China-Taiwan war would cost US$2 trillion

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A war between China and Taiwan would cost US$2 trillion and affect the whole world, because of the importance of the island’s chip industry and China’s integration into the world…

A war between China and Taiwan would cost US$2 trillion and affect the whole world, because of the importance of the island’s chip industry and China’s integration into the world economy.

That is the judgement of Tsai Ying-wen, President of Taiwan between 2016 and 2024, and a member of the Democratic Progressive Party (DPP). The current president, Lai Ching-teh, is leader of the DPP.

Tsai was speaking in an interview with the French news weekly magazine, L’Express.

“A crisis in the Taiwan Straits would not be confined to the region,” she said. “It would affect the whole world. The Straits are one of the most important commercial routes in the world.

“Taiwan produces about 70 per cent of the world’s semi-conductors and 95 per cent of top-end chips. It is a pillar of the AI revolution. The Chinese economy is far more deeply integrated into the global economy than that of Russia. For all these reasons, the results of a major conflict around Taiwan would be more far-reaching than those of the war in Ukraine,” she said.

A long crisis in the Straits would damage commerce, production chains and global economic growth and slow considerably technological innovation and the development of AI for many years.

“The Rhodium Group (an American research body) has estimated that the economic losses from such a conflict could reach US$2 trillion,” she said.

Beijing has said repeatedly said that the reunification with Taiwan is a matter of time. Over the last three years, the People’s Liberation Army has conducted large-scale encircling drills around the island, flown sorties by its jets and conducted live-fire exercises, coastguard enforcement patrols and gray-zone manoeuvres.

Tsai said that the countries of East and Northeast Asia were closely following the situation in the Straits and were fearful of all the intentions of China toward Taiwan.

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