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Taiwan: China vs USA · Cash Lads

• 0:01
  SPEAKER_01: Welcome to Cash Lads.
• 0:02
  SPEAKER_01: My name is Paul Malloy from BoxcoverTax.aue, and this is Marcus Doyle from Clear Financial.
• 0:08
  SPEAKER_01: We're here to take the mystery out of money and finance with some history, some stories, and plenty of humor too.
• 0:22
  SPEAKER_02: Thanks for coming along today.
• 0:25
  SPEAKER_02: Good, good, good.
• 0:26
  SPEAKER_02: Folks, today we're going to talk.
• 0:47
  SPEAKER_02: Taiwan is the real flashpoint two nuclear powers, China and the USA.
• 0:52
  SPEAKER_02: It's the one issue that'll really fall.
• 0:54
  SPEAKER_02: They won't fall out, you know, over trade.
• 0:57
  SPEAKER_00: But Taiwan is so sensitive, especially to China, that they want it.
• 1:02
  SPEAKER_00: Taiwan don't want to give up.
• 1:04
  SPEAKER_00: And everything's made in Taiwan or China.
• 1:05
  SPEAKER_00: It's like that girl in the disco that didn't want you, Marcus.
• 1:07
  SPEAKER_00: Like, you know, you just can't let it go.
• 1:08
  SPEAKER_00: Was her girl in the disco didn't want me?
• 1:10
  SPEAKER_00: I don't know.
• 1:11
  SPEAKER_02: What was her name?
• 1:12
  SPEAKER_02: That's a lie.
• 1:13
  SPEAKER_02: Anyway, but it it's it's it's well, I mean, it's it's not the worst comparison because you know, Taiwan is a uh 23 million uh democracy, it's very, very affluent.
• 1:23
  SPEAKER_02: Um, you know, it's not just the the TSMC uh that we've talked about, you know, there's many, many other companies.
• 1:30
  SPEAKER_02: 23 million, yeah, small little islands off the off the east coast, uh, southeast coast of China.
• 1:34
  SPEAKER_02: And um, you know, they I suppose they have seen what happened to Hong Kong.
• 1:40
  SPEAKER_02: So hang Hong Kong was you know in British uh hands uh for a long time, and then I believe it was 1997 that the treat the treaty came to an end.
• 1:50
  SPEAKER_02: Uh Hong Kong passed back into Chinese hands.
• 1:52
  SPEAKER_02: Um for a good a good 20 years or so.
• 1:56
  SPEAKER_02: Did they get their own kind of government stuff?
• 1:58
  SPEAKER_02: Yeah, they were.
• 1:59
  SPEAKER_02: They they were.
• 1:59
  SPEAKER_02: There was kind of a deal done and they kind of had their own uh way of things, but then there were in there were kind of up uprisings in about 20 n 2018, 2019.
• 2:10
  SPEAKER_02: And uh over the period of COVID, they just there was just a slow kind of crackdown, you know, and then a very heavy crackdown uh after COVID.
• 2:19
  SPEAKER_02: And so the people of Taiwan have seen what their future looks like if they join with uh if they join with uh with China, because you you you can make anything you want to China, you can do anything you want, but you do have to be careful about what you say.
• 2:33
  SPEAKER_02: And we're just not used to that.
• 2:35
  SPEAKER_02: Yeah, you know, we feel like we can say just about anything in our to any of our politicians or anyone like that.
• 2:40
  SPEAKER_02: It's just not the case.
• 2:41
  SPEAKER_02: It's funny if you go up to our politics, call them by their first name.
• 2:43
  SPEAKER_02: Well, yeah, yeah.
• 2:44
  SPEAKER_02: I mean, so it's there there's there it's just a different system over there.
• 2:48
  SPEAKER_02: Um whereas you went up and talked to a politician very might get thrown in jail.
• 2:52
  SPEAKER_02: Well, you know, I mean, I I don't want to get it too sidetracked, but like there are countries that China has um extradition treaties with.
• 3:02
  SPEAKER_02: There's quite a number, I think.
• 3:03
  SPEAKER_02: There's probably 50.
• 3:04
  SPEAKER_02: And so the people, the government, the Taiwanese authorities have told their citizens, do not go to these countries.
• 3:11
  SPEAKER_02: Because if the Chinese are aware that you have landed in one of these places, they can have you airport back to a Chinese prison cell, and it has happened.
• 3:18
  SPEAKER_00: Now that's quite scary, you know.
• 3:21
  SPEAKER_00: So gee, you just think in many ways they're obviously concentrating the military around and they obviously want to take it, but you didn't think if people travel to other countries, they're in trouble as well.
• 3:32
  SPEAKER_02: There's all this what I would call lower level.
• 3:34
  SPEAKER_02: It's called the grey zone.
• 3:35
  SPEAKER_02: So the grey zone is kind of in between black and white, you know.
• 3:39
  SPEAKER_02: So so so black is invasion, white is just leaves alone.
• 3:43
  SPEAKER_02: Um, and this this kind of grey zone activity is ongoing, it's not new, it's not, you know, they stopped doing it for a while.
• 3:50
  SPEAKER_02: That's not the case.
• 3:51
  SPEAKER_02: It's just it's just uh relentlessly ongoing.
• 3:53
  SPEAKER_02: Probably hacking and stuff going on as well.
• 3:55
  SPEAKER_02: Cyber, yep, cyber, absolutely.
• 3:57
  SPEAKER_02: Uh, you'll have, if you're in Taiwan, you'll have planes flying over the country, it's quite scary at quite a low, like low height, and just it's just meant to intimidate, you know.
• 4:05
  SPEAKER_02: Um, so why is Taiwan so important to to China?
• 4:11
  SPEAKER_02: Well, the Chinese see Taiwan as as part of China.
• 4:14
  SPEAKER_02: I mean, we don't think of the Iron Islands as independent of Ireland, you know, like um uh there are a group of islands on on the west coast of Ireland near Galway, and they're very much obviously part of Ireland.
• 4:25
  SPEAKER_02: Um, but you know, the Chinese really see it as the final step after 200 years of total humiliation at the hands of the West, where um China was once the most powerful country in the world, no question about it.
• 4:40
  SPEAKER_02: You know, strongest military, best economy.
• 4:43
  SPEAKER_02: And they turned in on themselves.
• 4:45
  SPEAKER_02: They just, I guess after the invasion from from the Mongols in the I think it was the 13th century, uh the Mongols actually took control of China for a while.
• 4:53
  SPEAKER_02: They just said, we don't want to know about other people, we're only interested in ourselves, we don't care about anybody else.
• 4:59
  SPEAKER_02: Um and they, you know, in in falling off in terms of trade, they fell off in terms of technology, and they weren't able to stop the Europeans uh when they came along.
• 5:09
  SPEAKER_02: And uh, this may come as a surprise, and I hope I haven't mentioned this before, but um, there were opium wars between Britain and uh I think it was Britain and France and China.
• 5:19
  SPEAKER_02: And this was the British wanted the Chinese to allow their British and French companies uh to sell heroin to the ordinary Chinese person.
• 5:31
  SPEAKER_02: That's bad, and they went to war, and Britain won that war, and the you know, the streets of Shanghai and places like that would have been flooded with uh with heroin.
• 5:39
  SPEAKER_02: So so that's how bad um China had fell back.
• 5:43
  SPEAKER_02: In 1895, China lost Taiwan to Japan in a war.
• 5:47
  SPEAKER_02: Um, Japan held it for maybe 50 years until after World War II, when it became an independent country.
• 5:53
  SPEAKER_02: So they the G talks about President Ji uh Xi Jinping.
• 5:57
  SPEAKER_02: Um, when he was meeting Trump uh back in September and back in May, he talked about the great rejuvenation of the Chinese nation, and that is code for Taiwan being part of China again, you know.
• 6:10
  SPEAKER_02: So that's why it's it's it's it's they feel it's just not like some uh you know Maggie Thatcher and the Falkland Islands.
• 6:17
  SPEAKER_02: There's a little bit of that, you know.
• 6:18
  SPEAKER_02: It's like this is our property, yeah, you know, this is ours, and um even though the Falklands is so far away from Britain, how could it be theirs?
• 6:26
  SPEAKER_02: Well, yeah, you would say the Chinese in a much more stronger case.
• 6:29
  SPEAKER_02: Um, but that that's how they feel.
• 6:32
  SPEAKER_02: And um, so I suppose, you know, the other side of the fence then in terms of the Americans, like why why does Taiwan matter so much to to the USA?
• 6:40
  SPEAKER_02: Well, so so the US uh after trade, I was um um yeah, I mean obviously now with TSMC, I mean they make all the the all the semiconductors that um that the U US companies designed.
• 6:54
  SPEAKER_02: But you know, when when Nixon uh went to China and normalized relations with China, um certain things happened.
• 7:01
  SPEAKER_02: So China then became up up to then Taiwan was the the Republic of China was the that was the country that was on the security case, not the mainland.
• 7:12
  SPEAKER_02: So that all changed in the 70s after Nixon's visit.
• 7:15
  SPEAKER_02: Um the the Americans rolled back on a kind of a military treaty with the with the Taiwanese, but they did have something called the Taiwanese relations or the Taiwan Relations Act in 1979, and and so that does commit the US to help Taiwan in resisting coercion.
• 7:32
  SPEAKER_02: Now, China is not specifically mentioned, to the best of my knowledge, in the act, but it's very much intended.
• 7:37
  SPEAKER_02: Uh who else in the region was well I suppose for a time it was Japan, but um it it certainly was, certainly China right now, yeah.
• 7:45
  SPEAKER_02: So um, you know, if you're sort of trying to think of a of a map of uh of China, it's this kind of big broad country down in the southeast.
• 7:53
  SPEAKER_02: Imagine Wexford, islands off Wexford would be like that's that's kind of where Taiwan is.
• 7:58
  SPEAKER_02: Um so uh you know, American presidents have you know always kind of had Taiwan's back.
• 8:06
  SPEAKER_02: I don't think Donald Trump has Taiwan's back.
• 8:09
  SPEAKER_02: The problem is the the Chinese military has grown so large now.
• 8:12
  SPEAKER_02: It's huge.
• 8:13
  SPEAKER_02: No, it's absolutely huge.
• 8:14
  SPEAKER_02: Um, so I mean is Trump going to risk uh boots on the ground?
• 8:18
  SPEAKER_02: Yeah, we've just seen what happened in Iran.
• 8:21
  SPEAKER_00: So this is why but Paul, that'll be over in a few weeks according to Mr.
• 8:24
  SPEAKER_00: Trump.
• 8:25
  SPEAKER_00: Even once everything out.
• 8:27
  SPEAKER_02: Jimmy Carter uh had the kind of the hostages taken in the in the American embassy back in 1979.
• 8:35
  SPEAKER_02: That ran on until early January 20, uh early January 1981, when Reagan took over.
• 8:42
  SPEAKER_02: And the day that Reagan took over, that was the day they gave the hostages back.
• 8:46
  SPEAKER_02: So that's what Iran did to Jimmy Carter.
• 8:48
  SPEAKER_02: I think they're going to do the same thing with Trump.
• 8:49
  SPEAKER_02: I think the Iran war will run on until the next president's interest.
• 8:53
  SPEAKER_00: Jeez.
• 8:54
  SPEAKER_02: So so that it makes it, you know, so much more unlikely for America to do anything.
• 9:00
  SPEAKER_02: But you know, at the same time, it's not like it's not like they can just ignore this either.
• 9:07
  SPEAKER_02: You know, like so TSMC, um, we've spoken about them before, they're the sixth largest company in the world, they make everything.
• 9:15
  SPEAKER_02: This is not a chip design company, this is a chip manufacturing company.
• 9:19
  SPEAKER_00: From start to finish, no external parts or anything.
• 9:22
  SPEAKER_02: They do everything.
• 9:23
  SPEAKER_02: So all these other countries, it was such a good idea for for a business.
• 9:26
  SPEAKER_02: They just said, We'll do you do all the designing and we'll make it.
• 9:29
  SPEAKER_02: We'll just manufacture it.
• 9:31
  SPEAKER_02: Um, and they are able to manufacture on Taiwan, they're able to manufacture at the two nanometer level, which is pretty fecking small.
• 9:41
  SPEAKER_02: Um they uh keep the slightly lower down the food chain stuff um in in Arizona and and Japan.
• 9:49
  SPEAKER_02: But they're really, really cutting edge high-tech stuff.
• 9:52
  SPEAKER_02: Cutting edge stuff.
• 9:53
  SPEAKER_02: It's all done there.
• 9:54
  SPEAKER_02: It's kept there.
• 9:54
  SPEAKER_02: And one of the reasons they do this, um, because wages are very high in Taiwan, but one of the reasons they do this is they're like they're trying to make themselves so important to the world economy that the West would have to come to their aid if they're invaded by China.
• 10:10
  SPEAKER_02: That's it's almost like an insurance policy.
• 10:12
  SPEAKER_00: I get it.
• 10:12
  SPEAKER_00: It's a bit like some of the country countries in the Middle East who produce so much oil, they kind of know the Americans will always come to their age because Saudi Arabia could be a very good example of that.
• 10:21
  SPEAKER_00: Because uh the market's obsessed with oil.
• 10:24
  SPEAKER_00: So I I get your point, but now obviously the chips have come in, they're the kind of new oil, I suppose.
• 10:28
  SPEAKER_02: These are the new oil, it's a really good way of putting it.
• 10:31
  SPEAKER_02: Absolutely.
• 10:31
  SPEAKER_02: So so so NVIDIA.
• 10:33
  SPEAKER_02: I have to copyright that.
• 10:34
  SPEAKER_02: Well, absolutely.
• 10:35
  SPEAKER_02: Hearing the podcast first.
• 10:37
  SPEAKER_02: The AI chips or the new oil.
• 10:39
  SPEAKER_02: Um, so so so particularly, I mean, there there's there like there's there's chips that go into uh you know a phone or a laptop, but it's it's the it's the chips that power the the the you know open AI and anthropics large language models.
• 10:55
  SPEAKER_02: Those are the chips, they're the NVIDIA chips.
• 10:57
  SPEAKER_02: They're the really, really special ones.
• 10:59
  SPEAKER_02: Um and they're the ones that are crucial.
• 11:01
  SPEAKER_02: So that's what ty that's what Taiwan is saying.
• 11:04
  SPEAKER_02: We're gonna be so so important.
• 11:05
  SPEAKER_02: You won't let us be taken by Ginpo.
• 11:08
  SPEAKER_02: Um so so there's a chap called um uh Ike Freiman.
• 11:14
  SPEAKER_02: He's uh he's an American, I suppose, specialist in this area, and he wrote a book this year called Defending Taiwan.
• 11:19
  SPEAKER_02: And he talks about the various um possibilities, and we're gonna touch on some of them.
• 11:25
  SPEAKER_02: But you know, one of the the the most, I suppose the most aggressive measure they could take is is invasion, an outright invasion.
• 11:32
  SPEAKER_02: And you know, we've touched on it, that would be very difficult.
• 11:36
  SPEAKER_00: We discussed before, isn't the straight between them very straight very shallow?
• 11:39
  SPEAKER_02: Yeah, it's it's the the the the the the harbors, if you like, or ports are very, very shallow on the on that side, and the weather is horrendous.
• 11:47
  SPEAKER_02: So um, you know, they would have to land all kinds of we'll we'll get into the exact details of it, but I just want to give the people listening just uh a sense of the options that China has just at a high level.
• 11:56
  SPEAKER_02: Decapitation is the other one.
• 11:58
  SPEAKER_02: So we saw the Americans do that with uh Iran and uh Israel and America.
• 12:02
  SPEAKER_02: Uh I think Israel had the intelligence and America had the capabilities to just literally not to wipe out the um the leadership of Iran.
• 12:09
  SPEAKER_02: So that's a possibility they could do that too in Taiwan.
• 12:12
  SPEAKER_02: Um the next opposite uh possibility is a blockade where they surround the country with uh with chips and nothing's allowed to get in or get out.
• 12:21
  SPEAKER_00: Cuban missile crisis.
• 12:22
  SPEAKER_02: Yeah, and we're absolutely going to touch touch on that now in a moment.
• 12:25
  SPEAKER_02: But yeah, I mean, for example, the Americans didn't call it a blockade, they call it a quarantine.
• 12:30
  SPEAKER_02: And the quarantine option is really where it's not so much Chinese troops, it's more Chinese law enforcement officers.
• 12:39
  SPEAKER_02: Um, you know, saying that look, there's a there's a COVID outbreak, there's um, you know, there's there's there's there's terrorism threats to China, we've we've discovered we we have we can't let anything in or out.
• 12:50
  SPEAKER_02: That you know, if it if it doesn't relate to the issue that we're talking about, you it's fine.
• 12:54
  SPEAKER_02: But um it's quarantine that really is the one that worries me.
• 12:58
  SPEAKER_02: Of all these options, quarantine worries me the most.
• 13:00
  SPEAKER_00: Because it's it's doing the job, but it's kind of more softy, softy.
• 13:03
  SPEAKER_00: It's not like aggressive.
• 13:05
  SPEAKER_02: So having uh and and obviously the the other app the last option is what they're already doing, which is the grey zone, which we talked about.
• 13:11
  SPEAKER_02: The cyber attacks you mentioned.
• 13:13
  SPEAKER_02: Um, you know, there are so many Chinese spies, they believe, working in Taiwan right now, uh trying to get you know access to the the technology and all kinds of stuff.
• 13:24
  SPEAKER_02: So um, and and also China is diplomatically uh isolating Taiwan.
• 13:29
  SPEAKER_02: So slowly but surely those very small number of countries, and they're literally mostly around, so Oceania, Southern Africa, are are now you know unwinding ties with uh with Taiwan.
• 13:41
  SPEAKER_02: So um they're they're kind of the range of of things that China could do.
• 13:46
  SPEAKER_02: So the invasion, as we just spoke about there, would be very, very, very difficult.
• 13:50
  SPEAKER_02: Um there's 23 million people in Taiwan.
• 13:54
  SPEAKER_02: Um it's a very geographically, it's a very mountainous region, right down right down the middle of it.
• 14:00
  SPEAKER_02: Um so all the populations are kind of on on either side.
• 14:04
  SPEAKER_02: Exactly.
• 14:05
  SPEAKER_02: So um it really, you know, you imagine Michael Collins that you know that that movie that we uh the archives, yeah.
• 14:13
  SPEAKER_02: Um, you know, so Michael Collins realized fighting Britain head head on is madness, can't win that war.
• 14:19
  SPEAKER_02: But what you can do is hit them with guerrilla tactics.
• 14:22
  SPEAKER_02: This is what this is what um Taiwan would do.
• 14:25
  SPEAKER_02: Taiwan has um other than Ukraine, it has more drones than anybody else.
• 14:30
  SPEAKER_02: It's really invested in drone technology.
• 14:33
  SPEAKER_00: So they're used for it anyway.
• 14:36
  SPEAKER_02: Yeah, so you could imagine like 250 Chinese troops like landing somewhere and grabbing a factory or an airport or something strategic.
• 14:43
  SPEAKER_02: You know, they could hit them very, very hard very quickly uh with drones.
• 14:47
  SPEAKER_02: So um, you know, it's it's just the idea of I suppose it's called asymmetric warfare, it's where you're you're weak, but your opponent is strong, but you use you use things that make you know you um use the the environment to your advantage, use the environment to your advantage.
• 15:02
  SPEAKER_02: So I I think this really I I can't I can't think that this is a realistic option.
• 15:08
  SPEAKER_02: The only way I would see this happening is if there was some kind of event or some kind of friction or some kind of thing, you know.
• 15:14
  SPEAKER_02: For example, if Taiwan in a moment of madness declared independence, publicly declared independence, I'd say China would do something like this.
• 15:24
  SPEAKER_02: So as long as Taiwan doesn't do something or the Americans doesn't do something that would really, really escalate things.
• 15:29
  SPEAKER_02: I think this option is is unlikely.
• 15:32
  SPEAKER_02: It's not possible, it's unlikely.
• 15:34
  SPEAKER_02: Because it could affect Chinese trade around the world as well.
• 15:37
  SPEAKER_02: They would be a pariah, you know.
• 15:38
  SPEAKER_02: They would be as they would be like Russia, and you know, and don't forget, if we lost if the world lost China, that'd be a disaster too, because look what all we get from them.
• 15:47
  SPEAKER_02: Like they make so many important things, they they make stuff at these days at high quality and low prices, so um, it would be a disaster for for for everyone.
• 15:56
  SPEAKER_00: Our inflation goes through the roof, tables, chairs, everything.
• 16:00
  SPEAKER_02: So so that I think is unlikely.
• 16:02
  SPEAKER_02: A blockade is the next level.
• 16:05
  SPEAKER_02: I I quarantine is so similar to blockade, and I mean blockade is very much a military move.
• 16:13
  SPEAKER_02: Yeah, so you surrounded the island with ships, and they're like military, it's a Chinese Navy, um, and they're like let not letting anything in art.
• 16:22
  SPEAKER_02: Um I I just I I it's it's it's it's this is all about kind of the American people.
• 16:30
  SPEAKER_02: What will the American people support?
• 16:31
  SPEAKER_02: So so if China kind of if China invades, then 100% um the American people support invasion.
• 16:39
  SPEAKER_02: A blockade, I think the American leaders or American politicians could make a case that say this is a blockade, this is an outrageous violation.
• 16:48
  SPEAKER_02: Uh, we need TSMC for our for all for the AI sector, which is a 40% of the US stock market now.
• 16:56
  SPEAKER_02: We we can't allow this blockade.
• 16:58
  SPEAKER_02: I think the American people could potentially go for that.
• 17:02
  SPEAKER_02: Yeah, some kind of intervention, you know.
• 17:05
  SPEAKER_02: And if you the the old thing about the the frog, if you throw a frog into boiling water, he'll jump out in seconds.
• 17:11
  SPEAKER_02: But if you put him into warm water and slowly raise temperature, he'll get used to the temperature over time before he knows it he's been boiled.
• 17:18
  SPEAKER_00: Yeah, so um the quarantine is really the one that would worry me because it's it's so much would the American people really go for they could they could really make it more real, the Chinese could release uh uh manufactured disease into the place, and then it would have to be corrant, and China would go, oh, we need to protect our borders and put it around Taiwan.
• 17:44
  SPEAKER_02: But if there if there if if T SMC's production was halted for three, six months, um you would be talking media world worldwide procession.
• 17:53
  SPEAKER_02: Because if you look at the AI sector, there's so much kind of people talk about the cross-investment or the the multi- you know, the multiple layers that NVIDIA owns half the half of these companies or has an ownership stake, has lent money to them, helping some of them, you know, maybe open AI buy some of their um data centers, stuff like that.
• 18:12
  SPEAKER_02: So the the this sector really just needs one big problem and it'll bust the dot com, yeah.
• 18:20
  SPEAKER_02: Yeah, I believe the dot com wasn't as connected as this.
• 18:23
  SPEAKER_02: Like these companies are really closely connected.
• 18:25
  SPEAKER_02: So and they're all had all their stuff is built by TSMC.
• 18:29
  SPEAKER_02: So something happened to TSMC would be uh 2008, immediately an immediate 2008.
• 18:36
  SPEAKER_00: Yeah, but do you think because the Chinese with their economy I know it's kind of slowed a bit recently, but um because they sell everything all over the world, they wouldn't want that.
• 18:45
  SPEAKER_00: They're gonna they're kind of cop caught in the problem here.
• 18:47
  SPEAKER_00: They obviously want their economy to keep going, but obviously they they do obviously lay claim to Taiwan as well.
• 18:52
  SPEAKER_02: They do, and I think there's a few kind of what one very interesting idea is called the and those with uh uh who've done kind of uh classical studies like Greek and Roman.
• 19:03
  SPEAKER_02: There's a chap called the Thucydides trap.
• 19:06
  SPEAKER_02: And this was uh this is the idea that when Sparta was a strong power, but Athens was starting to overtake Sparta in terms of its mil, you know, military and economic power, you know, it for it it forced China Spartan into mistakes that it shouldn't have, you know, that it shouldn't have made.
• 19:21
  SPEAKER_02: And G has actually spoken about this Graham Allison wrote a book called Destined for War, and it was all about the Thucydides trap.
• 19:28
  SPEAKER_02: And uh G has mentioned it twice this year at these at these things.
• 19:32
  SPEAKER_02: So G is basically saying it's very clear that he's reading, you know, well well-known US uh writers on this topic.
• 19:41
  SPEAKER_02: They're they're paying a lot of attention to what's going on in the States, they always have.
• 19:45
  SPEAKER_02: Um, you know, and America's been here before in terms of uh arrival.
• 19:50
  SPEAKER_02: I mean, Japan by the mid-80s was considered to have passed a market.
• 19:54
  SPEAKER_02: And then there was that thing called the plaza chords where the Americans and the Chinese uh the Japanese got together, and America said, You've been using your exchange rate, hammers, for years to help your own exports.
• 20:05
  SPEAKER_02: This has to stop.
• 20:06
  SPEAKER_02: And Japan said, Okay, fair enough.
• 20:08
  SPEAKER_02: And they did.
• 20:09
  SPEAKER_02: And um five years later the Japanese economy fell off the cliff and has barely recovered since.
• 20:15
  SPEAKER_02: So there is uh a further interesting idea called strategic ambiguity, and this is what America has done since 1979.
• 20:23
  SPEAKER_02: It's they say to the the Taiwanese, we'll probably help you.
• 20:27
  SPEAKER_02: We're not saying we will help you, we're not saying we won't help you, we're saying we'll probably will help you.
• 20:32
  SPEAKER_02: And they say to the Chinese, we'll probably intervene.
• 20:35
  SPEAKER_02: Probably.
• 20:36
  SPEAKER_02: Yeah.
• 20:36
  SPEAKER_02: So this sitting on the fence a bit.
• 20:38
  SPEAKER_02: What they have used this, I mean, it was such a good idea.
• 20:42
  SPEAKER_02: They have used this to keep the two of them kind of uh separate, you know, that they're not separate, but to keep the two of them guessing and not to take any risky um, you know, action, you know.
• 20:54
  SPEAKER_02: But I mean, I think this all comes down to one person.
• 20:56
  SPEAKER_02: That's the Xi Jinping.
• 20:58
  SPEAKER_02: What does he want for his legacy?
• 21:00
  SPEAKER_02: If he wants to take Taiwan, in my opinion, he can take it.
• 21:03
  SPEAKER_02: Yeah, he can take it.
• 21:04
  SPEAKER_02: If he's willing to pay the price, he's willing to he can take it.
• 21:07
  SPEAKER_02: If he takes Taiwan and it's either a success or a disaster, that will be his legacy.
• 21:14
  SPEAKER_02: That's all he will talk about.
• 21:15
  SPEAKER_02: You talk Tony Blair and the Iraq War.
• 21:17
  SPEAKER_02: Yeah, all the other good stuff that Tony Blair did, say up in Northern Ireland, Good Friday Agreement, that's all for that.
• 21:24
  SPEAKER_02: Tony Blair is really defined by that war.
• 21:26
  SPEAKER_02: So Xi Jinping would be uh done likewise.
• 21:29
  SPEAKER_02: He's also up for a re-election next year for his fourth term.
• 21:34
  SPEAKER_02: No one ever did two terms before, he's doing fourth, it looks like it looks like.
• 21:38
  SPEAKER_02: So um I think we'll I think we'll leave it there, I think Marcus, um, for today.
• 21:43
  SPEAKER_02: So thanks very much.
• 21:44
  SPEAKER_02: Um, hope you enjoyed listening, folks, and um, we'll see you next time.
• 21:48
  SPEAKER_02: Talk to you soon.