A war over Taiwan would cost the world about $10 trillion, according to one estimate.
The steep global price tag could keep China from escalating its actions against the island nation, which continues to fear for its sovereignty as Chinese planes and ships creep into its territory.
Taiwan is a major manufacturer of semicondoctors, the high-end chips found in everything from smartphones to washing machines.
Bloomberg Economics modeled two possible scenarios: a Chinese invasion triggering US involvement and a Chinese blockade of Taiwanese trade.
The war would cost the world about 10 trillion dollars, or 10 percent of its gross domestic product.
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That’s more than the toll of the COVID-19 pandemic or the 2008 financial crisis, according to Bloomberg projections.
A Taiwanese blockade would cut global GDP by about five percent, more than the Gulf War and the September 11 attacks combined.
There are no imminent signs of a Chinese invasion, but increasing provocations are evident as China seeks to assert its power over the country, which it still claims as its own.
On Tuesday, Taiwan’s authorities issued a red alert message to all mobile phone users on the island.
The brief text informed people that a Chinese satellite had flown over the southern Taiwanese airspace and that locals should be “aware for your safety” – particularly amid fears of falling debris.
Last week, Taiwan’s Ministry of National Defense tracked six Chinese military aircraft and six naval ships moving near the country.
China still claims that Taiwan is a province of the People’s Republic of China. However, the island nation has sought to govern itself independently of China, stopping short of explicitly declaring independence.
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