Amidst rising tensions between China and Taiwan, influential investor Kyle Bass has asserted that the United States holds significant economic power over China, capable of influencing the outcome of the geopolitical conflict.
Bass, a prominent hedge fund manager, took to X (formerly Twitter) to express his views on the situation. He responded to a post by Elbridge Colby, who expressed skepticism about the ability of democratic countries to support Taiwan against China. Bass countered that the U.S. controls China’s access and ability to use the USD globally, effectively holding the reins of China’s economic lifeline.
He further stated that the U.S. demonstrated its economic power by breaking Russia’s economy during the Cold War, leading to the fall of the Soviet Union. He believes the U.S. could similarly exert pressure on China.
Bass highlighted China’s heavy reliance on imports, which are paid for in USD. He suggested that by sanctioning China’s state-owned enterprises and banks, the U.S. could potentially cripple China’s economy overnight. This action would disrupt China’s access to essential resources like crude oil, liquefied natural gas, and food, all of which are paid for in USD.
Bass’ comments underscore the potential economic implications of the ongoing political tensions between China, Taiwan, and the U.S. They highlight the role of the U.S. in influencing the geopolitical landscape through its control over the global financial system.
While Bass’ views are his own, they contribute to the broader discourse on the complex geopolitical dynamics at play. His comments serve as a reminder of the economic ramifications that could potentially arise from the escalating tensions in the Taiwan Strait.
