How Will War Start in Taiwan?

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How Will War Start in Taiwan?
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What Will China Risk to Get Taiwan?

The nationalist Chinese forces retreated to Taiwan after losing the mainland more than 70 years ago. During that time China has threatened but has not tried to invade Taiwan. Today there is concern because of China’s huge military buildup in terms of force modernization and especially the size of their navy which now surpasses that of the USA. A serious problem for China should they invade Taiwan is that the USA and EU are their largest customers and such an action by Taiwan would accelerate reshoring of industries previous outsourced to China and a huge reduction in trade.

What Is China’s Red Line?

The general consensus is that should Taiwan declare its independence China would attack. Thus Taiwan and the US abide by the “one China” agreement while maintaining Taiwan’s actual independence. Things like Nancy Pelosi’s visit as the second in line to the US presidency upset China and cause reactions but don’t lead to immediate war. China has not made a decision about what to do or when but they will be increasingly tempted as their military ramps up and Xi Jinping sees his tenure coming to an end. This gives us a five to ten year time frame.

A Chinese Dream Becomes Plausible

From when the nationalists fled to Taiwan until today China has not had to military and especially naval and air power to successfully invade Taiwan should the US fight along side Taiwan. Within the coming five years or so this calculus will change as China reaches local parity or superiority. As the US moves to counter this shift the window of opportunity will close about ten or so years from now. Thus, China will shortly have the military capacity to make its Taiwan reunification dream come true. The question is whether or not China will risk its trade relationships and prosperity in order to gain their long-held goal.

Options Trading and a China-Taiwan Crisis

At Top Gun Options we pay attention to the DRINCs. This is our acronym for Democrats, Russia, Iran, North Korea, and China. The simple fact is that events far away from the USA can drastically affect markets in the USA. If the Chinese try to take Taiwan, they may well succeed in overpowering the island and its defenders. The ramifications of such an action would be substantial including military alliances against China and disrupted trade throughout the world. This is not a time to be trading options solo. Consider joining one of the trading squadrons at Top Gun Options where we potentially print money no matter which way the market is going or, for that matter, what the Chinese are up to.

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CEO TOPGUN Options, chairman & founder No Fallen Heroes Foundation, founder and CEO, Former F/A-18 USN fighter pilot, TOPGUN (adv) graduate. Father of 3.

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Matthew "Whiz" Buckley

CEO TOPGUN Options, chairman & founder No Fallen Heroes Foundation, founder and CEO, Former F/A-18 USN fighter pilot, TOPGUN (adv) graduate. Father of 3.