A Chinese invasion of Taiwan or an attack on the island nation as early as 2025 might cost the world economy $1 trillion, a calculation made by US intelligence services.
Avril Haines, the director of national intelligence for the US, gave what she described as a general estimate on Thursday during a hearing before the US Senate Armed Services Committee.
Taiwan Is Ready For Military Action
90% of practically every category of electronic gadget in the world uses cutting-edge semiconductors made by Taiwan Semiconductor Manufacturing Co (TSMC).
The Taipei Times quotes Haines as saying that although Xi Jinping is inclined toward a peaceful unification with Taiwan, he is also ready for potential military action to achieve that goal.
She remarked that if a Chinese invasion prevented TSMC from making those chips, it would have a significant negative financial impact on the world economy, which I believe would range from USD 600 billion to USD 1 trillion annually for the first few years.
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China’s Economy Effects
At the insistence of Washington, TSMC is spending USD 40 million to construct two very advanced wafer fabs in Arizona in order to mitigate that danger.
According to Taipei Times, two fabs, one utilizing the more sophisticated 3-nanometer technology and the other using the 4-nanometer technique, are set to start mass-producing chips in 2019.
It is anticipated that Xi’s directive to the Chinese military to give him a military option will significantly affect his ability to do so without worrying about [US] intervention.
In addition to Haines, US Defense Intelligence Agency Director Scott Berrier was present at the hearing.
According to Taipei Times, Berrier expressed greater anxiety than Haines over a potential invasion of Taiwan, claiming that Xi’s rhetoric has increased since he began his third term in office.
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