The Cost of Conflict: Economic implications of a Taiwan military crisis

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The Cost of Conflict: Economic implications of a Taiwan military crisis

Speaker: Joris TEER (Associate Analyst for Economic Security and Technology, European Union Institute for Security Studies (EUISS))
Moderator: NISHIKAWA Kazumi (Principal Director, Office of Economic Security, Minister's Secretariat, METI)

Navigating economic security in an increasingly interconnected world

In this deeply interconnected world of today, Europe should look toward East Asian countries such as Japan, Taiwan, and South Korea for best practice examples of industrial policy to increase prosperity and security. East Asian countries have distinct ways in which governments and industries work together to fortify the economy for this new age of great power competition. Today’s world is much more economically interdependent than many people believe and merely focusing on trade figures is not the right way to look at it. At the EU Institute for Security Studies (EUISS) and at the Hague Center for Strategic Studies (HCSS), the focus of Joris Teer’s work is on helping governments and companies to conduct risk assessments for determining feasible geopolitical risk premiums. Setting up semiconductor manufacturing in Arizona instead of Taiwan may not be the most cost-efficient way. So why is it done? It is an upfront cost to have guaranteed supply if a crisis occurs in East Asia. Governments and companies are both faced with the question of how much should be paid for our geopolitical risk premium and how this can be carried out in a smart way without inadvertently competing with like-minded countries or creating subsidy races between collaborative nations. The analysis presented assesses war scenarios and the impact they could have on supply chains, trying to craft policies on the basis of this knowledge.

To read the full text:
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