Preface: February 4th — Xi Jinping's Busy Day
February 4th, 2026, Great Hall of the People, Beijing. Chinese President Xi Jinping held conversations with the world's two most important leaders within just a few hours. First, in the morning, he conducted a video conference with Russian President Vladimir Putin. Immediately afterward, he called US President Donald Trump.
This 24-hour diplomatic blitz was no coincidence. China is executing a dual strategy — reaffirming its "unlimited partnership" with Russia while simultaneously seeking to stabilize relations with the United States. And at the center of this great power game stands Taiwan.
Xi's message to Trump was unambiguous: "The Taiwan question is the most important issue in China-US relations. The United States must handle arms sales to Taiwan with prudence."
At the very moment this warning was delivered, another crisis was unfolding in Taipei. The opposition-controlled legislature was pushing through a bill to slash 70% of the government's $40 billion special defense budget. External pressure and internal division are simultaneously closing in on Taiwan.
Chapter 1: Xi's Dual Diplomacy — Between Putin and Trump
A 'New Blueprint' with Russia
On the morning of February 4th, Xi met Putin via video conference. The date marked Lichun (立春), the beginning of spring in the Chinese calendar. Xi said he wanted to "draw a new blueprint for China-Russia relations" on this day symbolizing new beginnings. Putin responded that "every season is spring in Russia-China relations."
The two leaders discussed energy cooperation, peaceful uses of nuclear energy, and collaboration in high-tech industries and space research. Putin particularly praised China's decision to allow visa-free entry for Russians, a measure Moscow reciprocated.
Notably, Putin mentioned the US-Russia New START nuclear arms treaty during this call. The treaty was set to expire the very next day, February 5th. Putin said "Washington has not responded to the proposal for a one-year extension," yet promised to "act in a balanced and responsible manner." He was effectively using China as a witness to pressure the United States.
Xi invited Putin to visit China in the first half of 2026 and to attend the APEC summit in Shenzhen in November. Putin accepted both invitations.
An 'Excellent' Call with Trump
Just hours after concluding his meeting with Putin, Xi spoke with Trump by phone. It was their first conversation since November.
Trump posted on Truth Social that the call was "excellent," "long and thorough," and "all very positive." He said they discussed trade, Taiwan, the Russia-Ukraine war, the Iran situation, and China's purchases of US oil, gas, and agricultural products.
Trump particularly noted that China was considering purchasing 20 million tons of US soybeans this season — up significantly from 12 million tons the previous season. He also reconfirmed plans to visit China in April.
However, China's readout differed subtly from America's. According to the Chinese Foreign Ministry, Xi emphasized that the Taiwan question is "the most important issue" in bilateral relations. He stated that "China must safeguard its sovereignty and territorial integrity, and will never allow Taiwan to be separated."
The most critical passage: "The United States must handle the issue of arms sales to Taiwan with extreme caution."
Chapter 2: $11.1 Billion in Weapons and the 'Porcupine Strategy'
The Largest-Ever US Arms Package to Taiwan
Xi's warning had concrete context. In December 2025, the US State Department announced the largest-ever arms sales package to Taiwan — valued at over $11.1 billion, including missiles, artillery systems, and drones.
China reacted immediately. In late December 2025, the People's Liberation Army conducted two days of military exercises around Taiwan, deploying air, naval, and missile forces. China also imposed sanctions on US defense companies involved in the deal.
This arms package still awaits Congressional approval. But the real problem is unfolding not in Washington but in Taipei.
What Is America's 'Porcupine Strategy'?
The Pentagon has long recommended a strategy for Taiwan's defense known as the "Porcupine Strategy" or "Asymmetric Warfare" approach.
The core concept: Rather than confronting China's massive amphibious assault head-on, saturate the Taiwan Strait with drones and missiles to raise the cost of invasion to unbearable levels — like a porcupine using its quills to deter predators.
Key elements of this strategy include:
- Mass quantities of drones: Cheap, distributed attack assets capable of striking Chinese naval vessels
- T-Dome: A multi-layered air defense system modeled after Israel's Iron Dome
- Precision-guided munitions: Mobile missile systems like HIMARS
- Domestic defense industrial capacity: Self-production capability for wartime sustainment
The US and Taiwan have been working toward achieving these capabilities by 2027, including the establishment of a "Joint Firepower Cooperation Center" to integrate elite Taiwanese troops with American equipment and targeting data.
Chapter 3: Taiwan's Civil War — The Budget Battle in the Legislature
The 70% Slash
Taiwan's legislature is currently controlled by the opposition. The Kuomintang (KMT) and Taiwan People's Party (TPP) together can block any bill from President Lai Ching-te's ruling Democratic Progressive Party (DPP).
President Lai requested approximately $40 billion in special defense spending over eight years. This included not only the $11.1 billion US arms purchase but also items to strengthen Taiwan's own defense industrial capacity:
- Acquisition of 200,000 domestically-produced drones
- Development of the T-Dome air defense system
- Expansion of domestic missile and defense industrial base
But the opposition rejected this. The alternative bill jointly submitted by the KMT and TPP amounts to roughly $12.6 billion — only 30% of the government's request. A 70% cut.
The Logic and Subtext of the Cuts
On the surface, the opposition cites "fiscal responsibility" and "enhanced transparency." TPP legislator Wang Wan-yu criticized "opaque practices" and "blank check authorizations."
But examining the cuts reveals the real intent:
- Retained: HIMARS, precision-guided munitions — US-made weapons
- Cut: 200,000 domestic drones, T-Dome — all domestic defense capabilities
In other words, the opposition approves buying American weapons while blocking Taiwan's ability to defend itself independently. This directly undermines the core of the "asymmetric strategy" recommended by the United States.
President Lai's Warning
On February 4th, President Lai warned reporters: "If the opposition continues to block defense spending, the international community may misunderstand Taiwan's determination to defend itself."
He also said, after the Trump-Xi call, that ties with the US are "rock solid" and that "all cooperation projects will continue without interruption."
But reality is more complex than his words suggest. If Taiwan's own legislature slashes its defense budget, what reason does the United States have to continue defending Taiwan?
Chapter 4: The April Summit — Is Taiwan a Bargaining Chip?
Trump's China Visit
Trump confirmed he will visit China in April — his first trip since taking office for his second term. In October 2025, the two leaders met on the sidelines of a regional summit in Busan, South Korea, where they agreed to a one-year trade truce.
At that time, Trump told reporters that Taiwan "never came up" and "was not discussed." This time is different. China's readout explicitly named Taiwan as "the most important issue."
Professor Lev Nachman of National Taiwan University analyzes: "The days when trade was the center may be over. Taiwan will now be a central topic at the April summit. Taiwan needs to be prepared."
The Possibility of Becoming a 'Deal'
The Trump administration's diplomatic style is thoroughly transactional. Reducing the trade deficit, selling American products, isolating Iran, ending the Ukraine war — these are the priorities.
Xi hinted at purchasing 20 million tons of American soybeans and signaled willingness to engage with the US on Iran and Ukraine. In return, China's demand is clear: reduction or halt of arms sales to Taiwan.
Professor Nachman says "Trump is keenly aware of how important Taiwan is to America's economic growth" and "won't do anything to jeopardize that." But he also warns: "At minimum, in 2026, there will be more language and rhetoric about Taiwan from both the US and China."
Chapter 5: Cracks in the Silicon Shield
TSMC's Diversification Strategy
Taiwan's most powerful deterrent isn't military — it's TSMC (Taiwan Semiconductor Manufacturing Company). As long as this company, which produces over 90% of the world's advanced semiconductors, remains in Taiwan, China cannot easily invade. This is the "Silicon Shield" theory.
But cracks are appearing. On February 5th, TSMC Chairman C.C. Wei announced after meeting with Japanese Prime Minister Sanae Takaichi that the company would produce 3-nanometer chips at its Kumamoto, Japan facility — the most advanced process node, now to be produced outside Taiwan.
TSMC is already building a $100 billion facility in Arizona and has expansion plans for Germany. This "geographic diversification" is officially explained as "a hedge against US tariff threats and the possibility of a Chinese blockade of Taiwan."
The problem: If TSMC can produce advanced chips outside Taiwan, the Silicon Shield's deterrent effect weakens. Even if China invades Taiwan, the world can still source advanced chips from Japan and the United States.
The 2027 Timeline
US intelligence and military experts frequently mention a particular year: 2027. This is the estimated point when the People's Liberation Army will have achieved the capability to invade Taiwan.
The US and Taiwan have been accelerating defense capability improvements with this timeline in mind. But the legislative budget cuts, TSMC's diversification, and the Trump administration's transactional diplomacy — all these factors are working to weaken Taiwan's deterrence.
Chapter 6: Scenario Analysis — The Future of the Taiwan Strait in 2026
Scenario A: Status Quo Maintained (45%)
Rationale:
- Neither Trump nor Xi wants immediate conflict
- Both sides have incentives to avoid escalation before the April summit
- Strategic value of Taiwan's economy and semiconductors creates deterrence
- Historical precedent: No actual military conflict even after Nancy Pelosi's 2022 visit
Trigger Conditions:
- Trade agreement reached at April summit
- Taiwan opposition passes at least minimal defense budget
- US moderates pace of Taiwan arms sales
Timeframe: Could hold throughout 2026
Scenario B: Tension Escalation Without War (35%)
Rationale:
- Pattern of increasing Chinese Gray Zone Operations
- Military demonstrations like December 2025 exercises are trending upward
- If Taiwan cuts defense budget, China may interpret it as "lack of resolve"
- If Trump uses Taiwan arms sales as a bargaining chip, it could provoke Beijing hardliners
Trigger Conditions:
- Taiwan opposition forces through 70% defense budget cut
- Trump avoids mentioning Taiwan during April visit
- Chinese domestic instability requires nationalist mobilization
Expected Outcomes:
- Increased frequency and scale of Chinese military exercises
- Routine violations of Taiwan's Air Defense Identification Zone (ADIZ)
- Intensified non-military pressure: submarine cables, maritime blockades
Scenario C: US Support for Taiwan Weakens (15%)
Rationale:
- Trump's transactional diplomatic style
- "Why should we fight for Taiwan?" sentiment in US
- Taiwan cutting its own defense budget → perception of "lack of self-help will" spreads in US
- Historical precedent: Afghanistan withdrawal (abandoning allies)
Trigger Conditions:
- Trump attempts "grand bargain" with Xi at April summit
- Taiwan arms sales delayed or reduced
- Growth of anti-Taiwan support faction in US Congress
Outcomes:
- Taiwan's strategic isolation
- Increased anxiety among regional allies like Japan and South Korea
- Incentive for bolder Chinese actions
Scenario D: Military Conflict (5%)
Rationale:
- Low probability of Chinese preemptive action before 2027 "capability achieved" point
- Xi's stable power base in third term — no need for gambling
- Russia-Ukraine war's prolongation provides "lessons" for China
Trigger Conditions (highly limited):
- Taiwan formally declares "independence"
- US announces permanent military presence in Taiwan
- Severe political/economic crisis in China
Timeframe: Extremely low probability within 2026
Conclusion: Whose Responsibility Is Taiwan?
Xi Jinping's February 4th diplomacy demonstrates China's strategic positioning. Maintaining the "unlimited partnership" with Russia while simultaneously managing relations with the United States. Drawing clear red lines on Taiwan while avoiding immediate conflict.
Trump wants a "deal." Reducing the trade deficit, selling American products, isolating Iran, ending the Ukraine war. Taiwan could become one chip on this massive negotiating table.
But the most concerning factor is Taiwan itself. A legislature that wants to slash 70% of its own defense budget, an opposition that retains only US weapons purchases while cutting domestic defense capabilities — what are they calculating?
Professor Nachman's words resonate: "At minimum in 2026, there will be more language and rhetoric about Taiwan from both the US and China. Taiwan needs to be prepared."
The question is whether Taiwan is preparing. Internal division may prove a greater threat than external pressure. History has not been patient with nations that lack the will to defend themselves.
February 5, 2026 | Eco Stream Research
Leave a Reply