Future Chinese attack on Taiwan would spark global semiconductor crisis, Blinken warns

A hypothetical attack on Taiwan by China would spark a global economic crisis, particularly if the manufacturing of crucial semiconductors is disrupted, U.S. Secretary of State Antony Blinken warned this week.

Speaking at Stanford University on Monday with former secretary of state Condoleezza Rice, Blinken said the risk of “enormous” economic suffering in the event of a military attack in the Taiwan Strait was immense, making the need for a peaceful resolution to tensions in the region more important.

“On semiconductors, if Taiwanese production were disrupted as a result of a crisis, you would have an economic crisis around the world,” Blinken said.

“So there’s a profound stake — not just for us, but for countries around the world — in preserving peace and stability when it comes to Taiwan and the straits, and to making sure that the differences that exist are resolved peacefully.”

Western allies have been sounding increased alarms over China’s aggressive pursuit of reunification with Taiwan, which has a democratic self-ruling government and insists it is independent from Beijing’s influence.

The two sides split in 1949 after a civil war, yet the Chinese Communist Party has repeatedly claimed the island nation as its territory and has stepped up military presence in the region.

During his opening speech to the party’s congress on Sunday, President Xi Jinping said the potential use of force against Taiwan remained an option.

“We will continue to strive for peaceful reunification,” Xi said during the televised address. “But we will never promise to renounce the use of force. And we reserve the option of taking all measures necessary.”

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Most semiconductors used in smartphones, medical equipment, computers and other products are made in Taiwan, South Korea and China.

That has prompted concern among American officials about reliance on supplies that might be disrupted by conflict between China and Taiwan. They are lobbying Taiwan-based chipmakers to set up factories in the United States.

Taiwan Semiconductor Manufacturing Co., the world’s biggest contract manufacturer of processor chips for smartphones and other products, said last week that its quarterly profit skyrocketed to a record US$8.8 billion amid surging demand. The company’s clients include Apple, which uses the chips for its iPhones and other products.

Canada is also seeking to position itself as a player in global semiconductor manufacturing, including in the supply of critical minerals to other manufacturing countries.

Yet at least one lawmaker has also called on Taiwan to send more chips to help resolve an ongoing shortage that has affected auto production.

In his opening remarks to the parliamentary national defence committee on Tuesday for a session on Arctic security, Canadian defence chief Gen. Wayne Eyre noted China’s aggression and quest for economic dominance has, along with Russia, created the most disruptive time in geopolitics since the Cold War and potentially since the eve of the Second World War.

“Russia seeks to undermine our rules-based international order, while China seeks to bend it to its advantage,” he said.

Eyre did not mention Taiwan in his comments, but defence intelligence chief Maj-Gen. Michael Wright pointed to Xi’s comments on Taiwan as evidence of China’s authoritarian tendencies.

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Both Canada and the U.S. maintain “One China” policies that do not recognize Taiwan as a sovereign state, but lawmakers have grown increasingly bold in their support for the nation in the face of China’s aggression.

Following a visit to Taiwan by U.S. House Speaker Nancy Pelosi in August — becoming the highest-ranking U.S. official to travel to the island in 25 years — a delegation of Canadian MPs made their own trip earlier this month.

Both visits were condemned by China, which accused Canada and the U.S. of “grossly” interfering with internal Chinese affairs.

— with files from the Associated Press