What’s between a rock and a hard place December 11, 2016Posted by hslu in China, Cold War, Economics, Election, Global Affair, Politics, Taiwan.
Tags: China, ExxonMobil, One China, Putin, Rex Tillerson, Taiwan, Trump, Tsai Ing-wen
However, this time around, Taiwan, more precisely Tsai Ing-wen, will be played like a ping pong ball between two hard hitting ping pong paddles. Tsai ing-wen or a high level Taiwanese official may even get a chance to formally meet with someone from the State Department or DoD as a way to annoy China.
How China will hit back is not clear right now judging by China’s response to the phone call between Trump and Tsai.
The ball with Tsai ing-wen’sname on it is in China’s court now but China might down play Trump’s comments again because Trump isn’t the president yet. There is no need to be worked up by a TV interview yet.
Remember Trump’s comment on the phone call after it caused some fuss from the White House and Congress? “It was just a phone call.”
Trump’s intention was very clear though: if I got what I want from China, Taiwan can go back to be part of One China. If I didn’t get what I want, this ball game will continue down to the dark alley with bad outcomes.
The one player who will get the short end of the stick won’t be the U.S. or China. It will liked be Taiwan.
Whether Trump will follow his words with tough actions against China next year and how China’s Xi Jinping choose to respond will be THE blackswan for the world financial markets to digest. Can the major U.S. indices continue their march to another all time highs? I don’t think so.
It could end very badly.
The path to an outcome, any outcome good or bad, will be a long, unpredictable and tumultuous one. I don’t think markets will like it. I don’t think Taiwan’s economy will escape the damage either because America has less influence on Taiwan’s economy than China does.
How Tsai ing-wen choose to be played is also worth watching too. What will Taiwan want from Trump? What real and lasting benefits can Taiwan get from Trump? Will Taiwan’s stock market continue to rise next week? Will the New Taiwanese Dollar drop below the recent support of $33.6989 to 1 U.S.dollar？
Trump’s position on Russia is an interesting one too. Apparently Trump is courting Putin because he is considering ExxonMobil’s Tillerson as the Secretary of State. Will Putin fall in line and be played by Trump as well? Not likely.
In any case, brace yourself because the ride will be a very bumpy one and someone will get hurt.