What will the West do when China assaults Taiwan?
We see the international reaction to Russia’s war on Ukraine: sanctions and pull-backs, many companies abandoning Russia. When China attempts to take over Taiwan, the economic and financial consequences will be much more serious.
If we assume there will be economic sanctions and many countries will cut ties with China, then now is the time for all U.S. companies doing business in China to withdraw. If these companies don’t nurture other locations, then they will be in a world of hurt when they cannot do business.
Do we downplay the possibility of China attempting to conquer Taiwan? Well, most certainly downplayed the risk of Russia invading Ukraine. Never underestimate the determination of dictatorships to use violence to get what they want. Violence against their own citizens or against other countries, it’s all the same to them.
What and When
As we have learned, Russia alerted China in advance on their plans to invade Ukraine, as China asked Putin to wait until the Olympic games were completed before initiating military action. It is unknown when China may make its move on Taiwan, but it long has planned to do so.
Those U.S. companies with factories or suppliers in China should make immediate plans to find other locations, other sources, if they wish to stay in business. These companies undoubtedly will be rewarded with a continuation of business when China moves against Taiwan. Those companies without other resources will be unable to continue.
Those companies who have a large consumer base in China are in a potential bind. One way or another, China is likely to demand companies choose a side in the event of hostilities. It wouldn’t be impossible for China to nationalize foreign companies in a period of distress, and to do so with no recourse to those companies who do not signal loyalty to China.
Needless to say, any move of China’s against Taiwan will bring a lot more hand-wringing in the U.S. than Russia’s push against Ukraine. This is because there is so much more U.S.-based business in and with China than in Russia. So there will be pushback if and when sanctions and cut-offs are suggested or even initiated. Regardless of how this plays out, it would be prudent for U.S.-based companies doing business in China to initiate other plans.
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The Köppen–Geiger climate classification weather map of Taiwan is from 2018. Courtesy Wikipedia, licensed under the Creative Commons Attribution 4.0 International license. The Köppen–Geiger climate classification system is one of the most widely used climate classification systems. It was first published by German-Russian climatologist Wladimir Köppen (1846–1940) in 1884, with several later modifications by Köppen, notably in 1918 and 1936. Later, the climatologist Rudolf Geiger (1894–1981) introduced some changes to the classification system.
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