An attack by Beijing on Taiwan could lead to the collapse of the world economy!

As the global economy remains sluggish and the war in Ukraine continues, significant tensions have emerged between China and Taiwan. U.S. Representative Nancy Pelosi of California plans to visit Taiwan this week and White House officials say China is preparing to conduct “military provocations“. In addition, in recent weeks there have been reports that the world economy could collapse in the event of a Chinese military attack on Taiwan.

Nancy Pelosi visits Taiwanese President Tsai Ing-wen this week despite tensions between Taiwan and China

Although Taiwan is governed independently of mainland China, Beijing has always considered Taiwan to be part of Chinese territory. Taiwanese President Tsai Ing-wen and the Democratic Progressive Party, however, have supported Taiwan’s independent government since 1949.

Amid escalating tensions between Taiwan and China, Taiwan issued the country’s first wartime survival manual and Taiwanese army soldiers trained and conducted preparedness exercises.

More recently, tensions have grown tense between China and Taiwan only separated from the mainland by the Taiwan Strait. Chinese President Xi Jinping classifies Taiwan in the same way China classifies Hong Kong, using the phrase “one country, two systems“. Tsai Ing-wen, the Democratic Progressive Party and the Kuomintang (KMT) reject the concept of the People’s Republic of China (PRC) often referred to as the “One China” rule.

Nancy Pelosi’s (Speaker of the U.S. House of Representatives) visit has sparked much discussion about China using its military to make a show of force in the Taiwan Strait. An ABC program reports that the White House has warned China against “military provocations” against Taiwan during the visit.

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U.S. National Security Council Strategic Coordinator John Kirny said “China appears to be positioning itself to potentially take further action in the coming days and perhaps over longer time horizons“. Furthermore, Kirby added that “Beijing’s actions could have unintended consequences that would only increase tensions.

Reports indicate that a conflict between China and Taiwan could cause “economic chaos.”

While a recession is bad enough, the world is already dealing with the ongoing military conflict in Ukraine against Russia. Adding a conflict between China and Taiwan could make the situation much worse. A trade negotiator in the Taiwanese capital, Taipei, told Reuters that the problems of global trade flows would be greater than the problems arising from the Ukraine-Russia war, including a shortage of semiconductors.

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Reports indicate that Beijing's attack on Taiwan may have
Chinese, U.S., and Taiwanese warships have been positioned outside Taiwan and in the Taiwan Strait in recent weeks. Reports indicate that the USS Ronald Reagan (CVN-76), a Nimitz-class nuclear-powered supercarrier, is in Taiwan alongside the USS Tripoli (LHA-7) and the Marines’ F-35B Lighting II Joint Strike Fighter ahead of Nancy Pelosi’s visit.

In late June, Bloomberg published an investigation that confirmed the Taipei trader’s statements. The article states that a war between China and Taiwan could cause a “economic chaos“. The report insists that China’s attack on Taiwan could “go far beyond semiconductors“. “A major war over Taiwan could create global economic chaos that would make the mess produced by Russia’s war in Ukraine seem minor in comparison“, details Hal Brands of Bloomberg.

Last week, the New York Times noted that “an escalation by Beijing would have far-reaching economic consequences“. Like the financial crisis that occurred at the onset of the Covid-19 pandemic and the market volatility that began during the Ukraine-Russia conflict, escalating tensions between China and Taiwan could tip global financial markets from recession to depression.

Fears of the Taiwan Strait being cut off and speculation about World War III.

As with the Ukraine-Russia war, the U.S. and other countries could get involved by passing financial sanctions against China and funding the Taiwanese military. The NYT explains that one of the biggest fears is that “Beijing will cut off access to all or part of the Taiwan Strait, through which U.S. Navy ships regularly pass“.

According to some reports, Beijing's attack on Taiwan could have negative
The Taiwan Strait is a 180-kilometer-wide strait that separates the island of Taiwan from mainland Asia. The area is a well-known shipping route and warships from around the world pass through the strait. The passage is part of the “exclusive economic zone” of Xi Jinping, which is part of the “One China“.

The problems between China and Taiwan have also prompted analyses of a third world war. In the first week of July, financial analyst Gerald Celente pointed out that “the third world war has already begun“. At the time, Celente referred to the conflict in Ukraine and the tensions between China and Taiwan.

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