A Chinese invasion of Taiwan would strike an instant blow to the world economy and deal long-term damage to the web of allies and partners the U.S. has built over the years, Adm. Sam Paparo, the head of U.S. Indo-Pacific Command, told the Senate Armed Services Committee today.
A war over Taiwan would cause a 25% downturn in gross domestic product in Asia, Paparo said, which in turn would plunge domestic GDP by 10% to 12% and spike unemployment by seven to 10 points -- causing 500,000 “excess deaths of despair,” which is a metric that measures deaths induced by economic decline.
Paparo’s answer stemmed from a question by Sen. Tom Cotton (R-AR), who cited hedge-fund manager Ken Griffin’s prediction that a fight in Taiwan would cause a rupture of Chinese and American economies to rival the numbers of the Great Depression.
Taiwan is what Cotton referred to as a “center of gravity” for the world economy; thus the blistering economic consequences of a regional war would likely be caused by the loss of “freedom of navigation” in the region, Paparo said, as well as an instant cutoff of Taiwan semiconductors, which the U.S. and much of the world depends on.
And even if the U.S. military intervened and won, it would only so much as halve those economic effects, Paparo went on: “So, still a grave result,” he said. “But half as grave, with savings of a lot of human misery.”
Those are the short-term effects, according to the admiral.
The U.S. military’s strategic prowess in the region is founded on the allies and partners it has in Australia, Japan, the Philippines, South Korea and others. Some in the region could eventually “confer and submit” to China’s “mode of exploitation,” Paparo said, moving it one step further toward “setting the rules of the world and reaping the benefits of that.”
To deter a conflict from starting in the first place, Paparo said INDOPACOM needs counter-command, control, communications, computers, cyber, intelligence, surveillance and reconnaissance capabilities in cyber, space and counter-space, to “blind, to deceive and to destroy the adversaries’ ability to see and sense.”
The joint force also needs to both sustain and ramp up its investments in long-range fires and integrated air and missile defense in the region, as well as the “critical infrastructure across the theater that enables the force to reach the principles of expanded maneuver and push geography on our side, which it is,” Paparo said.
China has boosted military activities around Taiwan by 300% last year as it ran through “dress rehearsals for forced unification.”
The military’s job in the Indo-Pacific is two-fold, according to Paparo: Deter regional conflict and keep up its own ability to win if one breaks out -- but “that margin is eroding,” he said.