A China critic warns of Beijing’s intention to engage in conflict with the west and seize Taiwan

Prominent China hawk Kyle Bass expressed to CNBC on Tuesday his belief that Chinese President Xi Jinping is determined to “bring war to the West,” and that an invasion of Taiwan is likely to happen before the end of 2024.

Bass, founder and chief investment officer at U.S. investment firm Hayman Capital Management, stated that the West, particularly Wall Street, is too preoccupied with the perceived economic unviability of such an attack.

However, Bass argued that, much like Russian President Vladimir Putin, whose actions in Ukraine have isolated Russia from the West, Xi is not solely concerned with the potential economic consequences. Bass urged listeners to pay attention to Xi’s words, stating, “If you listen to what [Xi] says, I believe he will end up acquiring, reacquiring Taiwan by force by the end of next year.”

When asked about the common belief that Xi would not engage in such actions due to economic considerations, Bass responded, “We on Wall Street love to think he would never do that because it doesn’t make economic sense. We have to stop thinking that way and literally start listening to what the man says.”

The Chinese Communist Party did not immediately respond to CNBC’s request for comment on Bass’ statements. However, it has previously stated that the issue with Taiwan is an internal affair.

China’s president, when confirming his third term in March, highlighted the need to “promote peaceful development of cross-strait relations” with Taiwan, while emphasizing opposition to “external forces” and pro-independence movements.

Taiwan has been governed independently of China since the end of the civil war in 1949, but Beijing considers the island as part of its territory.

The dispute over Taiwan is a global flashpoint, with most in the West recognizing it as a self-governing nation. However, Beijing has called for “reunification” with Taiwan, describing its status as an “unalterable” part of China in a white paper.

China’s foreign ministry has also emphasized that Taiwan is an issue of Chinese “sovereignty and security” and warned against foreign interference.

Bass asserted that Xi is now primarily focused on reacquiring Taiwan, stating, “You can hear it in all of his speeches since 2017.” He compared Xi’s approach to that of Putin, highlighting that both leaders prioritize their intended outcomes over economic concerns. Bass noted that if Putin cared about economics, Russia would not have invaded Ukraine.

As the world’s second-largest economy, China’s role in international relations and global markets is widely recognized as surpassing that of Russia. This leads to increased caution surrounding the sensitive Taiwan issue.

Bass outlined three signals indicating an approaching conflict between China and Taiwan.

Firstly, Bass mentioned China’s intensifying military drills around Taiwan, which military experts believe are nearing completion. It should be noted that CNBC could not independently verify this claim.

China has stated that its drills are in response to meetings between Taiwanese President Tsai Ing-wen and several U.S. representatives, which Beijing considers a red line. Taiwan has also increased its own military exercises in recent times.

Secondly, Bass pointed out the sweeping mainland changes implemented by Beijing in preparation for a potential war. This includes a new counter espionage law that expands the government’s power to combat perceived threats to national security.

Lastly, Bass mentioned China’s increased production of marine diesel fuel, despite a slowing economy. This can be interpreted as a signal of heightened demand for marine fuel. Reuters has reported that China has doubled the number of licensed bonded marine fuel dealers since 2020, although exports of low-sulfur oil declined in 2022.

Bass concluded by stating, “There are so many signals that all point in the same direction. Everything you’d expect them to be doing, they’re actually doing. Unfortunately, none of us want war, but I’m going to tell you, Xi’s going to bring war to the West.”