# ANALYSIS: The 1260H list: how Beijing is arming the economic war for Taiwan

> On June 26, 2026, the Institute for the Study of War (ISW) published its update on the China-Taiwan situation with information of considerable strategic importance: the People's Republic of China retaliated against the American expansion of the "1260H list" — the list of Chinese entities linked to the military-industrial complex — by imposing export controls and banning Chinese

- Author: Maxime Marquette
- Publisher: MadMax (https://mad-max.co)
- Section: Analysis
- Published: 2026-06-28
- Canonical URL: https://mad-max.co/en/article/analyse-la-liste-1260h-comment-pekin-arme-la-guerre-economique-pour-taiwan

## Introduction: A list that says everything about Beijing's strategy

### The "1260H list" and the Chinese response

On **June 26, 2026**, the **Institute for the Study of War (ISW)** published its update on the **China-Taiwan** situation with information of considerable strategic importance: the **People's Republic of China** retaliated against the American expansion of the "**1260H list**" — the list of Chinese entities linked to the military-industrial complex — by imposing **export controls** and banning Chinese government entities from conducting business with American companies designated on that list.

To put it plainly: the **United States** expanded their blacklist of Chinese companies considered vectors of armaments or dual-use technologies that could serve a military operation against **Taiwan**. **China** responded in kind, by designating American companies and imposing its own restrictions. This is a declared economic war, conducted below the threshold of armed conflict, with control over the technological and industrial capacity that will determine the outcome of any potential military conflict.

### The logic of "preemptive economic war"

What is at stake with these crossed blacklists is a **preemptive economic war**. Before a single shot is fired, both powers are seeking to degrade the adversary's industrial and technological capabilities. The **United States** want to cut **China**'s access to advanced technologies — semiconductors, artificial intelligence, precision equipment — that would allow it to produce the weapons systems needed for an invasion of **Taiwan**. **China** seeks to do the same, while making itself independent of American supply chains.

This preemptive logic is in reality the dominant strategic doctrine in the **Taiwan Strait** for several years now. And the events of **June 2026** mark a significant acceleration of this dynamic.

*The 1260H list and the Chinese response — two lists of company names that, in their cold and bureaucratic way, sketch the contours of the next great war. The economic war for Taiwan has begun. It is being fought on spreadsheets and in export control regulations, not yet on battlefields. But the consequences will be just as real when the moment comes.*

## The 1260H list: an American tool of economic deterrence

### What the 1260H list is and how it works

The **"Section 1260H list"** is a designation created by the **U.S. Congress** under the National Defense Authorization Act. It targets Chinese entities considered to be operating in the defense sector or having ties to the Chinese military — the **People's Liberation Army (PLA)**. Companies designated on this list face commercial restrictions: American companies must obtain special licenses to trade with them, and certain transactions are simply prohibited.

The expansion of this list in **2026** means that the American administration has identified new Chinese entities considered linked to the potential military effort against **Taiwan**. These designations typically include companies in advanced technology, semiconductors, artificial intelligence, aeronautics, and communications systems. The message is clear: the **United States** is seeking to slow Chinese military modernization by cutting its technological access.

### The effectiveness of export controls: results and limits

The American policy of export controls toward **China**, intensified since **2020**, has produced tangible but uneven results. The embargo on advanced semiconductors has delayed the upgrading of China's chip industry. Companies like **Huawei** have experienced significant difficulties accessing the most advanced components. Chinese ambitions in cutting-edge artificial intelligence have been constrained.

But **China** has also accelerated massive investments in domestic semiconductor champions — **SMIC** and others — to reduce its dependence. It has developed alternative supply circuits through third-party countries. And it has benefited from technology transfers through informal channels. The embargo is not watertight. But it imposes a real cost and delays capabilities that would be decisive in an armed conflict.

*American export controls on semiconductors and AI technologies toward China — this is probably the most important strategic measure taken by Washington in years. Not because it will prevent everything, but because it imposes a development cost and a delay that China must finance entirely on its own resources. Time, in this competition, matters.*

## The Chinese retaliation: symmetry and escalation

### Chinese export controls: a structural response

The Chinese response to the expansion of the **1260H** list is symmetrical in form but asymmetrical in content. **Beijing** imposed its own export controls on technologies and materials in which **China** holds a dominant position — notably **rare earth elements** and certain materials critical to the American defense industry. This countermeasure exploits a genuine dependency in Western supply chains.

**China** controls a massive share of global **rare earth** production — elements indispensable for manufacturing electric motors, guidance systems, and advanced weapons. Chinese controls on these exports directly affect the American, European, and Japanese defense industries. This is a strategic lever that **Beijing** is deploying with increasing precision.

### The ban on government entities dealing with designated American companies

The newest measure described by **ISW** of **June 26, 2026** is the ban placed on **Chinese government entities** from conducting business with American companies designated on the **1260H** list. This measure has both symbolic and practical reach. Symbolically, it institutionalizes reciprocity and normalizes the logic of economic war. Practically, it creates complications for American companies that still had contracts or partnerships with Chinese public entities.

This decision is part of a broader strategy of accelerated **"economic decoupling"** between **China** and the **United States**. This decoupling, long described as a theoretical option, is now being concretely implemented. The two economies are preparing to operate with increasing independence — and this decoupling process is itself a preparation for the possibility of conflict.

*The China-United States economic decoupling is no longer hypothetical. It is underway, accelerated by these crossed lists, these export controls, these mutual bans. This decoupling does not guarantee war — but it reduces the economic costs of a conflict, which paradoxically makes it more likely. It is a perverse logic that both parties seem to accept.*

## Taiwan at the center: the military exercises of June 2026

### Five days of tanks in the streets of Taipei

The economic dimension of the Sino-American confrontation is accompanied by an increasingly explicit military dimension. The **Washington Post** of **June 22, 2026** reported that **Taiwan** conducted a five-day "**immediate combat readiness**" military exercise, with tanks patrolling the streets, in response to what was described as a **PLA** "**toward real war**" drill. Armored vehicles in the streets of **Taipei** — it is a striking image.

These exercises are set against a backdrop of growing Chinese military pressure around **Taiwan**. The regular incursions of Chinese military aircraft into **Taiwan's Air Defense Identification Zone (ADIZ)**, naval exercises around the island, encirclement simulations — all of this creates continuous psychological and operational pressure on Taiwan's armed forces.

### RIMPAC 2026 and Valiant Shield: the American counter-presence

Facing this pressure, the American response is visible in the massive military exercises deployed across the **Pacific**. **RIMPAC 2026** — the world's largest multinational naval exercise — began on **June 24, 2026**, with approximately **40 ships**, **25,000 personnel**, and **31 participating nations**, according to **ThinkChina**. The **Valiant Shield 2026** exercise took place on **June 22**.

These exercises are not rhetoric. They represent a concrete demonstration of American power projection capability in the **Western Pacific**. They send **Beijing** a precise message: the **United States** is present, its allies are too, and any military operation against **Taiwan** would encounter a coordinated and powerful resistance. The question — which remains open — is whether this message is sufficient to deter **Xi Jinping**.

*RIMPAC 2026 with 40 ships and 25,000 personnel — this is concrete deterrence, not empty posturing. And the fact that 31 nations are participating is the most important signal: Taiwan's independence is not solely an American interest. It is perceived as a regional and global interest by dozens of democracies. Beijing must integrate that reality into its calculations.*

## The European warning on China and Taiwan

### European powers take a position

A notable development of the week of **June 21–27, 2026**: European powers issued a "**rare warning**" about the Chinese threat to **Taiwan**, according to **Yahoo News** of **June 24, 2026**. It is rare for European governments to position themselves this explicitly on an Indo-Pacific security question. This fact, in itself, is an important strategic signal.

**Europe** has long sought to separate its economic relations with **China** from security questions tied to **Taiwan**. That posture is becoming increasingly difficult to maintain. Chinese support for **Russia** in the war in **Ukraine** — via dual-use components, technologies, and trade — has made plain the interweaving of the European and Indo-Pacific fronts. What **China** does in **Ukraine** foreshadows what it could do in the event of a conflict over **Taiwan**.

### The interweaving of fronts: Ukraine and Taiwan, the same struggle

It must be said plainly: the war in **Ukraine** and the question of **Taiwan** are two faces of the same challenge to the international order. **Russia** is testing whether territorial conquest by force is possible in the contemporary world. **China** watches, evaluates, draws lessons. If **Russia** obtains an agreement that validates its conquests, **China** concludes that the window for **Taiwan** is open. If **Russia** is pushed back, **China** recalibrates its risk calculations.

The **Europe** that is now issuing warnings about **Taiwan** has integrated this logic. This is not an altruistic impulse for Taiwanese democracy. It is an understanding that geopolitical precedents have global consequences. A victory for **Putin** would be an invitation to **Xi**. A successful defense of **Ukraine** is a deterrent for **Taiwan**.

*Europe issuing a "rare warning" on Taiwan — this is a major development that too many commentators passed over in silence. Ten years ago it would have been unimaginable. Today it is a recognition that the Chinese threat is real, that our interests in the Indo-Pacific cannot be dissociated from our interests in Europe, and that the international order is under threat on all fronts simultaneously.*

## The "quarantine" tabletop exercise: when Taiwan prepares for the worst scenario

### Simulating a maritime quarantine in order to prepare for it

**Bloomberg** of **June 25, 2026** reports that **Taiwan** conducted a simulation exercise — a "**tabletop exercise**" — simulating a maritime **"quarantine"** by Chinese forces. This scenario — distinct from a full blockade or an amphibious invasion — is considered the most likely near-term Chinese course of action. A maritime quarantine would allow **China** to exert maximum pressure on **Taiwan** without triggering an open war that would immediately mobilize American forces.

By simulating this scenario in a tabletop format, Taiwanese authorities are preparing their response protocols, identifying their logistical vulnerabilities, and testing the coordination between civilian and military institutions. This is serious preparation for a scenario one hopes will never materialize. But the preparation itself is a deterrent message: "we have anticipated your preferred scenario, and we have a response."

### Taiwan's logistical vulnerability: dependence and resilience

**Taiwan** is an island dependent on imports for its food, energy, and many industrial components. Even a partial maritime quarantine would quickly test the island's logistical resilience. Its strategic reserves — oil, food, medicines — are limited. Its capacity to withstand prolonged economic pressure is a recognized weak point.

This is precisely why tabletop exercises are essential. They allow bottlenecks to be identified, emergency protocols to be developed, and the civilian population to be prepared for the constraints of a crisis situation. **Finland** and **Switzerland** developed such strategic reserves over decades. **Taiwan** is accelerating this preparation — perhaps decades behind, but with renewed urgency.

*Taiwan simulating a maritime quarantine — it inspires in me a kind of respect mixed with sadness. These are 23 million people who must prepare emergency protocols for a potential siege scenario. This is not paranoia. It is prudence in the face of a neighbor who has publicly stated its intent to annex them. Taiwan's preparation is the correct response to a real threat.*

## Semiconductors as the decisive front in the war for Taiwan

### TSMC and the world's dependence on Taiwanese chips

**Taiwan** produces approximately **90% of the world's most advanced semiconductors**, primarily through **TSMC (Taiwan Semiconductor Manufacturing Company)**. This industrial concentration creates a global dependence — from smartphones to weapons systems — that gives **Taiwan** unprecedented strategic importance in the global economy. Even a temporary disruption of Taiwanese semiconductor production would trigger a global economic crisis of unprecedented scale.

This reality cuts both ways: it makes **Taiwan** a strategic asset that no one wants to see fall under Chinese control — including countries like **Japan**, **South Korea**, the **European Union**, and the **United States** that are massively dependent on these chips. But it also creates a vulnerability: a Chinese military operation that destroyed or paralyzed **TSMC** factories would inflict a global economic damage that could change the calculus of certain actors.

### The diversification strategy: reducing vulnerability without abandoning Taiwan

Facing this risk, major powers have accelerated the diversification of their semiconductor production. The **United States** adopted the **CHIPS Act** to stimulate domestic production. The **EU** launched its own **Chips Act**. **Japan** is attracting massive investment in its semiconductor capabilities. These initiatives aim to reduce critical dependence on **Taiwan** — not to abandon it, but so that its defense is not the sole protection for a critical supply chain.

**China** is seeking on its side to develop its own domestic semiconductor capabilities to reduce its dependence on Taiwanese and American chips. This is a massive effort, partially hampered by American export controls, but one that is progressing. The central strategic question is whether **China** will achieve semiconductor self-sufficiency before or after a potential military action against **Taiwan**. The answer to that question could determine the timing of **Beijing**'s decisions.

*TSMC may be the most strategically important company in the world right now. It produces the brains of virtually all advanced global technology. Its protection is a shared interest of democracies that goes well beyond the political stakes of Taiwanese freedom — even though those stakes are already considerable. The semiconductor industry is the convergence point of economics, technology, and geopolitics.*

## India between two fires: strategic partner or free rider?

### India buying Russian oil and selling to the world

**India** occupies a strategically ambiguous position in the Sino-American competition. It has been massively buying Russian oil since **2022** — taking advantage of the discounts forced by Western sanctions to build an economic advantage. Simultaneously, it is a privileged partner of the **United States** within the **QUAD** framework (Quadrilateral Security Dialogue), which aims precisely to counterbalance **China** in the **Indo-Pacific**.

This dual posture — profiting from gaps in the Western sanctions regime while benefiting from American security guarantees — is uncomfortable for **Washington**. The **United States** has chosen not to push too hard on **India** regarding its Russian oil purchases, prioritizing the strategic partnership against **China**. This is a debatable calculus: **India** is helping to finance the Russian war while claiming to be an ally of democracies.

### India's position on Taiwan: a neutrality with limits

On the question of **Taiwan**, **India** officially maintains a "**One China Policy**" — recognizing the Chinese position on Taiwanese sovereignty — while developing economic and cultural relations with the island. This ambiguous position reflects the deep competition and mutual distrust between **India** and **China**, particularly following the border clashes of **2020** in the **Himalayas**.

In the event of an armed conflict over **Taiwan**, India's position would be critical. A neutral **India** would leave **China** free to concentrate its forces without fearing a second front. An **India** actively opposed to Chinese aggression would considerably complicate **Beijing**'s strategic calculations. Investing in the partnership with **India** — including accepting its Russian oil purchases as a political price — is therefore a debatable but understandable American strategic decision.

*India buying Russian oil while serving as a strategic partner of the United States against China — this is geopolitics in all its uncomfortable complexity. There is no perfectly coherent posture in this multipolar world. There are only calculations of priorities and interests. Washington chose India over China, accepting to look the other way on Russian oil. I do not know if that is the right calculation. But I understand the logic.*

## Conclusion: The 1260H list is only the beginning of a long economic war

### Economic escalation as a prelude to what?

The economic war between the **United States** and **China** over **Taiwan** will continue to intensify. The crossed blacklists, the export controls, the technological restrictions — all of this creates a new economic reality in which both powers are preparing for an eventuality that neither should want. The question is not whether this economic war will have strategic consequences. That is inevitable. The question is whether deterrence will hold.

The **semiconductor** story is central to this equation. If the **United States** and their allies manage to keep **China** out of the most advanced chip generations, they delay its ability to deploy precision weapons systems in sufficient quantity for an operation against **Taiwan**. This delay is precious — it buys time for deterrence to solidify, for **Taiwan** to strengthen itself, and for the international community to consolidate its support for the island.

### What the West must do to support Taiwan

Supporting **Taiwan** means maintaining technological export controls despite economic pressures. It means participating in military exercises like **RIMPAC** and sending presence signals in the **Pacific**. It means issuing clear warnings — as **European powers** have just done — about the consequences of Chinese military action. It means building alternative supply chains for critical Chinese materials.

The **1260H** list is a tool in this arsenal. Imperfect, contested, but real. And the Chinese retaliation shows that **Beijing** is taking it seriously. That is already a result.

*The 1260H list, export controls, RIMPAC, Taiwanese exercises — all of this forms a coherent picture of a Sino-American competition intensifying every week. I do not know whether this competition will lead to conflict. What I know is that failing to prepare the option of resistance makes conflict more likely. Deterrence demands to be taken seriously. And right now, it is.*

**By Maxime Marquette, columnist**

## Columnist's transparency note

### Editorial stance

I am not a journalist but a **columnist and analyst**. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

I do not claim the cold objectivity of traditional journalism, which stops at reporting facts. **I claim analytical clarity**, rigorous interpretation and a deep understanding of the complex issues that concern us all. My role is to give meaning to the facts, to place them in their historical and strategic context, and to offer a critical reading of events.

### Method and sources

This text keeps the basic distinction between **verified facts and interpretive analysis**. The rule never changes: a factual claim is published only when a verifiable source supports it, and the sources this article actually used are listed under **Sources**, never here.

**Primary source families** used by the publication, when the story has them: official statements from governments and international institutions, public statements by political leaders, reports from intergovernmental organisations, dispatches from recognised international news agencies.

**Secondary source families**: specialised publications, internationally recognised news media, analyses from established research institutions, reports from industry organisations.

When an article cites statistical, economic or geopolitical data, it comes from the institutions that produce it (intergovernmental organisations, central banks, national statistics offices), and the exact institution is named under **Sources**.

### Nature of the analysis

The analyses, interpretations and perspectives in the analytical sections of this article are a **critical, contextual synthesis** based on the information available, the trends observed and the expert comments cited in the sources consulted.

My role is to interpret these facts, to set them in the context of today's geopolitical and economic dynamics, and to give them a coherent meaning within the larger story of the changes shaping our time. These analyses reflect expertise built through continuous observation of international affairs and an understanding of the strategic mechanisms that drive global actors.

This article describes a documented state of affairs on its publication date, not a prediction: later developments may shift its outlook. No update is promised in advance; when an article is corrected or completed, the change is dated in the text.

## Sources

### Primary sources

- [ISW — China-Taiwan Update: PRC retaliation against the 1260H list — June 26, 2026](https://understandingwar.org/research/china-taiwan/china-taiwan-update-june-26-2026/)

- [Washington Post — Taiwan: five-day immediate combat readiness exercise — June 22, 2026](https://www.washingtonpost.com/world/2026/06/22/taiwan-hosts-military-drills-readiness-china/0c4d53a2-6e13-11f1-8730-e7fd0e2a6404_story.html)

- [Bloomberg — Taiwanese tabletop exercise simulates maritime quarantine by China — June 25, 2026](https://www.bloomberg.com/news/articles/2026-06-25/taiwan-tabletop-drill-simulates-maritime-quarantine-by-chinese-forces)

### Secondary sources

- [ThinkChina — Why the Pacific is filling with warships: RIMPAC 2026 — June 25, 2026](https://www.thinkchina.sg/politics/why-pacific-filling-warships-china-rimpac-and-new-military-contest)

- [Yahoo News — European powers issue rare warning about Chinese threat to Taiwan — June 24, 2026](https://www.yahoo.com/news/world/articles/european-powers-issue-rare-warning-115803855.html)

- [The Straits Times — Taiwan says warning time for any Chinese attack is shortening — June 24, 2026](https://www.straitstimes.com/asia/taiwan-says-warning-time-for-any-china-attack-is-shortening)

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Source: Maxime Marquette, MadMax. When citing, name the author and link https://mad-max.co/en/article/analyse-la-liste-1260h-comment-pekin-arme-la-guerre-economique-pour-taiwan