U.S. East Asian envoy says investors are overpricing Taiwan conflict risk
Investors are overestimating the risk of conflict across the Taiwan Strait, a U.S. diplomat says, playing up deterrence to keep Beijing from taking the island.
TL;DR
- Investors are overpricing the risk of conflict in the Taiwan Strait, according to a top U.S. East Asian diplomat.
- Deterrence and the certainty of substantial consequences are expected to prevent Beijing from attempting to take Taiwan.
- The U.S. government has noted Beijing's directive for the PLA to be ready for military action by 2027, though Beijing has not confirmed this timeline publicly.
- Both China and the U.S. do not want conflict and are able to deter it.
- Beijing claims Taiwan as its territory and has not ruled out force, while the democratically governed island rejects these claims.
- Taiwan is a major global manufacturer of advanced computer chips, with TSMC investing heavily in facilities in Phoenix, Arizona.
- The diplomat stressed the importance of credible deterrence with allies and partners to prevent conflict.