"Econ 102" with Noah Smith and Erik Torenberg

Why Pax Americana is Dying and What Happens if China Attacks Taiwan

4 snips
Oct 18, 2023
Noah and Erik dive into the complexities of the Israel-Gaza conflict and the shifting dynamics of American diplomacy. They analyze how authoritarian regimes impact GDP and the potential misuse of foreign aid. The discussion shifts to the looming threat from China, especially regarding Taiwan, and the implications of a potential U.S.-China standoff. As Pax Americana wanes, they explore the need for companies to diversify supply chains and prepare for future global conflicts, igniting concerns about a new world order.
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ANECDOTE

China's Growth and Peace

  • China's economic growth has made it more powerful, but not necessarily more peaceful, as seen in its actions towards Taiwan.
  • However, a poorer China under Mao was arguably more volatile and prone to conflict.
INSIGHT

US Involvement in Taiwan Conflict

  • If China attacks Taiwan, the US is likely to enter the war, not solely for democracy or TSMC, but due to potential attacks on US bases.
  • China might preemptively strike US bases to avoid vulnerability during an invasion.
ADVICE

Supply Chain Audit

  • Companies should diversify their supply chains beyond China to prepare for potential disruptions during a Taiwan conflict.
  • Auditing supply chains to identify indirect reliance on Chinese components is crucial.
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