Is Nancy Pelosi Visit to Taiwan the grand plan of the American Deep State to cause Soviet Style collapse of CCP China?
The US-Taiwan relations got a boost in the month of July 2022 with passing of The National Défense Authorization Act for Fiscal Year 2023, which laid the framework for American partnership with Taiwan and mandated the American President to invite the Island military to join US-led drills in the Indo-Pacific region. Historically Taiwan has been a key American partner in the Indo-Pacific due to shared democratic values with deep commercial trade & investment links in semiconductor, critical supply chains, education, science & technology. The Americans had agreed in principle to the One-China policy in 1972, recognizing People’s Republic of China as sole legal government of China, while carrying on unofficial ties with Taiwan. In 1979 the Americans formally recognized the People’s Republic of China to establish formal ties with Communist nation to contain the rise of Soviet influence in the Asian subcontinent at the start of the Soviet-Afghan War during the year. The USA continued unofficial relations with Taiwan, with the American Congress enacting Taiwan Relations Act. The Act provides for the United States to provide Taiwan with arms to defend itself. The Act did not commit America to defend Taiwan in the event of invasion by China and did not fully recognize Taiwan as a separate nation. The People’s Republic of China considers Taiwan an inalienable part of mainland and renegade province with the intention of uniting the island with all possible means.
The status quo of 1979 to formally recognize PRC over Taiwan by the President Carter Administration seems to be dead in the event of the Russia-Ukraine War. China has used coercive means of sending its military aircrafts over Taiwan Air Défense Identification Zone, forcing nations to delegitimize and restraining them to operating embassies, denying participation in international multilateral institutions, threatening economic sanctions and weaponizing its trade to their advantage. The Chinese wolf warriors have often raised red flags whenever lawmakers from around the world crosses the Taiwan Strait centreline. The visit of US Congressional Speaker Nancy Pelosi to Taiwan drew strong response from Beijing. China termed the Pelosi visit as a gross interference in its internal affairs and warned of very serious developments and consequences. The foreign ministry spokesperson added that the mainland will take resolute responses and strong countermeasures to defend its sovereignty and territorial integrity. The Speaker’s visit left the Communist nation red-faced and reacted with the Eastern Theatre Command of the Chinese military carrying out exercises in the waters and airspace encircling the Island. The Americans responded by sending their military carrier USS Ronald Reagan in the region.
The untimely visit of Nancy Pelosi has all the ingredients to rile up the tensions in the region. The response from Beijing will be supposedly strong, with the US and its allies getting dragged into conflict. In May 2022 this year, The U.S announced the formation of the Indo-Pacific Economic Forum with partners including Australia, Japan, South Korea, India and others. The aim was to counter China economically and provide Americans with a leadership role in the Indo-Pacific region. The strategic partnership between India and America is growing with the arrival of a US Navy ship to dock in Chennai for repairs and ancillary services. The militaries of both countries will hold joint military exercises in Uttarakhand for high altitude warfare training near the disputed border of China. The American military is also conducting joint combat exercises in Indonesian waters, with Australia, Japan and Singapore joining the drill to counter the growing maritime activity in the Indo-Pacific region. The Americans are unable to deliver the arms to Taiwan which include M109A6 Paladin self-propelled howitzers, 66 F-16 fighters, 250 Stinger surface-to-air missiles due to ongoing war in Ukraine.
The strong military response from mainland China leaves the island nation Taiwan vulnerable to Chinese threat. The aggressive response is required to divert the attention of citizens from the economic turmoil happening in mainland China. The second largest economy is faltering with the multiple pillars of the Chinese economy crumbling with GDP figures being revised down to 4.3%. The real estate bubble burst came to light last year with corporations Evergrande, Sunac Holdings and others defaulted on their interest commitments. The realty sector is responsible for 30% of the Chinese Economy. The property prices are nosediving and bonds of the corporate sector are plummeting. The home buyers are refusing to pay their mortgage loans and have spread across 100 cities and for more than 300 projects and the non-payments are impacting the country banking industry. The pan nation movement against the prepay model system to acquire property has intensified and puts $350 Billion at risk. The Chinese authorities have responded by clamping down at protest and non-payment of mortgages could pose a serious challenge for the realty industry whose debt stood at $5.2 Trillion according to financial services company Nomura. The housing crisis has led to fear with hundreds of anxious bank deposit holders protesting against the accounts frozen in the central province of Henan and Anhui. The Chinese authorities responded by enforcing zero covid policy and deploying tanks outside banks preventing people from withdrawing their savings. The depositors are scared that the government may confiscate their hard-earned money in the freezed accounts and the confidence in mainland China’s 4000 small and medium sized banks which control $14 Billion deposits is waning.
Apart from Internal financial difficulties, China has lent around $1.4 Trillion to around 40 under developed countries in Asia, Africa and Latin America. Many countries are unable to service high interest costs with Beijing opting for deferred payments, reduction of interest rates, write offs. The default from countries like Pakistan, Argentina, Belarus, Egypt, Mongolia, Nigeria, Turkey, Ukraine and Sri Lanka, with junk ratings threaten to grow into a full-blown financial crisis. The Chinese holdings in US Treasury Bonds fell below $1 Trillion for the first time in decades and the authoritarian regime of Xi Jingping is working with Russia for De-dollarization and creating a non-dollar financial system. Russia’s SPFS and China’s CIPS payment messaging system have been linked in wake of banning Russia from the SWIFT network. These measures challenge the status of the US dollar being a universal reserve currency for countries to hold their foreign exchange reserves and international trade settlement. At present around 59% of global foreign exchange reserves are held in USD and 74% of international trade settlements happen in USD. All these are bound to stage with countries developing alternative payment mechanisms as a hedge against the dominance of the U.S dollar.
The United States deep state consisting of lobbies from Pharma, Oil, Arms, Big Tech, Wall Street would like the status quo of the dollar being reserve currency. And the visit of Nancy Pelosi will aggravate the financial crisis externally and internally for CCP ruled mainland China. With a high Debt to GDP ratio of over 300% the Lehmann moment of China seems to have arrived. The American Deep State had caused similar problems to the erstwhile USSR and the oil production decline and oil price shock caused the final breakdown of the Soviet Union economy. And the repeat of Soviet Union Style collapse of CCP China cannot be ruled out. Nancy Pelosi visit to Taiwan is a possible larger game plan to cause systemic financial collapse of China which has been battered by financial crisis. The internal unrest will grow with time as the problem for the reality sector seems to be never ending. The implosion of China is nearing marking the endgame of CCP.
Image sourced from internet.