China Is Pulling a Putin on Taiwan

Written by Jason Simpkins
Posted June 17, 2022

One might think Russia’s troubled invasion of Ukraine — which has cost thousands of lives, damaged the global economy, and spiked energy prices — would be a cautionary tale for China…

But in actuality, that couldn’t be further from the truth.

China has been telegraphing a move on its renegade province for years now, and we’re finally nearing the point of no return. 

Just look at the way the stage has been set…

In just the past few years, China has:

  • Launched large-scale cyberattacks against rival governments and private companies, stealing vital information. 
  • Attempted to seize control of the South China Sea — a body of water it shares with half a dozen neighboring countries.
  • Sent its navy and air force to harass those same neighbors, instigating conflicts with Japan, Taiwan, Vietnam, Malaysia, and others.
  • Gotten in multiple scrapes with India on its contested border.
  • Ramped up global propaganda campaigns. 
  • Brutally cracked down on its own citizens — jailing dissidents and forcing Muslims into concentration camps.
  • Attacked forces with laser weapons.
  • And reabsorbed Hong Kong.

Indeed, that move on Hong Kong happened so fast you’d probably already forgotten about it.

That’s just the way China wants it to be with Taiwan. 

And it’s spending big money to get to that point.

China’s defense spending is set to rise by 7.1% this year to 1.45 trillion yuan ($230.16 billion), up from a 6.8% increase in 2021 and 6.6% bump in 2020, when the country was navigating through the worst of the pandemic.

That’s more in line with its pre-pandemic growth rate, as defense spending rose 7.5% in 2019.

The endgame is so obvious here even Joe Biden can see it.

That’s why he stirred up a fuss a few weeks ago by straying from the traditional policy of “strategic ambiguity” regarding a potential U.S. response — flatly stating that America would intervene militarily in the event of an attack. 

“Yes. It’s a commitment we made,” Biden said when asked if he’d intervene militarily should China invade.

“We agree with the One China policy, we signed onto it and all the attendant agreements made from there,” he added. “But the idea that — that it can be taken by force, just taken by force, is just not — it’s just not appropriate. It will dislocate the entire region and be another action similar to what happened in Ukraine.”

Beijing heard him. 

“We believe he is actually paying lip service to this One China policy,” said Zhou Bo, a retired officer of the People’s Liberation Army and senior fellow at Tsinghua University’s Center for International Strategy and Security Studies.

Then, at a meeting of global powers in Singapore known as the Shangri-La Dialogue, Chinese defense minister Gen. Wei Fenghe portrayed the United States as a “bully” attempting to “impose its will on others.” 

“We will fight at all costs. And we will fight to the very end,” he said. “This is the only choice for China.”

And if that weren’t enough to make the point, China then conducted a massive military exercise around the island as Biden visited nearby Japan.

At least 30 warplanes flew through Taiwan’s air defense zone — formations that included fighter jets, as well as electronic warfare and anti-submarine aircraft. 

The combat drills were "a necessary action against U.S.-Taiwan collusion," China’s military command said in a statement. "Recently, the United States has frequently made moves on the Taiwan issue, saying one thing while doing another, overtly and covertly encouraging and supporting Taiwan independence forces. [The U.S.] will push Taiwan into a dangerous situation and also face serious consequences itself."

These aren’t empty threats. The threat is real — imminent, even. It’s going to happen. 

Make no mistake, the real lesson of the Russian invasion is that you have to believe militaristic autocrats when they tell you what they’re planning to do.

Aggressive rhetoric, sophisticated planning, heavy military spending, and warfighting dress rehearsals cannot be dismissed as “saber rattling” and “muscle flexing.” 

The global landscape is shifting under our feet. 

The United States and the Western order are being challenged by near-peer adversaries determined to have their way. 

It’s happening in Ukraine and it’s going to happen in Taiwan. 

That’s why I’ve been aggressively recommending defense stocks for the past five years. 

And it’s also why I just released a brand-new report on China’s (not-so) secret weapon that’s intended to obliterate the entire U.S. Pacific fleet.

Again, this is not a drill. This is a real and profoundly dangerous weapon that China has developed to ward off U.S. forces in case we do come running to the defense of Taiwan. 

It has members of Congress positively shook and military officials begging for more funds to develop a response. 

I even found the best way for investors to profit from that funding push with a company that is vital to that countermeasure. Check it out here.

Fight on,

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Jason Simpkins

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Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of Wall Street's Proving Ground, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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