Academy Securities Geopolitical SITREP
Geopolitical Flashpoints: The Macroeconomic Impact of the Geostrategic Landscape
Table of Contents:
Hong Kong Protest Background: 00:00 - 4:33
Mainland China’s Response: 4:34 - 11:28
The View from Taiwan: 11:29 - 15:43
North Korea and China: 15:44 - 19:09
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Key Points:
- For the last several years, the market has failed to fully recognize that Hong Kong is a part of China - it isn’t completely independent.
- If the U.S. were to respond to the crisis, it would be with more difficult terms around trade.
- Much of the anti-government sentiment and protests began in April in response to an extradition bill.
- China and Hong Kong are part of “one country two systems”:
- The Hong Kong system and “basic law” protects civil freedoms of Hong Kong citizens.
- The protesters wish to highlight the deterioration of these freedoms and protections.
- The protests are not hierarchical or organized.
- The protesters and their recent actions risk alienating the population to their cause.
- China’s growing global influence could impact its response.
- China’s deft social media and AI capabilities are important considerations when evaluating these protests.
- Two U.S. Navy port visits have been canceled amid protests and accusations of U.S. involvement.
- The Chinese People’s Armed Police - not Army - has massed on the Hong Kong boarder.
- China is walking a fine line trying to diminish the impact of the protests while using limited force.
- An escalation by mainland China would result in more disruptions to trade negotiations with the U.S.
- Taiwan is watching what happens in Hong Kong very closely:
- The events in Hong Kong could lead to more anti-Chinese/anti-communist sentiment in Taiwan.
- The U.S. has approved new military sales to Taiwan and China has responded by increasing military operations around Taiwan.
- North Korea remains economically dependent on China and China remains a consideration as we evaluate the ongoing negotiations with North Korea and its behavior.
