Chinese invasion of Taiwan as early as 2025 could cost world economy $1 trillion: Report

A Chinese invasion of Taiwan or an attack as early as 2025 on the island nation could cost the world economy $1 trillion, Taipei Times reported citing an estimate by intelligence officials in the United States.

The report mentioned that US Director of National Intelligence, Avril Haines, presented a "general estimate" during testimony before the US Senate Armed Services Committee on Thursday.

The top US intelligence official said,"A Chinese invasion of Taiwan could halt production by the world’s largest advanced chipmaker, wiping out up to USD 1 trillion per year from the global economy in the first few years."

Beijing views self-ruled Taiwan as part of its territory and even claimed that, in case needed, it will use force to unite the two territories. Italso claims that Taiwan will defy China's one-nation policy by pushing for formal independence.

In case China invades Taiwan, experts have saidthat it would put a massive impact on the global supply chains as the island is a major supplier of semiconductors—a key component of nearly all modern electronics.

Haines said that the advanced semiconductors produced by Taiwan Semiconductor Manufacturing Co (TSMC) are used in 90 per cent of "almost every category of electronic device around the world".

Meanwhile, she stated thatTSMC is investing $40 million to build two sophisticated wafer fabs in Arizona to deal with that risk.

An act of invasion will also lead to a Western fury, inciting China's isolation and pushing Beijing and Washington closer than ever to a direct military conflict. It put will also put an end to Taiwan's hard-won democratic liberties.

Haines further noted that said that Chinese President Xi Jinping is not only wanting to unify Taiwan in a "peaceful" manner but also preparing a possible military action to achieve that goal.

Last month, Xi asked the military forces to focus on "strengthening the military training oriented towards actual combat" and that the military must "resolutely defend China's territorial sovereignty and maritime interests, and strive to protect overall peripheral stability".

Hainessaid, "I think we continue to assess that he [Xi] would prefer to achieve unification of Taiwan through peaceful means."

The report further Haines as saying that if a Chinese invasion stopped TSMC from producing those chips, it will have an enormous global financial impact that runs somewhere between $600 billion to $1 trillion on an annual basis for the first few years.

"It will also have an impact on [US] GDP if there was such an invasion of Taiwan and that [TSMC’s production] was blocked," she also said.

Such an act will also put China in a tight spot, leading to a large impact on its economy.

(With inputs from agencies)

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