What are the potential consequences of an Asia-Pacific crisis on the global financial landscape?

Chinese communist aggression against Taiwan has the potential to wreak havoc on the economies in both the Asian region and the world at large.

As the international community focuses its attention on the tragedies occurring amid the recent wars in Ukraine and the Middle East, another terrorist nation in the South China Sea, China, made bold moves. Two Chinese vessels rammed a Philippine supply boat and coast guard ship in the waters surrounding the Spratly Islands belonging to the Philippines. The U.S. State Department has noted that the actions of China “violated international law,” but it seems that their message fell on deaf ears in the communist party.

As those who follow geopolitical affairs closely are aware, one of the most critical global developments during President Biden’s time in office has been the decline of America’s deterrence capabilities. The conflict in Ukraine and the escalating chaos and bloodshed across the Middle East illustrate the immense human and economic costs when American influence and policy can no longer keep communist powers in check.

It is no surprise that Washington is currently preoccupied with the risk of a more extensive conflict in the Middle East. The potential human and economic consequences would be substantial, and the United States could find itself entangled in the never-ending turmoil between Muslims and Jews. However, the dwindling power of America’s deterrent capabilities may very well result in China and North Korea pursuing military ambitions in the Far East, and the ensuing catastrophe could be considerably more disastrous.

Over the past two weeks, representatives throughout Asia have been concerned with the rising influence of despotic communist China and North Korea, both with their unique brands of economic systems that are seen as significant threats to a Western free market economy and global peace.

Key takeaways consistently emerged addressing primarily a potential conflict involving Taiwan that would have far-reaching implications surpassing the consequences of the ongoing Ukraine crisis or even a broader Middle Eastern war. This is principally because the effectiveness of American deterrence in the Far East appears to be waning, thereby increasing the risks in the near future. This waning is due primarily to the weak foreign policy of liberal leftist presidencies in the past fifty years. A policy that can be summed up with the following phrase: Be nice to our enemies, give them money and everyone will get along. This policy has obviously not worked.

Should China opt for an unjust invasion of Taiwan, it primarily has two methods at its disposal. The first would be a direct invasion, while the second involves imposing a blockade. Due to Taiwan’s dependence on imports for 97 percent of its energy supply, imports constitute a significant portion of its food resources, making the island nation particularly susceptible to such an act of aggression. However, the impact of this move would not be limited to Taiwan; on the contrary, it would precipitate the most severe economic crisis since World War II on a worldwide scale.

Focusing on the regional consequences, the closure of the South China Sea and the surrounding waters to international trade could easily result in a disastrous outcome. Both South Korea and Japan rely heavily on imported fuel and food to sustain their economies. Furthermore, their economic prosperity is contingent upon the uninterrupted flow of imported raw materials and exported finished products generated by each nation’s numerous manufacturing giants. Any suspension of maritime trade would effectively cripple both countries’ economies and trigger shockwaves throughout the global economic landscape creating chaos on a international scale.

The potential for increased aggression in the current global and regional turmoil cannot be underestimated, as despotic countries with a penchant for asserting their dominion would most likely capitalize on the chaos. One such example would be North Korea, which may utilize this opportunity to strike when the reinforcing and resupplying capacity of their adversaries, such as the United States, is substantially hampered.

Neighbors to the conflict would also be significantly impacted. Maritime trade would be severely disrupted, with vessels avoiding conflict-ridden waters and refraining from navigating to major port cities. Additionally, the United States may opt for more aggressive measures alongside imposing sanctions, such as enforcing a blockade against any ships providing the adversary with essential supplies.

The widespread implications of such a conflict would result in a monumental supply chain disruption on a global scale that would dwarf the problems caused by Covid. Key components and resources, such as semiconductors from regions like Taiwan, which are crucial for various industries and consumer products, alongside a multitude of goods manufactured by countries like China, Japan and South Korea, would quickly disappear from inventories and retail shelves. This would not only affect the countries producing these items but also impact the suppliers of raw materials and agricultural products, as they lose access to crucial markets.

The repercussions of this devastating scenario will not be limited to the supply chains, as the financial consequences of such a war could become an insurmountable challenge for central banks worldwide. Stock markets would plummet, currency values would fluctuate unpredictably, and debt markets may potentially collapse. Borrowers such as China and Japan, as well as corporations heavily reliant on Asian economies, would struggle to manage their debts under wartime conditions.

In conclusion, the possibility of escalated aggression under the guise of asserting sovereignty amidst global and regional chaos could severely disrupt the supply chain and the global financial market. The far-reaching consequences of such a conflict demand a severe and morally just response from global leaders and policy-makers, especially from the West.

In an era marked by a deceptive tranquility and a false sense of security, a great majority of Americans have yet to comprehend the looming threats that surround us. The sudden and forceful takeover of Taiwan by Xi Jinping, alongside a fierce assault on a sovereign nation by socialist extremist groups, should have underscored the reality that, in today’s world, unexpected and disastrous events can take place without warning. Consequently, we must consider not only unimaginable scenarios, but as Herman Kahn, an American physicist and a founding member of the Hudson Institute, once stated, we must contemplate the “unthinkable” and take proactive measures to prepare for them.

As we face a world marred by conflict and encroachment of sovereignty, it is incumbent upon us to acknowledge the potential for catastrophe and take the necessary steps to safeguard our future. By devoting attention to the pressing concerns of international aggression with the rise of socialist and atheistic movements, we must turn to Our Lady of Fatima to intervene as all human means of solving the current crises fail. In doing so, we provide ourselves and society with the tools and resources needed to navigate the uncertain landscape we find ourselves in.