The US and its allies face a grim choice if China escalates tensions with Taiwan. It could lead to an economic catastrophe.
The Chinese People’s Liberation Army last week launched a series of military drills around the island of Taiwan. Beijing’s escalation was presumably undertaken to overlap with the inauguration of Lai Ching-teTaiwanese voters had struck a blow to Beijing at the start of this year, by electing a candidate who campaigned on what many viewed as a “China sceptic” platform.
Lai clearly makes Beijing nervous – hence the military exercises. On Monday, American lawmakers vowed to bolster Taiwanese deterrence against an incursion by China. At a news conference in Taipei, US congressman Michael McCaul, chairman of the House Foreign Affairs Committee, stated the military exercises were an attempt to “punish democracy”. Beijing has described them as “strong punishment” for Taiwan’s “separatist acts”.
Taiwan would be extremely vulnerable to such a blockade. Despite having the world’s 21st largest GDP, Taiwan receives the sixth-largest number of container ship arrivals. This highlights just how reliant the island is on trade. Nearly 98 per cent of Taiwan’s energy is imported, and the Atlantic Council paper argues that in a blockade scenario, the island would have only 146 days of oil, 39 days of coal, and 11 days of natural gas.
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