The war in Ukraine has nothing to compare with devastated possible war over Taiwan

China recently announced it was halting negotiations with the United States on a range of critical issues, including the climate crisis and dialogue between the two countries’ military leaders, in response to the visit of the most senior US-elected official to arrive in Taiwan in more than a quarter century.

China has described the visit as “evil and provocative acts”.

These tensions made some ask, what if a real war happened in Taiwan?

To answer this question, four devastating effects can be assumed that will affect the global economy and make the Ukraine war seem a minor problem before it, as follows:

First: The great Chinese factory that serves the whole world stumbled.

In the event of war, it is expected that the United States, Western countries and some Asian countries will impose economic sanctions on China, but China is not Russia and economically punishing it will not be the same.

Indeed, economic sanctions against Beijing will be a double-edged sword; Because it is fully integrated into the global economy, China currently controlled 18.2% of global GDP last year, behind the US with a 23.8% share, while Russia has only 3.11% of global GDP.

China is also a global industrial center and the largest export market for most countries in the world, including the United States and Europe, not to mention that China is currently the largest single creditor in the world with outstanding loans from other countries worth $5 trillion, or more than 6% of GDP.

In this context, China’s leaders may not fear economic sanctions, knowing that they will not affect their economy without harming global trade, supply chains, and international financial institutions.

Second: Electronic industries and global technology will literally be paralyzed.

Taiwan, via the Taiwan Semiconductor Manufacturing Company, is the world’s leading supplier of microelectronic chips, with a share of up to 90% of total global chip demand.

As you know, semiconductors and chips are a major component of almost all electronic industries, from phones, computers and watches, to game consoles and industrial equipment, to cars, civil and military aircraft, and more.

In particular, Taiwan excels in producing chips below 10 nanometers, making it the main supplier of the vast majority of those needed to power the world’s most advanced electronic devices, from Apple’s iPhones to US-made F35 fighter jets model.

Hence, any shortage of semiconductors and electronic chips will affect many industries in the world.

Thus, any disturbance in Taiwan will lead to almost complete paralysis of the electronic industries in the world, knowing that China produces only 5% of the global production of chips, and does not produce the advanced chips that Taiwan excels in.

According to a study by the Boston Consulting Group, a one-year disruption of Taiwan’s chip supply will cost global tech companies nearly $600 billion.

Third: an insane rise in the prices of various commodities and products.

It is expected that the scenario of war between China and Taiwan will affect the rates of global trade, and Asian trade in particular, in light of the high dependence in the world on China to meet the market needs of agricultural and industrial commodities.

The world may face severe commodity shortages, especially in food and medical products, in the event of a military escalation between the two countries.

In this context, the scenario of military escalation will cause disruption to the shipping lines in the South China Sea, through which trade shipments worth an estimated $5.3 trillion pass annually, and through which more than 60% of global maritime trade, and more than 22% of the total trade, pass through it, and 40% of the world’s petroleum products.

Thus, any military conflict between China and Taiwan will result in a crazy rise in the prices of oil and non-oil products.

Fourth: Certain countries will suffer devastating economic losses

Japan is one of the most affected countries economically in the event of a war between China and Taiwan, as 40% of Japan’s sea trade passes through the South China Sea, which may hinder Japanese trade.

Also, if Japan supports Taiwan, China – Japan’s main trading partner – will impose restrictions to limit its trade with Japan, which will undermine the stability of the Japanese economy.

The Australian economy may also suffer from a decline in its exports to China, especially in the areas of agriculture and mining.

It is expected that the sectors of retail trade, construction and manufacturing industries in Australia, will witness a sharp decline with the disruption of shipping lines and air.

With the imposition of restrictions on trade with China, the chemical and pharmaceutical sector in India is also expected to face major challenges.

Because of China’s current dependence in these two sectors in particular.

The Chinese economy will be shaken by the interruption of Taiwan’s supply of electronic chips, as statistics indicate that Beijing imports 40% of its chip needs from Taiwan.

Although some analysts believe that if China carries out a ground invasion of Taiwan, it will be able to control the chip factories, this scenario is feasible, as Taiwan is expected to destroy chip manufacturing facilities with the start of any Chinese military operation, as a form of self-defense.