Chauluen Lin*

The geopolitical stability of the Indo-Pacific region, and Taiwan in particular, is currently facing a fundamental and unprecedented challenge from the People's Republic of China (PRC). China’s persistent use of maritime gray-zone tactics poses a severe threat to regional stability and the international rules-based order. These actions are meticulously designed to achieve strategic aims—such as territorial advancement and the erosion of neighboring countries’ sovereignty—without ever crossing the threshold into conventional armed conflict. By utilizing ambiguity and indirect coercion, China seeks to “advance without attacking”, shaping a favorable strategic environment under the convenient guise of civilian or law enforcement activities.

To properly understand these intrusions, experts often refer to the “ICAD” framework introduced by U.S. Indo-Pacific Commander Admiral Samuel Paparo in 2024, which categorizes China’s actions as Illegal (I), Coercive (C), Aggressive (A), and Deceptive (D).[1] China primarily executes these strategies through its national-level “Military-Civil Fusion” (MCF) strategy, a policy personally promoted by Chinese leader Xi Jinping. The core objective of the MCF strategy is to eliminate the barriers between the national defense sector and the civilian industrial and technological systems. This allows civilian assets to serve as a massive force multiplier for the military at a very low marginal cost, fundamentally blurring the lines between peace and war, and between civilian vessels and naval combatants.[2]

This report provides a comprehensive analysis of the recent patterns of Chinese gray-zone intrusions into Taiwan and surrounding regions, and subsequently details a robust, multi-layered framework of countermeasures that democratic nations must adopt to safeguard their sovereignty and regional peace.

A primary instrument in China’s gray-zone playbook is the People’s Armed Forces Maritime Militia (PAFMM), often referred to as China’s “Little Blue Men” or the “Third Navy”. This is a paramilitary force composed of vessels that appear to be engaged in civilian fishing but secretly collaborate with Chinese law enforcement and the military. The militia consists of two main types of vessels: specialized “Maritime Militia Fishing Vessels” (MMFV) built with military specifications, and “Spratly Backbone Fishing Vessels” (SBFV) which are heavily subsidized by the government to execute political missions.[3]

The militia frequently engages in deceptive practices to conceal its true intentions. For example, these boats often manipulate their Automatic Identification System (AIS) status, a tactic known as “going dark”, and frequently change their ship names—sometimes over 1,000 times a year—to confuse international observers and avoid accountability.[4] Recently, highly organized and quasi-military behaviors have been observed among these fleets. In late 2025 and early 2026, thousands of Chinese fishing boats in the East China Sea abandoned normal fishing patterns and instead executed precise naval-style formations. On Christmas Day, approximately 2,000 vessels formed a massive inverted “L” shape stretching 290 miles; shortly after, on January 11, 2026, over a thousand vessels formed a rectangular formation with a depth of 200 miles, maintaining these positions for up to 30 hours. These actions demonstrated a high level of command and control, effectively creating a physical barrier at sea that could disrupt international shipping lanes and delay the movement of adversary naval forces during a conflict.[5]

Taiwan faces direct threats from these deceptive vessels. In September 2023, the Taiwan Coast Guard intercepted a 600-ton steel vessel that had illegally entered Taiwan's territorial waters with its name erased. When ordered to stop, the vessel refused and deployed steel bars from its sides to violently resist boarding. After a forced boarding, the Coast Guard discovered 17 crew members equipped with high-tech communication gear, including satellite positioning systems, satellite phones, and facial recognition systems, proving the vessel was highly coordinated and connected to a larger command structure. These vessels are frequently used to test Taiwan's defense resilience, gather intelligence, and potentially target critical underwater infrastructure such as submarine cables.[6]

Under the Military-Civil Fusion strategy, China is actively weaponizing large civilian shipping assets to bridge the gap in the People's Liberation Army’s (PLA) amphibious transport capabilities. Large Roll-on/Roll-off (RO-RO) ferries, originally built to military standards, serve as a vital component of this strategy.[7]

A prime example is the RO-RO ferry “Ji Long Dao”, which belongs to the Bohai Ferry Group and is considered part of the PLA’s maritime logistics reserve “Eighth Transport Squadron”. In 2023, this vessel participated in the PLA’s “Surge Lift Event Two”, transporting military vehicles and personnel from the Bohai Sea to designated ports like Qingdao, Rizhao, and Lianyungang. Between September and October 2025, “Ji Long Dao” displayed highly anomalous behaviors: after a prolonged period of extremely low-speed loitering near Dalian port, it suddenly executed a high-speed, long-distance southward voyage across multiple military theater commands, traversing the Taiwan Strait and stopping at Xiaomo Port. During its southernmost ransit, the vessel suspiciously turned off its AIS.[8]

Similarly, in August 2025, a fleet of seven Chinese RO-RO ferries, including the“Bo Hai Heng Da”, sailed south from the Bohai Sea, gathered briefly in Quanzhou Bay, and then anchored in a designated military drill zone in the Red Bay area of Shanwei. This action perfectly aligned with a navigation warning issued by the Shanwei Maritime Safety Administration prohibiting civilian entry into the area due to military exercises.[9] These periodic, massive drills utilizing civilian RO-RO ferries, deck cargo ships, and even cruise ships demonstrate China's intent to normalize the rapid mobilization of civilian assets for potential amphibious assaults or blockade operations against Taiwan.

China’s gray-zone operations extend deep beneath the ocean surface. To gain underwater supremacy in the Western Pacific, China is heavily investing in Unmanned Underwater Vehicles (UUVs) and Long-Range Autonomous Underwater Vehicles (LRAUVs), such as the “Sea-Wing” and “Sea-Dolphin” gliders. These assets are frequently deployed under the guise of marine scientific research and exploration.[10]

These UUVs are crucial for “Battlespace Preparation”. By carrying sensors that measure temperature, salinity, and depth across vast ocean areas, the Chinese military can calculate precise “sound speed profiles”. This oceanographic intelligence allows their anti-submarine forces to identify “Acoustic Shadow Zones” where their own submarines can hide undetected, and map out “Convergence Zones” and “Bottom Bounce” areas to detect adversary submarines from much greater distances.[11]

Furthermore, these systems are transitioning from passive data collection to active anti-submarine warfare. The “Sea-Dolphin” glider, equipped with micro deep-sea piezoelectric vector sensors and built-in signal processors, can autonomously detect, track, and identify the acoustic signatures of advanced enemy submarines. Deployed in large numbers across the South China Sea, the Philippine Sea, or the Taiwan Strait, these low-cost, high-endurance gliders form a powerful underwater early warning line. In the future, driven by Artificial Intelligence, these UUV swarms could be equipped with explosive warheads or mine-countermeasure modules, acting as mobile minefields or conducting swarm attacks on high-value transport and surface combatant ships during the onset of a conflict.

China’s gray-zone tactics also involve complex maritime deception, particularly the use of “Ghost Ships” and AIS spoofing to evade international regulation and sanctions. A notable case involved a vessel broadcasting the MMSI code 677058400 under the name “Eternal 1”. Investigations revealed that this ship was illegally using the identity of a 1973 general cargo ship named “AL MAJED H” (IMO number 7319694), a vessel that had officially been recorded as “Broken Up” (dismantled).[12]

This ghost ship displayed numerous anomalies: its registration details were blank, its insurance status was unknown, and it frequently swapped flags of convenience, including those of Tanzania, Panama, Vanuatu, and Cyprus. The ship’s AIS data was clearly manipulated; within minutes, it switched its IMO code between the dismantled ship’s number, another number (7116896), and “unknown”. Its destination constantly toggled between Busan, Taipei, Kaohsiung, and Hong Kong, while its reported draft wildly fluctuated between 0.5 meters and 4.5 meters.

Crucially, in March 2025, AIS tracking recorded this cargo ship physically mooring alongside a Chinese fishing vessel named “Liaoyingyu36099”.[13] This ship-to-ship transfer behavior is a strong indicator of illegal activities such as smuggling, unauthorized cargo trading, or espionage in sensitive geopolitical zones. Such ghost ships frequently roam the Exclusive Economic Zones (EEZ) of Taiwan and neighboring nations, exploiting legal gray areas.

A newly observed dimension in China’s gray-zone strategy is the utilization of Private Military and Security Companies (PMSCs). Historically, Chinese private security firms did not carry weapons, but to protect expanding overseas interests, China has allowed the rise of armed private security firms.

In May 2026, a private security ship named “Hui Chuan”, operated by the Chinese firm Sinoguards Marine Security and flying a Honduran flag, was seized by Iranian authorities near the Strait of Hormuz. Sinoguards is registered in Hong Kong, giving it a legitimate multinational corporate facade, but it operates as a vital tool in Beijing's overseas risk management architecture. The company hires foreign mercenaries—including veterans from Europe, Ukraine, and Nepal—equipped with heavy weapons like AK-47s to escort state-owned Chinese shipping fleets, such as those of COSCO Shipping.[14]

For Taiwan, the maturity of these Chinese armed PMSCs represents a new threat. In the event of an escalation in the Taiwan Strait, the PLA could easily repurpose these combat-experienced, heavily armed private security vessels as an upgraded proxy force or advanced maritime militia. Under the pretext of “protectinglegitimate Chinese maritime interests”, these vessels could harass Taiwanese forces, gather intelligence, or participate in a blockade, all while using their non-governmental status to bypass traditional military rules of engagement.

China’s gray-zone tactics are not static; they are gradually escalating. A critical turning point occurred on August 11, 2025, near the Scarborough Shoal (Huangyan Island) in the South China Sea. During a high-speed pursuit of the Philippine Coast Guard patrol vessel “Suluan”, a PLA Navy Type 052D destroyer (“Guilin”) and a China Coast Guard (CCG) vessel (“3104”) collided with each other. The CCG vessel suffered severe damage to its bow, resulting in casualties among the Chinese crew.[15]

This incident exposed China’s aggressive “Three-Tiered” maritime force structure: the maritime militia and civilian ships act as the first line of contact; the CCG serves as the second line; and the PLA Navy and Air Force act as the third line of deterrence. The collision was a direct result of the high-risk “high-speed encirclement” tactic and severe coordination failures between the Navy and the Coast Guard. The two branches operate under different command chains and communication protocols, leading to fatal misjudgments during complex joint operations. Shockingly, the commander of the “Guilin” did not stop to rescue the injured Coast Guard personnel, prioritizing top-down orders to intercept the Philippine ship over international maritime search and rescue obligations.

The direct involvement of a PLA Navy destroyer in a frontline interception signifies a dangerous escalation from “maritime law enforcement” to “quasi-military operations”. By blurring the lines between military conflict and law enforcement, China creates strategic ambiguity, making it incredibly difficult for adversaries to determine the appropriate nature and intensity of their response.

The integrity of the maritime domain and the survival of regional democracies hinge on a coordinated, transparent, and resolute response to these deceptive and persistent gray-zone tactics. Based on the detailed analysis of China’s operational patterns, Taiwan and its allies must implement a comprehensive framework of countermeasures, heavily emphasizing technological superiority, clear rules of engagement, and international cooperation.

The primary advantage of China’s gray-zone strategy is its ambiguity. To defeat this, Taiwan must adopt a strategy of “radical transparency” to strip away the plausible deniability of the Chinese maritime militia and MCF vessels.

(1) Establish Comprehensive Databases: Taiwan’s security agencies must systematically integrate intelligence to build a massive, real-time database of Chinese maritime militia and dual-use RO-RO ferries. This database must track ship names, ownership structures, historical movement patterns, and MCF exercise participation. By treating these supposedly civilian ships as military assets during peacetime tracking, Taiwan can accurately gauge the PLA’s mobilization capabilities .

(2) Technological Superiority in Surveillance: Because Chinese militia ships frequently turn off their AIS to operate as “dark vessels”, traditional monitoring is insufficient. Taiwan must leverage advanced space-based surveillance. Currently, Taiwan is partnering with two friendly foreign nations that provide satellite surveillance and reconnaissance capabilities through a confidential application, allowing Taiwan to track these dark vessels in real-time. Furthermore, Taiwan must accelerate the development of its own sovereign low-earth-orbit satellite monitoring capabilities to ensure independent, uninterrupted deterrence against gray-zone activities.

(3) Public Exposure and Multilingual Social Media Campaigns: Following the model of international think tanks like CSIS, Taiwan must regularly and publicly release concrete evidence (such as satellite imagery, drone footage, and intercepted communications) of China’s illicit activities. By rapidly exposing these actions on multilingual social media platforms, Taiwan can dominate the narrative, counter Chinese cognitive warfare, and impose massive reputational and political costs on Beijing, potentially forcing Chinese managing organizations to act with more caution.

To counter China’s overwhelming numerical advantage and its three-tiered force structure, Taiwan must implement a highly disciplined, layered defense strategy.

(1) The Double-Layer Alert Line: Taiwan must strictly separate its law enforcement response from its military response to avoid falling into China's trap of escalating a civilian encounter into a military war. When facing gray-zone intrusions (such as a swarm of militia fishing boats or a CCG harassment operation), the Taiwan Coast Guard must always be deployed on the absolute front line to handle the situation under the legal framework of domestic law enforcement. Simultaneously, the Taiwan Navy must remain positioned in the rear as a standby deterrent and support force. This precise division of labor ensures that China cannot use Taiwan’s military presence as a pretext for a kinetic escalation.

(2) “Existence Against Existence”: Affected nations must maintain a constant, visible, and unyielding presence in their Exclusive Economic Zones. Recognizing the massive resource advantage of China’s layered deployment, Taiwan and neighboring democracies must adopt an “existence against existence” model. This means matching China’s physical presence on the water with Coast Guard patrols to assert legal jurisdiction and actively prevent Chinese vessels from operating arbitrarily or normalizing their encroachments.

Frontline personnel face immense pressure when dealing with aggressive, quasi-military civilian vessels. The legal and tactical frameworks must be upgraded to support them.

(1) Clear and Specific ROE: Taiwan must continuously review and update its Rules of Engagement and emergency response protocols. The ROE must clearly define the exact conditions under which Coast Guard personnel can use warning shots, water cannons, or lethal force against heavily fortified militia ships (such as those armed with steel bars). Providing frontline personnel with unambiguous, risk-graded response options prevents both inadequate reactions that project weakness and excessive reactions that could trigger a war.

(2) Deploying Asymmetric Unmanned Systems: To counter the sheer volume of Chinese militia and UUVs, Taiwan must heavily invest in asymmetric, unmanned technologies. Deploying long-endurance Unmanned Aerial Vehicles (UAVs) and Unmanned Surface Vehicles (USVs) allows Taiwan to maintain continuous, wide-area surveillance and deterrence over gray-zone swarms without exposing expensive, manned naval vessels to the risks of ramming or attrition. These unmanned systems drastically reduce resource consumption and shorten decision-making times during high-stress encounters.

(3) AI-Driven Detection of Ghost Ships: To counter AIS spoofing and illegal ship-to-ship transfers, maritime and Coast Guard authorities must upgrade their Vessel Monitoring Systems (VMS). By integrating big data and artificial intelligence algorithms, these systems can automatically cross-reference broadcasting IMO codes against global registries in real-time. If a system detects a vessel transmitting the IMO of a “dismantled” or “sunken” ship, or exhibiting impossible draft changes, the system must instantly flag it. Taiwan must establish a “High-Risk Watchlist” (a Common Operational Picture) and mandate forced interception and boarding of vessels exhibiting these traits. If illegal, alterable AIS equipment is found, the vessel must be seized and its shipping agents prosecuted.

Gray-zone tactics exploit the seams in international law and boundaries. Therefore, the response must be deeply collaborative and legally grounded.

(1) Deepening Intelligence Sharing and Joint Patrols: Taiwan must actively construct real-time intelligence-sharing mechanisms with regional allies, including the United States, Japan, and the Philippines. When a problematic vessel, such as an AIS-spoofing ghost ship or an armed private security vessel, is detected fleeing across maritime borders, this multinational network can enable rapid, coordinated interception and boarding. Furthermore, democratic nations should explore conducting joint patrols or maritime exercises at appropriate times to send a unified, powerful signal of deterrence to Beijing.

(2) Pushing International Lawfare: Taiwan and its allies must utilize international legal frameworks, primarily the United Nations Convention on the Law of the Sea (UNCLOS), to continuously challenge the legality of China’s actions. States must issue strong diplomatic protests against unilateral actions, such as unauthorized oil exploration or the establishment of "natural reserves" in contested waters like the Scarborough Shoal, highlighting that these actions violate international law and threaten global energy and supply chain security. By forming a united front to condemn China’s domestic laws (like its Coast Guard Law) that attempt to supersede international norms, the international community can solidify the rules-based maritime order.

Finally, the ultimate target of gray-zone tactics is the psychological resolve of the target nation’s population. Taiwan must build an impenetrable societal defense.

(1) Enhancing Public Defense Consensus: Taiwan must implement comprehensive public education campaigns to help citizens thoroughly understand the nature, intent, and limitations of China’s gray-zone intrusions. By transparently communicating the realities of the threat, the government can inoculate the public against panic, psychological warfare, and the cognitive manipulation that China frequently attempts to spread through social media.

(2) Securing Critical Infrastructure: Gray-zone operations often serve as precursors to sabotage. Taiwan must drastically elevate the protection and redundancy of its critical infrastructure, particularly ports, power grids, and submarine communication cables. Ensuring that these facilities have robust backup systems and the capacity for rapid repair after an attack is absolutely essential to maintaining national security and societal functions during a prolonged crisis or a transition from gray-zone harassment to a full-scale blockade.

The PRC’s gray-zone campaign is a highly sophisticated, multi-domain strategy that leverages everything from deceptive fishing militia and dual-use RO-RO ferries to ghost ships, UUVs, and armed private security proxies. By operating below the threshold of war, China seeks to exhaust its neighbors and slowly alter the geopolitical reality of the Indo-Pacific. However, by deeply understanding these patterns, Taiwan and the democratic world can implement a formidable web of countermeasures. Through radical transparency, AI-enhanced surveillance, strict rules of engagement, layered “existence against existence” defense, and unyielding international legal cooperation, the international community can effectively neutralize the gray-zone threat and ensure long-term regional stability.