Reports Say Beijing Attacking Taiwan Could Lead to ‘Far-Reaching Economic Consequences’

Ralph Smith

As the global economy remains bleak and war continues in Ukraine, there are major tensions between China and Taiwan. U.S. Representative Nancy Pelosi of California is scheduled to visit Taiwan this week, and White House officials say China is preparing to carry out a “military provocation.” In addition, reports in recent weeks have suggested that a Chinese military attack on Taiwan could cause the global economy to collapse.

Nancy Pelosi is visiting Taiwanese President Tsai Ing-wen this week, and Taiwan has been tense with China.

Sourcestold Reuters that California representative Nancy Pelosi is expected to visit Taiwan on August 2, 2022; CNN alsoconfirmedthat Pelosi will visit Taiwan, despite the risk of provoking China. Although the country is governed independently of mainland China, Beijing has always consideredand

has regarded Taiwan as a territory of China,

Chinese territory. However, Taiwanese President Tsai Ing-wen and the Democratic Progressive Party (DPP) support Taiwan’s independent government, which has operated independently since 1949.
Amid rising tensions between Taiwan and China, Taiwan has issued the country’s first War Survival Handbook and Taiwanese soldiers are undergoing training and readiness enhancement exercises.

Tensions have recently increased between China and the island, which is separated from mainland Asia by the Taiwan Strait. China’s Xi Jinping has classified Taiwan under the “one country, two systems” formula, similar to Hong Kong. Tsai Ing-wen, the DPP, and the KMT have rejected the People’s Republic of China’s concept of “one country, two systems,” “one China” rule according to a Financial Times (FT) report Pelosi is scheduled to discuss the issue with Taiwan’s president on Wednesday.

Pelosi’s visit sparked much debate about China’s use of military force in the Taiwan Strait; ABC’scoverage reports that during her visit, the White House warned that China would engage in “military provocations” against Taiwan, according to the report. U.S. National Security Council Strategic Coordinator John Kirby told the press, “(The U.S.) and the rest of the world believe that escalation is not in anyone’s interest.”

“China seems to be positioning itself to possibly take further steps in the coming days or over a longer time horizon,” Kirby said. Kirby added that “Beijing’s actions could have unintended consequences that could only increase tensions.”

Reports have indicated that a confrontation between China and Taiwan could cause “economic turmoil.”

The recession is bad enough, but the world is already dealing with the military conflict with Russia going on in Ukraine. Add to that the conflict between China and Taiwan, and things could get much worse. The head of trade negotiations in the Taiwanese capital of Taipeitold Reutersthe problem of global trade flows. Reuters said the problems with global trade flows would be greater than those stemming from the war between Ukraine and Russia. A trader in Taipei said one of the biggest possible problems would be a shortage of semiconductors.

Chinese, American, and Taiwanese warships have been deployed outside Taiwan and in the Taiwan Strait in recent weeks. According to reports, the Nimitz-class nuclear-powered supercarrier USS Ronald Reagan (CVN-76) has been deployed to Taiwan along with USSTripoli(LHA-7). Also, that Tripoli (LHA-7) and Marine Corps F-35B Lighting II Joint Strike Fighter aircraft are deployed to Taiwan in advance of Nancy Pelosi’s visit.

At the end of June, Bloomberg published a published a report that a Sino-Taiwanese war could cause “economic turmoil,” and published an article further verifying the statements of a trader in Taipei. The report argues that a Chinese attack on Taiwan “could go far beyond semiconductors.” Bloomberg’s Hal Brands elaborates, “A major war over Taiwan could cause global economic disruption beyond comparison to the disruption caused by Russia’s war in Ukraine.

Last week, the New York Times (NYT) Dealbookemphasized in a editorialthat “the escalation from Beijing will have far-reaching economic consequences.” Like the financial crisis that erupted at the start of the Covid 19 pandemic and the market turbulence that began during the Ukraine-Russia conflict, heightened tensions between China and Taiwan could send global financial markets tumbling from recession to recession

Concerns of a Taiwan Strait breakup and speculation of World War III

Similar to the Ukraine-Russia war, the United States and other countries may enact financial sanctions against China and engage Taiwan by funding its military The NYT Dealbook explains that one of the biggest concerns is that “Beijing would block access to all or part of the Taiwan Strait, through which U.S. naval ships regularly transit.”

The Taiwan Strait is a 180-kilometer-wide strait separating the island of Taiwan from mainland Asia. It is a well-known shipping route andnaval vessels from all over the world pass through this strait. This passage is part of the “exclusive economic zone” that is part of Xi Jinping’s “one China” rule.

The problems between China and Taiwan have also sparkedspeculationthat these battles may startWorld War III. During the first week of July, trend forecasterGerald Celentespoke with Bitcoin.com News in an interview in which he stressed that “World War III has already begun.” At the time, Celente discussed the conflict in Ukraine and tensions between China and Taiwan.

The trend forecaster and publisher of Trend Journal has tweetedabout China and Taiwan in the past 24 hours. In contrast, Celent’s blog postdescribes Pelosi’s meeting with Tsai Ing-wen as “U.S., again, sending mixed messages on foreign policy”

Image Credits: Shutterstock, Pixabay, Wiki Commons, Editorial Photo Credit: NurPhoto via Getty Images, Shutterstock.com,

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