Quant Padawan

Stretch is for everyone. $STRC

some probably too simple thoughts on Taiwan x China Taiwan is only strategically useful to China if they can take control of the island while keeping the fabs running. If by invading they destroy the fabs then they have cut themselves off from the US (and perhaps more importantly) European markets, at great military cost, taking on ongoing political liability (since the Taiwanese are likely to remain quite restive), all for a relatively small island that is no longer geostrategically important. If they could take the island and keep the fabs going then they would win an important geostrategic chip, that they could use in all sorts of useful leveragable ways against Western governments. But it's much easier to destroy the fabs than keep them running. Even just cutting off power for any prolonged period would probably cause irreversible damage. A rational Taiwan, knowing this, would signal (and has signalled) that an invasion would destroy the fabs (and if imminent would probably commit to destroying the fabs themselves conditional on an invasion, so as to forestall the attempt.) It's difficult to conduct a kinetic war, without disrupting underlying infrastructure, and Taiwan may even site its military assets alongside the fabs to make it impossible for China to win without losing. Net, a Taiwan invasion for China probably poisons the entire geostrategic logic of doing so. They get all of the downside without materially improving their position. Compare to the Hong Kong strategy--the slow choking embrace--which provides a much cleaner path to winning control of the assets. It's clearly the more strategically optimal path. So then, why all the noise about invading or preparing for an invasion of Taiwan? Three interpretations: 1) the strategically optimal path is not the politically optimal path for Xi vis a vis retaining power. This is the darkest interpretation. A political leader, backed into a corner, makes a move that is disastrous for himself and for the world, because he thinks it will narrowly bridge his way across eroding support. It's hard to see, however, how even an irrational actor would perceive benefit in violently grappling for a chalice that will surely spill in the attempt to wrest it. 2) China thinks it can kinetically occupy Taiwan without disrupting the fabs. I suppose this is a perhaps more catastrophically likely interpretation of their stance, and would be consistent with other vainglorious military interventions that have run against the rocks of reality throughout history. That Taiwan, as a rational actor (or even a minority within Taiwan) could credibly threaten to pre-emptively destroy the fabs before they are taken, seems like it should dampen whatever optimism there is tho. 3) China is posturing for invasion to increase its negotiating leverage on other vectors as well as for internal domestic signalling of strength. Isn't this far and away the most economical explanation for all of the noise? What am I missing?