China’s Taiwan Problem
Just by its existence, a prosperous and technologically advanced Taiwan acts as a constraint on China’s potential domination of the Pacific region. The US alliance with Taiwan is an irritating thorn in China’s side. China is warning the US to stay out of its upcoming invasion of Taiwan this October.
U.S. Speaker of the House Nancy Pelosi’s reported visit to Taiwan, if it happens, could trigger a Chinese military response…
Once his third term is confirmed, Xi’s status as China’s undisputed leader will enable him to take such action with little to no opposition within the Chinese government. Dissenting views, though faint, have persisted inside the system, but Xi’s success in claiming apparently indefinite rule and his appointment of loyalists to key positions will eliminate them. The echo chamber in which China crafts its foreign policy will be sealed even tighter, amplifying the voices of security services and propaganda departments. With no expiration date for Xi’s reign, his critics will have few channels, official or unofficial, through which they can express their opinions or hope for a change in leadership. Bureaucrats will not only follow Xi’s policies but also augment the tough approach they believe is Xi’s preference.China Goes Bold
China’s Boom Years Are Over
Chinese cities have recently brought battle tanks onto the streets, as the combined real estate – banking crisis is heating up. The Chinese people have very few places to invest their money, and real estate has been the most popular choice. But the great Chinese real estate dream is turning into a nightmare, just as the Chinese economy overall is beginning to slow under a massive debt burden.
Chinese entrepreneurs are also growing disillusioned with the communist regime. Many millionaires are in a hurry to leave the country. The Xi Jinping government is gunning for capitalist entrepreneurs. It looks like there is growing confusion over political ideology – should China work towards becoming the numero uno economic power or go back to its hardcore communist practices? The demographics isn’t in favour of China either as the working population is shrinking. In the next 15 years, as much as 45% of the Chinese population will be over 60 years of age, and thus, government spending will increase massively to provide for an ageing population.China’s Slow Motion Economic Contraction
Tech Factories are leaving China
China’s system of governance is a key impediment for American and other foreign firms looking to do business there, the ITA says: “Despite significant Chinese government efforts to streamline bureaucracy and reduce red tape, foreign companies continue to complain about lengthy and opaque administrative procedures, especially with respect to permits, registration and licensing.”Leaving China and Russia
China’s Demographic Collapse Causes Economic Collapse
The country’s long-expected demographic decline is coming faster than anticipated, meaning a threat to its economic model is arriving years ahead of schedule.Fortune
China is dependent upon the US military umbrella protecting sea lanes and free trade
China needs safe sea lanes for its very existence as a modern industrial nation. China ships most of its imported energy and raw materials by sea. In case of an international conflict with any of its powerful neighbors or international rivals, China would be cut off from resupply and its economy deprived of energy, food, and essential materials — not to mention essential high precision machinery and high tech materials..
China’s resupply by sea is naturally threatened by several island chains controlled by its rivals, including three pictured below. Another equally threatening chokepoint for Chinese shipping cuts the Indian Ocean essentially in two.
While an invasion of Taiwan will go even worse for China than Ukraine went for Russia if one can imagine that, it will be even worse for the global economy. Losing access to Taiwan’s semiconductor production is going to be a nightmare for everyone.