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Barbarians at the Gate

“Resolving the Taiwan question and realizing China’s complete reunification is…a natural requirement for realizing the rejuvenation of the Chinese nation.” – China President Xi.

“We do know, as has been made public, that President Xi has instructed the PLA, the Chinese military leadership, to be ready by 2027 to invade Taiwan, but that doesn’t mean that he’s decided to invade in 2027 or any other year as well.” CIA Chief Nick Burns

In the drip-drip of headlines of close calls by military aircraft over the Taiwan Strait or foreign executives detained in China, it’s easy to miss the big picture—there is trouble brewing. By trouble, I mean the increasing hubris of those who want to use force to coerce others to follow their dictate. This is obvious in Ukraine, but it is evident across the world as perceived US hegemony and governing norms weaken. The two major flashpoints that worry me most are Taiwan and/or a disputed US election that erodes the rule of law.


To be clear, each event is probably less than 50% odds, but the impact on wealth (not to mention life) is so disruptive in either case that both are worth worrying about. Of the two, I put higher odds on a Taiwan War, which is what I want to focus on today. Staring at such possibilities is not pleasant but necessary. The key thing that has shifted relative to the Cold War (1946-1989) is the relative economic influence of the adversaries, which has altered the playing field.

During the Cold War, Russia and China were run more like North Korea is today. Their militaries could be lethal but their people were hungry and technology-starved. This made the Supreme Leaders less willing to directly challenge the West. Now Russia and China each have leaders with territorial ambitions, sophisticated militaries, and much more meaningful capabilities in economic warfare because each economy is now pseudo-capitalist.

Critically, both Moscow and Beijing perceive the US as weak. Two messy invasions (Iraq and Afghanistan), the 2008 credit crisis, the 2021 Capital riot, and Biden’s age all play a role. In international relations, the weak get bullied. That’s part of the picture I was trying to paint with my second book, Master, Minion.

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