Sadly, some of the most accurate news about China’s increasingly fragile supply chains are coming from Taiwan.
Although some argue that Taiwan is inherently incentivised to report negatively on their giant and overpowering neighbour, their democratic and western-aligned governance provides for a clear and honest picture of Chinese happenings in many cases. As an economic and manufacturing powerhouse in their own right, Taiwan is under increasing pressure to succumb to the CCP’s controlling overtures, and many fear that Taiwan has a similar fate to that of Hong Kong in its near future.
With many Taiwanese businesses heavily reliant on strong Chinese supply-chains,as with the rest of the world, the Taiwanese have a particular interest in watching the rapidly deteriorating flood conditions along the Yangtze River. Current preoccupation of the PLA in shoring up flood-defences may provide the Taiwanese people with some limited respite from the growing threat of Chinese intervention, although the Taiwanese and Chinese political impasse is not likely to be resolved anytime soon and sadly for the CCP and Chinese people, the weather forecasts suggest further deluges are due to hit the most badly affected regions again in comings days.
Aside from the unavoidable and very real risk of failure of the critical 3-Gorges Dam, the existing flooding in major economic zones is clear to see. Western media, being generally preoccupied with COVID-related matters has let this critical issue slide through the news-cycle. Satellite pictures of major riverside cities, including gargantuan metropolises such as Chongqing and Wuhan show widespread devastation as the ‘all-gates open’ status of the 3-Gorges forces billions of mega-litres of floodwaters into cities unable to cope. Read Taiwan news here…..
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BTIG Managing Director, Chief Equity and Derivatives Strategist Julian Emanuel joins the On the Move panel to discuss the market reaction to the July jobs report, the stock market, and the impact of US-China tensions on the stock market.