Buoyant Stocks Used to Mask Crisis Posed by PLA Drills
By Wang Kun-yi, China Times Opinion, December 31, 2025
Mainland China has conducted the “Justice Mission–2025” encirclement drills against Taiwan. From a crisis-management perspective, this already constitutes a substantive Taiwan Strait crisis. While Taiwanese stock investors remain largely indifferent, chasing surging stocks, the government must not assume that a lack of public reaction means the crisis does not exist; otherwise, Taiwan will be in grave danger.
The elements of crisis management can generally be divided into three: surprise, timing, and decision-making. Surprise refers to an event’s ability to shock and intimidate the other side; timing means launching a crisis in a way that catches the other side off guard; decision-making, of course, concerns how the other side responds to a sudden crisis. These three factors test a leader’s wisdom and psychological resilience—that is, whether the government can handle and respond to a crisis in the shortest possible time.
This round of the People’s Liberation Army’s (PLA) encirclement drills around Taiwan has substantively constituted a crisis. It should no longer be dismissed as mere saber-rattling. The drills were launched precisely in accordance with the elements of a crisis, with the aim of catching the administration of President Lai Ching-te off guard and testing the president’s assertion that China lacks the capability to threaten the Taiwan Strait—making Taiwan see clearly that today’s PLA is no longer what it once was, and that the Taiwan Strait is no longer an insurmountable natural barrier.
The “Justice Mission–2025” drills were announced early in the morning, before the Presidential Office had even begun work, and the PLA had already made moves prior to the announcement—all to surprise the Lai administration and see how it would respond. If the response were chaotic, it would demonstrate Taiwan’s inadequate crisis-handling capacity, let alone its ability to cope with war.
The government kept a low profile until 4:30 PM, when Ministry of National Defense officials finally held a press conference. If this had truly occurred at the outset of a war, such crisis management would likely be deemed a failure. The government may argue that this was to avoid disrupting people’s daily lives, but if a real war crisis were to occur, could people really continue going to work and school as usual, as Democratic Progressive Party (DPP) politicians claim? That would be nothing more than self-deception. The reason people remain calm is that Taiwanese have long understood that mainland military drills target Taiwan independence and will not escalate into war; thus, stocks are traded as usual, classes proceed as normal, and PLA shells seem like passing clouds.
The worst form of crisis management is when the government, in an effort to conceal potential social panic caused by military drills, instead repeatedly pours money from the National Stabilization Fund to prop up the Taiwan Semiconductor Manufacturing Company (TSMC) and push up the broader stock market, making people unafraid and believing that the mainland’s drills are merely for show. This kind of self-deceiving behavior is akin to the elementary-school tale of “The Boy Who Cried Wolf.” Over time, the public becomes numb to military drills, and if the PLA were ever to truly attack Taiwan, so-called social resilience would likely collapse instantly.
Therefore, in response to mainland military drills, the government should each time make it clear to the public that this is serious business—without inducing fear of the drills themselves—but rather ensuring that Taiwan remains at all times in a state of war readiness or near-war readiness, so that President Lai does not dare become a genuine Taiwan independence activist. Such warnings through military deterrence are more effective than rhetorical offensives; this has been the result of years of experimentation by the mainland. If the Lai administration still fails to take seriously drills that have already encroached into territorial waters, and continues to blindly believe in weapons-only doctrines—insisting on turning Taiwan into a porcupine—then in the end, it will be the indifferent public who suffer, not the politicians who repeatedly deceive themselves. Therefore, the people of Taiwan should clearly understand that mainland military drills may only be good news for politicians, but they are certainly not great news for the stock market.
(The author is chairman of the Taiwan International Strategic Study Society.)
From: https://www.chinatimes.com/opinion/20251231003762-262104?chdtv