As tensions escalate between Taiwan and China, the Institute for Economics & Peace (IEP) has delved into the uncertainties surrounding the effects of this conflict on GDP and global supply chain demands in the recently published Global Peace Index (GPI). Taiwan, officially known as the Republic of China (ROC), remains an independent state, while China, referred to as the People’s Republic of China (PRC), seeks reunification, perceiving Taiwan as part of its territory. Although the PRC claims to pursue reunification through peaceful means, tensions persist on both sides, causing concern among the international community. China’s military prowess, which surpasses Taiwan’s capabilities has prompted scrutiny of its potential military strategies, raising doubts about peaceful intentions.
China’s display of military might and intimidation tactics has contributed to the rising tensions. Despite asserting a commitment to peaceful reunification, China’s military expenditure has been increasing, with significant investments in defence weapons and military growth. In contrast, Taiwan faces financial constraints and lacks comparable resources to counterbalance China’s power. The international community is closely monitoring China’s actions, as incidents like the recent Chinese military aircrafts that flew into the territorial area of Taiwan raise further concerns about potential conflicts.
According to the IEP, a Chinese blockade of Taiwan would result in a staggering estimated loss of USD 2.7 trillion within the first year. However, this figure is considered conservative, suggesting that the actual economic impact could be even more substantial. The blockade would have a profound effect on numerous Southeast Asian countries, causing significant disruptions across their economies. Specifically, IEP estimates a 2.8% decline in global economic output, almost double the loss experienced during the 2008 Global Financial Crisis. China’s economy would shrink by an estimated 7%, while Taiwan’s economy would face a devastating contraction of almost 40%.
Taiwan holds a prominent position in the global semiconductor industry, manufacturing chips that serve as vital components in various technologies, ranging from mobile phones to computers and even AI-powered weapons. In fact, Taiwan is a global leader in semiconductor production, boasting a 20% share of the total global capacity. Moreover, it holds a staggering 37% of the world’s logic semiconductors production capacity and an astonishing 92% of the world’s advanced logic semiconductors production capacity. This dominance makes Taiwan a crucial player in global trade for computers, electronics, and electrical equipment. China and several East Asian countries, including South Korea and Japan, heavily rely on imports of computer and electronic components from Taiwan. For example, the share of trade with Taiwan in this sector ranges from 10% for the Philippines to 21% for China. That is why a blockade on Taiwan would severely disrupt global supply chains, impacting industries that rely on complex electronics.
IEP estimates that the blockade would result in a 2.8% decline in global economic output within the first year, with China and Taiwan combined experiencing a loss of $1.6 trillion in output. This loss would not only be confined to the two countries but would also be strongly felt in other parts of the world, particularly in Southeast Asia and Oceania. Countries in these regions, such as Australia, Laos, and Vietnam, would suffer economic losses ranging from 3% to 6%.
The escalating tensions between Taiwan and China have the potential to impact not only the two nations but also the global economy and supply chains. IEP’s estimates highlight the significant economic losses that could ensue from a Chinese blockade on Taiwan, underscoring the need for diplomatic efforts and peaceful resolutions to mitigate the potential consequences. The world watches with concern as the delicate balance in this region teeters, hoping for a peaceful resolution that safeguards stability and economic prosperity for all parties involved. The reliance on Taiwan’s semiconductor industry and its crucial role in global supply chains make it imperative to address the potential consequences of a Chinese blockade.
The significance of Taiwan’s semiconductor industry extends far beyond its borders. Major economies, including the United States, heavily depend on Taiwan for the supply of semiconductors. Prominent tech companies like Apple rely on Taiwanese manufacturers to meet the demands of their products. However, if a blockade were to occur, it would disrupt the global supply chain for computers, electronics, and electrical equipment, which collectively account for a significant portion of international trade. China and Taiwan combined dominate the global trade in these sectors, with a 31% share in computers and electronics and a 23% share in electrical equipment.
A Chinese blockade on Taiwan would have far-reaching consequences for the global economy. The estimated economic losses, already substantial, would likely be even more significant than initially predicted. The disruption to global supply chains, particularly in the vital semiconductor industry, would have cascading effects on various sectors and industries worldwide. It is essential for all parties involved to seek diplomatic resolutions and peaceful means of addressing the tensions between Taiwan and China to preserve stability, economic prosperity, and the interconnectedness of the global economy.
"Wakati wa mgogoro kati ya Taiwan na China, Taasisi ya Uchumi na Amani (IEP) imechunguza athari za mgogoro huu kwa Pato la Taifa na mahitaji ya mlolongo wa usambazaji wa kimataifa katika ""Indeksi ya Amani ya Ulimwenguni"" iliyotangazwa hivi karibuni." Taiwan, inayojulikana rasmi kama Jamhuri ya China, inabaki kuwa nchi huru, wakati China, inayojulikana kama Jamhuri ya Watu wa China, inatafuta kuunganishwa tena, ikiona Taiwan kama sehemu ya eneo lake. Ingawa China inadai kufuatilia kuunganishwa tena kwa njia ya amani, mvutano unadumu pande zote mbili, na kusababisha wasiwasi kati ya jamii ya kimataifa. Uwezo wa kijeshi wa China, ambao unazidi uwezo wa Taiwan, umesababisha uchunguzi wa mikakati yake ya kijeshi, na kuibua mashaka juu ya nia ya amani. Maonyesho ya China ya nguvu za kijeshi na mbinu za kutisha yamechangia kuongezeka kwa mvutano. Licha ya kudai kujitolea kwa kuunganishwa tena kwa amani, matumizi ya kijeshi ya China yamekuwa yakiongezeka, na uwekezaji mkubwa katika silaha za ulinzi na ukuaji wa kijeshi. Kinyume chake, Taiwan inakabiliwa na vikwazo vya kifedha na haina rasilimali zinazolingana ili kupinga nguvu ya China. Jumuiya ya kimataifa inafuatilia kwa makini hatua za China, kwani matukio kama vile ndege za kijeshi za China zilizoruka hivi karibuni katika eneo la Taiwan zinaongeza wasiwasi zaidi juu ya migogoro inayowezekana. Kulingana na IEP, kuzuiwa kwa Taiwan na China kutaathiri Taiwan kwa kiasi kikubwa na kuharibu dola za Marekani bilioni 2.7 kwa mwaka mmoja. Hata hivyo, takwimu hii inachukuliwa kuwa ya kihafidhina, ikidokeza kwamba athari halisi ya kiuchumi inaweza kuwa kubwa zaidi. Mkataba huo utakuwa na athari kubwa kwa nchi nyingi za Kusini Mashariki mwa Asia, na kusababisha usumbufu mkubwa katika uchumi wao. IEP inakadiria kupungua kwa 2.8% katika uzalishaji wa uchumi wa ulimwengu, karibu mara mbili ya hasara iliyopatikana wakati wa Mgogoro wa Fedha wa Ulimwenguni wa 2008. Uchumi wa China utapungua kwa asilimia saba, huku uchumi wa Taiwan ukipungua kwa asilimia 40 Taiwan ina nafasi muhimu katika sekta ya semiconductor duniani, kutengeneza chips ambazo hutumika kama vipengele muhimu katika teknolojia mbalimbali, kuanzia simu za mkononi hadi kompyuta na hata silaha za AI. Taiwan ni moja ya nchi zinazoongoza katika uzalishaji wa semiconductor duniani, na inashikilia asilimia 20 ya uzalishaji wa semiconductor duniani. Kwa kuongezea, inashikilia 37% ya uwezo wa uzalishaji wa semiconductors ya mantiki ya ulimwengu na 92% ya uwezo wa uzalishaji wa semiconductors ya mantiki ya ulimwengu. Utawala huo hufanya Taiwan iwe sehemu muhimu katika biashara ya ulimwengu ya kompyuta, vifaa vya elektroniki, na vifaa vya umeme. China na nchi kadhaa za Asia Mashariki, ikiwa ni pamoja na Korea Kusini na Japan, hutegemea sana uagizaji wa kompyuta na vipengele vya elektroniki kutoka Taiwan. Kwa mfano, sehemu ya biashara na Taiwan katika sekta hii inatofautiana kutoka 10% kwa Ufilipino hadi 21% kwa China. Kwa hiyo, kuzuiwa kwa Taiwan kungevuruga sana minyororo ya ugavi wa kimataifa, ikiathiri viwanda vinavyotegemea vifaa vya elektroniki tata. IEP inakadiria kwamba kizuizi hicho kitatokeza kupungua kwa uzalishaji wa uchumi wa dunia kwa asilimia 2.8 katika mwaka wa kwanza, na China na Taiwan pamoja zikitumia dola bilioni 1.6 katika uzalishaji. "Hiyo haingekuwa tu kwa nchi hizo mbili, lakini pia ingehisiwa sana katika sehemu nyingine za dunia, hasa katika Asia ya Kusini Mashariki na Oceania. """ Nchi za mikoa hiyo, kama vile Australia, Laos na Vietnam, zitapata hasara ya kiuchumi ya kati ya asilimia 3 na 6 ya uchumi wao. Mvutano kati ya Taiwan na China una athari kubwa kwa uchumi wa kimataifa na ugavi. Makadirio ya IEP yanaonyesha hasara kubwa za kiuchumi ambazo zinaweza kutokea kutokana na kizuizi cha China juu ya Taiwan, ikikazia hitaji la juhudi za kidiplomasia na azimio la amani ili kupunguza matokeo ya uwezekano. """Ulimwengu unaangalia kwa wasiwasi wakati usawa dhaifu katika eneo hili unazunguka, ukitumaini suluhisho la amani ambalo linahifadhi utulivu na ustawi wa kiuchumi kwa pande zote zinazohusika." Utegemezi wa Taiwan katika sekta ya semiconductor na jukumu lake muhimu katika minyororo ya ugavi wa kimataifa hufanya iwe muhimu kushughulikia matokeo ya uwezekano wa kizuizi cha China. Umuhimu wa sekta ya semiconductor ya Taiwan unaenea mbali zaidi ya mipaka yake. Uchumi mkubwa, ikiwa ni pamoja na Marekani, hutegemea sana Taiwan kwa ajili ya usambazaji wa semiconductors. Kampuni za teknolojia kama vile Apple zinategemea watengenezaji wa Taiwan ili kukidhi mahitaji ya bidhaa zao. Hata hivyo, ikiwa kizuizi kingefanyika, ingevuruga mlolongo wa usambazaji wa kompyuta, vifaa vya elektroniki na vifaa vya umeme, ambavyo kwa pamoja hufanyiza sehemu kubwa ya biashara ya kimataifa. China na Taiwan pamoja kutawala biashara ya kimataifa katika sekta hizi, na 31% sehemu katika kompyuta na vifaa vya elektroniki na 23% sehemu katika vifaa vya umeme. Kizuizi cha China juu ya Taiwan kingeweza kuwa na matokeo makubwa kwa uchumi wa dunia. Hasara za kiuchumi zinazokadiriwa, ambazo tayari ni kubwa, huenda zikawa kubwa hata zaidi kuliko ilivyotarajiwa mwanzoni. Uharibifu wa minyororo ya usambazaji wa kimataifa, haswa katika tasnia muhimu ya semiconductor, itakuwa na athari za mfululizo kwenye sekta mbalimbali na viwanda ulimwenguni. """Ni muhimu kwa pande zote zinazohusika kutafuta suluhisho la kidiplomasia na njia za amani za kushughulikia mvutano kati ya Taiwan na China ili kuhifadhi utulivu, ustawi wa kiuchumi na kuunganishwa kwa uchumi wa ulimwengu."