China is probably not going to invade Taiwan, and it is nowhere near the threat it is made out to be. From James Rickards at dailyreckoning.com:
Geopolitics play a major role in the outlook for global economies. But more importantly, today, we must look at the world through the prism of geoeconomics.
What is “geoeconomics”? Obviously, it’s a portmanteau from the words geopolitics and economics. There’s nothing new about considering those disciplines in the same context.
Wars are geopolitical and are often won through industrial capacity, which is primarily economic. Economics and global strategy have always been entwined. What is new is the idea that economics are not just an adjunct of geopolitics, but are now the main event.
This does not mean that warfare is over or that military prowess no longer matters… It means that the major powers in a globalized age will base their calculations on economic gain and loss, and will use economic weapons not as ancillaries, but as primary weapons.
This change was described at the beginning of the new age of globalization by strategic thinker Edward N. Luttwak in a 1990 article titled“From Geopolitics to Geo-Economics: Logic of Conflict, Grammar of Commerce.”
Luttwak wrote that the end of the Cold War and the start of globalization meant that armed conflict was too costly and uncertain for great powers. Economic interests would now be the arena for great power conflict.
Luttwak wrote, “Everyone, it appears, now agrees that the methods of commerce are displacing military methods – with disposable capital in lieu of firepower, civilian innovation in lieu of military-technical advance and market penetration in lieu of garrisons and bases.”
