US warnings and sanctions could impact global markets post-conflict.
Occupying Taiwan entails complex governance challenges and post-war uncertainties.
Regional diplomatic and economic responses crucial in deterring risky behaviors and shaping outcomes.
Deep dives
Analyzing the Economic and Political Consequences of a Chinese Victory in a Taiwan Conflict
Speculative scenario analysis explores the economic, political, and geopolitical consequences if China prevails in a conflict involving Taiwan. Analyzing such a scenario sheds light on gaps in existing assessments and emphasizes the need to consider the financial, economic, and diplomatic ramifications alongside military aspects.
Impacts of a Hypothetical Conflict on Global Trade and Economy
In the event of conflict, US warnings and potential sanctions could drive portfolio investors to respond quickly, impacting stock and commodity markets. Direct investors may adopt a 'wait and see' approach, assessing credibility of warnings and potential escalations. The disruption could lead to economic uncertainty and investment volatility, affecting multinational corporations and global markets.
Challenges of Occupation and Post-Conflict Governance
Military victory on Taiwan could trigger an occupation requiring prolonged efforts to establish effective governance. Counterinsurgency, social stability, and economic rebuilding pose significant challenges. Assumptions about swift success must consider realistic post-conflict complexities, including resource distribution, power struggles, and cultural resistance.
Potential Responses of Asian Neighbors and Global Alliances
Asian neighbors like Japan and regional powers may react to conflict with military preparations or strategic actions. US allies and global partners' economic responses, as well as the US role in building a coalition for sanctions, could shape post-conflict diplomatic scenarios. Disruption in global trade and supply chains could influence regional and international responses.
Policy Implications and Deterrence
Insights highlight the importance of deterrence and understanding the broader implications of military actions. Policymakers should focus on signaling the potential costs and consequences to deter risky behaviors. Addressing analytical gaps, quantifying assessments, and planning for occupation scenarios can enhance strategic preparedness and diplomatic responses.
Say China wins a war for Taiwan. What happens next?
To discuss the political and economic consequences of a PRC takeover of Taiwan, I have on today Jude Blanchette and Gerard Dipippo, both fellows at CSIS. Our conversation builds off their paper https://www.chinatalk.media/p/war-for-taiwan-what-happens-after.
We recorded this episode in mid-December.
Outtro Music: 水哥 ft. 蛋堡 https://www.youtube.com/watch?v=nHU9kEYiAQw&list=PLegPxPQebljkJOhscK3tLUXfZ9n1lgkwC&index=31