Originally published on Sep. 13, 2021 by TraderStef at CrushTheStreet
Tensions over Taiwan are ratcheting higher in the background as domestic issues in the U.S. and geopolitical chess dominate mainstream news cycles after Trump’s January departure from the White House. A brief on Taiwan’s relationship with China, the “One China” policy, and strategic concerns surrounding their geography can be found in part one.
“The tension between the free world and China’s (the People’s Republic of China, aka PRC) view of Taiwan (the Republic of China, aka ROC) is not a new political flashpoint and it deserves a review given recent threats by Beijing amidst a contested presidential election in the U.S.” – TraderStef, Nov. 2020
Issues with the Chinese Communist Party (CCP) range from the pandemic’s origins, the political takeover of Hong Kong, U.S. election interference, Taiwanese independence, South China Sea sovereignty violations, and disrespect of Joe Biden’s administration that surfaced in a diplomatic disaster during the first U.S.-China face-to-face meeting in Alaska in March. China is absolutely fearless of “dementia Joe’s” ability to lead, and the following comments by the CCP in July were prophetic and preceded the disgraceful U.S. withdrawal from Afghanistan in August.
“The United States is in no position to lecture China or make wanton comments on China, let alone asserting to deal with China ‘from a position of strength’, a foreign ministry spokesperson said on Friday. Spokesperson Zhao Lijian made the remarks at a daily press briefing in response to a question regarding U.S. Deputy Secretary of State Wendy Sherman’s upcoming visit to Tianjin. The United States’ repeated assertion to deal with China ‘from a position of strength’ reflects its arrogance and hegemony, he said. ‘We did not buy it in Anchorage, nor will we buy it in Tianjin,’ he added.” – XinhuaNet, July 23
The rapid withdrawal from Afghanistan this past summer is wrought with ignominy. Two weeks before the last Marine departed, before 13 U.S. soldiers that were murdered by a suicide bomber and leaving behind hundreds of U.S. citizens, Tucker Carlson succinctly described the architects of disaster that pontificate chaos without regret.
“We are led by buffoons, everything they touch turns to chaos.”
So, the buffoons in the Biden administration are navigating domestic policy and commitments to our foreign allies going forward? I could not have conceived what we’ve witnessed since penning part one on Taiwan back in November. We must plan for the worst and pray for the best on our horizon. Let’s keep it simple and start where Tucker left off in mid-August.
A Watch List for Trading the Chip Addiction… “There are only three major FABs (fabricating facilities) in the world today, with two of them located in Asia and one in the U.S. at Intel. The ongoing pandemic harshly brought to light the fragility of global supply chains since the U.S. is 88% dependent upon foreign FABs. The largest supplier and most advanced FAB is located in Taiwan at Taiwan Semiconductor Manufacturing ($TSM).” – TraderStef, May 21
“If you think we don’t have a moral obligation for Taiwan, leave that aside for a minute. The practical considerations. Silicon Valley West, the entire American economy centers around the chips, and in particular the advanced chips designed, made, and manufactured in Taiwan. It is something we have to hold. If we don’t hold it, we don’t have an economy. The economy will implode.” – Steve Bannon, Aug. 15
China Threatens Taiwan Following Collapse of Afghanistan – Aug. 16
Afghanistan today, Taiwan tomorrow?… “The aftermath of its failure in Afghanistan will further weigh on the Biden administration, as it is still struggling to contain COVID-19, which will put the US government in an awkward position not only at home but also overseas, as the total defeat of the US has dealt a fatal blow to Biden’s political career and the Democrats’ credibility, Li Haidong, a professor at the Institute of International Relations of the China Foreign Affairs University, told the Global Times on Monday. ‘The US’ fleeing action is a warning to the Taiwan secessionists, or rather, a forecast,’ Li said. He noted that if the island of Taiwan continues on a path misled by secessionists to directly confront the Chinese mainland, the US will cast Taiwan aside just as it has done with Vietnam, and now Afghanistan.” – Global Times, Aug. 16
The following military drill launched by the CCP was prepositioned to send a message to Taiwan and the U.S. as Afghanistan imploded.
PLA holds joint live-fire assault drills near Taiwan island… “The Chinese People’s Liberation Army (PLA) on Tuesday launched joint live-fire assault drills in multiple locations near the island of Taiwan in response to recent collusion and provocations by the US and Taiwan secessionists.” – Global Times, Aug. 17
Peruse the following headlines and the agendas hidden within them. Keep in mind that the Global Times carries weight as a covert messaging arm of the CCP.
- White House Walks Back Biden’s Statement About Defending Taiwan – Human Events
- US, China Accuse Each Other of ‘Bullying’ Nations – NewsMax
- China Ramps up Attacks on U.S. Over ‘Cold War’ Mentality – NewsWeek
- Taiwan says 19 Chinese warplanes entered air defense zone – BBC
- NATO chief urges China to join nuclear arms control talks – AP
- China won’t accept US hegemonic acts in the South China Sea – Global Times
- PLA warships sail in waters between Taiwan island, Japan – Global Times
- Korea test-fires new long-range cruise missile – Yonhap
- Teach the US, Taiwan island a real lesson if they call for it – Global Times
- S. Carrier Launches F-35 Jets in South China Sea for First Time Ever – DC Patriot
- PLA jets will eventually patrol over Taiwan – Global Times
- China Warns of ‘Severe’ Military Measures if Taiwan Office in U.S. Changes Name…
“If the U.S. and the Taiwan island change the names, they are suspected of touching the red line of China’s Anti-Secession Law, and the Chinese mainland will have to take severe economic and military measures to combat the arrogance of the U.S. and the island of Taiwan. At that time, the mainland should impose severe economic sanctions on the island and even carry out an economic blockade on the island, depending on the circumstances.” – NewsWeek
Within “China won’t accept US hegemonic acts in the South China Sea,” the CCP vowed that the PLA military will soon confront the U.S. in a hostile exchange.
“The US will definitely see the PLA show up at its doorstep in the not-too-distant future… The warships and aircraft on the seas will carry huge mutual strategic hostility, and the two countries will not yield to each other.” – American Military News
I annotated the map above with an arrow pointing to the Strait of Malacca. Roughly 90% of crude oil supply flowing through the South China Sea must go through the Strait of Malacca from the Persian Gulf, Africa, and other markets in Asia. Alternate routes can add 1,000 miles in transit time. That is a major chokepoint for China and any escalation or Strait of Malacca blockade would be a significant shot across the bow to get your investment portfolio in order asap.
In Taiwan’s Ministry of National Defense (MND) 2021 annual report, it warned that China can paralyze its defenses if a conflict comes to fruition, which is a disturbing departure from last year’s assessment. Potential Chinese action toward Taiwan includes cognitive warfare, gray-area threats, joint military deterrence, seizing outer islands, and a decapitation strike. The PLA has increased its incursions to probe Taiwan’s strengths and weaknesses in its air defense zone. The U.S. continues to supply arms despite Biden’s silence and U.S. naval operations are probing China’s defensive and offensive capabilities throughout the South China Sea.
How Taiwan Became Biggest Risk for U.S. / China Clash – Quicktake, Jun. 15
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