Ahead of Taiwan’s presidential election on Saturday, Bloomberg has a piece out today that assesses the global economic impact of a war over Taiwan at $10 trillion. The news outlet put together a model that estimated the Year One effects of an outright Chinese invasion and of a blockade of the country.
Other findings from the model are also worth noting, such as a 5 percent global GDP impact in the event of a successful Chinese blockade and the hits to China’s own economy in either scenario (16.7 percent in the event of a war and 8.9 percent following a blockade).
As Bloomberg reports in the piece, it seems that the strategic pause that Washington and Beijing appear to have agreed to at November’s Biden–Xi meeting makes both of these possibilities less likely. A senior Chinese Communist Party official, Liu Jianchao, claimed during an event at the Council on Foreign Relations today that Beijing would never start a war, cold or hot. (The obvious thing to note here is that Liu’s job is to put a globally acceptable face on a fundamentally dishonest regime with revanchist intent.)
The $10 trillion figure puts a price tag on what just about everyone already assumed would be a cataclysm. It’s a reminder that the mutual drive to, at least temporarily, turn down the temperature can’t stand in the way of meaningful progress toward bolstering Taiwan’s defenses and America’s capabilities in the Indo-Pacific.