Fourth Taiwan Strait Crisis

While everyone is focusing on Taiwan island:

AUG4 - PLA drones fly over Kinmen for the first time

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China Taiwan Net August 4th U.S. House of Representatives Speaker Nancy Pelosi visited Taiwan in disregard of China's opposition. The People's Liberation Army will conduct a series of joint military operations around the island. According to Taiwan's "Zhongshi News Network", a PLA drone flew over the Kinmen and Beiding areas in the middle of the night yesterday (3rd). For the first time, drones entered Kinmen.

The "Kinmen Defense Command" of the Taiwan Army stated today that unidentified aircraft were found in the Kinmen and Beiding areas yesterday evening, and they should be unmanned aerial vehicles after comparison and analysis. The department claimed that, in accordance with standard operating procedures, flares were fired to "warn and drive away," while maintaining combat readiness and implementing covert actions.

Colonel Shi Yi, a spokesman for the Eastern Theater Command, previously stated that starting from the evening of August 2, the Eastern Theater Command of the Chinese People's Liberation Army will carry out a series of joint military operations around Taiwan Island and conduct joint air and sea operations in the sea and airspaces of the northern, southwest, and southeastern Taiwan Island. During the training, long-range live ammunition fire was conducted in the Taiwan Strait, and a constant-guided fire test was organized in the eastern waters of Taiwan Island. This action is a solemn deterrent against the recent major escalation of the negative actions of the United States on the Taiwan issue, and a serious warning to the "Taiwan independence" forces seeking "independence

Source in Chinese:

@Patchwork_Chimera

How long do you reckon Taiwan can hold out for if they are under a full naval and air blockade before their military stops becoming a threat?

Latest update on the positions of various aircrafts around Taiwan, with around 1 hour 45 minutes remaining till the commencement of the exercise.



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NeutralWarrior said:

While everyone is focusing on Taiwan island:

AUG4 - PLA drones fly over Kinmen for the first time

---------------------

China Taiwan Net August 4th U.S. House of Representatives Speaker Nancy Pelosi visited Taiwan in disregard of China's opposition. The People's Liberation Army will conduct a series of joint military operations around the island. According to Taiwan's "Zhongshi News Network", a PLA drone flew over the Kinmen and Beiding areas in the middle of the night yesterday (3rd). For the first time, drones entered Kinmen.

The "Kinmen Defense Command" of the Taiwan Army stated today that unidentified aircraft were found in the Kinmen and Beiding areas yesterday evening, and they should be unmanned aerial vehicles after comparison and analysis. The department claimed that, in accordance with standard operating procedures, flares were fired to "warn and drive away," while maintaining combat readiness and implementing covert actions.

Colonel Shi Yi, a spokesman for the Eastern Theater Command, previously stated that starting from the evening of August 2, the Eastern Theater Command of the Chinese People's Liberation Army will carry out a series of joint military operations around Taiwan Island and conduct joint air and sea operations in the sea and airspaces of the northern, southwest, and southeastern Taiwan Island. During the training, long-range live ammunition fire was conducted in the Taiwan Strait, and a constant-guided fire test was organized in the eastern waters of Taiwan Island. This action is a solemn deterrent against the recent major escalation of the negative actions of the United States on the Taiwan issue, and a serious warning to the "Taiwan independence" forces seeking "independence

Source in Chinese:

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I knew it!

siegecrossbow said:

I knew it!

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There is an easy way for China to save face then. Get one of those VTOL drones we’ve seen on Shandong and get it to land briefly on Taiwan and take off before someone could fetch it. Capture whole thing on video. Worst case scenario would be a drone getting shot down if they decide that flare won’t cut it.

ACuriousPLAFan said:

Latest update on the positions of various aircrafts around Taiwan, with around 1 hour 45 minutes remaining till the commencement of the exercise.

View attachment 94835

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So what does this signify? No change? Basically no one gives a shit?

siegecrossbow said:

There is an easy way for China to save face then. Get one of those VTOL drones we’ve seen on Shandong and get it to land briefly on Taiwan and take off before someone could fetch it. Capture whole thing on video. Worst case scenario would be a drone getting shot down if they decide that flare won’t cut it.

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beijing doesnt seem too bothered with the save face thing. i think its one of those stereotypes that some "strategists" mistook for actual weakness and thought that they could somehow influence China's behavior by goading it into certain actions to "save face".

Or perhaps GT and the other Chinese state commentators needed to convince everyone that China was planning to shoot down Nancy's plane to make a play similar to the rejection-then-retreat technique from psychology that's often found in sales:




On the state and diplomatic level, people are relieved the "worse case" outcome didn't occur and retreated to what is perceived as a lower cost settlement: giving China a pass to conduct military drills off the island's near coast that would have been unthinkable months ago - no diplomatic protests, no sanctions, no threats of sending USN carrier groups to defend Taiwan, etc. Had China managed to diplomatically call off Pelosi's flight, they would had a minor diplomatic win. But now, they managed to set a precedence that allows them to change the territorial status quo in a strategic way. (Page is from Cialdini btw, highly recommended reading).

For those of us in the financial markets and watching FX/Bond moves on Monday/Tuesday, we would have seen a massive spike up in US Bond rates as China's central bank frantically sold off US Treasuries(lowering price, therefore driving up yield) and a signifiant weakening of USD as they "dumped" USD after seeing what was done to Russia. But we saw no major deviations in both UST and FX rates, meaning China's central bank was not preparing for any "fireworks"


UST 3M rates - essentially flat.



USDCNY:

HereToSeePics said:

On the state and diplomatic level, people are relieved the "worse case" outcome didn't occur and retreated to what is perceived as a lower cost settlement: giving China a pass to conduct military drills off the island's near coast that would have been unthinkable months ago - no diplomatic protests, no sanctions, no threats of sending USN carrier groups to defend Taiwan, etc.

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“If you say the room is too dark, and you want to put a window onto a wall, people will not allow you to do so. But if you suggest tearing the whole roof off, then they will compromise and put the window in the wall.” - Lu Xun

(It’s kinda funny, this is originally used by Lu Xun to describe the Chinese mentality)

HereToSeePics said:

Or perhaps GT and the other Chinese state commentators needed to convince everyone that China was planning to shoot down Nancy's plane to make a play similar to the rejection-then-retreat technique from psychology that's often found in sales:

View attachment 94831


On the state and diplomatic level, people are relieved the "worse case" outcome didn't occur and retreated to what is perceived as a lower cost settlement: giving China a pass to conduct military drills off the island's near coast that would have been unthinkable months ago - no diplomatic protests, no sanctions, no threats of sending USN carrier groups to defend Taiwan, etc. Had China managed to diplomatically call off Pelosi's flight, they would had a minor diplomatic win. But now, they managed to set a precedence that allows them to change the territorial status quo in a strategic way. (Page is from Cialdini btw, highly recommended reading).

For those of us in the financial markets and watching FX/Bond moves on Monday/Tuesday, we would have seen a massive spike up in US Bond rates as China's central bank frantically sold off US Treasuries(lowering price, therefore driving up yield) and a signifiant weakening of USD as they "dumped" USD after seeing what was done to Russia. But we saw no major deviations in both UST and FX rates, meaning China's central bank was not preparing for any "fireworks"


UST 3M rates - essentially flat.
View attachment 94840


USDCNY:
View attachment 94841

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This actually make sense (aftermath of course), not only US, Chinese economy also suffered during the first half of the year, the pandemic, especially locking down Shanghai had hurt China hard, the latest Caxin PMI, manufacture is very surprisingly only 49, which put them in the concession, so I think from Chinese point of view, they also like to take a break, especially after Xi chatting with Biden.

Also, world was expecting a 100B import tax cut months ago but only 10B was issued, so could this be a chance to issue more tax cut in sometime later this year? Like Sep or early Oct?