"Butterfly Effect: China’s Real Target Is Taiwan"

Of course it is.
From OZY, May 28:

WHY YOU SHOULD CARE

For Xi Jinping, the new controversial law for Hong Kong is part of a bigger plan to restore his credibility at home and send a message to Taiwan and the West.

U.S. Secretary of State Mike Pompeo on Wednesday said Hong Kong is effectively “no longer autonomous” from mainland China. National Security Adviser Robert O’Brien has said Washington might impose sanctions on China. And Beijing says American threats are signs of a “new Cold War.”

All of this rhetoric is rooted in a proposal for a controversial law, unveiled last week at China’s National People’s Congress. The proposal bill, which will now be drafted by a smaller committee, would bypass Hong Kong’s semi-autonomous legislature in allowing the mainland to use military force to crush “subversive activity” and “terrorism” on the island. It comes months after pro-democracy protesters in Hong Kong successfully blocked an extradition law.

But Beijing’s moves aren’t only about Hong Kong. Its real target is Taiwan, and political legitimacy in mainland China for President Xi Jinping, whose credibility has taken a beating over his handling of the coronavirus crisis. It’s a high-stakes game drawn from the playbook of Xi’s frenemy, President Donald Trump.

Taiwan’s success in handling the pandemic and global concerns over China’s opacity in the early days of the scare have bolstered the international stature of the self-governing region that has otherwise been bleeding diplomatic allies to Beijing’s economic clout in recent years. Earlier this month, the U.S., Canada, Germany, France, the U.K., Japan, Australia and New Zealand lobbied to try and get Taiwan a seat at the World Health Organization. Beijing — whose “One China” policy means it won’t deal with countries or agencies that diplomatically recognize Taiwan — has expectedly pushed back. But the proposal is still on the table, only postponed for now.

Trump, in an angry letter this month to WHO Director-General Tedros Adhanom Ghebreyesus, claimed that Taiwan’s heath authorities had warned the UN agency of “human to-human transmission of a new virus” as early as Dec. 31 — though that’s not true. Meanwhile, France has promised to sell Taiwan weapons. And at press briefings, White House officials have been seen wearing masks labeled “Made in Taiwan.”

For all its bluster, China knows it can’t hope to regain Taiwan as a part of the motherland anytime soon. But it also can’t afford to see the self-ruled territory gain greater diplomatic weight. So it’s responding with its own stern messages — both direct and indirect.

On the one hand, it is planning military drills for later in the summer that will simulate the takeover of the Pratas — Taiwanese islands in the South China Sea. On the other hand, it is using the proposed security crackdown in Hong Kong to warn moderates in Taiwan against escalating tensions with Beijing. To the U.S., China is signaling an implicit trade off: The more Washington tries to needle Beijing by strengthening ties with Taiwan, the more Xi will try and impose his own writ over Hong Kong. Let’s not forget, China’s National People’s Congress is a rubber-stamp parliament — if it wanted to, it could pass the Hong Kong law in minutes. For the moment, Beijing appears to be testing the waters.... 

...MORE

The National People's Congress passed the bill the same day this was written. 
Our thinking (and The Diplomat's), Vietnam first:

May 16, 2019
China Will Attack Vietnam
Oh sure, now that General Giap is dead.*
From The Diplomat:

Derek Grossman is a senior defense analyst at the nonprofit, nonpartisan RAND Corporation. He formerly served as the daily intelligence briefer to the Assistant Secretary of Defense for Asian and Pacific Security Affairs at the Pentagon.

Vietnam Is the Chinese Military’s Preferred Warm-Up Fight...
At some point, the Chinese military will need to test its new capabilities – and Vietnam is likely the preferred adversary....

*****

*From April 11's "Philippines President Duterte Threatened Beijing with Military Action":

When the Chinese stopped laughing they reflected and gave thanks it wasn't Vietnam making the threat....

***

...The Vietnam line is in reference to the fact that General Võ Nguyên Giáp, possibly the greatest general of the 20th century, defeated in turn, the French empire, the U.S.A. Cambodia and China in 1954, 1975, 1978 and 1979 respectively.

That last conflict was the result of China's invasion of Vietnam in an attempt to force Vietnam out of Cambodia which Vietnam had invaded in 1978, putting Pol Pot and the Kmer Rouge génocidaires out of business. It didn't work, Vietnam stayed in Cambodia until 1989.
The General died in 2013 age 102.

And that's a wrap for today's Beyond the Trade War mini-serial.
June 4, 2019 
Vietnam Rising: "US-China trade war pushing Vietnam’s manufacturing industry to capacity"
A major piece on the country The Diplomat says will be the testing ground for China's military, prior to an invasion of Taiwan. See last month's "China Will Attack Vietnam".

Throw in Vietnam's undeveloped rare earth resource base, tied with Brazil for #2 in the world (combined they match China) and the risk it poses to China's lock on prices and Vietnam has suddenly gotten very interesting.
Oh, and China is still smarting from being unable to achieve their goals during the 1979 invasion of Vietnam....