Issues Which Keep Me Awake At Night - Outlook 2023: Rhymes And Reasons Redux
It is widely acknowledged that history does not repeat itself. But there is still much we can learn from it. Indeed, only by grasping the ‘rhymes’ and the reasons behind them can policymakers and investors alike hope to understand the challenges we face today and where they lead.
The first two substantive sections of my Outlook 2023 offer a reminder of the original ‘Rhymes And Reasons’ report published on 19 September 2022 (IWKMAAN No 22/03). Thereafter, just as 22/03 drew on presentations I made and discussions I had during my September marketing in Europe, the later sections of this update owe much to my four-city sweep through northeast and southeast Asia during the first half of December.
With very few exceptions, clients with whom I met on this latest trip only wanted to discuss three subjects, ie:
(b) China domestic, and (related)
This is not to say that there will be no other political and geopolitical ‘issues’ which will weigh on investors in 2023; simply that these three are — unsurprisingly — major preoccupations just now. Furthermore, barring yet another ’grey rhino’ (see below), or even a ‘black swan’, they are likely to remain so. Thus, these are the issues on which I have largely concentrated in this report.
“A generation which ignores history has no past — and no future."
Robert A Heinlein (1907-1988)
Sadly for political commentators and analysts, some of the ‘quotes’ most apposite to our profession are apocryphal. One such, widely attributed to Mark Twain, is “History does not repeat itself but it rhymes”. I suspect that the origin of this lies in something Mr Twain wrote in 1874 as follows:
“History never repeats itself, but the Kaleidoscopic combinations of the pictured present often seem to be constructed out of the broken fragments of antique legends.”
More poetic but not really suitable for today’s sound bite/short attention span world. Nevertheless, the meaning is clear; and the sentiment is, in my view, unerringly accurate.
One way or the other, there is much for both policymakers and investors alike to learn from history. However, and critically, it it is not only generals who have a propensity to ‘fight the last war’. We therefore need to grasp the reasons behind today’s ‘rhymes’ and adjust our responses accordingly, rather than simply relying on ‘solutions’ which may have been appropriate in the past but which are not valid to current specifics.
The End Of An Era, Not ‘History’
“Wir erleben eine Zeitenwende. Und das bedeutet: Die Welt danach ist nicht mehr dieselbe wie die Welt davor.”
German Chancellor Olaf Scholz, 27 February 2022
History may not repeat itself but I shall, albeit briefly, and with no apology for recalling an overarching theme I have been promoting since early 2008. My specific justification for this is that history tells us that what we are seeing in the world today, ‘big picture’, is exactly what we should expect at this stage in the geopolitical cycle, ie the end of a period of hegemony — in this case, not only the US unipolar moment but also, and at least as relevant, the demise of the Soviet empire.
As Ronald Findlay and Kevin H O’Rourke identified in their 2007 ‘Power and Plenty’, hegemonies are generally good for economic growth (the Soviet bloc arguably being an exception). They remove barriers to trade, economies grow and societies get richer. The corollary of this is that when a hegemony declines barriers to trade go up; economic growth slows; what we refer to today as nationalism swells; and all too often, though not always, there is war — what Professor Graham T Allison termed Thucydides’s trap based on the 431-405BC Peloponnesian War.
The key point here is that Vladimir Putin, presiding over a Russian/Soviet empire in severe decline since 1989, has effectively triggered a variation on Thucydides’s trap by invading Ukraine and starting what amounts to a proxy war with the West, which may itself be in decline too but which remains powerful in relative terms at least.
This takes me to a second misrepresented author, ie Francis Fukuyama. The title of his 1992 book ‘The End of History and the Last Man’ owes far more to marketing, in my view, than it does to the book’s substance. The following quote is both illustrative and particularly pertinent:
“Experience suggests that if men cannot struggle on behalf of a just cause because that just cause was victorious in an earlier generation, then they will struggle against the just cause. They will struggle for the sake of struggle. …if the greater part of the world in which they live is characterised by peaceful and prosperous liberal democracy, then they will struggle against that peace and prosperity, and against democracy.”
Europe/Ukraine: Staying The Course?
“A new report from the IEA found that Europe could face a natural gas shortage of 27 billion cubic meters in 2023. That’s equivalent to nearly 7% of the region’s annual consumption.”
Julia Horowitz, CNN, 12 December 2022
In the face of pretty much exactly what Mr Fukuyama anticipated, if there was a bigger surprise in 2022 than Russia’s invasion of Ukraine, it has been the strength and unanimity of the EU’s response. For sure, reaching agreement on the nine packets of sanctions rolled out to date has not always been either quick or easy. But Russia’s President Vladimir Putin was far from alone in failing to anticipate such cohesion and determination on the part of Europe.
The turn of the year has seen much time and effort devoted to penning scenarios for how the war is likely to unfold in 2023. My personal inclination is to side with a view expressed recently by NATO Secretary-General Jens Stoltenberg that we are in for “a long haul”. However, my bet is that Mr Putin is only now learning not to underestimate Europe. It is only in the past couple of weeks that he seems to have accepted that ‘General Winter' is not about to come to Russia’s rescue again, as strongly suggested by the shift in the Kremlin’s public messaging clearly aimed at preparing Russians for a long war.
Even before the current winter turned out to be unusually mild (to date, at least) I doubted very much that his hopes would be fulfilled. Yes, the winter will still be tough for Europe (though nothing like as hard as it is already proving for Ukraine itself). However:
Nevertheless, unless the war comes to an unexpectedly sudden and decisive conclusion, the current winter is far from the end of the story. Mr Putin may still be nurturing hopes for winter 2023/4 when conditions may be more in his favour. A poll of economists published by the FT on 28 December underlined the near-consensus that:
“The eurozone economy is set to shrink next year as high inflation and potential energy shortages drag down output and trigger a reversal in the fortunes of the labour market…”.
Furthermore, gas reserves depleted this winter will need to be restocked at, possibly, even higher prices than we have seen in 2022 as flows from Russia are further reduced and Chinese demand rises on a post-covid economic uptick, even if, as now seems likely, the arrival of spring sees European reserves at or around record highs for the time of year. It is hardly surprising, therefore, that ING Bank’s Carsten Brzeski (quoted in the aforementioned article) is far from alone in believing that “next winter will be even more challenging”.
Russia: Sow The Wind, Reap The Whirlwind
“A continued, grinding conflict is most likely”
Tony Barber, Financial Times, 31 December 2022
Nor is it going to be an easy time for Russia. As I wrote in September, sanctions are working, albeit slowly. Expectations of an immediate economic collapse were never realistic. But the Russian economy without western technology, with foreign companies pulling out, and losing many of its brightest and best who are also upping and leaving the country, will gradually grind lower. As Holger Schmieding, Chief Economist at Berenberg Bank, wrote in a 17 August note to clients:
“With Putin at the helm, Russia looks set to turn more and more into an inefficient petro-state controlled by a kleptocracy with roots in the secret service. Like the Soviet Union before, Russia will fall ever more behind the advanced world.… In the case of Russia, which is waging a much more intense war and is facing much tougher Western sanctions, the process will likely be faster.”
As for Mr Putin himself, will he still be in the Kremlin in, say, five years time? Or even five months from now? I don’t know. But what I do know is that if he isn’t it will most likely not be because of popular unrest but through a ‘palace coup’ which would bring with it a new president with a similar world view who might just be more capable of directing Russia’s war effort than Mr Putin has been. On the other hand, there is also a respectable argument that a Russian president, even a hardliner, who didn’t start the war may actually find it easier to come to the table and broker a deal to end it. Nevertheless, it needs both parties to agree a peace and, to judge from Ukrainian President Volodymyr Zelenskyy’s December speech to the US Congress inter alia, there seems little prospect of Ukraine willingly negotiating as long as parts of its territory remain under occupation.
United States: Reversing Relative Decline (For Now?)
“As 2022 comes to an end and President Biden reaches the halfway point of his first term in office, 43% of Americans approve of the job he is doing, according to polling averages. But the president will face a new reality next week when Republicans take over the House majority.”
Judy Woodruff, PBS anchor, 28 December 2022
If the war does indeed drag on through next winter, the event thereafter which is most likely to force Ukraine to the table may be the prospect of former US President Donald Trump returning to the Oval Office. After all, US leadership under President Joe Biden has been the cornerstone of the West’s response to Russia’s invasion of Ukraine and it is hard to believe that we would have seen anything remotely similar had Mr Trump won the 2020 election.
If the 2016 election should have taught us anything it is that it would be very unwise to dismiss Mr Trump’s prospectsin 2024. However, the outcome of the 2022 midterms and the ongoing slide in his approval ratings, not to mention the veritable flood of legal cases against him, suggest that he faces an even tougher battle than he did in 2016 even to prevail in the primaries. And if he were to secure the Republican nomination, his ability to get the vote out for the Democrats(!) would likely see him beaten even by Mr Biden who now looks very likely to stand for a second term, be it for better or worse from his party’s perspective.
To be fair to Mr Biden, despite his parlous approval ratings he has had a notably — and unexpectedly — successful term in office to date. However, domestically at least his impressive winning streak must now largely be at an end. Nevertheless, and another lesson from 2022, thanks in significant part to the actions of America’s adversaries (ie not just Russia but also China and even Iran) rather than his own, Mr Biden has reestablished a measure of US leadership in the international arena. In other words, in relative terms at least ‘America Inc’ has just had rather a good year; furthermore, there is no obvious reason to suppose this will not continue through 2023.
However, we should not get too carried away. First, this is a remarkable shift relative to how the world looked two years ago as Mr Trump was trying to cling onto office; thus, as I have already intimated, who’s to say we won’t see it reversed two years or so from now? Second, even if the current trend continues through to the end of 2024 the key word here is “relative”. Or, as the FT’s Edward Luce put it:
"This makes [the US] the world’s tallest dwarf rather than a giant among nations”.
China/ US: The Technology War
“Today our world is once again at an inflection point. We are in the early years of a decisive decade. The terms of our competition with the People’s Republic of China will be set….”
US National Security Advisor Jake Sullivan, 13 October 2022
Mr Luce was writing just as the US launched a new National Security Strategy, about which he opined just a few days later on 19 October as follows:
“Joe Biden this month launched a full-blown economic war on China…. America is now pledged to do everything short of fighting an actual war to stop China’s rise”.
In this second article, he also rightly referenced the draconian technology-related sanctions Washington announced against China on 7 October, which have been followed by further measures as well as pressure on key allies — notably Japan and the Netherlands — to get on board.
Technology expert Richard Windsor and I wrote about this at length in the fifth volume of our periodic Clash of the Titans series focussing on the China/US ‘tech war’; so it is not my intention to go into detail here. Suffice it say that the US, determined to contain China’s rise by hobbling its economy, will continue to escalate the technology wardespite the undoubted risks which this brings. These include the possibility that, to quote Mr Luce again, it “could prompt Xi Jinping…to accelerate his timetable for Taiwan reunification…”, more on which below.
Additionally, I should update on one particular point, ie the ongoing (and long-running) negotiations between Beijing and Washington on auditing Chinese firms listed in New York — an issue which Richard and I see as closely related to the tech war. To judge from a 16 December announcement, it appears that Richard was correct in his belief that a deal would ultimately be struck — and that I was wrong in doubting such. Despite Xi Jinping’s clear determination, at maximise the Party’s control over China’s private sector, even at significant cost to the economy, he seems to have concluded that a wholesale denial of access to New York’s deep pool of capital would simply be too damaging, probably especially for the technology sector. Nevertheless, I shall be interested to see if, in practice:
(a) Some entities currently listed in New York are forced by the Chinese authorities to follow Sinopec and CNOOC and pull out for ‘national security’ reasons; and
(b) The desire of both political parties in the US to ‘out-hawk’ one another over China will see either the Administration or lawmakers or both attempting to lock more and more Chinese tech firms in particular out of New York through new instruments and measures.
China: The Middle Kingdom Trap
“A slower-growing China will have fewer resources with which to challenge the West.”
Roger McShane, The Economist, 18 November 2022
If China’s motivation in ceding ground over audit is indeed economic, it has good reason. Similarly if, as I believe to be the case, the economy was the principal motive behind the sudden and sharp easing of the zero-covid restrictions (which, I confess, I did not believe we would see until after the end of the northern hemisphere flu season and the National People’s Congress, ie in April).
As I wrote in a note published by Heteronomics on 2 November, Ruchir Sharma, Chair of Rockefeller International, is now far from alone in believing that the point China has reached in its economic development means that (once the probable post-covid ‘spike’ is exhausted, probably around the end of 2H2023) growth targets of much over three percent per annum look increasingly optimistic. In an op-ed piece in the 24 October edition of the FT he writes:
“Growth in the long term depends on more workers using more capital, and using it more efficiently (productivity). China, with a shrinking population and declining productivity growth, has been growing by injecting more capital into the economy at an unsustainable rate.
China is now a middle-income country, a stage when many economies naturally start to slow given the higher base. Its per capita income is currently $12,500, one-fifth that of the US. There are 38 advanced economies today, and all of them grew past the $12,500 income level in the decades after the second world war — most quite gradually. Only 19 grew at 2.5 per cent or faster for the next 10 years, and did so with a boost from more workers; on average the working age population grew at 1.2 per cent a year. Only two (Lithuania and Latvia) had a shrinking workforce.
China is an outlier. It would be the first large middle-income country to sustain 2.5 per cent gross domestic product growth despite working-age population decline, which began in 2015. And in China this decline is precipitous, on track to contract at an annual rate of nearly 0.5 per cent in the coming decades. Then there’s the debt. In the 19 countries that sustained 2.5 per cent growth after reaching China’s current income level, debt (including government, households and businesses) averaged 170 per cent of GDP. None had debts nearly as high as China’s.”
He concludes as follows:
“If anything, 2.5 per cent is an optimistic forecast that plays down the risks to growth, including growing tensions between China and its major trade partners, growing government interference in the most productive private sector — technology — and mounting concerns about the debt load. China at 2.5 per cent growth has major implications for its ambitions as an economic, diplomatic and military superpower. A lesser China is more likely than the world yet realises.”
Among these implications — and as I discussed at meetings throughout my recent visit to Asia — China stands at serious risk of being caught in the middle income trap for years, if not decades, to come.
Taiwan: The Coming Storm?
“Xi Jinping may one day decide to attack or blockade Taiwan — but probably not in 2023. An invasion would be a colossal gamble.”
Gideon Rachman, Financial Times, 31 December 2022
In IWKMAAN No 22/03, I referenced at some length ‘Danger Zone: The Coming Conflict With China’ by top geopolitics experts Hal Brands and Michael Beckley. I noted that, their dramatic starting point of a Chinese assault on Taiwan on 18 January 2025 notwithstanding, the main focus of their analysis revolved around their belief that this is around the time when we are likely to see “peak China”, ie beyond this point the country goes into relative and, possibly, absolute decline thanks to NPLs, demographics, slowing productivity growth, the middle income trap, technology lag etc. I concluded as follows:
“Back in 2002, Robert Subbaraman, these days Nomura’s Chief Economist AEJ, and I coauthored a major study on China which came under severe attack for its alleged bullishness from the ‘China bears’ who were as numerous at that time as they were vociferous. And yet China’s rise since then has continued inexorably (actually exceeding our forecasts by a considerable margin) — and to the point where these days few question its seemingly imminent ascendancy over the West. For sure the ‘peak China’ thesis is open to debate. But China’s manifold and daunting internal weaknesses should not be underestimated. It may just be that Messrs Brands and Beckley are on to something and that Thucydides’s trap could be triggered not by a declining US but, and despite Xi Jinping’s massively ambitious agenda, by a declining China — thus ‘rhyming’, if you wish, with a declining Russia’s assault on Ukraine.”
Amid the myriad articles and papers I have read about China/Taiwan more recently, among the more impressive is ‘The Taiwan Long Game’ by Jude Blanchette and Ryan Hass published by Foreign Affairs on 30 December. The authors set out a compelling case for rejecting what they see (rightly) as an emerging consensus in Washington that the US “must use all its military power to prepare for war with China in the Taiwan Strait”. In so doing, they acknowledge that “there are sound rationales for the United States to focus on defending Taiwan”; but they see Taiwan “ultimately” as “a strategic problem with a defence component, not a military problem with a military solution”. Accordingly, they argue as follows:
“The sole metric on which US policy should be judged is whether it helps preserve peace and stability in the Taiwan Strait — not whether it solves the question of Taiwan once and for all or keeps Taiwan permanently in the United States’ camp. Once viewed this way, the real aim becomes clear: to convince leaders in Beijing and Taipei that time is on their side, forestalling conflict. Everything the United States does should be geared toward that goal.”
In addition to the worthiness of the “goal” they believe the US should be pursuing, there is much in their supporting argumentation to applaud, including their concern that US policy is fixated with the belief that war is inevitable — and, perhaps, imminent. However, they fail, in my view, to make sufficient of two important, and related, factors which call seriously to question the likelihood of Washington even setting such a goal, let alone being able to achieve it.
First, and as previously noted, the US is now bent on containing China's rise through what amounts to an economic war primarily revolving around technology embargoes. History (ie the oil embargo imposed by the US on Japan in 1941) confirms that this is dangerous in its own right, even discounting Taiwan's paramount importance as a source of leading edge semiconductors. And it is all the more so since the US seems to have given no thought to the ultimate objective of this policy beyond maintaining its own status as global 'top dog', ie what is its vision for China (and is it realistic)? As Edward Luce has noted, from Beijing’s perspective it looks remarkably like it may turn out to be regime change, which is, of course, patently unacceptable to the Chinese Communist Party.
Second, the authors make no mention of 'peak China'. Not only the 'tech war' but also some of Xi Jinping's own policies are set to compound the impact of the inevitable structural slowdown in growth, strongly suggesting that, in at least relative (to the US) terms, China may be approaching, or even already at, its peak powers as envisaged by Messrs Brands and Beckley. And especially if the US continues to have good years relative to its geopolitical rivals, as has been the case in 2022.
None of the above is to argue that invasion is indeed inevitable, let alone imminent. Blanchette and Hass's exploration of the risks involved for China in opting for a military 'solution' is also very persuasive. However, so is the case they make to the effect that current US policy and actions may actively be pushing in this direction by, effectively, painting Xi Jinping into a corner.
My final point on this (for now) is a clarification. Contrary to the impression I may have given in the recent past, it is not the case that I am firmly predicting an invasion of Taiwan in 2025. Rather, I believe that this is around the time when, on our current trajectory, there is likely to be good cause for real concern. However, at the same time, I acknowledge the strength of the case which was put to me while I was in Asia that Xi Jinping may be more inclined to make a move after he has secured a fourth term, ie not before 2028. On the other hand, and despite my firm belief that the probability of a Chinese invasion of Taiwan before 2025 is very low (not least thanks to the lessons Xi Jinping is learning from Russia’s invasion of Ukraine), I would not rule it out totally even in 2023 as recently proposed by US Admiral Mike Gilday.
“A grey rhino is a highly probable event with a great deal of impact which is dismissed or overlooked, perhaps because we’re not taking it seriously enough.”
Dr Jo Robertson, Rothstein Publishing, 18 September 2020
(with credit to Michele Wucker who first coined the term)
Since I read Martin Wolf’s 26 April FT article musing on the Ukraine war, in which he referenced the four horsemen of the apocalypse, ie plague, war, famine and death, I have been playing with a number of variations on this theme. The most recent of these draws on a 13 November article by Mohamed El-Ehrian for Project Syndicate from which the following is taken:
“As Michael Spence,…an expert on growth and development dynamics, pointed out to me recently, the probability of simultaneous growth, energy, food, and debt crises is worryingly high for too many developing countries. If that nightmare scenario materialises, the effects will be felt far beyond individual developing countries – and will extend well beyond economics and finance. It is therefore in advanced economies’ interest to help poorer countries reduce the mounting risk of little economic fires everywhere.”
My key point here is that the world appears to be increasingly prone to grey rhinos. Covid-19 was certainly one. And Dr Robertson’s definition above neatly sums up where I, and many others, stood on Russia/Ukraine at this point last year. While there seems to be a number of possibilities which could strike in 2023 ranging from a total crypto crash to a really serious Sino-Indian clash in the disputed border area, one I am personally watching particularly carefully is sovereign debt stress in a part of the world where real rhinos are to be found, ie here in Africa. The risks are well documented; but neutralising them appears still to be a low priority, the G20 Common Framework notwithstanding. At minimum, as David Pilling wrote in 31 December edition of the FT, “there will be debt restructurings with haircuts for investors”. Worse, even a cursory glance at the history of financial crises should be sufficient to make it clear that, in the absence of speedy and sustainable resolutions for a significant number of economies, we stand to be at risk from a ‘domino’ debt default crisis.
In sum, although Tom Standage, writing in The Economist on 14 November, was undoubtedly correct in claiming that “unpredictability is the new normal”, Mark Twain’s kaleidoscope remains a fitting analogy for what history can teach us about provoking the unpredictable grey rhino into charging. As the sovereign debt issue underlines, the biggest ‘known unknown’, therefore, is whether are we willing to look back, learn and adapt as appropriate.
Board Chairman, 30Thirty Capital
**Alastair is a Co-founder and director of Alavan Business Advisory and author of the Alavan Independent
 ‘The Gilded Age’ by Mark Twain and Charles Dudley Warner (1874).  “We are experiencing a turning point. And that means: the world after is no longer the same as the world before.”  Writing for Arab Digest in January 2022, I forecast that Brent crude would end the year between USD80 and USD90 per barrel — and then stuck to it. With Brent at USD85.91pb at close of business on 30 December, I’d like to claim some credit for this call; BUT I’d also have to own to a great deal of luck given the way in which energy markets in general were driven hither and thither by not only politics but also economics, in particular the actions of major central banks fighting inflation. We should expect more of the same in 2023 as has been underlined by the sell-off in the first week of January which has seen Brent slide back below USD80pb. So, it was therefore with no small degree of caution that in my December 2022 article for the same journal I plumped for Brent at USD100pb at the end of this year — albeit based principally on the (flimsy?) grounds that Saudi Arabia’s Crown Prince Mohammad bin Salman seems determined to put a USD100 floor in the price. For more on Arab Digest including a free trial period, please see here.  Energy expert David Sheppard’s response to the question of whether there will be blackouts in Europe is worth quoting in full, as follows: “Yes. It could happen before April if the weather is cold enough, but next winter is the bigger challenge. Though gas storage sites are now close to full, refilling them in the spring will be tough. In 2022, Russian gas flows were largely intact until June; in 2023 they will be close to zero. Liquefied natural gas will struggle to cover the shortfall. Offsetting the risk is Europe’s backwards shift from gas to coal. France’s nuclear plants should have fewer maintenance issues. But the energy system has been straining for 18 months. The risk of something breaking is increasing.” (Financial Times, 31 December 2022)  See: https://biblehub.com/hosea/8-7.htm#:~:text=For%20they%20sow%20the%20wind%2C%20and%20they%20shall,should%20produce%2C%20the%20foreigners%20would%20swallow%20it%20up.  My personal view is more likely for worse. While I think he would prevail in a(nother) head-to-head with Donald Trump, I reckon he would struggle against a younger and more competent Trump-like candidate such as Florida Governor Ron DeSantis (currently attracting a lot of media attention) or Virginia Governor Glenn Youngkin; or even against former Vice President Mike Pence or former Secretary of State Mike Pompeo, both of whom are thought to be weighing their chances. Challenged by any of these four, age may count against Mr Biden suggesting that Democrats might do well to nominate a younger candidate. This being said, if Mr Biden does run for a second term (in which case I doubt he would face a serious primary challenge) irrespective of his opponent he could improve his prospects with a change of running mate. Kamala Harris, for a variety of reasons, has failed to impress to date. However, he strongly suggested in January 2022 that, if he does run, she would be on the ticket again.  Copies of the report are available from me by email on request.  This is not to deny that the November spate of civil protest played a part in driving the dramatic change of course. However, the authorities in China are well accustomed to, and expert in, dealing with such protests. What we saw in November was classic, ie: (i) contain, (ii) monitor, (iii) record, (iv) disperse, (v) arrest and warn, and (vi) offer some concessions. The one surprise in this process was the significance of the apparent concessions, which is consistent with my view that there was something much bigger behind the easing, ie the economy. Additionally, I find credible the suggestion in, eg, The Economist, that the sudden policy change may also have been influenced by China’s losing control of the omicron variant.  For more on Heteronomics, for which I now write more or less weekly, including a free trial period, please see here.  Mr Sharma reckons that in terms of absolute GDP China may not catch the US up until 2060, “if at all”. One interesting question which came up in my various discussions is whether democracy is a precondition to escaping the middle income trap. Given the small sample size of economies which have — and the large-ish numbers of democracies which have not — I am reluctant to pass a firm view one way or the other. But it does seem likely that democracy is, at minimum, a handy attribute for economies aspiring to do so.  See here.  The context for this is another contested US election but one which is even more messy than the aftermath of the 2020 election with both candidates still vying to be sworn into office on 20 January. It is additionally relevant that Taiwan is due to hold presidential and legislature elections in 2024, which might possibly be another watershed moment.  ‘China: Gigantic Opportunities, Present Realities’, Lehman Brothers (2002).  Blanchette and Hass argue against claims that Xi Jinping has a fixed timeline, adding that the US needs to “develop a more nuanced understanding of Beijing’s current calculus, one that moves beyond the simplistic and inaccurate speculation that Xi is accelerating plans to invade Taiwan”. I agree.  I gave a presentation on this to the Berne Union in November — copies available by email on request.