Taiwan’s national flag is hoisted on a street in Kinmen City on October 29, 2025.
Chen Yihua | AFP | Getty Images
SINGAPORE – America’s top diplomat in East Asia says investors are overestimating the risk of conflict across the Taiwan Strait, stressing that deterrence and “significant consequences” could prevent China from seizing the island by 2027.
The U.S. government has repeatedly indicated that Beijing has directed the People’s Liberation Army to be ready for military action on Taiwan by 2027, but Beijing has never publicly acknowledged that timeline.
“I think the biggest mispricing is with respect to Taiwan. I actually think people are overestimating the risk of something happening across the Taiwan Strait,” Michael DeSombre, assistant secretary of state for East Asian and Pacific Affairs, told CNBC on Thursday.
“Neither China nor the United States wants conflict, and we can deter conflict,” he told CNBC in an exclusive interview on the sidelines of the Milken Institute Asia Summit. “Perhaps the price of that concern is too high.”
The Chinese government claims Taiwan as its own territory and has not ruled out using force to bring it under its control. The island’s democratically ruled government rejects Beijing’s claims.
China is also trying to get the United States to change its longstanding diplomatic stance toward Taiwan, officially opposing Taiwan’s independence. However, last month’s summit between US President Donald Trump and Chinese President Xi Jinping failed to reach a national consensus on Taiwan.
The US president in December put on hold approval of a new package of arms sales to Taipei worth $14 billion after an earlier package of $11 billion in arms sales to Taiwan drew a fierce reaction from the Chinese government.
A few days after the summit, Taiwanese Foreign Minister Lin Chia-lung visited Arizona to open a new de facto consulate in Phoenix.
Beijing has increasingly increased its military presence near the island in recent months. Citing surveillance reports, Reuters reported that a Chinese military vessel was first spotted off Taiwan’s Pacific coast in August along with two other ships. Since last year, he has been lobbying Taiwan’s opposition party, the Kuomintang, to bring Taiwan into its orbit for the 2028 presidential election.
Asked whether plans to “unify Taiwan” by 2027 were a cause for concern, Desombre said Xi was “a very rational person…as long as he recognizes that it’s impossible or that it can’t happen without serious consequences, it won’t happen.”
Mr. Desombres emphasized the importance of maintaining the credibility of deterrence. “That’s why it’s important that we work with our allies and partners to ensure that deterrence is in place to prevent that from happening.”
Taiwan is one of the world’s leading manufacturers of cutting-edge computer chips, and TSMC, the world’s largest contract chip maker, has invested tens of billions of dollars in its Phoenix facility. These projects are heavily subsidized by the United States as Washington seeks to revive domestic semiconductor manufacturing.
