3 ways the Taiwan-China standoff could impact world markets

The standoff between China and Taiwan (and the U.S.) has heightened tensions to their highest level in decades but — so far at least — economic observers haven’t seen a worst-case scenario.
Honor guards prepare to raise the Taiwan flag in the Chiang Kai-shek Memorial Hall square. Honor guards prepare to raise the Taiwan flag in the Chiang Kai-shek Memorial Hall square ahead of the Taiwanese presidential election on January 14, 2016 in Taipei, Taiwan.

The standoff between China and Taiwan (and the U.S.) has heightened tensions to their highest level in decades but — so far at least — economic observers haven’t seen a worst-case scenario.

The island’s crucial semiconductor industry has dodged a direct hit and, while China currently has Taiwan effectively blockaded, that is expected to end this weekend.

But White House officials and other observers say that doesn’t mean Taiwan’s economy and world markets are getting off scot free. There are three key economic ripples — from global shipping to cyber attacks to trade wars — that may be felt across world markets in the weeks and months to come, even if tensions don’t get any worse.

“We will not seek, nor do we want, a crisis,” NSC Coordinator for Strategic Communications John Kirby told reporters Thursday, but he was clear that China’s actions “erode the Cross-Strait status quo” on both economic and military issues.

Here are some of the immediate economic effects likely to be felt even if China stops short of full scale economic (or actual) warfare following House Speaker Nancy Pelosi’s trip to the island.

Continue reading at finance.yahoo.com.