China will put Taiwan on ‘back burner’ after ‘scary’ Russia sanctions: Bill Browder
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As the Russian invasion of Ukraine upends global politics and whipsaws markets, eyes have turned to Taiwan as the next possible site for a similar conflict.
The island of nearly 24 million residents, which sits about 100 miles east of China and hosts the world's leading semiconductor manufacturer, has for years faced threats of an incursion from its powerful neighbor. The crisis in Ukraine has elevated concern, giving rise to an ominous catchphrase: “Today Ukraine, Tomorrow Taiwan.”
However, instead of increasing the likelihood of a Chinese attack on Taiwan, the invasion of Ukraine and the global sanctions regime that followed have put such an operation on the "back burner," says Bill Browder, an asset manager who for years specialized as an investor in major Russian firms.
"The Chinese are equally malicious actors in the world," says Browder, the CEO of Hermitage Capital Management and a longstanding critic of Russian President Vladimir Putin.
"The coordinated financial attack that the West has executed against Russia — I think it's so scary that the Chinese probably won't, if they were eyeing up Taiwan to do something similar, I think they put that on the back burner," he adds.
A U.S. delegation to Taiwan, led by former Chairman of the Joint Chiefs of Staff Mike Mullen, on Wednesday reaffirmed its support for Taiwan and its opposition toward "any unilateral changes to the status quo," Reuters reported.
Taiwanese government officials have downplayed parallels between Ukraine and Taiwan. Soon after Russia initiated its invasion, Taiwan’s President Tsai Ing-wen characterized the circumstances faced by Taiwan as "very different," the Washington Post reported. A Cabinet spokesperson said it's "inappropriate" to describe Taiwan as the next site of conflict, the Post found.
China, a Russian ally, said last month that Taiwan "is not Ukraine," noting Beijing's longstanding claim of sovereignty over the island.
In 1949, Chinese Nationalists fled the country and took refuge in Taiwan, leaving China under Communist rule and establishing a separate government on the island. Nearly 50 years later, in 1996, Taiwan held its first direct presidential election, capping a years-long shift toward democracy. Mainland China is Taiwan's top trade partner.
Since 1979, the U.S. has recognized Taiwan as part of the People's Republic of China but remains a key ally and arms supplier for the island.
A conflict in Taiwan would cascade across the global economy, as supply chain disruptions continue to snarl global trade and a global sanctions regime on Russia casts uncertainty over the world's long-term economic outlook.
In the late '90s and early 2000s, Browder’s firm delivered strong returns by exposing corruption at major Russian companies, bringing about company shake-ups, and boosting share prices. In 2005, Browder was denied re-entry to Russia and later became the victim of a Russian government scheme to undermine his firm, he says.
Sergei Magnitsky, a lawyer hired by Browder to investigate Russian corruption, was arrested and died in Russian custody.
Speaking to Yahoo Finance, Browder predicted that Russia will seek financial support from China as it tries to mitigate sanctions.
"Now that the West has completely cut off Russia from the financial markets, Putin is going to have to go begging for money," he says.
"I think the Chinese will provide money on highly usurious terms," he adds. "It'll be like borrowing money on a credit card."
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