Weapons: Really Secret Weapons


October 15, 2007: A war with China, over Taiwan’s continued independence, would have some interesting economic and political side effects. Basically, the loss (even temporary) of Taiwan production will not be the end of the world. We got a taste of that when there was a fire, a few years back, at factory there that made a key electronic component. There would be some shortages at the consumer level, but the industry plans for such interruptions, and sees planning for those events as a competitive opportunity. That is, the companies that are most prepared (via stockpiles, alternative components or suppliers) are going to gain market share. The unprepared are going to suffer. Taking out all of Taiwan is a major interruption, but some companies have planned for that eventuality.

The Chinese have a bigger problem, in that interruption of their seaborne trade would have immediate, and serious economic and political impact. Over a hundred million people would be put out of work. The main thing that keeps the Chinese Communist Party in power has been economic growth. Without it, China would have gone the way of the Communist dictatorships in Eastern Europe.

Look at it this way, a protracted war against Taiwan, including interruption of commercial shipping, would do far more damage to China, than to the Western nations that trade with China. While journalists can quickly whip up nightmare scenarios about Americans unable to cope with the loss of Chinese goods, the American companies have been using risk management techniques for decades to plan for these eventualities, and deal with them. This goes largely unnoticed by the general public, but it would be a major "weapon" in any future war with China.

The Chinese are aware of risk management, and many of the Chinese grad students in the U.S. learn all about. These Chinese MBEs return home and scare the hell out of the Chinese leadership by describing in chilling detail just how behind the curve China is in this department. As a result, China appears to have shifted to a strategy of subverting political parties on Taiwan, and terrorizing others, in order to eventually carry out a voluntary merger with the mainland.




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