China’s ambition to take over Taiwan by force is one of the most serious threats to global peace and security. If China were to launch a military invasion of Taiwan, it would not only trigger a war with the United States and its allies, but also disrupt the world economy and endanger the lives and assets of millions of people.

One of the possible scenarios that could precede or accompany a Chinese invasion of Taiwan is the nationalization of US companies that operate in China or have significant exposure to the Chinese market. China could seize or expropriate the assets of these companies, such as factories, offices, data centers, or intellectual property, as a way to weaken the US economy, deter US intervention, or retaliate against US sanctions or actions.

Some of the US companies that could be targeted by China are Apple, Starbucks, Nike, Tesla, Wynn Resorts, Advanced Micro Devices, Broadcom, Smithfield Foods, AMC Entertainment, and Legendary Entertainment. These companies rely heavily on China for their supply chains, markets, or assets, and they could face significant losses or disruptions if China were to take over or nationalize their operations in China.

If China were to take over US companies, it might target those that have strategic or technological value, such as telecommunications, energy, or defense sectors. For example, China Oceanwide attempted to buy Genworth Financial, a US insurance company, in 2016, but the deal was blocked by US regulators in 20201. China has also acquired several US tech companies, such as Ingram Micro, Motorola Mobility, and General Electric (GE) Appliances. China might also nationalize US companies that operate in China or have significant assets or market share there, especially if there is a conflict over Taiwan or other issues. For example, China could seize or expropriate the assets of Apple, which relies heavily on Chinese suppliers and consumers, or Starbucks, which has over 4,000 stores in China.

China’s actions might be similar to how Venezuela nationalized several US companies in the oil and gas, agriculture, and fertilizer sectors under the leadership of Hugo Chavez. For example, Venezuela nationalized ExxonMobil’s assets in 2007, leading to a long legal dispute that was settled in 20154. Venezuela also nationalized a rice mill operated by Cargill, a fertilizer plant owned by Fertinitro, and an agricultural supply company called Agroislena.

Apple and other companies could try to negotiate with the Chinese government or seek legal recourse through international courts or arbitration. However, this might not be very effective, as China could ignore or reject any claims or rulings that are unfavorable to them. Apple and other companies could try to diversify their supply chains and markets by moving some of their production and operations to other countries, such as India, Vietnam, or Mexico. However, this would be very costly and time-consuming, and might not be feasible in the short term. Moreover, China could still retain or destroy the assets that are left behind.

Apple and other companies could try to lobby their governments or allies to impose sanctions or retaliation measures against China, such as tariffs, bans, or boycotts. However, this could also backfire, as China could retaliate in kind, leading to a trade war or a military escalation that could harm both sides.

What can you do to protect yourself and your investments from this potential scenario? Here are some suggestions:

• Diversify your portfolio. If you own stocks or bonds of US companies that have ties to China, you should consider diversifying your portfolio and reducing your exposure to China-related risks. You can invest in other sectors or regions that are less dependent on China, or in alternative assets that are more resilient to geopolitical shocks, such as gold, cryptocurrencies, or commodities.
• Monitor the situation closely. You should keep yourself informed of the latest developments and trends of the US-China relationship, especially regarding Taiwan. You can follow reputable news sources, such as the New York Times, the Wall Street Journal, or the Council on Foreign Relations, or subscribe to newsletters, podcasts, or blogs that provide analysis and insights on the US-China situation, such as the National Interest, Politico or the Diplomat.
• Prepare for contingencies. You should have a plan for how to deal with possible emergencies or disruptions that could result from a US-China conflict over Taiwan. You should have enough cash, food, water, medicine, and other essentials on hand, as well as backup power sources, communication devices, and security measures. You should also have a way to access your financial accounts and documents, and to contact your family, friends, and colleagues in case of a crisis.

Investing in US companies with ties to China is not a simple or straightforward decision. It requires careful research, analysis, and judgment, as well as awareness of the changing and uncertain environment. You should be prepared for any possible outcome and act accordingly.

U.S. companies with ties to China:

Wynn Resorts – a casino operator that gets 75.2% of its revenue from its Macau operations.

Advanced Micro Devices – a chipmaker that gets 39.4% of its revenue from China, where it sells processors and graphics cards.

Broadcom, another chip-maker that gets 48.2% of its revenue from China, where it supplies components for smartphones and other devices.

Smithfield Foods, a pork producer that was acquired by China’s WH Group in 2013 for $7.1 billion, making it the largest Chinese takeover of a US company.

AMC Entertainment, (everyone’s favorite MEME stock) the largest movie theater chain in the US, which was bought by China’s Dalian Wanda Group in 2012 for $2.6 billion.

Legendary Entertainment, a film studio that co-financed movies such as “Jurassic World” and “Warcraft”, which was also acquired by Dalian Wanda Group in 2016 for $3.5 billion.

These are just some of the US companies that have ties to China, either through ownership, revenue, or operations. There are many others that have varying degrees of exposure to the Chinese market.

IN THE NEWS

Journalist Leaks China’s Plan to Nationalize US Companies Before Taiwan Invasion

A journalist who wishes to remain anonymous has leaked a recording of a conversation between two high-ranking Chinese officials that reveals China’s plan to nationalize the assets of several US companies operating in China before launching a military attack on Taiwan. The recording transcript shows that Beijing has decided to take over or nationalize the assets of some of the US companies that have high exposure to China, such as Apple, Starbucks, Nike, and Tesla. The recording also shows that the officials are preparing for possible US retaliation, such as sanctions, legal actions, or military strikes. The recording ends with the officials saying that China’s goal is to achieve the “reunification” of Taiwan with the mainland by the end of 2024, the centenary of the founding of the People’s Republic of China. A similar report was noted here in a recent leak by an unnamed journalist.