A war over Taiwan would cost so much blood and treasure that even those dissatisfied with the status quo have reason not to take the risk. Bloomberg Economics estimates its price tag at about $10 trillion, equivalent to about 10% of global GDP and dwarfing the devastation caused by the Ukraine war, the coronavirus pandemic, and the global financial crisis.
China’s growing economic and military power, Taiwan’s growing national consciousness, and the strained relationship between China and the United States mean that the conditions are ripe for a crisis. Taiwan’s election on January 13 is a potential flashpoint, as cross-Strait relations are on the ballot.
Few believe that a Chinese invasion is likely imminent. The People’s Liberation Army is not concentrating troops on the coast. Reports of corruption in China’s military have cast doubt on President Xi Jinping’s ability to run a successful election campaign. U.S. officials said a November summit between President Joe Biden and Chinese President Xi Jinping eased some tensions, with Xi promising “heart-warming” steps to attract foreign investors.