Think Tank's Two Scenarios on How a Chinese Invasion of Taiwan Might Play Out

Summary

Bloomberg discusses a German Marshall Fund report co-authored by Zach Cooper that games out two China-Taiwan conflict scenarios: a minor skirmish and a major war. Cooper argues China would face severe economic, domestic political, military, and diplomatic costs, with a major war potentially costing 10-15% of GDP and causing long supply-chain disruptions. He sees Xi Jinping as risk-averse and near-term deterrence as likely holding, though U.S.-Europe tensions and decapitation-strike risks add uncertainty.

• The report models a minor Taiwan skirmish versus a major war.
• A major war is assumed to draw in the U.S., possibly after strikes on U.S. assets.
• China would face high economic, political, military, and diplomatic costs.
• Economic costs could reach 10-15% of GDP and disrupt trade and supply chains.
• A failed invasion could create domestic stability risks for Beijing.
• U.S.-Europe disputes over Greenland and Venezuela may weaken allied deterrence.
• The Venezuela operation has focused attention on decapitation-strike scenarios.
• Cooper concludes Xi is risk-averse and unlikely to act unless boxed in.