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Taiwan & China

09:15 01-Dec-19

Okay, that was very helpful. Although I consider myself intelligent, I'm still young and not very educated on geopolitics, and in most investment thesis I've had, I tend to be (generally speaking) right on the concept of the thesis, but too early on the timing.

I find your assertion that my timing is way off to be pretty convincing. But, the future is hard to predict, so who knows. I'll check out those speeches you linked.

Thanks for your responses

On Thu, Nov 14, 2019 at 10:51 AM Esekla wrote:

Hacking, cyberwarfare, whatever you want to call it, is part of what I'm referring to, yes, but I did not specifically call that out because traditional spying, vote and opinion meddling, plus simple economic pressure are at least equally effective and also underway.  There's also no doubt about what you've said about the direction of the U.S. in global relations, though each election will represent a tap on the gas or brakes.

I do think that I have better than average (western) understanding of the Chinese national mindset, but that's largely due to various social connections; so it's nothing I can link to.  Culturally China does tend to view itself as the center of the world (Zhōngguó, its own name, means "central state") and there is a bias that parallels the American Manifest Destiny doctrine from the 19th century.  If you want more detailed and up-to-date reading, I highly recommend looking back through the writing and speeches of Kevin Rudd, former PM of Australia, on the subject.  His thoughts mirror my own, but he is far more academically versed on China than I will ever be.

He lends some weight to your fears, saying that America and China decoupling would be "deeply destabilizing."  The only thing that I have to add to that is to reiterate that I think your (original) time frame is significantly off.  My modeling indicates that the real trouble will start to kick in sometime between 2030 and 2050, rather than in the next few years.  If there's war, that's my best guess, and I'm serious enough about this to have uprooted my family's life in an effort to make sure we have the choice of more than one continent to live on by then.  However, that horizon is just beyond what's embodied by almost all current stock investments.

Esekla

On 11/14/19 8:36 AM, collin wrote:

Just to clarify, it sounds as if you're referring to cyber warfare, I would agree that China is ( and will continue) to wage conflict in that manner.

China's capabilities (military and economic) and intentions (geopolitical and internal) are very interesting to me, if you have good information or sources to share in regard to that, I'm always interested - but I don't have any specific questions on that matter. 

Am I wrong to be nervous and unwilling to take much risk in regard to investment? I wonder if I'm too pessimistic. I just get a sense that something akin to world war 3 could be approaching.

U.S. politics seems to be shifting away from playing "world police" and anti-globalism and nationalism in general are on the rise in many countries, Europe, UK, India, Turkey.  

Israeli politics appear to be shifting in the direction where a strike on Iran is more likely. China has completely militarised the South China Sea and if history is any guide, Xi will follow Putin's playbook and use annexations as a tool to bolster popularity at home.

I guess I'm asking you because you're knowledgeable in general, and in not sure if I'm just being fearful, or seeing more clearly while others stick their head in the sand

On Wed, Nov 13, 2019, 11:30 AM Esekla wrote:

Hi Collin,

I've read at least one piece that pondered this and I agree that from a
technology standpoint it would be "Game Over" if the effort was
successful.  I also think there's no doubt that those in control of
China would like to do so.  What I can not speak predictably to is
whether or not China could (or thinks it could) pull off such a move
since, even in the current geopolitical environment, that goes far
beyond just China and Taiwan.

What I can say as a programmer is that there is a high likelihood that
China doesn't need military action to achieve most of the same goals,
which I guess decreases the odds of the specific scenario you asked
about.  I also think that it's a process (which is already underway and)
that is likely to extend beyond the "few years" time frame that you
reference.

Let me know if you want me to expound on any particular point.

Esekla

On 11/13/19 11:19 AM, collin wrote:
> Hi Esekla,
>
> Do you have an opinion (and reasoning to support it) on the likelihood
> of China making a military move against Taiwan in the next few years?
>
> If not, that's okay.
>
> I believe it is likely to happen, although it is purely speculation on
> my part, based on things Xi himself has said, the actions China has
> taken in recent years, the current state of U.S. leadership
> geopolitically; and the way Hong Kong is being handled

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