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China's Potential Aggression Towards Taiwan: A Forecast for 2024
On a seemingly ordinary day in Keelung, Taiwan, a man was seen taking pictures at the harbor where Taiwanese Navy warships were anchored. However, the tranquility of this scene belies the growing tension in the region. Kyle Bass, a prominent China hawk and founder of the U.S. investment firm Hayman Capital Management, has issued a stark warning. He believes that Chinese President Xi Jinping is preparing to "bring war to the West," with a potential invasion of Taiwan by the end of 2024.
Wall Street's Misplaced Focus
According to Bass, the West, and particularly Wall Street, is too focused on the economic unfeasibility of such an attack. This preoccupation, he argues, overlooks the fact that, much like Russian President Vladimir Putin, Xi is not solely concerned with potential economic fallout. Bass asserts that if we truly listen to Xi's rhetoric, it becomes clear that he is determined to reclaim Taiwan, even if it means resorting to force.
Ignoring Xi's Intentions
"We on Wall Street love to think he would never do that because it doesn't make economic sense. We have to stop thinking that way and literally start listening to what the man says," Bass stated. The Chinese Communist Party has not responded to these comments, but it has previously asserted that the issue with Taiwan is an internal affair.
Xi's Stance on Taiwan
Upon confirming his third term in March, Xi Jinping emphasized the need to "promote peaceful development of cross-strait relations" with Taiwan. However, he also stressed that China should oppose "external forces" and pro-independence movements. It's clear that Xi is focused on the reacquisition of Taiwan, a sentiment that has been echoed in his speeches since 2017.
Taiwan's Status: A Global Flashpoint
Taiwan has been governed independently of China since the end of a civil war in 1949, but Beijing views the island as part of its territory. This dispute over Taiwan's status is a global flashpoint, with most in the West considering it a self-governing nation. Meanwhile, Beijing has called for "reunification" with Taiwan, describing its status as an "unalterable" part of China.
China's Military Drills and Preparations
Bass points out that there are clear signals of a forthcoming conflict between China and Taiwan. Firstly, China has been escalating its military drills around Taiwan. Bass, who claims to have consulted military experts, believes that Beijing is close to completing its military exercises. China has stated that these drills are in response to repeated meetings between Taiwanese President Tsai Ing-wen and several U.S. representatives, a red line for Beijing.
Preparation for Potential War
Secondly, Bass noted that Beijing has been making sweeping changes on the mainland in "preparation for a potential war." He cited a new counter-espionage law that expands the government's power to punish apparent threats to national security. Lastly, despite a slowing economy, China has been "running marine diesel refining at full tilt," signaling an increased demand for marine fuel.
Conclusion: A Warning to the West
"There's so many signals that all point in the same direction," Bass said. "Everything you'd expect them to be doing, they're actually doing." While nobody wants war, Bass warns that Xi is prepared to bring war to the West. As the world's second-largest economy, China's actions have far-reaching implications for international relations and global markets, necessitating heightened caution around the sensitive Taiwan issue.
A Hot Take: Implications for New Businesses
In conclusion, the potential for conflict between China and Taiwan could have significant implications for new businesses, particularly those with interests in the Asia-Pacific region. The geopolitical tension and the potential for economic fallout could create a volatile business environment.
Uncertainty and Risk
For new businesses, this situation presents both uncertainty and risk. Companies may need to reassess their strategies, particularly if they rely on supply chains or markets in this region. The potential for disruption could be significant, and businesses must be prepared for a variety of scenarios.
Navigating the Challenges
However, this environment also presents opportunities. Companies that can navigate these challenges effectively, perhaps by diversifying their supply chains or exploring new markets, could find themselves well-positioned to succeed. In times of uncertainty, adaptability and resilience are key.
Final Thoughts
While nobody wants war, businesses must be prepared for all eventualities. As Bass warns, Xi appears prepared to bring war to the West. This serves as a reminder that in the world of international business, geopolitical considerations can never be ignored. Businesses must stay informed, be prepared, and be ready to adapt to changing circumstances.
Article First Published at: https://www.cnbc.com/2023/08/09/china-hawk-says-beijing-to-bring-war-to-the-west-take-taiwan.html
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