If there’s an upside from the Bloomberg Economics analysis, perhaps it’s this: The $10 trillion cost of a crisis would be so high for all players that the incentive to avoid it is strong
Bloomberg’s research unit used computer modeling to estimate the impact of a conflict over Taiwan on the global economy.
It considered two scenarios: one involving a year-long naval blockade by China and the other a full-scale US-Chinese war. The first would cost the world 5% of its annual GDP, while the second would do more than twice as much damage.
The modeling relies on certain assumptions, such as the US ability to rally its allies to punish China with economic restrictions.
The Bloomberg estimate for the cost of the war, however, is not the worst-case scenario. If businesses relying on Taiwanese chips underperform in substituting them, the global GDP may lose as much as 14%, Bloomberg said. However, if they fare better than expected, the cost would be lower.
Bloomberg forecasts that in both scenarios, China would take a heavier economic hit than the US, but “the $10 trillion cost of a crisis would be so high for all players that the incentive to avoid it is strong,” the report said.
The Bloomberg estimate for the cost of the war, however, is not the worst-case scenario. If businesses relying on Taiwanese chips underperform in substituting them, the global GDP may lose as much as 14%, Bloomberg said. However, if they fare better than expected, the cost would be lower.
Bloomberg forecasts that in both scenarios, China would take a heavier economic hit than the US, but “the $10 trillion cost of a crisis would be so high for all players that the incentive to avoid it is strong,” the report said.
On Tuesday, Taiwan’s administration issued an island-wide alert, reporting a Chinese rocket launch over its airspace. Mainland media said the payload was an astronomical satellite. Earlier, in December 2023, Taiwanese media had also reported Chinese carrier rockets had passed over the island.
War over Taiwan would have a cost in blood and treasure so vast that even those unhappiest with the status quo have reason not to risk it. Bloomberg Economics estimate the price tag at around $10 trillion, equal to about 10% of global global GDP — dwarfing the blow from the war in Ukraine, . . conditions are in place for a crisis
/cdn.vox-cdn.com/uploads/chorus_asset/file/22489271/headshots_1620071842362.jpg)
No comments:
Post a Comment