The Coming Holocaust

 

The Economist has published an alarming analysis of the situation of Taiwan.

Apparently, China has established naval dominance in the Eastern Pacific. The proximity of the Chinese mainland ensures air dominance over Taiwan. This dominance cannot be reduced without bombing the Chinese mainland. 

American wargaming now shows the Chinese winning any confrontation with the US over Taiwan.

The Economist, as always, is relatively sanguine about the prospects. Why would China risk upsetting the global applecart so long as the situation for them is improving year over year?

I am less sanguine. If this were their calculus, why march in and take Hong Kong? Why rattle sabres in the South China Sea? Why cross the Zone of Actual Control with India?

It is not clear that things are really improving for China year over year. The calculation in Beijing may be the opposite: that things are likely to collapse unless something is done to reshuffle the deck. 

What is really going on in China in economic terms has never been transparent. We must rely on government reporting on their own performance. It seems likely the figures are fake. The prosperity is real, so long as everyone thinks it is real. But it can pop like a soap bubble.

China is progressively less competitive on their prime advantage, cheap labour. Without that, can they compete with the West on innovation and efficiency? I suspect a centrally-planned society intrinsically cannot. The officials in Beijing see the real accounts, and they may look grim.

This, after all, is the obvious explanation for the rapid rise of Xi Jinping’s totalitarian domestic policies. The government feared unrest. Loosening up failed to save the old Soviet regime in Russia; they were determined to do the opposite. 

The Soviet Union hit a wall and collapsed: this seems to have been because their economy was all smoke and mirrors. Nazi Germany faced the same dilemma: their impressive economic performance towards the end of the 1930s was based on cooking the books and printing money. Hitler had no choice but to invade neighbouring countries and seize assets to meet the next payroll or debt repayment.

Xi’s China may be in the same situation. They may have taken Hong Kong because they needed the assets. They may have been probing for weakness elsewhere.

They may see a pressing need to take Taiwan.

Taiwan is the world’s largest chipmaker. That is an immense asset. China could rule the market in high-tech.

For this reason, taking Taiwan could also change the balance of power globally. According to someone The Economist quotes, losing Taiwan could be “America’s Suez,” the effective end of US dominance.

In other words, the stakes are gigantic, for both China and the US. The stage is perfectly set for a serious, total war; for neither side can easily accept defeat.

And it would probably be a world war. Australia, India, Japan, are also necessarily deeply concerned should China come to dominate. Britain and France have also recently signaled their concern, sending warships to the area. Vietnam, the Philippines, Indonesia, South Korea, Canada, would probably also join an American-led anti-Chinese coalition.

China may bank on the West being too decadent to pull themselves together to resist. And they may be right, Ominously, a poll suggests only 50% of the Taiwanese themselves are prepared to resist if China invades. 

But Hitler made the same calculation in 1939, and turned out to get wrong. Imperial Japan made the same calculation in 1941, and turned out to get wrong.

And we thought COVID was the big problem…