Speaker 1: Well, as he had mentioned um China extending its drills
Speaker 1: near Taiwan following Nancy's Pelosi Nancy Pelosi's visit to the
Speaker 1: territory that was a week ago. Now drills ongoing joining
Speaker 1: us now, as Steven Angel Bloomberg's TV chief North Asia correspondent, Stephen,
Speaker 1: what's the situation around Taiwan at the moment. Yeah, So
Speaker 1: we were going to have those four days of military exercises,
Speaker 1: which we did have from Wednesday to Sunday following Nancy
Speaker 1: Pelosi's exit from the island after her controversial visit, and
Speaker 1: they did have these six exclusion zones encircling Taiwan, and
Speaker 1: that's where we had a number of different exercises with
Speaker 1: the p l A, Navy, the Air Force as well
Speaker 1: as rocket teams. A number of different missiles were fired,
Speaker 1: ballistic missiles as well as claims by Japan that a
Speaker 1: few of them actually went over the island of Taiwan
Speaker 1: and also into Japan's Exclusive Economic Zone or e Z.
Speaker 1: So it was set up for being quite an inflammatory
Speaker 1: a week. Obviously that was supposed to conclude on Sunday.
Speaker 1: But again we're hearing from the military of China that
Speaker 1: they've either extended or launched new exercises. As we just
Speaker 1: heard from Ed that anti submarine operations are underway as
Speaker 1: well as well as air to see strikes. And again
Speaker 1: Taiwan would call this the most provocative by the p
Speaker 1: l A and decades. We'll have to see where it
Speaker 1: goes from here, Steve, as you know, I mean, the
Speaker 1: big concern here is on the invasion front, right that
Speaker 1: that the mainland Chinese forces would actually invade Taiwan. Are
Speaker 1: people saying that this is essentially a dress rehearsal under
Speaker 1: these circumstances, I think they're using this opportunity to fine
Speaker 1: tune their tactics obviously, and to poke little holes in
Speaker 1: the fence around Taiwan. Uh see where there's vulnerabilities. And
Speaker 1: for their sake, Taiwan is doing the same thing. They're
Speaker 1: seeing the tactics being used by the p l A
Speaker 1: forces and where they need to bolster their defenses as well.
Speaker 1: I would be the last wanted to say that Nancy
Speaker 1: Pelosi's visit would spark an invasion of Taiwan. I think
Speaker 1: there's been a standoff in a status quo for a
Speaker 1: long time for very good reason. Neither side if you will,
Speaker 1: would want war right now. But I think they're just
Speaker 1: testing each other right now. Yeah, to what degree, both
Speaker 1: Pelosi's visits and what we're seeing from the Chinese military
Speaker 1: at the vironment, it's really tailed to domestic audiences rather
Speaker 1: than address rehearsal for an invasion. Oh, he absolutely, absolutely,
Speaker 1: if you're talking about shij and PINGI absolutely has a
Speaker 1: domestic audience to cater too. I think when Nancy Pelosi
Speaker 1: actually landed on the island, there was an outcry from
Speaker 1: ultra nationalists on way bar in the Chinese social media
Speaker 1: that the Beijing did not do enough well in the
Speaker 1: last you know, six days or so. They've been trying
Speaker 1: to escalate, if you will, the military exercises and show
Speaker 1: a sign of strength, if you will, against the moves,
Speaker 1: and there's been some economic moves as well, But just
Speaker 1: how far can China go without also damaging itself as
Speaker 1: well on the economic front. So if you're she she
Speaker 1: in Ping and you're dealing with difficulties on the economic
Speaker 1: front visa vie the property market, you're looking at the
Speaker 1: People's Congress in the fall, do you exploit this as
Speaker 1: a way of building nationalism? I think obviously everything they
Speaker 1: do kind of tries to build up nationalism and support
Speaker 1: for the Communist Party. I think that's Is it a distraction,
Speaker 1: It's well, it depends on how you do it. I mean,
Speaker 1: if you are seen by the populace in China as
Speaker 1: losing the optics game, then then it is a distraction.
Speaker 1: But if you also say, you know, vilify Nancy Pelosi,
Speaker 1: villify the u S efforts to destabilize the status quo,
Speaker 1: then they can use it to their advantage, especially as
Speaker 1: you say at ahead of this Party congress where seed
Speaker 1: in Ping will very likely get that third consecutive term.
Speaker 1: A number of other countries Australia you're included, have described
Speaker 1: China's actions after Pelosi's visit as an overreact. Shouldn't do
Speaker 1: you think the US and its allies got a bit
Speaker 1: caught off? God by just how long these drills have
Speaker 1: been going on for now? Well, Joe Biden was asked
Speaker 1: about that today and he expressed confidence that China would
Speaker 1: not escalate beyond just these drills. As I said, the
Speaker 1: economic sanctions so far a pretty miniscule. Again, the big
Speaker 1: economic trade between the two is on integrated circuits and
Speaker 1: China absolutely needs those integrated circuits from Taiwan, so cutting
Speaker 1: that off would do itself there you know, some harm um.
Speaker 1: But again Joe Biden also kind of refused when he
Speaker 1: was asked, did did Nancy Pelosi cause this tension these
Speaker 1: military games? And he refused to falter. Really he's saying
Speaker 1: that was her decision to go. But I'm sure there's
Speaker 1: been a lot of internal dialogue and maybe some uh
Speaker 1: conversations if you will, behind the scenes. Is like that
Speaker 1: probably wasn't such a good idea. Well, it's interesting you
Speaker 1: bring up the semiconductor story, I mean where Taiwan is
Speaker 1: concerned and the product that needs to go to the mainland.
Speaker 1: What has commercial shipping been like in the Taiwan Straight
Speaker 1: over the last week. Well, there was big concern obviously
Speaker 1: because these six exclusion zones, or as state media in
Speaker 1: China called them, danger zones. Uh many of them, or
Speaker 1: at least three of them I could see on the map,
Speaker 1: are in the Taiwan Straight uh key shipping lane. Obviously
Speaker 1: for global shippers, some have had to divert around the
Speaker 1: east side of the island rather than go through the
Speaker 1: Taiwan Straight But shipping tracking data that Bloomberg has seen
Speaker 1: shows that four of the p l A so called
Speaker 1: danger zones are being traversed right now by merchant ships.
Speaker 1: So it seems as though the threat, at least according
Speaker 1: to many of the shipping lines, has diminished. How does
Speaker 1: all of this get received domestically in Taiwan, not just
Speaker 1: Nanci Pelosi's visit, the military flaxing that's going on from China,
Speaker 1: you know, how do how do the ordinary Hiwanese feel
Speaker 1: about all of this? Yeah, that that's an interesting question.
Speaker 1: I think it probably um they've they've been dealing with
Speaker 1: this threat for many, many years. I lived in Taiwan
Speaker 1: in the early or to mid nineties, and there was
Speaker 1: there was these kinds of things. In fact, six there
Speaker 1: was an eight month long standoff called the Third Taiwan
Speaker 1: Straight Crisis. Two different US aircraft carrier groups were sent
Speaker 1: to the area. One the Nimbits even passed through the
Speaker 1: Taiwan Straight There was serious saber rattling going on, and
Speaker 1: Taiwan got on with its business. And I think they're
Speaker 1: still doing that as well. There's gonna be a little
Speaker 1: bit of economic pain, but even the Ministry of Finances
Speaker 1: chief statistician giving a press conference, the Chief statistician, essentially saying,
Speaker 1: because of the China's reliance on electronics and integrated circuits
Speaker 1: and the like, we expect very little chance of China
Speaker 1: imposing stricter economic sanctions that would be the biggest pain.
Speaker 1: That the military threat has always been there. But yes,
Speaker 1: these are very provocative war games, obviously, Stephen, good stuff. Oh,
Speaker 1: by the way, very quickly, what do we know about
Speaker 1: the way in which this is being represented in Chinese
Speaker 1: press outlets. Oh, they're absolutely using it to their advantage
Speaker 1: as they would. I mean, the most of the media
Speaker 1: outlets are controlled by the Communist Party, so they'll they'll
Speaker 1: they'll be using this to their advantage. Obviously. Always a pleasure, Steve,
Speaker 1: thanks so much for being with this Bloomberg. Stephen Engel,
Speaker 1: who is our chief Asia TV North Asia TV correspondent,
Speaker 1: joining us from Hong Kong