There may be another reason why China is ridding itself of US currency of any form: It intends to invade Taiwan, which will likely lead to war with the US.
I wrote here a while back about my concerns for China commencing a war and what that will mean for Australia: invasion of our northern half.
But I want to rephrase that now with a new pitch, mostly to highlight my concern. We are at war with China now! Well, that is what China will say in the future about our present action, once the guns start firing. What we have done to plant the seeds of war with China according to them, will be the presence of Australia's battleships now in the South China Sea, along with those of the US. China's official position now on the areas of the SCS that surrounding nations are in dispute with, is that 'China has no plans of expansionism, because those areas of the SCS that other nations are in dispute with us, already belong to China.' Such is their arrogance and their intentions of supremacy.
Little wonder then that they are so pissed with little Australia, who thinks it can prevent China from securing what belongs to them.
There is only thing preventing China from securing what she believes belongs to her: the presence of the US Western Pacific Battle group (and little Australia). But things are changing back home in the US, and the US fleet on the wrong side of the Pacific may not be there forever. It may, fully or partially, get withdrawn home by the infighting that is likely to break out soon in the US. If this happens, China will immediately take Taiwan. Let's call it a three day war.
What then? I believe that northern Australia is at risk of invasion, when China, after securing the SCS, will come to secure its assets here, that is, those assets that it has legally purchased or leased, and that will be denied once war begins. After all, it is Australia that will have started this war, according to China, and in their mind, they will have every right and ability to secure what 'rightfully' belongs to them.
Anyway, before a few more words on that thesis, here is a little recent economic piece. Readers may be surprised to learn that it is not only China who believes that war is coming. There is a link to a report from the US military. But if I'm not wrong, Australia is also beginning its preparations.
"All war ends in military war. Currency, economic, whatever the name. Its resolution is a reset through violent means. The current fray over the South Sea is based on natural resources that China wants access to. The War paper herein is based in large part on the failure to rectify that economic situation."
https://www.marketslant.com/articles/war-china-thinking-through-unthinkable
At this point of the discussion, critics may suggest that there are good reasons why China will not make war, and especially invade Australia:
The US will not allow it to happen. However, the US may not be in a position in the near future to protect Taiwan. Furthermore, there is no guarantee that the US will win the Taiwan war. China has a larger fleet and military hardware there. Yes, it is considered inferior, but history has shown that the stronger never always wins.
China has no need to invade Australia to secure its assets here when they already have full access to them. But China will lose its assets here when it declares war on Taiwan and its allies. Then China will come to secure those assets.
China cannot take northern Australia because Australia and its allies will prevent it. I don't think there is a credible military strategist who would believe this. Australia has an extremely small defense force, and its plans to rebuilt it are a generation away (French submarine completion 2040's, ditto air force). Yes, Australia has a reputable fighting ability and hits above its weight, but never on its own soil. Its proven record in battles are far from home and never tested in defending a land size far beyond its military capacity. Australia cannot fully defend its northern half without significant assistance.
If Australia's European allies were to assist, Putin will commence sabre rattling in Europe, not to mention the new aggressive road that Turkey has begun that Putin will support. No, we will not be able to fully rely on our European brothers in arms.
Let's all hope that the US holds itself together, because if they don't, the balance of world power will change for the worse very rapidly.
https://www.google.com/search?q=chinese+troops+marching+in+Moscow+2020&rlz=1C1AWFC_enAU855AU855&source=lnms&tbm=isch&sa=X&ved=2ahUKEwiv2-mB1PbrAhXA7HMBHT9aD60Q_AUoAXoECA0QAw&biw=1366&bih=657
Photo of the 2020 victory day parade of when Russia defeated Germany in WW2. But wait, those are Chinese troops! Yes, they march well in step in Moscow.
The above thesis can be argued for and against in terms of economic arguments, resources, or expansionism. But in my mind, the best way to consider the possibility of war with China is to consider the worst of human nature, and little comes close to revealing that than communism and dictators who will go to any means to achieve their objectives. The CCP represents such a case.
How do markets react in times of war?
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