Michael DeSombre says investors overestimate Taiwan conflict risk

U.S. Assistant Secretary of State Michael DeSombre said investors were placing too high a risk premium on a Taiwan Strait conflict, arguing that credible deterrence could prevent military action.

Speaking to CNBC at the Milken Institute Asia Summit in Singapore on Oct. 8, DeSombre said neither China nor the United States wanted conflict. He argued that the prospect of substantial consequences would discourage Beijing from trying to seize Taiwan.

Asked about 2027, he emphasized deterrence rather than treating the year as an established invasion deadline. U.S. officials have described a Chinese military preparedness target for that year, but Beijing has not publicly confirmed the timeline. Preparing forces for possible action does not establish a scheduled attack.

DeSombre described Xi Jinping as a rational actor who would avoid an operation that could not succeed or would carry significant consequences. He said Washington needed to maintain deterrence with its allies and partners.

Beijing claims Taiwan and has not ruled out force, while the self-governed island rejects those claims. DeSombre's comments represent his assessment of the risks, rather than an agreement by the parties to renounce military action.