Odd Lots The Massive Economic Impact If China Invades Taiwan
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Jan 15, 2024 
Jennifer Welch, Chief Geoeconomics Analyst at Bloomberg Economics, and Gerard DiPippo, Senior Geoeconomics Analyst, dive into the potential fallout of a Chinese invasion of Taiwan. They estimate a staggering economic impact of $10 trillion, far surpassing previous crises like the COVID pandemic. The discussion covers Taiwan's pivotal role in the semiconductor industry and various military strategies China might employ. They explore the intertwined nature of military actions and global economics, assessing how the world could be shaped by these geopolitical tensions.
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Current Tensions in Taiwan Strait
- Heightened concern over a potential China-Taiwan conflict stems from shifting military balances and political dynamics.
- China's military modernization and the U.S.'s focus on China as its primary challenge increase tensions in the Taiwan Strait.
Economic and Nationalist Factors
- China's economic growth and integration into the global economy create a complex dynamic.
- While China has more to lose economically, its focus on self-reliance may embolden it.
Diversionary War Unlikely
- Xi Jinping is not pessimistic about China's economic growth, making a diversionary war unlikely.
- A war with Taiwan would be all-encompassing, not a mere distraction.
