Bloomberg: Possible war in Taiwan to cost global economy 10 trillion dollars

If China decides to start a war over Taiwan, the possible conflict will cause $10 trillion in damage to the world.

“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 GDP — dwarfing the blow from the war in Ukraine, Covid pandemic and Global Financial Crisis,” according to Bloomberg.

According to experts, the prerequisites for the aggravation of the crisis already exist. These are the growth of China's economy and military potential, the growth of national identity among Taiwan's population, and problems in relations between China and the United States. The upcoming elections in Taiwan could also potentially exacerbate the rift between the island and mainland China.

The agency believes that the situation could follow one of two scenarios. According to the first, the conflict over Taiwan will take place with the active participation of the US. In this case, the world economy will lose up to 10.2% of GDP, and Taiwan and East Asian countries will suffer the most. The second scenario assumes a blockade of Taiwan by China, in which case the world economy will lose up to 5% of GDP within the first year.