Taiwan war would hit Japan, Philippines, South Korea hardest due to ‘devastation’ of supply chains, EIU says

Japan, the Philippines and South Korea would be the most impacted by any conflict in Taiwan due to “devastation” of regional supply chains, the Economist Intelligence Unit (EIU) said in a white paper on Wednesday.

A conflict in Taiwan would also create “severe vulnerability” for Australia and Hong Kong, plus parts of Southeast Asia, according to the EIU, which is a research division under the Economist Group media organisation.

“The devastation of regional information and communications technology production and supply-chain networks would cause disproportionate shocks for Northeast and Southeast Asia,” the white paper said.

The EIU evaluated risks in the case of a conflict over Taiwan with the mainland Chinese military and participation by the United States.

Beijing sees self-ruled Taiwan as a breakaway territory that must be reunified, by force if necessary. Cross-strait relations have worsened in recent years, and the Taiwan issue has been the flash point in the deteriorating relations between China and the US.

Countries that have diplomatic ties with Beijing, including the US, acknowledge the existence of the one-China principle that holds Taiwan to be part of China, but they may not explicitly agree with it. Washington does not take a position on the status of Taiwan, but opposes any attempt to take the island by force.

A military conflict would cause “huge disruption” to marine shipping, passenger traffic and air cargo, the EIU paper said.