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It's awful that the whole world will possibly be dragged into China's incomplete civil war because of anxious interventionistas.

Is this the tipping point for WWIII or will it be isolated enough to not spill over?

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I don't really see how it can't spill over. For example, I've been wondering why China's neighbors wouldn't see Taiwan's independence and/or absorption of Chinese naval capability as an opportunity in their territorial waters disputes and I think it's unlikely none of them would become proxies for (or get favorable arms deals from) the US or others interested in containing China.

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