Taiwan imports roughly 98 percent of its energy, making it one of the world's most energy-insecure economies. This vulnerability creates an opportunity for Beijing to pursue its campaign to force Taipei’s capitulation through gray-zone tactics, using economic, legal, and cyber-enabled economic warfare to throttle Taiwan's fuel supply without firing a shot. A successful Chinese campaign to disrupt Taiwan's LNG supply would force the island into difficult choices between powering civilian infrastructure or maintaining industrial production – including the semiconductor manufacturing that produces a super-majority of the world’s advanced chips.

This summer, teams from the Foundation for Defense of Democracies (FDD) and the Taipei-based Centre for Innovative Democracy and Sustainability (CIDS) at National Chengchi University conducted a tabletop exercise examining how the Chinese Communist Party (CCP) might escalate military, diplomatic and economic pressure towards an unacknowledged quarantine, interrupting and potentially blocking Taiwan’s energy imports. The exercise revealed that while Taiwan must urgently address its energy vulnerabilities, coordinated actions by the United States, Japan, Australia, and European partners can significantly impact Beijing's strategic calculus.

For a discussion on the findings from this tabletop exercise and actionable steps Taiwan and its partners can take to build resilience and strengthen deterrence, FDD hosts a panel of exercise participants including Kenan Arkan, managing director of commodities origination at J.P. Morgan; RADM (Ret.) Mark Montgomery, senior director of FDD’s Center on Cyber and Technology Innovation (CCTI); and Craig Singleton, senior director of FDD's China Program. This conversation is moderated by Politico China Correspondent Phelim Kine. 

For more, check out: https://www.fdd.org/events/2025/11/17/power-under-pressure-the-fight-to-protect-taiwans-energy-lifelines-from-beijings-aggression/