The Chinese Dragon Prepares To Swallow Taiwan
Chinese ships and aircraft continue to encircle Taiwan. They are not simply threatening the island nation. They are practicing for a blockade. They can move from practicing to implementing such a blockade in almost no time at all. We could wake up any day and find Taiwan has been sealed off from the rest of the world.
Taiwan cannot survive such a blockade. It is completely dependent on food and fuel from outside. According to Taiwan’s former deputy defense minister Richard Chen in fact, Taiwan would run out of energy in two weeks if a blockade were imposed.
“In two weeks, Taiwan would start to go dark,” Chen said. “No electricity, no phones, no internet. And people would start to go hungry.”
What is about to happen will be catastrophic for not only Taiwan but the entire world. A recent report by the Rhodium Group noted that a blockade of Taiwan would cost the world $2 trillion in economic activity. The think tank characterized that estimate as conservative and partial. "Unsurprisingly, we find that the scale of economic activity at risk of disruption from a conflict in the Taiwan Strait is immense: well over two trillion dollars in a blockade scenario, even before factoring international responses or second-order effects."
To begin with, Taiwan manufactures something like 92% of the world’s advanced computer chips and perhaps half of all the world’s computer chips. That means without production from Taiwan essentially the entire world economy will come to a screeching halt. There will be no more manufacture of computers, smartphones or tablets.
"A rough, conservative estimate of dependence on Taiwanese chips suggests that companies in these industries could be forced to forego as much as $1.6 trillion in revenue annually in the event of a blockade," Rhodium found. The researchers also noted that trillions more in economic activity could be disrupted due to second-order effects that hit industries reliant on Taiwanese chips: "Ultimately, the full social and economic impacts of a chip shortage of that scale are incalculable, but they would likely be catastrophic."
What we are talking about here is not an economic downturn. This would be economic Armageddon.
The follow-on effects of a blockade would be even greater. Assuming China moves on Taiwan and the world makes any effort at all to respond, one can presume a massive disruption of all trade between mainland China and the world. Walk through your local Wal-Mart. Envision it without any of the products made in China. That’s what we are talking about.
Rhodium's report concluded with these comments about the full impact of a blockade, "When taken together, our estimates suggest that the global disruption from a Taiwan conflict would put well over two trillion dollars in economic activity at risk, even before factoring in the impact from international sanctions or a military response. This note offers a look at just some of the likely disruption channels in a blockade scenario, and this figure should be regarded as a floor; the full scope of imperiled activity would surely be greater."
The Chinese are poised not simply to starve out Taiwan and force it into accepting assimilation by the Chinese Communist Party but potentially to destroy the world economy in the process. Meanwhile, the man in the White House and his team of Chinese ‘cooptees’ totter along either blissfully ignorant of the threat or willingly complicit in helping Xi Jinping achieve his ultimate fantasy. Our priority remains not surging forces into the Pacific and ensuring the Chinese understand that a move on Taiwan means war with the United States but rather sending seemingly endless quantities of cash and equipment into the now stalemated conflict between Ukraine and Russia.
The peril we all face can hardly be exaggerated. All Beijing has to do to implement a blockade of Taiwan is to announce it has done so and begin to intercept ships and aircraft. Commercial vessels and planes are not then going to try to run the blockade and risk being fired upon. Flights will be grounded. Ships will turn around or simply anchor offshore.
That could happen tonight.
No other nation on the planet is then going to act on its own to break the blockade. They are going to turn to us and to the man in the Oval Office and they are going to wait for our response. The fate of the world economy is going to be completely dependent on the willingness of a man who has taken tens of millions of dollars from the Communist Chinese, and his similarly compromised advisors, to stand up and order the 7th Fleet to break that blockade and engage Chinese ships and aircraft if necessary to do so.
Don’t hold your breath. There will be bluster. There will be calls for international bodies to express disapproval. There will be everything but action, and meanwhile, in Taiwan, the clock will be ticking and the lights will be going off.
We are a heartbeat away from seeing Taiwan follow Hong Kong into the mouth of the Dragon, and Joe isn’t going to lift a finger to stop it from happening.
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