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The likelihood of China's invasion of Taiwan is sooner than we think
For several decades, China has been beating the drums of Taiwan. It wasn't until 2018 when China started flying planes around Taiwan and it wasn't until Pelosi's visit of the island back in August of 2022 when China started having its naval vessels surround the island. When times are bad domestically, China beats the drums of war to distract its people and stoke nationalism. Since China has been doing this for a long time, the pressure that Chinese citizens are pressing the CCP to fulfill its promises and launch the invasion of Taiwan is growing.

From Sunday 6am to Monday 6am Taiwan time, 103 Chinese planes were detected flying around the island. This is a record number of planes flying around the island. We've never seen over 100 Chinese planes fly around Taiwan before. Knowing what's happening in China with the crisis brewing in the property markets, manufacturing firms moving their operations out of China, and deals within the Belt & Road Initiative falling apart, we can conclude that China's domestic issue are large. Large to the extent that it could lead to a legitimacy crisis. As the CCP continues to beat the drums of war, China is putting itself in the position where it would have to be forced to launch an invasion of Taiwan to regain any loss of confidence that the Chinese people have on their government.

As October nears, it's expected that tensions between China and Taiwan will get worse. If you've read my previous memos on this issue, you'd know that April and October are the two months that present any foreign invader an opportunity to invade Taiwan. The seas surrounding the Taiwan Strait are calmer, there's little chance of a typhoon happening in the region during that time, and the winds are calmer.

Within the White House, panic over China launching its invasion sooner is evident. Last week, the US redirected military aid from Egypt to Taiwan. To calm concerns over an invasion of the island, President Biden says that China won't invade Taiwan because it's busy with its own economic issues. Weeks ago, President Biden approved military aid to Taiwan under a program that's normally reserved for sovereign nations. All of this happened within the last 4 weeks. Throughout this year, we've seen an accelerated number of weapons deals to Taiwan. In some instances, we've seen the US do everything it can accelerate arms shipments to Taiwan, forcing other nations to wait longer for their weapons. When looking at all these actions from a broader perspective, the US is concerned that China will invade Taiwan soon.

While the US has been urgent with providing more lethal aid to Ukraine throughout the end of 2021 and early 2022 as Russia built up a military presence along the Ukrainian border, since Ukraine is a sovereign nation, there are less hurdles for the US to go through to provide Ukraine with as much weapons as they need. For arming Taiwan, there are more hurdles to jump through because the US has been supporting the status quo since the 1970s. Because we see President Biden willing to use arms programs reserved for sovereign nations to help Taiwan, we get a bigger sense of desperation from the White House on preparing Taiwan for the inevitable. Because we see the US redirect military aid from Egypt to Taiwan, that we get a sense that Taiwan needs the aid more, even though Egypt is in danger of seeing the war in Sudan leak into its own territory.

With foreign investors cashing out of Chinese equities at a record pace last month, I'm getting the sense that the Wall Street whales are cashing out before Chinese equities eventually plunge to $0 like Russian equities. The big investors know that China will be forced to invade Taiwan or face a legitimacy crisis that could mean the end of the CCP's rule as we know it. China is already building guns, missiles, ships and other items with the many steel mills and idle factories that they have. There's a likelihood that Chinese troops are getting combat training by participating in Russia's invasion of Ukraine and certainty that Chinese-made weapons are being used by the Russians in Ukraine.

Any successes that Ukraine has against Russia won't alter the opinions of dictator Xi Jinping. China has been beating the drums for far too long and the the CCP is putting itself in the position where it is forced to invade Taiwan or face a legitimacy crisis.
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