The consequences of invading Taiwan would be “grim” for Beijing even if it were a military success, the US-based Center for Strategic and International Studies (CSIS) said in a report on Tuesday.
Any success China might achieve in annexing Taiwan by force would be a “Pyrrhic victory,” as its political, economic and diplomatic position would likely be worse than before, analysts Jude Blanchette and Gerard DiPippo wrote in the report.
“China will have gained Taiwan, but sacrificed its larger ambition of becoming a global and comprehensive superpower,” they wrote.
Photo: Sam Yeh, AFP
Beijing’s military, economic and propagada preparations for war would be hard to conceal, and Washington would likely be at least partially alerted, which would lead to efforts to warn allies to counter the invasion via sanctions and the threat of military force, the report said.
Core US allies, including Australia, Japan and the UK, would likely coordinate a response to deter China, but a lot would depend on the credibility of Washington’s intelligence and leadership at such a time, it said, adding that other governments could be slow to respond.
Were a conflict to begin, the damage to the global economy would be devastating, as commercial shipping would collapse, supply chains would be disrupted and financial markets would panic to a degree potentially exceeding the 2008 recession, it said.
Beijing would be more hard-hit by the crisis due to the measures it would have to take to sustain the war effort, likely including capital controls, sales of overseas assets, rationing, and hardening of military bases and population centers on its economically vital coast, Blanchette and DiPippo wrote.
Assuming that Taiwan were to resists the invasion and the US was engaged militarily, the war could become intense and protracted, resulting in extensive economic damage to China, they wrote.
A year-long conflict between the US and China would probably reduce China’s GDP by 25 to 35 percent, while US GDP would fall 5 to 10 percent, they said, citing a RAND Corp study from 2016.
Maritime trade and air freight in and around the conflict zone crucial to China would be disrupted, as China’s six largest ports are near Taiwan and would likely be affected, they said.
A substantial number of the multinational corporations that do business in China would likely flee the country to avoid risk to employees and business interests stemming from war, while exporters and parts-sourcing firms might redirect operations to safer regions, the report said.
Capital flight from China would take place as investors and firms race to avoid being affected by Western sanctions, it said, adding that sales of Chinese shares and holdings would cause the yuan to plummet.
Economic sanctions would be severe, assuming US forces are directly engaged, as Washington and the US public would not tolerate partners that continued to trade or invest in China, even if US military casualties were low, it said.
“A Western sanctions coalition could coalesce quickly, as happened after Russia’s invasion of Ukraine, in part because of lessons learned and coordination mechanisms established in response to the sanctions against Russia,” it said.
Taiwan’s economy would be ravaged with disastrous consequences to China, as 60 percent of microchip exports from the country go to Chinese firms that produce electronics exported to the West, it said.
Even if victorious, China’s political, economic and diplomatic challenges would be compounded, as Beijing would have to occupy, stabilize and rebuild a hostile territory that formerly enjoyed a higher standard of living than much of China, Blanchette and DiPippo wrote.
Moreover, Taiwan’s semiconductor industry — including the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Corp (TSMC) — would be damaged beyond repair, while control of facilities would “only give China a snapshot of its technology,” they wrote.
Semiconductor factories in a hypothetically occupied Taiwan would lose their value overseas, while TSMC’s overseas facilities would be disconnected or absorbed by other firms, they wrote.
Even were Beijing to stave off US resistance, its relationship with other advanced economies would deteriorate significantly, which could lead to export controls and sanctions for months or years, the report said.
China would suffer more from the resulting trade barriers because G7 economies collectively are 65 percent larger than China’s, and Beijing has little hope of overcoming its key dependencies in technology, commodities and US currency in the medium term, it said.
Furthermore, Asian countries in China’s periphery would be driven into the arms of the US if Washington puts up a credible military performance, or if it failed, they would be spurred into increasing military spending and creating nuclear programs, the report said.
“The conclusion reached is stark: China would court disaster if it launched an invasion across the Taiwan Strait,” it said, adding: “The key strategic challenge for the US remains to ensure Beijing never actively contemplates an attack on Taiwan.”
While Beijing likely has a general understanding of the costs associated with a military venture in Taiwan, the growing isolation of Chinese President Xi Jinping (習近平) could “lead to groupthink in Beijing’s policymaking” that raises the risk of miscalculation, it said.
INCREASED RISK: The Omicron BA.2.75 subvariant has higher immune evasive capacity, but the CECC is more concerned about newer subvariants such as XBB and BQ.1 With the peak season for infectious respiratory diseases coming to an end, the Central Epidemic Command Center (CECC) yesterday said that details of the next phase of lifting COVID-19 masking rules — removing the mask requirement in most indoor settings — are to be announced this week. Discussions on lifting other COVID-19 restrictions are also being held, including further easing border control measures, home isolation requirements and revising the definition for reporting cases, while also downgrading COVID-19 to a lower category of notifiable communicable disease, said Deputy Minister of Health and Welfare Victor Wang (王必勝), who heads the CECC. As the daily
GUT FEELING: In the leaked memo, US Air Force General Mike Minihan urged mobile command personnel to go to a firing range, shoot at a target and ‘aim for the head’ A four-star US Air Force general has warned of a conflict with China as early as 2025 — most likely over Taiwan — and urged his commanders to push their units to achieve maximum operational battle readiness this year. In an internal memorandum that first emerged on social media on Friday, and was later confirmed as genuine by the Pentagon, Air Mobility Command Commander General Mike Minihan said that the main goal should be to deter “and, if required, defeat” China. “I hope I am wrong. My gut tells me we will fight in 2025,” Minihan said. Minihan said that Taiwan’s presidential election
PEACE AND STABILITY: The two nations called for the peaceful resolution of cross-Taiwan Strait issues through dialogue without the threat or use of force or coercion The Ministry of Foreign Affairs yesterday thanked France and Australia for voicing their support for Taiwan, saying that peace across the Taiwan Strait is crucial to the stability and prosperity of international society. France and Australia on Monday pledged to deepen ties with Taiwan and reiterated their support for its participation in international organizations at this year’s Foreign and Defense Ministerial Consultations in Paris. The meeting between French Minister for Europe and Foreign Affairs Catherine Colonna, French Minister of the Armed Forces Sebastien Lecornu, Australian Minister for Foreign Affairs Penny Wong (黃英賢) and Australian Minister for Defence Richard Marles was the second
DEMOCRATIC SYSTEM: Czech president-elect Petr Pavel said his nation stands firmly on the side of democracy and would boost cooperation with Taipei in all aspects Czech president-elect Petr Pavel spoke by telephone with President Tsai Ing-wen (蔡英文) yesterday, a highly unusual move given the lack of formal ties and a diplomatic coup for Taipei. Tsai spoke with Pavel for 15 minutes in a harmonious atmosphere, Presidential Office spokeswoman Lin Yu-chan (林聿禪) said, adding that Minister of Foreign Affairs Joseph Wu (吳釗燮) was also present during the conversation. Lin quoted Pavel as telling Tsai that Taiwan is a trustworthy partner, adding that the Czech Republic stands firmly on the side of democracy and supports Taiwan in maintaining a lively democratic system free from authoritarian coercion. The Czech Republic would