Geopolitics and Markets Review 21st November 2022:

The G20 fallout saw Xi confront Trudeau. This was about what was a private conversation between the two that Trudeau leaked to the media. The Chinese are known for their privacy in relation to foreign policy. They keep their cards close to their chest. We’re seeing it now with the COVID restrictions easing. and There is uncertainty about when it will come to an end, and when we’ll see China rejoin the global trade markets.

One aspect of great news from the G20 was the cooperation in the meeting between Biden and Xi. Biden discussed that they wanted to avoid a war with China and that they need to work together. As I mentioned last week, communication is key in resolving any tensions. This is a very good sign of geopolitical tensions between the two biggest powers in the world reducing. The most recent CCP conference pointed towards strong strategic interests as a priority. One of these priorities is reunification with Taiwan. The elephant in the room will always be relevant in US-China relations. Taiwan is a US ally, but its location is so close to mainland China.

The CCP has the People’s Liberation Army (PLA). They will want the PLA to be more experienced before attempting any reunification with Taiwan by force. Hopefully, it doesn’t come to an aggressive act of war and any conclusion occurs in which both sides are happy, and few people get hurt. We currently see Hong Kong operate under the one country, two systems approach. China said Taiwan could operate under the same ideology.

China has been interested in reunification with Taiwan since the 1950s. I wrote a thread on the history of Taiwan here.