Cross-Strait tensions remain the highest-consequence scenario in current global risk assessments. The People's Liberation Army has conducted multiple large-scale exercises around Taiwan, with frequency increasing approximately 40% year-on-year since 2022. The exercises are widely interpreted as both military preparation and political signalling.
Cross-Strait tensions remain the highest-consequence scenario in current global risk assessments. The People's Liberation Army has conducted multiple large-scale exercises around Taiwan, with frequency increasing approximately 40% year-on-year since 2022. The exercises are widely interpreted as both military preparation and political signalling.
Taiwan's defence posture has evolved significantly: the government has extended mandatory military service, accelerated procurement of asymmetric defence capabilities including anti-ship missiles and drone systems, and deepened defence cooperation with the United States and Japan.
The economic stakes are extraordinary. TSMC produces approximately 92% of the world's most advanced semiconductors (3nm and below). Any kinetic conflict would immediately disrupt global technology supply chains, with estimated economic damage exceeding $2 trillion in the first year.