HomeContributorsFundamental AnalysisResearch China - The Risk of a Taiwan War and What it...

Research China – The Risk of a Taiwan War and What it Implies – Part 2

In Research China: The risk of a Taiwan war and what it implies – part 1, 11 August, we looked at the risk of a Taiwan war. In this follow-up we consider the implications, both of a possible war and of the rising tensions.

Apart from being a human tragedy with significant loss of lives, we believe a war on Taiwan would trigger a deep global recession through the effects from sanctions, huge disruption to supply chains as well as from a sharp rise in uncertainty due to the risk of a war developing into WWIII.

While we do not expect a war in the short term, the heightened tensions itself and risk of a war on a 5-10 year horizon, will also have implications. Companies will increasingly consider how many eggs they have in the China basket and de-globalisation and decoupling trends will see an extra push. On the geopolitical front we move faster towards what could resemble a new Cold War between the West and China/Russia, albeit a different Cold War than the first, as the world will stay more connected economically and the rest of the world is reluctant to choose sides. This leads to a multipolar and more fragmented world.

Full report in PDF.

Danske Bank
Danske Bankhttp://www.danskebank.com/danskeresearch
This publication has been prepared by Danske Markets for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Markets´ research analysts are not permitted to invest in securities under coverage in their research sector. This publication is not intended for private customers in the UK or any person in the US. Danske Markets is a division of Danske Bank A/S, which is regulated by FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange. Copyright (©) Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.

Featured Analysis

Learn Forex Trading