Chinese court 28 Nov sentenced Taiwanese human rights activist Li Ming-che to five years’ prison for subversion; Taipei called verdict “unacceptable”, said it “severely damaged cross-strait relations”. During visit to China by U.S. President Trump, Chinese President Xi 9 Nov told Trump that Taiwan is “most important, most sensitive core issue in China-U.S. relations”; Trump reportedly reiterated U.S. commitment to “one China” policy. President Tsai 29 Oct said Taiwan will increase its defence budget by 2% each year, which would take defence spending to 3% of GDP in 2018. Panama 16 Nov opened first embassy in China, five months after cutting ties with Taiwan.

President Tsai Ing-wen took conciliatory tone toward China during her National Day speech 10 Oct, saying old path of confrontation was over and vowing to maintain her commitment to cross-strait status quo. Opening Communist Party of China’s 19th Congress 18 Oct with Party’s Political Report charting next five years, General Secretary Xi Jinping reaffirmed that Beijing has “the resolve, the confidence and the ability to defeat separatist attempts for Taiwan independence in any form”. Xi went on to state that China respected Taiwan’s “current social system and way of life”, but that island must recognise historical fact “that the two sides both belong to one China”.

President Tsai 5 Sept appointed new Premier William Lai Chin-te, known for tough, pro-independence stance. Delivering first administrative report to parliament 26 Sept, Lai became first holder of his position to explicitly endorse island’s separate status from mainland China, risking further tensions with Beijing.

President Tsai 9 Aug said she seeks new way to end deadlock in cross-strait ties since she took office May 2016; called on Beijing to work with her to establish “new model of cross-strait interactions” and said Taiwan “remains committed to maintaining the status quo”. Taipei 15 Aug said it had placed military on high alert after three days of Chinese air force drills that sometimes entered Taiwan’s air defence identification zone; Chinese defence ministry 31 Aug said air force exercises were “routine”.

Following late June U.S. announcement of sale of $1.42bn arms package to Taiwan, China’s ambassador to U.S. 13 July warned that “troubling developments” could “derail” bilateral relationship. U.S. Congress 14 July passed defence bill including proposed expansion of training and exercises with Taiwan; China said it had lodged complaint. Taipei reported China flew several fighter and reconnaissance aircraft drills near Taiwan during month, 25 July said it would “not back down in the face of threats”, was prepared to defend itself against China if necessary.

Amid increasing tensions between U.S. and China over South China Sea and North Korea (see entries), U.S. 29 June announced it would sell Taiwan $1.4bn in military hardware over coming years, including missiles, torpedoes and electronic warfare system upgrades. U.S. Senate Armed Services Committee 28 June proposed that U.S. Navy resume regular port calls to Taiwan, suspended since 1979 start of “one China” policy. China urged immediate halt to moves, saying they “severely violate the three joint communiqués between China and the U.S., and constitute interference in China’s domestic affairs”. In 4 June remarks to Shangri-La Dialogue, U.S. Sec Defense Mattis said U.S. committed to providing Taiwan with “the defence articles necessary”. Panama 12 June announced it would sever diplomatic ties with Taiwan and establish formal relations with China, recognise “one China” policy and consider Taiwan part of Chinese territory; leaves only nineteen countries plus Vatican with formal diplomatic relations with Taiwan.

President Tsai mid-month reportedly said she needs more give and take from Beijing to rein in pro-independence hardliners in Taiwan; China responded blaming Tsai’s Democratic Progressive Party for strained ties. Taiwanese Coast Guard 6 May detained several Chinese fishermen and accused them of trespassing in Taiwanese waters off SE coast; China demanded their release. After backtracking on questioning “One-China” policy, new U.S. administration appears to have delayed plans to sell $1bn package of weapons to Taipei. Chinese authorities arrested Taiwanese human rights activist Li Ming-che and charged him with subversion in Hunan province 26 May.

Media 12 April reported Taiwan’s navy issued tender for locally-built amphibious ship, $207 million landing platform dock; part of indigenous shipbuilding plan announced in 2016 including new submarines and destroyers within military expansion and modernisation strategy. In sign of warming Taiwan-Japan ties, foreign ministry 19 April said govt will rename its representative office in Japan to Association of Taiwan-Japan Relations; follows similar move by Japan in Jan, after which China said it was “extremely dissatisfied”. U.S. President Trump 27 April said he would not repeat Dec 2016 phone call with Taiwanese President Tsai without first consulting with Chinese President Xi.

China lodged complaint with Tokyo after senior Japanese official Jiro Akama visited Taipei to attend tourism promotion event, in highest-level meeting since severing of diplomatic ties; Beijing said visit contrary to Tokyo’s pledge to have only unofficial and local relations with Taipei. Anonymous U.S. officials mid-March told Reuters that U.S. is planning significant new arms package for Taiwan possibly including advanced rocket systems and anti-ship missiles.

Speaking with Chinese President Xi for first time 9 Feb, U.S. President Trump said that he would honour One China policy, in reverse of his previous actions and statements questioning doctrine, which had caused increased tensions in cross-straits relations and between U.S. and China. Move calmed fears among some Taiwanese of possible U.S.-China trade war with economic ramifications for Taiwan. U.S. official 16 Feb said uniformed Marine guards would be posted at American Institute in Taiwan once it is completed.