"the economic cost China would pay from going to war"

Noah's argument has a glaring flaw. He talks about the economic downside of war primarily as a loss of access to foreign markets. The biggest and decisive economic cost would be the destruction of all those gigantic factories situated along the coast within easy reach of American missiles. American means of production are by no means as vulnerable. We don't need to target civilian residential areas. Doubtless the destruction of several hundred factories, the factories where the Chinese people work, would make a vivid impression and make It obvious to them how wrong headed their leadership is.

Indeed, war might even be prevented by the US pointing this out to Chinese leadership.

We all know that Xi wants a leaner, meaner China, but despite his current frustration, he is also aware that the Chinese people have their limits. They don't want to see the country go 30 years in reverse.

I have many thoughts more thoughts on this issue, and a few of them are expressed in my Substack post.

Are the United States and China “At Each Other’s Throats?”


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The forest analogy leaves out one other possibility. If the forrest is large enough, selective cutting will allow for the taking of mature trees, giving the youngr ones room to grow. If done correctly, this will allow the forrest to survive for a long period of time. This has been accomplished in the Southern portion of the United States and has worked for over 100 years. Some reports seem to indicate that todays forrest is larger and more productive than ever before. Selective cutting also allows for the removal of brush and this provides less fuel for forrest fires.

In the past, wars provided away for countries or empires to grow and become richer, but that is no longer possible. War is so destructive that the captured terriorty is basically worhtless - from an economic perspective.

The one thing China would gain, but only in their own belief perspective, is to capture a run away territory that they feel should be under their control. They have destroyed any semblence of freedom in Hong Kong and they would do the same in Taiwan. Resistence to Chinese control will be very strong and could lead to a nuclear exchnage between China nd America. If so, everyone loses.

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A factor Noah doesn't mention is that China's military-age population is decreasing. They might feel that puts them under pressure to act sooner rather than later.

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Sep 6, 2023Liked by Noah Smith

I think this is a good analysis, and economic factors do matter somewhat, but I think ultimately wars generally happen much for internal reasons than external ones. Not 'what is good for China?' but 'what is good for the CCP' or, given consolidation of power around himself, 'what is good for Xi Jinping?' As such all instability increases the risk of war, because of the temptation to cut off rivals by forcing everyone to rally around the flag - or be denounced as a wartime traitor. If he feels a threat to his power, considerations for China as a whole - economic or otherwise - will be a distant concern.

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"Meanwhile semiconductors, the most important sector where developed countries still retain a slim edge, are now subject to export controls. And China’s ability to appropriate technologies by buying companies in the U.S. and other developed nations has been impeded by inbound investment restrictions. Between these measures and the drop in FDI into China, much of the country’s appropriation of foreign technology will probably now shift to traditional Cold War-style espionage rather than voluntary economic partnerships."

The scary part of China invading Taiwan is not the loss of TSMC's 2nm process foundries. It is the loss of access to all the ancillary electronic components Taiwan manufacturers. The modern world runs on surface-mount resistors and capacitors and transistors. On various components that support the microprocessors and comprise other circuitry as well. And the U.S. off-shored manufacture of said electronic components many years ago. You can't build Tomahawk or PATRIOT or HiMARS missiles with entirely domestically sourced electronic components.

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The opportunity cost of war in a young country (lots of prime-age males) is lower than a demographically older one.

By this standard, China should be reluctant to start a war. However, China's sex ratio is so skewed (https://www.statista.com/statistics/282119/china-sex-ratio-by-age-group/) that, even though they're old, they still have lots of excess young males. Regardless of Taiwan, societies with lots of young men with no marriage prospects are often very violent places. Not sure how that combination plays out.

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I'm not sure the TSMC angle will be salient for much longer - granted the veracity of these statements by China and their SOEs is suspect but if true would suggest a much faster and larger leap in manufacturing than many had thought:


I think the real angle is the historical agenda of reintegration of Taiwan and the economic malaise to come. The fiscal stimulus from war and the potential assets either taken or scorched would be a benefit to China as it uses it's manufacturing base and manipulated currency to support exports.

If their economy does deteriorate further and they decide to let the yuan go lower to support exports in industries they deem "important" then we wouldn't need a war. We'd be on the brink of an economic war we haven't seen in our lifetimes.

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Some authors have noted that China and Russia would prefer to wait for a Trump Presidential victory before deciding on the fate of their wars. For the same reasons, the US military would probably prefer to begin war before a potential Trump reelection. As I see it, many pieces are being put in place to fight such a war, rather than simply deterring it. For some reason, the US does not appear to fear a nuclear war. Technology must be a deciding factor for all parties of whether to go early or go late.

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I was surprised to see this: "outweighs the modest gains from conquering pieces of Asia"

I don't think conquering Taiwan would be a 'modest' gain. Control of the entire South China Sea, heavier influence on all the other smaller countries in the region, power projection opportunities into the Pacific. The list goes on. It has the potential to be a historic prize.

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Interesting argument - but remember the 'Wolf-Warrior' strategy Chinese diplomats embarked on a couple of years ago - picking fights all over the world. However, remember that it failed and now they have reversed course. One thing Noah did not mention is the Russia-Ukraine war. My guess is that Xi Jingping will be heavily influenced by the outcome - if the Ukrainians lose then he will probably go ahead with an invasion of Taiwan. If not he will probably think twice.

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Noah, I think you're right that invading Taiwan would pose foolish risks for China. One thing the past 200 years have taught us is that major powers that launch voluntary wars rarely do well. I can think of the Bismarckian wars of German unification and Operation Desert Storm as the only successful examples. Germany launched WWI and WW2 and suffered defeats. The US lost Vietnam (and Afghanistan and I'd argue Iraq). The Soviet Union paid a high price for its Afghanistan adventure, as is Russia in Ukraine.

China would pay a terrible economic price for even a successful invasion of Taiwan and its gains from doing so would be paltry.

But, as you note, sometimes leaders (and nations) don't act rationally. Ironically, a Chinese attack on Taiwan, no matter the outcome (other than nuclear war) would probably result in an overall relative strengthening of the US position in the world, along with its allies, and a diminishing of China's despite its seizure of a devastated Taiwan.

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I would be curious to get your thoughts on the new Huawei phone with 7nm chip

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Gordon Chang of CNN also touts the theory that Xi is pushing to be more aggressive with the Americans to deflect blame of the Chinese economy from himself. There have been recent changes in top military positions as well as the foreign minister, which have been inexplicable.

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Imagine an international blockade of China. Maybe they can feed themselves, but they’re one wheat harvest failure away from their own Arab Spring. Why assume Chinese youth have an appetite for war? I just don’t believe the Chinese people are lemmings that can be herded over a cliff. They gain nothing if they takeover Taiwan. All the chips fabs would grind to a halt. Then what would be the reaction if nobody’s smart phones could be replaced? Smart phones are an addiction. Many Chinese have two. Maybe Xi lacks judgment (he’s made a series of mistakes) or is desperate. Time will tell. But in the event of Xi starting a war, think of all the countries who suddenly would be willing to default on Chinese loans. That would present a serious economic problem.

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If we gauge the reaction to Covid locks

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To add to what Kathleen Weber wrote: the reason the US, in particular, benefited from WWII is our geographic isolation. The only American territories bombed in WWII were Hawaii and two Aleutian Islands. The US was not only a massive industrial power in the 1940s, we were also the only massive industrial power that remained outside of wartime conditions. The American home front was spared the fate of Germany, the USSR, Japan and Britain. This meant that not only did the US get to massively stimulate its economy: it got even MORE demand from its Allies. We then compounded this by rebuilding Europe with American made equipment postwar.

Needless to say I do not think China will find itself in this position in a war for Taiwan. American missiles would hit Chinese targets (causing damage), to say nothing of the escalatory risks of a direct Chinese-American conflict.

But I will be honest, I do not think a conflict over Taiwan will be chosen due to economic calculations but geopolitical ones. My suspicion is China is actually waiting for someone like Donald Trump to take office. Joe Biden has basically declared his intention to intervene in a resumption of the Chinese civil war. Trump has basically said the opposite, claiming the US can't stop China from retaking Taiwan. The return of a populist demagogue who does not want to send American soldiers to Taiwan to fight and die feels inevitable and without the US it's highly likely China can conquer Taiwan.

I suspect China is waiting for that to occur, and not for an economic case to be made. The only other thing that would convince them is if they think they have such a military advantage over the US that they would win before American forces can even reach Taiwan, OR if Taiwan unilaterally declares independence.

We'll see. I pray we never find out.

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