GOOD MORNING FROM LONDON
The New York Times follows up on remarks made during the unusual joint address in London by Mr. Wray, Director of FBI + Mr McCallum, Director General of MI5. It reports that following its review of Russia’s invasion of Ukraine, China is looking for ways to protect its economy from the threat of international sanctions should a confrontation over Taiwan/S China Sea occur. Western sanctions over the war + Russian retaliation have cost Western businesses billions of dollars in Russia, and they could be caught in a similar but far bigger + more dangerous scenario should hostilities break out over Taiwan or the South China Sea
Taiwan is China’s territory + China has always reserved the right to settle the Taiwan issue in its own way. Hostilities cannot be ruled out. After all it was President Reagan who invaded Grenada at will in 1983 + President Biden would surely invade Hawaii if it seceded from the US.
China is seeking to insulate its economy against potential sanctions. Western business is much more deeply invested in China than Russia. Beijing reported in November 2021 that among the 70,000+ American companies doing business in China, 97% were earning profits. Mr. Wray said that companies from the United States + its allies would find themselves caught if hostilities broke out over Taiwan. As Wray said “this is not just geopolitics, it’s business forecasting.”
Wrays’ comments – coupled together with the US citing China as “a rising threat” – focus on the dilemma facing Washington as it plans ahead. In the event of hostilities over Taiwan or the South China Sea, it has to anticipate a strong backlash against the US Government from the 70,000 US companies who focus on China and the long term in their strategic business planning.
After all, Politicians have one set of priorities but Businessmen have a different set of priorities.