“Bloomberg” agency warned of the repercussions of a military confrontation over Taiwan on the global economy. The agency stated that the impact of such a confrontation, if it occurs, would exceed previous geopolitical crises and tensions.
According to the agency’s estimates, the economic cost of a military conflict over Taiwan could reach approximately 10 trillion dollars, surpassing the impacts of the Ukrainian crisis, the COVID-19 pandemic, and the global financial crisis of 2007-2008.
In a report published today, Tuesday, “Bloomberg” said, “A war over Taiwan would be extremely costly in terms of bloodshed and material losses, and the cost of the conflict would be about 10 trillion dollars, which is about 10% of the global Gross Domestic Product (GDP).”
The agency noted that conditions conducive to a potential crisis have been set in light of the strained relations between China and the United States, the increasing economic and military influence of Beijing, and the growing sense of national identity in Taiwan.
“Bloomberg” described the elections in Taiwan, scheduled for January 13, as a potential flashpoint. The agency outlined two possible scenarios for the development of events, taking into account semiconductor supplies, shipping disruptions, and trade tariff wars.
In the first scenario, which involves a Chinese operation against Taiwan dragging the United States into the conflict, the global economy would lose about 10.2% of its GDP in the first year of the crisis. Taiwan would lose 40% of its GDP, China would lose 16.7%, and the United States would lose 6.7%.
In the second scenario, which includes China imposing a blockade on the island of Taiwan, the global economy’s loss would be 5% of its GDP in the first year. In this scenario, Taiwan’s economy would decline by 12.2%, the Chinese economy would drop by 8.9%, and the American economy by 3.3%.
The situation around Taiwan significantly escalated after the visit of the former U.S. House Speaker Nancy Pelosi to the island in early August 2022. China, which considers Taiwan one of its provinces, condemned the visit as supporting Taiwanese separatism and conducted extensive military exercises.
