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Why China Does NOT Want a Thriving Taiwan

Let me tell you a dirty little secret about China. It’s not just about Taiwan being a “runaway province.” China hates Taiwan for one terrifying reason: Taiwan proves the Chinese people don’t need the Communist Party to have prosperity, technology, or global respect.

Beijing isn’t scared of Taiwan’s army. It’s scared of Taiwan’s ideas. Because if 23 million Chinese people across the strait can run a thriving democracy, what’s stopping 1.4 billion mainlanders from asking: “Why can’t we have that too?”

The CCP’s Worst Nightmare

In The Narrow Corridor, economists Daron Acemoglu and James Robinson argue: Freedom is rare. It only survives when there’s a balance of power between state and society. On one side: chaos and failed states. On the other: totalitarian control. Freedom lives only in the middle.

China? It’s nowhere near the middle. It’s a Despotic Leviathan. The CCP controls everything — even your private thoughts.

Taiwan Walked the Narrow Corridor

Forty years ago, Taiwan looked a lot like China. Martial law. One-party rule. But then civil society pushed back. Step by step, Taiwan built a vibrant democracy.

Today, Taiwan proves that Chinese people can have freedom. That democracy isn’t a “Western idea” — it’s universal. And this is what terrifies Beijing.

Taiwan destroys the CCP’s favorite propaganda line: “Chinese culture is incompatible with democracy. Chinese people need authoritarianism to survive.” It’s a scam narrative to justify dictatorship. But Taiwan proves them wrong every single day.

Why the CCP Can’t Stand the Comparison

Look at the numbers: Taiwan’s GDP per capita is 3x higher than China’s. Taiwan makes 90% of the world’s advanced semiconductors. Taiwan ranks among the freest societies on Earth. And it does all this without a CCP.

Meanwhile, China is drowning in censorship, ghost cities, real estate bubbles, and surveillance.

Taiwan is like a Ferrari parked next to China’s busted bicycle. And Xi Jinping can’t stand the comparison.

The CCP’s Existential Fear

Authoritarian regimes fear internal collapse most of all. The CCP survives by keeping its people weak and divided. But Taiwan’s very existence plants a dangerous idea: “If Taiwan can do it, maybe we can too.”

This is why Beijing calls Taiwan a “renegade province.” Why it floods social media with trolls. Why it threatens war every election cycle. It’s not about territory. It’s about control.

I’ve walked the streets of both Taipei and Beijing. The difference is night and day. Whenever I visit Taiwan, I think: “This is what China could be… if it ever escapes the CCP.”

So next time you hear Beijing scream about “reunification,” remember: It’s not a family reunion. It’s a cover-up. Taiwan isn’t just fighting for its own survival. It’s fighting for the soul of an entire civilization.

Question for you: What happens when 1.4 billion people finally see the truth in that mirror?

Hedge Fund Founder | Portfolio Manager | YouTube Commentator | Newsletter Author

Ken is the portfolio manager of the YCC International Value Fund, LP, a hedge fund positioned to capitalize on China’s economic unraveling and the global restructuring of supply chains. He runs the fast-growing KenCaoMacroLens YouTube channel, where he explains complex economic and geopolitical shifts for investors, policymakers, and the broader public. He also authors The China Crash Newsletter, covering China’s decline, the rise of Japan and Taiwan, and the forces reshaping Asia.

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Ken Cao

Ken Cao

Hedge Fund Founder | Portfolio Manager | YouTube Commentator | Newsletter Author
Ken is the portfolio manager of the YCC International Value Fund, LP, a hedge fund positioned to capitalize on China’s economic unraveling and the global restructuring of supply chains. He runs the fast-growing KenCaoMacroLens YouTube channel, where he explains complex economic and geopolitical shifts for investors, policymakers, and the broader public. He also authors The China Crash Newsletter, covering China’s decline, the rise of Japan and Taiwan, and the forces reshaping Asia.

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