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Chinese attack against Taiwan would cause global economic chaos

World's 3 largest economies likely to get involved and war could come 'sooner rather than later'

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Military exercises in Taiwan in 2021. 

Military exercises in Taiwan in 2021.  (AP photo)

TAIPEI (Taiwan News) — A Chinese invasion of Taiwan will not only impact the semiconductor supply chain but might cause global economic chaos, according to an opinion piece published by Bloomberg News Friday (June 24).

Columnist Hal Brands argued such a crisis would make Russia’s war against Ukraine look minor in comparison. He also said a Chinese invasion was more likely than most assumed, and could come “sooner rather than later.”

If the United States becomes involved in the conflict, this will mean a conflict between the world’s two largest economies, and if Japan joins in to help Taiwan and the U.S., then the top-three global economies will all be directly affected, CNA reported.

Such a conflict might involve a long drawn-out fight for control over the seas and the air, with missile attacks targeting Taiwan but also U.S. bases in the West Pacific, according to Brands. In such a war, it would be inevitable that major economic areas would be affected, including shipping lanes used by one third of the world’s shipping.

Washington and its allies would try to use economic and financial sanctions to try and silence China’s war machine, while Beijing would seize the assets of U.S. firms doing business in China, Brands said.

As Taiwan supplied 90% of the world’s most advanced semiconductors, any war involving the country would have severe repercussions on the global manufacturing of phones, computers and cars, he added.

The lesson to be learned from the war in Ukraine was that a local or regional conflict could have a major economic impact in an interconnected world, Brands concluded.