Potential Chinese invasion of Taiwan: U.S. response and economic consequences
(Kitco News) - Taiwanese independence isgeopolitically unsustainable, and it's not a matter of if China will takeaction towards unification, but when, according to a panel of experts on theAsia-Pacific region.
Harold Kempfer, formerU.S. Marine Corps intelligence officer and CEO of Global Risk & IntelligencePlanning Inc. joined Matt Gertken, VP of Geopolitical Strategy of BCA Research,in a discussion with Michelle Makori, editor-in-chief of Kitco News, to talkabout the likelihood of a Chinese incursion on Taiwan and possible U.S. response.
While Taiwan sees itselfas a sovereign state, the official position of Beijing is that Taiwan is a provinceof China and should not be internationally recognized as a separate governingentity.
The "One China" policy,which dictates that there is only one official Chinese government that does notinclude the parliament of Taiwan, has been a cornerstone of U.S.-Chineserelations for decades.
In the past few weeks, tensionsbetween the Taiwan and the Mainland have escalated as a record number ofChinese fighter jets flew within Taiwan's aircraft identification zone.
"Geopolitically, Taiwanis a threat to any Chinese empire," Gertken said. "[Taiwan] has a naval power,which is its own, but also a military alliance with the United States. This isjust geopolitically unsustainable for a government rooted in Beijing. WhileBeijing couldn't really do anything about it for 70 years, over the past 20years we've seen such an increase in economic power that the Chinese aregetting very close to where they're able to do something about it."
In particular, China'smilitary build-up over the last two decades has worried both Taiwan's DefenseMinistry and U.S. military planners.
"China's military hasdramatically expanded. For example, their marine corps, which would be used foran amphibious invasion of Taiwan, has jumped from 10,000 in 2017 to somewhereabout 35,000 today. That's a huge leap. And then if you look at the platformsthat they would use for amphibious assault, they basically built that fromscratch over the last few years. So, they have a number of platforms that theycould use and things necessary to actually conduct an invasion," Kempfer said.
Kempfer has previouslyserved in the military in the West Pacific region and later worked with theU.S. Department of Defense on issues related to Chinese expansion in thePacific.
Taiwan, however, has alsoincreased its defensive capabilities, and so an outright Chinese invasion wouldbe no easy feat, especially considering the possibility of U.S. intervention inthe defense of Taiwan, Kempfer added.
"Amphibious operationsare tough, they're not easy to do, and there's a very good chance that it couldend up looking more like Gallipoli than Normandy for the Chinese," he said.
With the withdrawal ofAfghanistan and the winding down of American military involvement in the MiddleEast, the U.S. now has more resources to dedicate to the Pacific theater. Thiswould mean that the window of opportunity for Beijing to act is narrowing.
The trigger for directaction would be economic and domestic political pressures on the Chinesegovernment.
"If mainland Chinaexperiences a massive economic and financial crisis, you could see thisnationalism that's been building up there and it could really start to becomeexplosive. Also, you could have political destabilization in China, whetherconnected to an economic event or not and that could also cause the leadershipto be less rational," Gertken said.
If armed conflict were tobreak out, commodities would see a significant rally, Gertken added.
"Historically, it's thepreparation of war and war itself that really causes super bull markets forcommodities," he said.
For more information on the market and economic impacts of heightenedgeopolitical tensions around Taiwan, watch the interview above. Follow MichelleMakori on Twitter: @MichelleMakori
By Kitco NewsFor Kitco News
Follow @kitconewsnow
newsfeedback@kitco.comwww.kitco.com