THE global shipping industry may have to brace itself for a rise in operational costs, loss of ships, and delays if China invades Taiwan, reports Fort Lauderdale's Maritime Executive.
The report from the Mercatus Centre think tank at George Mason University hypothesised that China would cut undersea Internet cables vital to the semiconductor industry.
As tension between China and taiwan escalated recently, the report looked at Chinese data to demonstrate the potential scenarios and impact on the global economy.
If done, the invasion could exceed the impacts of Russia's invasion of Ukraine.
The report claims that an invasion of Taiwan by China, a Taiwanese declaration of independence, or a clash at sea between China and Taiwan or the US could lead to a crisis in the Taiwan Strait.
'The potential effects of a Chinese invasion of Taiwan on the US economy are far greater than those of the Russian invasion of Ukraine. Container shipments to and from major ports in the region, as well as digital flows, would be at direct risk,' said senior research fellows Christine McDaniel and Weifeng Zhong.
The report estimates that US$3.4 trillion in trade passes through the South China Sea, or 21 per cent of the global trade, using the Taiwan Strait as a vital route.
The disruption could impact containerised shipments to or from major ports in China, Japan, the Philippines, South Korea, Taiwan and Vietnam.
'Any geographic expansion of a crisis that begins in the Taiwan Strait would easily make rerouting harder, if not impossible,' said the report.
Lastly, another impact would be delays in supply chains, a development that would have ripple effects across various industries.
For example, in the US, most technology firms rely on Taiwanese manufacturers to produce up to 90 per cent of semiconductor chips.
SeaNews Turkey
The report from the Mercatus Centre think tank at George Mason University hypothesised that China would cut undersea Internet cables vital to the semiconductor industry.
As tension between China and taiwan escalated recently, the report looked at Chinese data to demonstrate the potential scenarios and impact on the global economy.
If done, the invasion could exceed the impacts of Russia's invasion of Ukraine.
The report claims that an invasion of Taiwan by China, a Taiwanese declaration of independence, or a clash at sea between China and Taiwan or the US could lead to a crisis in the Taiwan Strait.
'The potential effects of a Chinese invasion of Taiwan on the US economy are far greater than those of the Russian invasion of Ukraine. Container shipments to and from major ports in the region, as well as digital flows, would be at direct risk,' said senior research fellows Christine McDaniel and Weifeng Zhong.
The report estimates that US$3.4 trillion in trade passes through the South China Sea, or 21 per cent of the global trade, using the Taiwan Strait as a vital route.
The disruption could impact containerised shipments to or from major ports in China, Japan, the Philippines, South Korea, Taiwan and Vietnam.
'Any geographic expansion of a crisis that begins in the Taiwan Strait would easily make rerouting harder, if not impossible,' said the report.
Lastly, another impact would be delays in supply chains, a development that would have ripple effects across various industries.
For example, in the US, most technology firms rely on Taiwanese manufacturers to produce up to 90 per cent of semiconductor chips.
SeaNews Turkey