CHINA ATTACK TAIWAN AND .... PART 1

This is an extremely grave hypothetical scenario that many financial organizations and think-tanks (such as Bloomberg Economics and the RAND Corporation) have simulated. If a conflict were to erupt in the Taiwan Strait with the intervention of the US and Japan, the economic consequences would far exceed those of the 2008 financial crisis or the COVID-19 pandemic.

Below is a detailed analysis of the global economic implications:

1. The "Silicon Shield" Shock (Semiconductor Crisis)

Taiwan is not merely a strategic island but also the "heart" of global technology.

Reliance on TSMC: Taiwan Semiconductor Manufacturing Company (TSMC) produces approximately 90% of the world's most advanced chips (used for AI, iPhones, supercomputers, and military applications).

Consequences: If these facilities are destroyed or halt operations due to a blockade:

Global production lines for automobiles, phones, computers, and medical devices would grind to an immediate halt.

It would take years and trillions of dollars to rebuild this manufacturing capacity elsewhere (such as in the US or Germany), creating a massive supply void.

2. Supply Chain Rupture and Maritime Transport Disruption

The Taiwan Strait is one of the busiest maritime routes in the world.

Transport Paralysis: About 50% of global container ships pass through this region. If hostilities occur, this area would become a "no-fly/no-sail zone."

Skyrocketing Costs: Cargo ships would have to take much longer detours; maritime insurance premiums would spike, pushing consumer goods prices (inflation) to record levels.

3. Financial Warfare and Sanctions (Decoupling)

The US and Japan would certainly impose economic sanctions on China (similar to or harsher than those on Russia), and China would retaliate.

Asset Freezing: The US could freeze China's foreign exchange reserves and restrict access to SWIFT.

China's Retaliation: China is the "factory of the world." They could stop exporting rare earths (raw materials for EV batteries and defense), pharmaceuticals, and basic components to the West.