The global economic cost of a Taiwan Strait military conflict has been modeled by institutions ranging from the Rhodium Group to Bloomberg Economics to various government think tanks and war gaming centers. The estimates vary widely because the scenarios they model vary widely — a short, limited conflict produces different numbers than a prolonged blockade, which produces different numbers than a full-scale invasion with global power intervention. What the models agree on is that the numbers are very large, larger than any economic disruption since the Second World War, and large enough that they constitute an argument for prevention that is separate from any moral or political case for Taiwan’s defense.

The Center for Strategic and International Studies published a major wargame analysis of the Taiwan Strait in January 2023. It ran 24 iterations of a Chinese invasion scenario, varying assumptions about Chinese military capability, American intervention, Japanese participation, and Taiwanese defense posture. The headline finding — that the United States and its allies could likely defeat a Chinese invasion but at very high cost — made international news. The details of the analysis were more nuanced and more alarming than the headline suggested. Understanding what the wargames actually show, and what they cannot show, is prerequisite to understanding the current state of Taiwan contingency planning.