack on the offshore islands. Signals, therefore, were sent to Washington via the movement of military equipment to areas directly across from the two islands. By mid April the balance of forces clearly favored the PRC by 4 to 1 with the possibility of an even larger mobilization in the event of war.

The United States made no effort to stop the shelling of the islands and it was obvious that Taiwan, acting alone, was in an untenable position. Why then did extended deterrence succeed?

Extended deterrence succeeded for three reasons. First, deterrence, unlike coercion,26 is a much more tenable posture for the defender. The pressure is on the challenger to either escalate the conflict or withdraw its challenge. At the time, 1954, China did not have the capability to further escalate the conflict with any hope of achieving its objective. While the local balance of forces favored the PRC, they possessed inadequate naval and air forces to meet the challenge of the 7th Fleet.

Second, Beijing apparently took the American threat in March 1955 of a possible nuclear attack on PRC coastal positions as credible. Paul Huth posits that the “threat of nuclear use by the defender will not increase the probability of extended deterrence success when the potential attacker is a non-nuclear power.”27 While I agree that that hypothesis holds today, I believe that during the time of the first crisis (1954-55) the use of nuclear weapons by any of the three nuclear powers was a definite possibility. The stigma attached to the use of nuclear weapons was just beginning to form in the mid-‘50’s and, especially as smaller tactical nuclear weapons came into existence, policy makers (and military officials) continued to view their use as, not a weapon of last resort, but as just another weapon in the arsenal.

On March 16, for instance, in the heat of the crisis, Eisenhower informed journalists that tactical nuclear weapons could be employed on “strictly military targets” and “I see no reason why they shouldn’t be used just exactly as you would use a bullet or anything else.”28 Thus, when Dulles warned the PRC against escalation around the same time stating that, “U.S. air and naval forces were “equipped with new and powerful weapons of precision, which can utterly destroy military targets without endangering civilian centers.”29 China listened.

Finally, throughout the crisis, Eisenhower did not overreact to events on the ground. Too strong a stand by Washington may have provoked a Chinese attack, either as a means of forestalling a perceived attack by the United States or simply as a means of saving face with domestic constituents (in the case of China, the army). Some American military officials had advocated a preemptive strike on PRC coastal positions during the military build-up in January and February. Had those strikes taken place China may have felt compelled to escalate the conflict despite the possible implications. By not overreacting, the United States allowed China room (and time) to deescalate the crisis without loosing face.

Unfortunately for U.S. policy makers that cautious approach left open the question of the status of America’s commitment to the offshore islands. The Chinese realized that nothing short of an outright invasion would draw American forces into a general war. They were, therefore, able to pressure the U.S. commitment with the hope of slowly eroding U.S. resolve to defend the islands whenever they chose, knowing that no response would be forthcoming from Washington. Thus, the ambiguous policy following by Washington during the crisis, which had proven effective in keeping both the Communists and the Nationalists from escalating the crisis in the short term, became a hindrance to the effective implementation of deterrence theory over the longer term. Given the choices available to Eisenhower at the time, however, there was little else that he could have done short of conceding Chinese sovereignty of Matsu and Quemoy.

A war of attrition, thus, began between a defender (the United States) and the challenger (China) over a group of islands with no economic or military significance to the defender. Under these circumstances the ultimate resolve of the defender to maintain an extended deterrence threat may well come into question.

What must be taken into account, however, is the tremendous symbolic significance that these islands represented to many U.S. policy makers that made their loss impossible to accept. Extended deterrence for the United States, then, had taken on a rigid, inflexible tone with no room for the flexibility that had been practiced so skillfully by the British during the nineteenth century.30 As Alexander George and Richard Smoke write, “Dulles may have been a clever tactician in using diplomacy to support deterrence strategy when the latter seemed inadequate by itself to deal with a crisis. However, he lacked the wisdom of classical statesmanship in supplementing deterrence with conciliation and flexibility in order to reduce a situation’s conflict potential before it erupted into dangerous crisis.”31

On August 23, 1958, China began the shelling of Quemoy from its coastal positions directly opposite. This, along with the use of torpedo patrol boats, effectively ended Taiwan’s ability to resupply the islands (which by this time was garrisoned with almost 100,000 troops)32 without American support. Unlike the earlier crisis, however, China did not begin a military build-up of troops and amphibious landing craft. This was clearly meant as a signal to Washington that no invasion would be forthcoming, but simply another probe to determine the resolve (and extent) of America’s extended deterrence threat. Indeed, if the Chinese strategy of blockading the islands succeeded, there would be no need for an amphibious attack.

By simply blockading the islands, thus making it impossible for Taiwan to resupply its troops, China thought that it may have found a means of retaking, at least some of the islands without provoking a U.S. military response. And if a response were forthcoming, they always had the option of quickly deescalating the crisis. In poker terms, they had a full house. Taiwan had a royal flush, however, in the form of the U.S. 7th Fleet and within ten days of active U.S. support, the blockade was broken without having to resort to force and the crisis quickly subsided.

China believed that it had found a method, below the threshold set by Washington, for military intervention that could achieve, at least, a limited objective, that being the acquisition of the offshore islands.

America’s policy set out in the Mutual Defense Treaty of 1954, stated that the United States would aid in the defense of the offshore islands if it was perceived that the attack was part of a larger invasion of Taiwan or the Pescadores (of course, whether or not that was the case would be a purely subjective matter, since the Washington did not which to articulate any specific scenario that would force them to defend the offshore islands). Clearly, this was not. Thus, unlike the previous crisis, the decision to escalate, it was believed in Beijing, would rest squarely on the shoulders of the Americans. Escalation on the part of the United States would entail attacks on the mainland which meant the possible entry of the Soviet Union into the conflict. As Eisenhower stated during the first crisis, “if we get into a general war, the logical enemy will be Russia, not China, and we’ll have to strike there.”33 Given the changing military balance between the United States and the Soviet Union, it was even less likely in 1958 that the U.S. would consider an attack on the Soviet Union than in 1954.

As in the case of Berlin in 1948, America was able to break the blockade without escalating the conflict. Once that was achieved, the ball was back in Beijing’s court so to speak. The Chinese, then, had to decide whether or not escalating the crisis was worth the possible risks. Since Moscow had made it clear to China that military aid would not be forthcoming if China attacked Taiwan, the PRC had little choice other than to deescalate or risk certain defeat. The Chinese were, thus, very rational in their conduct of the crisis in 1958. By weighing the options, they were able to create a plan that minimized the risk to themselves, and when the risks grew to the point where the expected utility of the action was less than the potential costs, they backed off.

Because the Chinese were unwilling to risk a possible military showdown with the United States in 1958, America’s policy of extended deterrence can said to have been, for the most part, a success. While the PRC continued to make speeches about retaking both the offshore islands and Taiwan itself, and even though the United States had been unable to stop the Chinese from initiating an artillery bombardment of Quemoy, America’s policy of extended deterrence was successful in forcing the Chinese to scale down their objectives. Just eight years earlier the Communists were preparing for an amphibious landing on Formosa which would have ended the Nationalist’s hopes for control of the mainland. By 1958, the Chinese had given up hope of a quick victory against Taiwan and were willing to settle for a war of attrition in an attempt to weaken U.S. resolve. Since America’s policy of extended deterrence regarding Taiwan was costing the United States nothing (unlike Vietnam), it was a type of war that the Chinese could not win.

Finally, after a brief crisis in 1962, military conflict, for the most part, ceased between China and Taiwan. The withdrawal of Nationalist forces from the Tachen Islands (and China’s subsequent occupation of those islands) had not caused a slump in moral among the Taiwanese which some in Washington had predicted, and China by the mid- ‘60’s, suffering from a growing sense of isolation, was less interested in provoking the United States.

While there was actual violence between China and Taiwan between 1950 and 1958 which America’s policy of extended deterrence was unable to prevent, this does not invalidate the effectiveness of extended deterrence theory. The fact that China was forced into accepting a less ambitious outcome (even if it was a tacit, rather than declared acceptance) lends support to the theory’s effectiveness.34 These crises also show, however, the theory’s limitations, which can be exploited by a determined challenger.

By 1958, the mind-set of the PRC had changed considerably. Over the previous eight years Communist control over the mainland had been solidified. Its major ally, the Soviet Union, was in a stronger position, vis a vis the United States than at any time since the Second World War and the PRC had vastly increased its coastal artillery positions near the island of Quemoy. The PRC felt secure enough, then, to initiate another challenge to the United States.

China clearly saw a window of opportunity due to the ambiguity of America’s extended deterrence statements and the new, more favorable, military realities on the ground. That is not to say that the Chinese were risk-acceptant. Unlike the Korean War, where Beijing was operating from a domain of loss and were, obviously, risk-acceptant, in regards to Taiwan, they were risk neutral. The PRC was willing to take limited risks when they were able to control the level of escalation, however, they still recognized that they would be unable to counter any large-scale U.S. military attack without direct Soviet intervention. By 1958, the tacit acknowledgment of a new status quo had been accepted by both sides in the conflict. Despite continued tough talk from Beijing and Taipei, both sides understood the new realities. China would not be able to take Taiwan by force while the United States offered it protection, and Taiwan realized that reunification under a Nationalist flag was impossible. Just as prospect theory suggests, it took the Nationalists much longer to assimilate the loss of the mainland into their reference point than it did the Communists to assimilate the corresponding gain.

By the 1990’s, China had further refined its policy toward Taiwan, stating that they would not invade the island unless it declared its independence.35 The Taiwanese (or rather, the Chinese Nationalists who came to the island in 1949),36 for their part, are less interested in reunification. China is viewed as a backward country by many in Taiwan and democratic elections in 1996, the first ever for Taiwan, only served to further separate the two nations in the eyes of most Taiwanese.37

China today is still unable to launch an attack on Taiwan with any hope of success. The offshore islands continue to be particularly vulnerable, however China has shown no inclination to differentiate its claims between the offshore islands and Taiwan itself. Indeed, the Chinese realize that any attack on the offshore islands will end any hope of peaceful reunification.

In 1996, the Communists attempted to intimidate Taiwan into electing a president more favorable to reunification than Lee Teng-hui, the front runner. The result was a resounding victory for Mr. Lee. The saber rattling by Beijing also served to demonstrate America’s continued resolve to defend Taiwan from any Chinese threat, despite the fact that formal relations between the United States and Taiwan no longer exist.38 The Taiwanese were heartened by the presence of two U.S. aircraft carriers off the coast of Taiwan during the elections (in what amounted to the largest show of American naval power in East Asia sense the end of the Vietnam War).39

The military balance, so critical to deterrence theory, began to shift for the first time in the early 90’s in favor of China. Although China has always enjoyed a quantitative edge in weapons systems, that disparity has been, until recently, offset by the qualitative edge enjoyed by Taiwan. The acquisition by China in recent years of Soviet SU-27 and SU-30 fighter-bombers, Kilo-class submarines, and Sovremenney Class guided missile destroyers, however, has threatened to erode that edge.

Furthermore, it has become Chinese policy to pressure other nations to end arms sales to Taiwan. The Dutch, for instance, caved in to Chinese pressure when they scrapped an order from Taiwan for four submarines. Recently the U.S., under President George Bush, agreed to sell Taiwan submarines for the first time, thus making a blockade of the island by China virtually impossible. The administration also agreed to sell a host of other weapons systems to Taipei including Orion coastal patrol aircraft, in an effort to maintain Taiwan’s ability to ward off an attack at least long enough to allow American forces to intervene.

Taiwan has expressed an interest in the purchase of U.S. destroyers armed with the Aegis weapons system. While the potential sale was denied by the Bush administration, it did agree to the sale of four Kidd Class destroyers, which would represent a quantum leap in the capabilities of the Taiwanese navy.

Any new weapons acquisitions made by Taiwan will undoubtedly raise the ire of Beijing, thus, creating a security dilemma for Taipei. To this point they have been able to maintain a qualitative edge over their rival without raising alarm in China. Given the fact that China undoubtedly expects the qualitative edge enjoyed by Taiwan to erode over time, probably nothing short of the acquisition of nuclear weapons by Taipei would force China’s hand.

One interesting development to watch in the near to medium term is the development by Washington of its ballistic missile shield. The system has to be at the forefront of China’s strategic thinking. If the system proves capable it would make the enormous number of conventional missiles that China currently has deployed against Taiwan irrelevant and tip the military balance considerably. More worrying for Beijing, however, is how the system may affect its nuclear deterrent. Given the relatively minuscule number of missiles that China has deployed, the U.S. shield could make China’s deterrent, at least temporarily, irrelevant as well.

America’s extended deterrence regarding Taiwan has remained amazingly consistent through 10 different U.S. administrations. A clearly defined strategy toward Taiwan (and the Pescadores), an ambiguous one regarding the offshore islands and a belief that there should be only one China.

If Taiwan does declare independence most experts believe that China would attack (most probably by blockading the islands and launching missile attacks on Taiwanese cities). The Taiwanese have a very limited window of opportunity to officially break away if that is their objective. Taiwan must have adequate protection from Chinese missiles (which it does not now possess) and, thus, must wait until an effective “shield” has been established by the United States, perhaps near the end of the next decade.

However, China’s power will only continue to grow as its economy does and within the next thirty-forty years it may no longer be within America’s capability to extend its “umbrella” over Taiwan simply by sending a few aircraft carriers into the Straits. At some point, the costs of defending Taiwan may become too great to justify an extended deterrence policy for Taiwan. Their window of opportunity is, then, very small.

They must also face the possibility that the United States will not come to their rescue if they declare independence. Washington’s official policy is to not support a Taiwanese unilateral declaration to that end. However, Congress has, traditionally, been an even greater supporter of Taiwan than American presidents have been (as the 1996 standoff demonstrated) and thus, may force a president’s hand in any confrontation. Importantly for Taiwan, they have created a powerful military, which makes it impossible for the Chinese to initiate a rapid offensive attack strategy.40 In the event of any aggression by China, there would be some time, however short, for Washington to intervene before the Chinese could complete their offensive.

All of these considerations must be taken into account when extended deterrence theory is made operational. Will the public support the policy? Will the Congress back the President or will a division be created that would signal to a challenger a lack of resolve, thus making extended deterrence that much more difficult. For extended deterrence to be effective over the long term, a unified stance is needed in support of the policy. A less than united front may lead to miscalculations on the part of a challenger who sees a window of opportunity where none actually exists, which can then lead to a breakdown in extended deterrence.

This paper has sought to demonstrate through case study analysis the effectiveness of extended deterrence theory, while at the same time pointing out the theory’s possible weaknesses by bringing in cognitive forces that might disrupt the decision-making process. This last development clearly makes the real-world practice of extended deterrence a tricky process. The cases considered in this paper, particularly the crisis of 1954-55, also show the dangers of applying extended deterrence theory too rigidly. While credibility is critical to the effective implementation of extended deterrence theory, there must be some room for compromise. The real test for governments is recognizing when to assure and when to deter. Policy makers got it wrong in 1914 and again in 1938, with terrible results. Unfortunately, it is often only in hindsight that we see the errors in the decisions of our policy makers. A close examination of the potential benefits of Prospect theory may be of some use to policy makers as they struggle with the complexity of America’s new role in this now uni-polar world.

1. Paul Huth, Extended Deterrence and the Prevention of War (Yale: Yale University Press, 1988) 16.
2. See Graham Allison, Essence of Decision Making: Explaining the Cuban Missile Crisis. Boston: Little, Brown, 1971.
3. For a comprehensive look at signaling, read James Fearon, “Signaling versus Balance of Power and Interest”, Journal of Conflict Resolution. Vol. 38, no. 2. June 1994.
4. Robert Jervis, Richard Ned Lebow and Janice Gross Stein, Psychology and Deterrence (Baltimore: Johns Hopkins University Press, 1985). Esp. ch. 2.
5. Barbara Farnham, Avoiding Losses/Taking Risks (Ann Arbor: University of Michigan Press, 1994). P 7.
6. This includes the research methods used by social scientists testing the theory. For a look at some of the weaknesses of prospect theory, see Jack Levy’s “Prospect Theory, Rational Choice, and International Relations”, International Quarterly. 1997. 41. 87-112.
7. See W. Phillip Davison, The Berlin Blockade (Princeton: Princeton University Press, 1958).
8. Josef Kalvoda, Czechoslovakia’s Role in Soviet Strategy (Washington DC: R.F. Publishing Inc. 1978.
9. Martin Sicker, The Bear and the Lion (New York: Praeger Publisher, 1988).
10. Suzanne Pepper, Civil War in China (Los Angeles: University of Los Angeles Press. 1978).
11. Read Alexander George and Richard Smoke, Deterrence in American Foreign Policy (New York: Colombia University Press. 1974) chs. 6-8.
12. The Munich crisis of 1938 has become synonymous with the word appeasement. It was at a meeting in Munich in 1938 that Great Britain and France agreed to the partition of Czechoslovakia (with the Sudetenland going to Germany) in an unsuccessful attempt at appeasing Hitler and, it was hoped at the time, of preventing another World War.
13. George Kennan, American diplomat and author of an influencil aticle in Foreign Affairs which was used as the bases for the U.S. policy of containment during the Cold War. For a review of the article (authored by “X” , see Foreign Affairs, July 1947. Vol. 25, no. 4.
14. John Foster Dulles was the American Secretary of State from 1953-59 and was the man responsible for making operational the ideas put forth by George Kennan in 1947.
15. 1Known as the Truman Doctrine.
16. Massive retaliation was used as a strategy to counter the Soviet superior conventional forces, primarily in Europe. It was thought that NATO’s ability to counter a Soviet invasion of Western Europe would be impossible without nuclear weapons. The United States, therefore, drew up a strategy, which stated that any attack by Soviet forces on the United States or its allies would be met, immediately, by a full nuclear strike.
17. The status quo.
18. From George and Smoke, Deterrence in American Foreign Policy, 274.
19. Jervis, Lebow and Stein, Psychology and Deterrence, 22-23.
20. For instance, the Eisenhower administration did not look at how the U.S. decision to push forward to the Chinese border during the Korean War may have forced the hand of Beijing in entering the war.
21. According to Robert Jervis, there are two types of cognitive biases. An unmotivated bias is a product of the complexity of the environment. That type conserves cognitive resources and allows people to avoid being overwhelmed by complexity and ambiguity. These are biases that, once pointed out to us, we would try to avoid committing. A motivated bias is used primarily to minimize the negative attributes of objects that a person values such as a favored policy or goal. These are mental errors that would not be corrected even if they were pointed out to the person because they provide a shield against painful perceptions or can be used to rationalize a particular course of action. Jervis, Lebow and Stein. Psychology and Deterrence, 4.
22. George and Smoke, Deterrence in American Foreign Policy. 280.
23. Ibid., 540.
24. Department of State bulletin, 31: 807 (1954): 896.
25. US Department of State, American Foreign Policy, 1950-1955. Vol. 2, 2487.
26. Coercion is an attempt by one state to force another state to undo an action already taken, as apposed to deterrence, which is an attempt to deter another state from taking an action. The first is reactive and the second is proactive.
27. Huth, Extended Deterrence, 42.
28. Piers Brendon, IKE (London: Martin Secker & Warburg Ltd. 1987), 303.
29. Huth, Extended Deterrence, 111.
30. See Huth’s, Extended Deterrence, especially ch. 6, for a look at how Great Britain, at times, was able to offer a more conciliatory position vis a vis other great powers. The case of Anglo-Russian negotiations over Afghanistan in the latter half of the 19th Century is used as the case study.
31. George and Smoke, Deterrence. 384.
32. Chiang Kai-Shek had stationed huge numbers of troops on the island in an attempt to more closely tie their security to the security of Taiwan itself. Chiang felt that Washington could not accept the loss of such a large number of nationalist troops in the event of a Communist attack on Quemoy and would intervene to protect them. It is also true that certain members of the US administration were in favor of such a move for the same reasons.
33. Brendon, IKE. 300.
34. See Eli Lieberman, The Rational Deterrence Theory Debate: Is the Dependent Variable Elusive? Security Studies 3, no. 3 (Spring 1994): 384-427.
35. China’s policy now is for peaceful reunification under the banner, “two governments one China”. They have agreed to allow the Taiwanese to maintain an army of their own, hold free elections and maintain an independent economic policy. However, they must be represented by China internationally and may not conduct foreign affairs. Taiwan has rejected this. They counter that reunification can take place only after China has democratized.
36. Eighty-four percent of the island’s population is native Taiwanese descended from Chinese immigrants in the eighteenth and nineteenth Centuries. The Chinese who came to Taiwan after the loss of the mainland in 1949 account for 14% of the population. but have dominated political and economic life since 1949. Only recently have the natives begun to achieve a level of parity with the Chinese nationalists.
37. Taiwan had been ruled without democratic elections from the time of the nationalist’s departure from the mainland in 1949. The ruling party, Kuomintang, ruled with martial law in place until 1987. The first general elections for a president were held in 1996.
38. The United States terminated relations with Taiwan in 1979 in favor of relations with Communist China. The US maintains the right to intervene in any attack on Taiwan from the mainland, however, Washington has stated that it will not support a Taiwanese unilateral declaration of independence. Despite the lack of official relations, Taiwan is. today, the 7th largest trading partner of the United States.
39. London Times.
40. A rapid offensive strategy is a strategy whereby the challenger seeks to over run the ally of a defender before the defender is able to react with force, thus, presenting the defender with a fait accomplis. Huth Extended Deterrence, 35-38.


The author, a free-lance writer, currently lives and works in Ann Arbor, Michigan, USA.


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