What Happens to the World if China Blockades Taiwan?

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What Happens to the World if China Blockades Taiwan?
What Happens to the World if China Blockades Taiwan?

Chinese communist aggression against Taiwan has the potential to wreak havoc on the economies in Asia and the world.

With the world attention focused on Ukraine and Israel, China is making bold moves in the South China Sea. Two Chinese vessels recently rammed a Philippine supply boat and Coast Guard ship in the waters surrounding the Spratly Islands belonging to the Philippines. The U.S. State Department has noted that the incidents “violated international law,” but took no other actions.

Those who follow geopolitical affairs closely see these and other incidents as examples of China’s efforts to test America’s deterrence capabilities under President Biden. The disaster in Afghanistan and other policy failures show the immense human and economic costs when American influence and policy wanes.

While Washington’s attention is turned to Ukraine and the Middle East, China and North Korea may take advantage of the dwindling power of America’s deterrent capabilities to flex their military muscle with disastrous results for the West.

A potential conflict involving Taiwan could have far-reaching implications surpassing the consequences of the ongoing Ukraine crisis or even a broader Middle Eastern war.

All this would be a result of the decline of American deterrence in the Far East. This waning is to due to a failed foreign policy over the years that might be summed in the following way: Be nice to our enemies, give them money and everyone will get along.

China has two option for an unjust invasion of Taiwan. The first would be a direct invasion, while the second would be imposing a blockade.

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A blockade would exploit Taiwan’s dependence on imports for 97 percent of its energy needs and for a significant portion of its food supply. The impact of this move would not be limited to Taiwan. It could cause the most severe economic global crisis since World War II.

The regional consequences of a blockade would be the disastrous closure of the South China Sea and the surrounding waters to international trade. Both South Korea and Japan rely heavily on imported fuel and food to sustain their economies. Furthermore, their economic prosperity is contingent upon the uninterrupted flow of imported raw materials and exported finished products. Any suspension of maritime trade would cripple both countries’ economies and trigger shockwaves throughout the global economic landscape.

The potential for military action cannot be underestimated during a blockade, as the two communist powers might capitalize on the chaos. For example, North Korea might strike South Korea when the reinforcing and resupplying capacity of its American ally is substantially hampered.

Maritime trade would be severely disrupted, as vessels would avoid conflict-ridden waters that would keep them away from major ports. The United States might opt for enforcing its own blockade against any ships providing the adversary with essential supplies.

The consequences of such a conflict would be a monumental supply chain disruption that would dwarf the problems caused by Covid. Semiconductors from Taiwan are especially crucial for many industries and consumer products. Goods from China, Japan and South Korea would quickly disappear from inventories and retail shelves. This disruption would also impact the suppliers of raw materials and agricultural products as they lose access to crucial markets.

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The financial consequences of a blockade could become an insurmountable challenge for central banks worldwide. Stock markets would plummet, currency values would fluctuate unpredictably, and debt markets may potentially collapse.

Borrowers in China and Japan and corporations heavily reliant on Asian economies, would struggle to manage their debts under wartime conditions.

All these factors could easily lead to an escalation of the conflict that could lead to global war. The West would need to respond to this unjust provocation to prevent further steps having far worse consequences.

In an era marked by a deceptive tranquility and a false sense of security, a great majority of Americans have yet to comprehend these looming threats. However, an attack on or blockage of Taiwan underscores the reality that, in today’s world, unexpected and disastrous events can take place without warning. America should contemplate the “unthinkable” and take proactive measures to prepare for such situations.

Photo Credit:  © Seika – stock.adobe.com

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