Media: potential military conflict over Taiwan could lead to 10% reduction in global GDP
In case of a military escalation of the conflict over Taiwan, global gross domestic product could drop by 10 percent, TASS reports
Bloomberg economists estimate that the potential damage to the global economy from possible developments around Taiwan is estimated at approximately $10 trillion – equal to about 10 percent of global GDP – dwarfing the blow from the war in Ukraine, COVID-19 pandemic and global financial crisis. This is due to the fact that Taiwan plays a leading role in semiconductor manufacturing, and total market cap for the top 20 customers of chip giant Taiwan Semiconductor Manufacturing Co. is around $7.4 trillion. Moreover, the Taiwan Strait is an important trade route in the world.
According to Bloomberg experts, in the event of a military scenario with the US participation, Taiwan’s GDP will fall by 40 percent, and that of mainland China will drop by 16.7 percent. The US GDP will suffer a 6.7 percent blow, while GDP would be down 10.2 percent for the world as a whole. Countries in Southeast Asia, including Korea and Japan, will be most affected. In the absence of military action, but in the event of a blockade of Taiwan by the People’s Republic of China, Taiwan’s GDP would be down 12.2 percent, that of mainland China would drop by 8.9 percent, that of the US would shrink by 3.3 percent, while the global economy would lose 5 percent GDP.
