Who would be hurt more in a US-China ECONOMIC confrontation over Taiwan?

[lord of the mark]

Originally posted by el freako
To cause problems for the US economy, China and Japan don't need to sell off their assets - they just need to stop buying more

why, in the scenario above, would Japan sell off its dollar assets, with dollar interest rates rising?

Would not raising US interest rates draw in money from all over the world? Would not EVERYONEs interest rates be effected?

Assuming that the US sourced its imports differently, (though UR has a good point in that that takes time, at least on a large scale) would not that create more wealth in the alternate sources (india, central america, etc) which has to go somewhere? But perhaps the marginal propensity to save is lower in those countries than in China?

Where does China put its savings? Does it use them to buy critical imports for the duration? How long can they do that?

[lord of the mark]

Originally posted by Urban Ranger
NYE,

All the Taiwanese mobo makers have most of the factories in China now and will continue the move.

Interesting point.

[lord of the mark]

Originally posted by DaShi
There seems to be a lot of wishful thinking in these threads.

Gepap makes the simplest and best cases: everyone will be hurt.

The thing about China is that you really can't predict where it will be in 10 years. 10 years ago, they couldn't either. Having a fast growing economy is one thing, having a stable economy is something else entirely. One only needs to look at Japan. I already see a repeat of the concerns of Japanese economic and world dominance. China's economy is very delicate as most rapidly developing one's are. The government is watching it very carefully and doing what is necessary to prevent it from crashing and burning, like Japan, while worrying about the more unique factor that China has. If something big and deliberately harmful appeared, many countries would be affected, but it will be the stable economies that will survive through it. Until China stabilizes its economy, it is in no position to make economic threats and has wisely not even hinted so.

So the real question is, would this deter the PRC from taking actions likely lead to this kind of economic conflict? I think its clear that if Taiwan launched a UDI, PRC would use force, despite the consequences, which might be lesser since Taiwans provocation might effect what the US (not to mention Japan) would do. OTOH I agree that as long as there is no change in the status quo, theres no reason for the PRC to take action. OTOH, what if Taiwan slowly "desinifies" without going so far as a UDI? I could see that as a scenario where PRC would use force, and where counter action by the US would be a real (even a likely) possibility. In that circumstance, I suspect Japan would sympathize with the US position, which would effect the economic conflict, at least.

[Patroklos]

Taiwan's manufacturing or lack there of is mute. If China and Taiwan are fighting (or it is taken), we would not have access to their stuff anyways.

[Urban Ranger]

Originally posted by lord of the mark
OTOH I agree that as long as there is no change in the status quo, theres no reason for the PRC to take action. OTOH, what if Taiwan slowly "desinifies" without going so far as a UDI?

It depends on how you see "status quo."

For example, the Taiwanese government is going to change the name of its offices from "ROC something" to "Taiwan something." The day after that some States Department spokeman come out and said that would be a bad idea because that would involve an unilateral change of the status quo. That sent some panic waves through the DPP government.

[Patroklos]

So if you are from India, Central America, and Africa it seems like this would be a good thing from some of what has been said above.

They would go through an economic crisis as well, but depending on how long China remains isolated, wouldn't the markets dump money and investments into those sheres to again secure cheap goods outlets?

[Whoha]

Re: Who would be hurt more in a US-China ECONOMIC confrontation over Taiwan?

Originally posted by lord of the mark
Lets assume that China, concerned about the steady development of a distinct Taiwan identity, attacks Taiwan (presumably via air and missile attack, and naval blockade) Assume there is no declaration of independence as provocation.


Assume further that the US does NOT go to war, but responds by embargoing all trade with China. Assume China responds by selling off all its assets in the US.

What are the economic and political consequences in A. The US B. China C. elsewhere ?

The US would declare war over Taiwan, and the Chinese as of yet, would not fair well.

Economically they are our creditor, but only to a tune of about 400 billion dollars as far as debt is concerned. They hold property but that will be seized, but we'll have to make the difference on the dollars that they are sitting on. Our position is not so eroded yet as to make conflict with China unthinkable.

as far as cheap goods and low low prices are concerned, a great many nations will be quite happy that China is no longer competing for "their" share of the US market.

Originally posted by notyoueither
Who is the biggest supplier of food to China?

Right now it is the US but they are making deals with other countries such as Brazil, their main problem would be the unrestricted submarine warfare preventing any and all ships from entering or leaving their ports as well as our land bases in Asia.

[GePap]

Unrestricted submarine warfare is patently illegal.

As for a full blockade- I doubt that is even an option- not only is it dangerous for our vessels, but most states would cry bloody murder.

[Whoha]

We don't have a merchant marine right now(a handful of ships that does US port to US port stuff), Reagan made the decision to axe that(a mistake).

[lord of the mark]

Re: Re: Who would be hurt more in a US-China ECONOMIC confrontation over Taiwan?

Originally posted by Whoha


The US would declare war over Taiwan, and the Chinese as of yet, would not fair well.
.

Maybe, but the original post explicity assumed this would NOT happen. The goal being to get a better sense of what the US can do to deter China strictly with the threat of economic sanctions apart from military means.

[lord of the mark]

Originally posted by GePap
Unrestricted submarine warfare is patently illegal.

The US declared unrestricted submarine warfare against Japan during WW2. When since was it declared illegal?

[GePap]

Nothing.

[lord of the mark]

Originally posted by Whoha
We don't have a merchant marine right now(a handful of ships that does US port to US port stuff), Reagan made the decision to axe that(a mistake).

I think GePap meant it would be dangerous to US warships enforcing the blockade.

[lord of the mark]

Originally posted by GePap
Unrestricted submarine warfare is patently illegal.

As for a full blockade- I doubt that is even an option- not only is it dangerous for our vessels, but most states would cry bloody murder.

I assume PRC would be enforcing a blockade on Taiwan, using air power and missiles to attack both ships and port facilities, and using submarines against shipping. In that context it would be difficult to complain about a counter blockade.

[GePap]

Originally posted by lord of the mark


I assume PRC would be enforcing a blockade on Taiwan, using air power and missiles to attack both ships and port facilities, and using submarines against shipping. In that context it would be difficult to complain about a counter blockade.

Its not an issue of complaints-1. unrestricted submarine warfare is illegal

2. I am sure third parties would scream bloody murder about a Chinese blockade of taiwan too.

Your point?