China vs Taiwan

Is anyone looking at their portfolios through the lens of China invading Taiwan? If so, what changes are you making if any? This is seemingly inevitable and more disruptive than the Ukraine invasion.

China does not want to invade Taiwan any more than it wants to invade Hong Kong. Instead, it will try to work within the country to install sympathizers within the government that will pave the way for China to gain more influence and effectively take over the government without military action.

Who agrees it will be disruptive but in different ways and the only way to plan for it is to either accept it will impact your portfolio or get out of the country all together, but even then, it will impact your other investments as well, so really, there’s no escaping it no matter what you do…

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From my viewpoint that has been a possibility since at least the 1980’s and so no, not any more concerned about it now than I was then. No portfolio changes needed. Rewards are great than the risk.

China is much more engaged in international trade than Russia. Sanctions would be much more difficult to enforce. Many, many US companies depend on parts or products made in China. Higher tariffs might be the limit of a reaction on our part.

China suspects we would be unlikely to come to Taiwan’s aid. Not with US soldiers anyway. Weapons to Taiwan already raises objections. The same problem with Ukraine. Might result in escalation of tensions or even military response.

Taiwan Semiconductor is the one most people worry about falling into Chinese hands. They seem to be building production capacity elsewhere. If Taiwan falls to China, the company might split.

I think we all recognize an element of risk in any investments in China. And that includes numerous multinational companies with operations there sometimes including manufacturing.

Most of us are advised to keep an eye on these investments. As part of a diversified portfolio, probably ok. But don’t over do it. Are you willing to take the gamble?