BCA Research has said that the chances of a conflict between China and Taiwan have gone up to 35% in the next 12 months. They think there is now a 10% chance of a full war and a 25% chance of a smaller or limited conflict. This is more than what they had said before.
The main reason is the growing tension between the U.S. and China, especially after President Trump’s return. The U.S. is putting heavy tariffs on China, and China may see this as an attack on its economy. Because of this, China might feel forced to act against Taiwan sooner.
BCA says China could try to capture a small island near Taiwan to show it is serious. They call this a “Reckoning” moment — when trade fights become more dangerous and military action becomes possible.
They also say that if China does not make any move in the next 12 months, it may not try again for a very long time. In that case, China will likely focus on growing its economy and power in the region in other ways.
Even though the risk is higher now, BCA still believes there is a 65% chance that things will stay calm. But they are telling investors to be careful and think about protecting themselves from losses in stocks like TSMC or Nvidia.
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