China -> Taiwan

[madatrub]

Hypothetical here:

If things with Taiwan/China go south:

Would you change your active/retirement allocations?
Would you seek safety somewhere (gold? digital currency? etc) If so, where?
How do you think the China/Taiwan situation plays out?
What do you think the impact on the market would be?

The way I see it, this feels like one of the larger "black swan" events hanging out there. Curious how others are viewing it.

[njhowie]

Non-event for my portfolio or strategy/approach.

[MichaelB]

Here’s a thread from last year on this same topic https://www.early-retirement.org/for...-114880-2.html

[flyingaway]

I would not move to Taiwan in the next five years.

[Sunset]

I'm expecting a surprise move, China -> Russia

• There have been past interactions.
• Russia has shown itself to be a lot less mighty than thought.
• Russia has it's hands full, and has already used up a lot of stored weapon material.
• China would not have to worry about anyone jumping to Russia's defense.
• The few alias of Russia are also friends with China.
• China has an extra ~40 million young men that need some diversion due to the sex imbalance.

I've never been a big investor in China, Russia, or Taiwan, in a direct targeted sense, so I am not making any changes, except I think travel to Russia is off the table now for a few years.

[Sojourner]

Quote:

Originally Posted by madatrub Hypothetical here: If things with Taiwan/China go south: Would you change your active/retirement allocations? No. Would you seek safety somewhere (gold? digital currency? etc) If so, where? No. How do you think the China/Taiwan situation plays out? I have no idea, nor does anyone else. What do you think the impact on the market would be? I have no idea, nor does anyone else. The way I see it, this feels like one of the larger "black swan" events hanging out there. Curious how others are viewing it.

Black swan events and the markets' reaction to them is fundamentally unpredictable.

[Bigdawg]

Quote:

Originally Posted by Sunset I'm expecting a surprise move, China -> Russia There have been past interactions. Russia has shown itself to be a lot less mighty than thought. Russia has it's hands full, and has already used up a lot of stored weapon material. China would not have to worry about anyone jumping to Russia's defense. The few alias of Russia are also friends with China. China has an extra ~40 million young men that need some diversion due to the sex imbalance. I've never been a big investor in China, Russia, or Taiwan, in a direct targeted sense, so I am not making any changes, except I think travel to Russia is off the table now for a few years.

I do not hear any China experts talking about China going into Russia. Don't see the point. No threat from Russia. Not worth the Schlitz. Not much of value for China in southern Russia. Maybe the Islands to the North of Japan. Tawain is their prize. They will go for it eventually. They may have a male/female imbalance but overall they are short of total bodies.

[itsme2]

Quote:

Originally Posted by madatrub Hypothetical here: If things with Taiwan/China go south: Would you change your active/retirement allocations? Would you seek safety somewhere (gold? digital currency? etc) If so, where? How do you think the China/Taiwan situation plays out? What do you think the impact on the market would be? The way I see it, this feels like one of the larger "black swan" events hanging out there. Curious how others are viewing it.

1. Mainland China wanted to militarily take Taiwan for the last 7 decades. Nothing major happened.

2. In 1913, no one predicted WWI was to break out.

[explanade]

Hopefully the support by NATO for Ukraine sends a message to China that Taiwan would be a redline.

China has been building up its navy and military and being aggressive against smaller countries in the South China Sea on fishing rights, maritime economic zones and mineral or oil rights.

Last week US protested a Chinese naval ship cutting close in front of a USN ship in the area. Chinese jets have been flying close to Taiwanese airspace.

If Taiwan falls, China could control much of the shipping lanes in the Far East, threatening the interests of South Korea and Japan, not to mention U.S. interests.

Unless the US declines to do any intervention, it will disrupt the global economy. At a minimum, economic sanctions meaning all major U.S. corporations like Apple, the car manufacturers and other companies with significant businesses in China, both supply chain/manufacturing as well as selling goods and services in the Chinese market will be severely impacted.

It’s not just high tech gadgets. Remember the car shortages and high dealer markups because of lower end chip shortages? We’re trying to move chip manufacturing back to the US but it will take years.

The question is how committed would Europe be. Recently Macron visited China and his delegation included key French industry reps, because sales of luxury goods like designer bags are huge in China. So are luxury German cars.

[W2R]

Quote:

Originally Posted by madatrub Hypothetical here: If things with Taiwan/China go south: Would you change your active/retirement allocations? No changes at all. Would you seek safety somewhere (gold? digital currency? etc) If so, where? No. How do you think the China/Taiwan situation plays out? Pretty scary. What do you think the impact on the market would be? Some increased volatility. The way I see it, this feels like one of the larger "black swan" events hanging out there. Curious how others are viewing it.

When events like this threaten, I am even more glad than usual that I am a Boglehead-ish buy-and-holder. I usually do OK that way, and I don't have to go through the stress of trying to time the market. I regard it as a time to hang on tight and do nothing until things settle down.

[jollystomper]

The "black swans" no one anticipates are the ones to worry about . I am sure, in 2018 or 2019, if a poll was taken on "what is more likely to happen, China invading Taiwan, or a world-wide pandemic causing shutdown of the economy?", the vast majority would have said the former.

The Taiwan economy is such that China wants to take them over without much economic harm to Taiwan. That is the value, along with the location. They are more likely to leverage their economic influence over other countries to accomplish a takeover than military force. Just my view, I do not know anything . From my investment positions, I am still sticking with my current AA.

[DFW_M5]

China does not need to do anything provocative with Taiwan if they are smart. They can sit back and patiently watch the US destroy itself with silly policies and political bickering and unwillingness to decouple critical supply chains. I am already conservatively invested so not much more for me to do.

[flyingaway]

Xi's justification for holding power beyond the normally 2nd term is that he will take back Taiwan, realizing the unification of China, a major part of the so-called Great China Dream. So if there is no action by the end of his third term, it would be difficult to explain to the Chinese people why he should have the fourth term, which he intends to.

[itsme2]

Quote:

Originally Posted by flyingaway Xi's justification for holding power beyond the normally 2nd term is that he will take back Taiwan, realizing the unification of China, a major part of the so-called Great China Dream. So if there is no action by the end of his third term, it would be difficult to explain to the Chinese people why he should have the fourth term, which he intends to.

it seems to be.

[milford]

Quote:

Originally Posted by flyingaway Xi's justification for holding power beyond the normally 2nd term is that he will take back Taiwan, realizing the unification of China, a major part of the so-called Great China Dream. So if there is no action by the end of his third term, it would be difficult to explain to the Chinese people why he should have the fourth term, which he intends to.

Xi basically rooted out any dissent within the party so I don't think he would need to explain to anyone if no action were taken and if anyone did try to question it, I'm pretty sure they would be "re-educated" in heartbeat.

[HawkeyeNFO]

China is preparing for war by building ships and warfighting capabilities at a fast rate, while Taiwan's main defense strategy is based on US intervention. Meanwhile the US Navy has been shrinking its capacity over the years. If China does it smartly, they won't need to fire many shots kinetically. But if that doesn't work, I don't think the US can realistically defend Taiwan for very long.

[DFW_M5]

According to this article the US is ramping up plans to evacuate US Citizens from Taiwan. I hope nothing is imminent and this is just prudent just-in-case planning.
https://themessenger.com/news/the-u-...iwan-exclusive

[Koolau]

Quote:

Originally Posted by DFW_M5 According to this article the US is ramping up plans to evacuate US Citizens from Taiwan. I hope nothing is imminent and this is just prudent just-in-case planning. https://themessenger.com/news/the-u-...iwan-exclusive

I make the assumption that (unlike the Russians parking tanks and trucks across the border from Ukraine for several months) whatever China does when they attempt to annex Taiwan, it will be a surprise to us and to the US.

I assume they won't try until they are certain it will be successful. I have no idea what all this will do to markets, but I'm guessing it won't be pretty. I think this is an issue of pride and "justice" to China. They'll likely worry less about the immediate effect on markets or their moral standing in the world. I'm guessing they will accept whatever downturn such a move will cost them.

Returning you now...

[mf15]

Very easy to spread the USA thin. All China has to do is tell North Korea to start
something. Spent all of 1971 in and around the DMZ. Not a nice place.
Oldmike

[DFW_M5]

Quote:

Originally Posted by Koolau I assume they won't try until they are certain it will be successful. I have no idea what all this will do to markets, but I'm guessing it won't be pretty. I think this is an issue of pride and "justice" to China. They'll likely worry less about the immediate effect on markets or their moral standing in the world. I'm guessing they will accept whatever downturn such a move will cost them. Returning you now...

Right, they will not worry about the short term impact as they are playing a long term game and we are getting closer to when they make their move, and although aware, we will not fully prepare until it's too late. It's the same for shoring up SS and medicare, just kick the can down the road and don't worry.