16 October, 2021: Brief Update on China and Taiwan

China’s energy crisis went from bad to worse on Friday with coal prices hitting another record high. With winter now on the horizon and high oil and gas prices forecast, China is now in talks with US LNG suppliers to secure long term contracts. Beijing has been moving frantically to turn the tide in China’s favor. Domestic coal output was raised, and supplies to industries that use high levels of coal have been cut. The current energy crisis is having a detrimental effect on the Chinese economy, which is also suffering from crises in sectors aside from energy. Monthly industrial production is weakening and the uncertainty surrounding Evergrande continues on. These factors weigh heavily on investors and the Chinese government.

Meanwhile, on the other side of Taiwan Strait, the Taiwanese government wants to accelerate the delivery of F-16 fighters. 22 aircraft were purchased in 2019 and normally it takes an average of seven years for the delivery to be completed. Given the recent surge in tensions with China, Taiwan has inquired about the possibility of an early delivery.

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