What is the Eurodollar Market?
The most important and least understood driver of global financial markets.
The hotly contested island nation is one of the most important geopolitical chokepoints of the coming decade.
U.S. Speaker of the House Nancy Pelosi visited Taiwan. She’s the first Speaker to do so since Newt Gingrich visited in 1997.
At the risk of stating the obvious:
As it turns out, that was a naïve sentiment. The world is going multipolar – and China is on the rise, aiming to use its newfound wealth and strength to achieve what Chinese President Xi Jinping refers to as his dream of “the great renewal of the Chinese nation”. Reacquiring Taiwan is one of the most important aspects of Xi’s dream, and from Beijing’s perspective, one of the most powerful political figures in the U.S. (dear Nancy) just spit in that dream’s face.
The result? Not World War III, despite the breathless coverage from the media, which will fade away in a few weeks’ time as it has around the still-ongoing war between Russia and Ukraine. China is not powerful enough to conquer Taiwan yet, but make no mistake – China is building up its military capabilities in part so that a threat of force against the renegade island will mean more in the future.
For years, China has strengthened economic ties with Taiwan, from poaching Taiwan’s best tech talent with the promise of higher salaries to absorbing large parts of Taiwan’s manufacturing base to the point where today, over 80%of Taiwan’s information and communication technology products are manufactured in China.
Politically, China has tried to increase its influence as well, though in this area most of China’s efforts have backfired: an increasing number of people in Taiwan feel Taiwanese, not Chinese (63.7% to be accurate, according to recent polling data), and the more nationalist Democratic Progress Party (DPP) has a strong foothold amongst voters, having been in power since 2016.