If China is to keep stepping up and escalating its grey zone tactics on Taiwan to eventually conquer it, the logical conclusion may be that a Taiwan blockade is on the cards. China has just conducted what seems to be a blockade drill on Taiwan. This seems to be very consistent with China’s strategy.
A blockade would provoke Taiwan or the US to fire first, giving China the convenient and deceptive excuse to launch a full-scale invasion. Slowly and gradually, China is winning more leverage by conducting grey zone tactics with impunity.
The only financial hedge against this scenario may the US Dollar as China would potentially unload its gold reserves in exchange of US Dollars to fund its war effort. The Euro would get wrecked.
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