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A Chinese Invasion of Taiwan Could Unleash an Economic Disaster

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U.S. Air Force Maj. Kristin "BEO" Wolfe, F-35A Lightning II Demonstration Team pilot and commander, flies an aerial performance for the 2021 Arctic Lightning Air Show, July 30, 2021, Eielson Air Force Base, Alaska. The F-35 Demonstration Team utilized F-35s from the 354th Fighter Wing in order to showcase the combat capability of the Pacific Air Force's newest F-35 units. (U.S. Air Force photo by Capt. Kip Sumner)

China Invading Taiwan Would Unleash a New Wave of Economic Uncertainty, Political Turbulence – China could be planning its own Russia-style “special military operation” in Taiwan, an island that the Chinese Communist Party insists is Chinese territory, according to reports from China.

This week, the Chinese Communist Party government declared that President Xi Jinping had laid the legal basis for the expansion of the Chinese military’s role in foreign countries. It means that the Chinese government could technically initiate invasions of foreign territory while claiming that the operations are not actually war.

According to a report by the state-run Global Times newspaper, the Chinese People’s Liberation Army now has the legal authority to “safeguard China’s national sovereignty, security and development interests.”

“Chinese President Xi Jinping, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, recently signed an order to promulgate a set of trial outlines on military operations other than war, which will take effect on Wednesday,” The Global Times reports.

“The outlines will standardize, and provide the legal basis for Chinese troops to carry out, missions like disaster relief, humanitarian aid, escort, and peacekeeping, and safeguard China’s national sovereignty, security and development interests, experts said.

The tactic seems remarkably similar to Russian President Vladimir Putin’s efforts to justify his invasion of Ukraine, first signing a decree that recognized the independence of the self-styled people’s republics of Donetsk and Luhansk in Ukraine. The Russian president also first described his so-called “special military operation” in Ukraine that soon followed the decree as a “peacekeeping” mission.

Global Economic Impact Bigger Than Ukraine War

If China goes ahead with an invasion of Taiwan, regardless of whether China officially considers it an invasion, it could have a substantial impact on global trade.

Speaking to Reuters on Tuesday, Taiwan’s top trade negotiator John Deng warned that the move would have a bigger impact on global trade than the Russian invasion of Ukraine for one simple reason: microchips.

While the Russian invasion of Ukraine has driven up the cost of fuel, with the United States and several NATO countries implementing sanctions against Russian energy, the invasion of Taiwan could worsen an already serious semiconductor shortage globally.

During the interview, Deng said that the economic impact of a Chinese invasion would be “much more significant” than the impact of the Russian invasion of Ukraine.

“The disruption to international supply chains; disruption on the international economic order; and the chance to grow would be much, much (more) significant than this one,” Deng said. “There would be a worldwide shortage of supply.”

How China Could Make the Semiconductor Shortage Worse

Taiwan presently accounts for 92% of the world’s semiconductor manufacturing capacity, and should China invade the sovereign territory, those manufacturing facilities may wind up destroyed.

Last year, American academics recommended that Taiwan threaten to destroy its own factories to deter a Chinese invasion.

Describing the move as a “broken nest” strategy, academics Jared McKinney and Peter Harris argued in a piece published in the U.S. Army War College Quarterly “Parameters” that Taiwan should prevent a full-scale war with China by threatening to destroy its own factories.

Such a move would cause significant economic turbulence, hurting the global economy including China. It would also remove perhaps the second-biggest motivating factor for China’s plans to invade.

If China calls Taiwan’s bluff, however, the move would make the global semiconductor shortage even more impactful than it already is. The global semiconductor shortage impacts virtually every industry in the world, with low-margin processors – used in toasters and washing machines – becoming harder for manufacturers to find. It doesn’t just mean a shortage of products, but higher prices for consumers.

The semiconductor shortage has hit the automotive sector the hardest, too. Ford, Jaguar Land Rover, and Volkswagen – three of the biggest car manufacturers in the world – have shut down factories over the last year, reduced vehicle production, and laid off thousands of workers.

Taiwan Warns Of Missile Strike On China

In response to the news from China, Taiwanese officials warned that the country is armed with missile systems capable of striking Chinese territory.

Speaking to Taiwanese media outlet Liberty Times Net, the president of Taiwan’s Legislative Assembly, You Si Kun, said that the country wouldn’t shy away from a conflict with China and would use its Yun Feng supersonic cruise missiles to defend its borders.

The most recent variant of the Taiwanese Yung Feng missiles is capable of striking targets as far away as 1,200 miles, meaning Taiwan could theoretically strike Beijing – just 50 miles short of the maximum range of the missile.

You told Taiwanese media that, unlike in the Russia-Ukraine conflict, China would need to cross the Taiwan Strait to invade the country, meaning soldiers would ultimately “fight on the beachhead.”

“If the landing is successful, everyone in Taiwan must be as determined to die as Ukraine,” You said. “Go out and never let China swallow Taiwan.”

Should China go ahead with an invasion of Taiwan, the country may also receive military support from the United States – not only making the conflict more dangerous but potentially worsening the economic impact of an invasion even more.

“I believe that the U.S. would help Taiwan in a robust manner far beyond what the Biden Administration is doing for Ukraine right now,” explained Harry J. Kazianis, President of the Rogue States Project and author of the book the Tao of A2/AD, a look at China’s vast military modernization. “That would put China in a position of having to consider unleashing its vast weapons arsenal against U.S. convoys and aircraft trying to bring aid into Taiwan.”

Kazianis continued: “My gut tells me Beijing would be hard pressed not to strike U.S. forces hard, going far beyond just ships and planes bringing in aid. That means actually launching a full-out assault to lay waste to U.S. command and control assets in a sort of Chinese style ‘shock and awe’ to get Washington to back down or pay a high cost.”

It is not clear, however, how seriously the Chinese Communist Party takes President Joe Biden’s repeated claims that he remains committed to the One China Policy, and his support of Taiwan’s independence.

Zhou Bo, a senior fellow at the Tsinghua University’s Center for International Strategy and Security Studies, said recently that the United States is merely paying “lip service.”

The “One China” policy is the cornerstone of Chinese-U.S. relations. It is a diplomatic recognition that there is only one Chinese government and that Taiwan is an “inalienable” part of China.

“We believe he is actually paying lip service to this One China policy,” Zhou Bo said recently. It was not clear, however, what the Chinese academic meant by “we.”

U.S. undersecretary for defense policy Colin Kahl, however, made it clear this week that any Chinese “act of aggression” in Taiwan would draw a similar response as Russia has seen over the last three months.

“Where the world is now, the Ukraine scenario is a much more likely outcome,” Kahl said.

China’s decision in Taiwan will ultimately depend on several major diplomatic, economic, and geopolitical factors ranging from the United States’ commitment to the One China Policy and the likelihood of Western military involvement in a future invasion, as well as the potential economic damage that could hit China.

Jack Buckby is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the U.K., Europe, and the U.S., he works to analyze and understand left-wing and right-wing radicalization, and reports on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society.

Written By

Jack Buckby is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the U.K., Europe, and the U.S., he works to analyze and understand left-wing and right-wing radicalization, and reports on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society.

24 Comments

24 Comments

  1. Eric-ji

    June 16, 2022 at 1:56 pm

    One China policy is a non-sensible travesty that ignores reality on the ground.

    • John

      June 16, 2022 at 2:33 pm

      Agreed….lip service.

  2. Francis Maikisch

    June 16, 2022 at 2:44 pm

    I believe this will be inevitable. Once the conflict starts I would expect the Chicoms to cut off all essential goods to the US. As our incompetent leaders over many decades have allowed almost all manufacturing to be sent to Communist China, the effect will be profound. I don’t think it will stop the US from defending Taiwan, but it will hurt on many levels. And it would most likely end the regime in China.

  3. MAGA MAGA

    June 16, 2022 at 3:44 pm

    China has shown enormous restraint over Taiwan despite extremely brazen provocations, quite possibly to bide its time while it ramps up its space weaponry and hypersonic weaponry and also due to fairly robust cross-strait economic ties that exist despite severe provocations.

    It would be extremely stupid to invade Taiwan a la Okinawa style when china now has the weapons to easily take down the 101 tower in taipei.

    Or the giant pave paws radar in north-eastern Taiwan that looks deep into the mainland.

    China didn’t act against Taiwan during the bloody Lieyu massacre incident, why would it act in face of dumb political provocations.

    Space weaponry is needed to neutralize the Pacific forces which are a far far greater threat than Taiwan.

    There’re still pictures available showing Jap soldiers in WW2 using Chinese civilians for bayonet practice, surely those things haven’t being forgotten.The Pacific forces would like to re-enact ’em if given half a chance.

  4. Rich

    June 16, 2022 at 4:09 pm

    It should be remembered that China currently sells the US over $450 billion in goods and services annually. China also holds over a trillion dollars in US debt which would be frozen if not unilaterally abrogated should there be a major conflict between the two nations. China will not jeopardize the above for political control of Taiwan. That is not to say that unification efforts won’t continue, but the Benjamins preclude open conflict against the US.

  5. Bill in Houston

    June 16, 2022 at 5:18 pm

    Hey, here’s an idea. Why don’t we start making our crap here again?

    If this doesn’t send up a flare, what will?

  6. Joey Bidet

    June 16, 2022 at 8:46 pm

    Tell me how in the hell can US resupply Taiwan in an event of China special operation? By train? By road? By sea? By air?

    Taiwan is an island…so Biden was right…US have no choice but to defend Taiwan with boots on the ground. Period.

    • JerryD

      June 18, 2022 at 2:11 pm

      Agree 100%. Don’t see any way that Taiwan could be resupplied. Taiwan needs to take a hard look at Finland’s preparedness and modify it for island defense.

  7. Steven

    June 16, 2022 at 10:10 pm

    No one ever takes into account Cyber war and what our cyber command can do.

  8. Him

    June 17, 2022 at 10:59 am

    Anyone who proposes logical reasons why China won’t attack Taiwan, forgets that totalitarian dictatorships like China, Russia and North Korea are not motivated by logic, but by a psychosis that goes all the way to being willing to destroy the entire world … if that’s what it takes.

    The difference between China/Russia and the United States is that, somewhere in the selfishness of the U.S. there nevertheless also is an American motive to make the world a better place, such as through bringing democracy.

    Many motives can be operative at the same time. Sure, the U.S. attacked Afgahnistan to get the Taliban, and even some might argue to get the oil in the Middle East or whatever imperial reasons of conquest. But when you hear the stories of Afghan women, who appreciated the new opportunities for education and careers – that were snuffer out when the Taliban gained control — somehere in there, there was also the motive of bringing good things to a society through democracy and freedom.

    That sense minimal of altruism is non-existent in the motives of Russia and China!!!!!

    I know many people will suffer indigestion at reading that. But it’s why many nations are completely comfortable with the U.S. being the sole superpower, but quiver in consternation at China taking over as the superpower. And China is totally fine with that.

    I speak as a person who has lived under Western colonialism, and appreciate that colonialism has its negatives as well as positives. Whereas conquest by China/Russia, I see zero positives.

    Freedom is built into the heart of every man and woman. Every slaves yearns for freedom. Even Chinese yearn for freedom, but they tolerate Communism as long as they can make tons of money. But the heart cry for freedom remains dormant, but never extinguished, in every human heart. The American system is roughly based on that freedom, even if it usually fails to live up to its ideals due to greed and self-interest. Whereas the Russian/China system does not even pretend to be based on freedom at all.

  9. Jacksonian Libertarian

    June 17, 2022 at 11:18 am

    China is much more vulnerable to a strategic blockade than Russia. Nothing China produces can’t be produced elsewhere with less risk. Russia can keep selling oil, China would lose all it’s world markets, 40% of its GDP.
    Also, China has to perform a massive amphibious attack in an era of “mature precision strike regime”. Taiwan has 1,200 anti-ship missiles, so China’s invasion force is likely to be sunk.

    • Him

      June 19, 2022 at 10:02 am

      Similarly the world could be more vulnerable to sanctions against China, given that around the world so many businesses and manufacturers are reliant on China-made parts and products. Also, China has a bigger manufacturing sector and could potentially supply more military hardware to its forces than Russia’s smaller manufacturing sector.

  10. Bihari Krishna Shrestha (Nepal)

    June 17, 2022 at 12:35 pm

    It is time to stop war mongering around the world.The US is effective in starting a conflict but not ending it with positive outcomes, neither for itself nor for its victims. Afghanistan Iraq and Vietnam are poignant examples. Since the world including the US acknowledges that Taiwan is an integral part of China historically, why not work towards a peaceful unification of Taiwan with China with win-win outcomes for both and the rest of the world. If China and US were to engage in full-scale conflict that would be the end of human civilization as we know it today.

    • David Chang

      June 17, 2022 at 1:24 pm

      Yes, but many people, such as The Diplomat, Atlantic Council, Brookings Institution, Hoover Institution, 1945, project 2049, think about the strategy of socialism countries by socialism, so they are wrong.

      And, Communist Parties have reason to make war, and their reason is also because of the above-mentioned wrong thought. All of them think about rational, so the reason and logic they worship is the cause of the war.

    • Joe Comment

      June 19, 2022 at 2:47 pm

      Bihari Krishna Shreshta: It is the Mainland that threatens to attack Taiwan. Taiwan does not threaten to attack the Mainland. So, who is the war-monger? If for example one of the Koreas attacks the other, would you expect the rest of the world to have no reaction?

  11. DanS

    June 17, 2022 at 3:34 pm

    How will China invade Taiwan? It would be nice to know.

    • Puerto

      June 17, 2022 at 7:19 pm

      I’m, Dan, they get in a boat and go there.

  12. Jay Dee

    June 17, 2022 at 9:01 pm

    The situation is an unresolved civil war. The Chinese Communist Party cannot let Taiwan go its own way; their existence demonstrates that there are alternatives to the Communists. Nor do the Communists really want to invade Taiwan. Their fear is such an invasion could succeed much like Russia is succeeding in the Ukraine. Finally, CCP handling of Hong Kong has pretty much ruined any prospect of a peaceful reunification. I have little doubt that the PRC could successfully invade Taiwan if they really wished to do so but at what cost? The CCP has created a real mess.

    • Him

      June 18, 2022 at 2:57 am

      Nice summary, and the way you put it, it sounds like a balance that leads to inaction. But the factor that tips it towards China invading Taiwan is the Communist arrogance and disregard of anything except their own power – plus believing their own propaganda. Your analysis logical, but global hegemony and the decision of dictators is usually according to the same logic as the West.

      No doubt there is a logic, but, at its root, there’ll be lies, e.g. Putin’s strategy being based on the Russian assumption that everyone wants to, and eventually will, attack Russia. From that false lie, the Russians build their logic which makes sense, after they have accepted the original lie.

  13. Mike

    June 18, 2022 at 5:10 am

    The price of voter fraud putting Biden in power is going to hurt us in a war with China. We have a mentally unfit president not making the decisions. We’re in a bad spot here economically now. Let’s just let the war happens because at this point we can still beat China. After they blast the whole area with their medium range missiles for about 6 months they will be dominant but then USA will start pounding them out. The Chinese navy can surround Taiwan but they must remain within China based air power range to protect their ships. The whole Chinese navy will be sunk because the key is the strike carriers and within say 8 of them spread out over the area firing anti ship missiles and the stealth fighters dropping bombs unseen from above their whole navy will be sunk. And do not forget about the USA attack subs that will be firing missiles sinking their ships and escaping with their advanced tek helping them. Once the cease fire is declared and Chinese naval forces are sunk to the last ship the whorls needs to cut off all trade with China permanently in order to not allow this threat to the world to grow strong again.

  14. JerryD

    June 18, 2022 at 2:20 pm

    “Since the world including the US acknowledges that Taiwan is an integral part of China historically, why not work towards a peaceful unification of Taiwan with China with win-win outcomes for both and the rest of the world.”

    Bihari,
    I think the Taiwanese may look to how well that has gone for Hong Kong and decide otherwise.

  15. Tbrennan

    June 18, 2022 at 4:04 pm

    What is the source claiming 92% of world chip capacity is in Taiwan ?
    Sure, they make a lot but I doubt that much. Also, there are many kinds of
    Chips (processors, dram, SSD, etc)

    Still, the title is wrong. Substitute “would” for “could”.

    • Him

      June 19, 2022 at 1:13 am

      Search for – TSMC percentage world chips

      In terms of total semi-conductors, it’s more like 60%, however, that includes all types of chips for cars, washing machines, etc. But if you narrow down the criteria for computer chips and other high-end chips, it may be that TSMC handles a lot of the high-end technology chips.

  16. David James

    June 20, 2022 at 1:15 am

    The problem with destroying TSMC is that China is actually moving to locally mass produce semi’s while the US cannot even pass the Chips bill despite the threat of economic collapse being shoved down our throat (thanks republicans, great work you short sighted wankers.)

    The US has been talking about bringing manufacture home but it reality things have just gotten worse. Other that Tesla, our one bright star in US manufacturing we are in a very bad way.

    Its remarkable that even under this great threat Trumps tariffs were all that was done and those did not produced the desired effect and now Biden is rolling them back.

    Clearly the US government is not capable of bringing even basic necessary manufacture back to the States.

    So anyway China can endure this by simply making their own semis, while we cannot even start to try to solve this issue at home. Most of our largest corporations would just cease to exist, Apple for example would implode if we went to war with China. The US economy would be deleted instantly and yet we cannot even attempt a solution like the Chips bill.

    Were 100% screwed and have to fight and if we loose our whole nation would be in question.

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