Hi guys,
If things get very bad between China and the US (say, a conflict over Taiwan), what would China do in the following scenarios?
Scenario 1: U.S. Implements a total chip ban on China
Basically place the entire country on the "entity list" similar to that of Huawei. China's total indigenous semiconductor capacity is very far behind; currently choked at the 90 nm SMEE lithography node level. That means that they would no longer be able to build or import modern computers, including smartphones. Over time, this would obviously degrade their access to the Internet, and the whole IT economy. Including China's military being crippled eventually due to lack of cutting edge chips.
Scenario 2: Cut out of the SWIFT banking system
The SWIFT system is an information exchange system among international financial institutions. The bank card payment function supported by the SWIFT system is the reflection of a country's financial security. In the Ukraine crisis in 2014, the United States and Europe imposed sanctions across multiple sectors, including financial sanctions against Russia. The goal of such an extreme measure was to cut off the Russian banks from the SWIFT system, thereby crashing the Russian bank card payment system and in turn disrupting domestic and foreign economic activities. Although this measure was not actualized in the end, its threat to the Russian financial system has become an urgent issue for the country to address.
The same could be imposed on China.
In terms of membership composition, almost all the important financial institutions in the world are SWIFT members.
Scenario 3: Ban Chinese apps
Certain apps such as WeChat and Alipay have become core and base for Chinese society and the Chinese economy. However, these apps run on U.S. Google Android and Apple iOS operating systems. If these apps were banned from these operating systems, banned from the "Google Play Store" and the "Apple App Store" they could no longer be available. This could cause widespread chaos throughout China's economy. Other companies like Baidu and Alibaba could be banned as well instantly destroying their parent companies.
Scenario 4: Cut off oil
While the U.S. economy has become more energy self-sufficient over the past decade, the opposite is now true of China, which is now the world's largest energy importer of over 10 million barrels a day, a record level in 2019. If the U.S. closes the Persian Gulf, Panama Canal, or the Straits of Malacca then it can cut off China's supply of oil from OPEC members, which is 55% of the supply. China might be able to make up some of these with inland sources. However China's current sourcing from Iran is very low due to U.S. sanctions, while only about 15% of China's oil imports come from Russia. These run on long pipelines and some of the pipelines run through central Asia. These pipelines are very vulnerable to being crippled by a missile strike.
There are likely other scenarios not mentioned here. For instance, since Boeing and Airbus are the duopoly suppliers to China's aerospace industry, a cutoff here could cause chaos in China's commercial aviation market's ability to grow.
Today are not the days of Mao Zedong hiding in the mountains anymore. China is no longer autarkic and integrated with the world. What could it do to these scenarios, or is there no defense?
If things get very bad between China and the US (say, a conflict over Taiwan), what would China do in the following scenarios?
Scenario 1: U.S. Implements a total chip ban on China
Basically place the entire country on the "entity list" similar to that of Huawei. China's total indigenous semiconductor capacity is very far behind; currently choked at the 90 nm SMEE lithography node level. That means that they would no longer be able to build or import modern computers, including smartphones. Over time, this would obviously degrade their access to the Internet, and the whole IT economy. Including China's military being crippled eventually due to lack of cutting edge chips.
Scenario 2: Cut out of the SWIFT banking system
The SWIFT system is an information exchange system among international financial institutions. The bank card payment function supported by the SWIFT system is the reflection of a country's financial security. In the Ukraine crisis in 2014, the United States and Europe imposed sanctions across multiple sectors, including financial sanctions against Russia. The goal of such an extreme measure was to cut off the Russian banks from the SWIFT system, thereby crashing the Russian bank card payment system and in turn disrupting domestic and foreign economic activities. Although this measure was not actualized in the end, its threat to the Russian financial system has become an urgent issue for the country to address.
The same could be imposed on China.
In terms of membership composition, almost all the important financial institutions in the world are SWIFT members.
Scenario 3: Ban Chinese apps
Certain apps such as WeChat and Alipay have become core and base for Chinese society and the Chinese economy. However, these apps run on U.S. Google Android and Apple iOS operating systems. If these apps were banned from these operating systems, banned from the "Google Play Store" and the "Apple App Store" they could no longer be available. This could cause widespread chaos throughout China's economy. Other companies like Baidu and Alibaba could be banned as well instantly destroying their parent companies.
Scenario 4: Cut off oil
While the U.S. economy has become more energy self-sufficient over the past decade, the opposite is now true of China, which is now the world's largest energy importer of over 10 million barrels a day, a record level in 2019. If the U.S. closes the Persian Gulf, Panama Canal, or the Straits of Malacca then it can cut off China's supply of oil from OPEC members, which is 55% of the supply. China might be able to make up some of these with inland sources. However China's current sourcing from Iran is very low due to U.S. sanctions, while only about 15% of China's oil imports come from Russia. These run on long pipelines and some of the pipelines run through central Asia. These pipelines are very vulnerable to being crippled by a missile strike.
There are likely other scenarios not mentioned here. For instance, since Boeing and Airbus are the duopoly suppliers to China's aerospace industry, a cutoff here could cause chaos in China's commercial aviation market's ability to grow.
Today are not the days of Mao Zedong hiding in the mountains anymore. China is no longer autarkic and integrated with the world. What could it do to these scenarios, or is there no defense?