The Taiwan Strait, a narrow body of water separating the self-governing island of Taiwan from China, has long been one of Asia’s most volatile geopolitical fault lines. With Taiwan’s 2025 annual Han Kuang military exercise underway and millions today – July 17, 2025 – across Taipei taking part in drills to evacuate streets as the nation’s military runs through live fire exercises and cyber-defence simulations, the island’s determination to prepare for the worst is clear.

But what if the worst did indeed come to pass? What if the People’s Republic of China, under the leadership of President Xi Jinping, were to make the grave strategic miscalculation of launching a full-scale invasion of Taiwan?

Such a scenario would almost certainly plunge Asia into crisis, with global repercussions stretching well beyond the region. From military confrontations to economic convulsions, and diplomatic rifts to humanitarian consequences, the entire Indo-Pacific would be reshaped. Countries like the United States, Japan, Australia and members of the European Union would be pulled into the vortex, willingly or not.

Lightning strike or quagmire?

Should Beijing decide to use force to bring Taiwan under its control, it would almost certainly begin with a rapid, high-intensity campaign: air and missile strikes on key Taiwanese military installations, cyberattacks against infrastructure, and amphibious assaults on key coastal areas along the west coast. The objective would be a swift decapitation of Taiwan’s political and military leadership, aiming to achieve unification before the international community could mount an effective response.

Yet, unlike Hong Kong which ‘fell’ with little real opposition – mass demonstrations led by high-profile anti-Chinese activists notwithstanding - Taiwan is no soft target. The island has fortified itself through years of strategic defence planning. Its current Han Kuang drills which simulate urban warfare, counter-amphibious assaults, and mass evacuation procedures are designed with just such a scenario in mind.

Moreover, its terrain favours defenders: steep mountains, dense urban centres, and unpredictable weather would likely turn any invasion into a protracted and bloody conflict.

Immediate regional reactions

As such, a Chinese assault on Taiwan would be seen across Asia not just as a bilateral crisis but as a fundamental challenge to the rules-based international order. Japan, whose southernmost islands lie just 100 kilometres or so from Taiwan, would almost certainly activate its own Self-Defence Forces, and while its constitution technically limits offensive warfare, a conflict so close to home potentially disrupting shipping lanes and endangering US forces stationed in Okinawa would compel Japanese intervention.

South Korea, already wary of China’s growing regional assertiveness, would also face immense pressure to support its US ally. And while the Korean Peninsula remains consumed by the North Korean threat, Seoul’s alignment with Washington would make neutrality difficult to sustain.

Southeast Asian nations would be deeply divided. Vietnam, with its own long history of tension with Beijing, might quietly lend support to Taiwan’s cause, at least diplomatically. The Philippines, now strengthening defence ties with the US under its Enhanced Defence Cooperation Agreement (EDCA), could allow US forces access to key airstrips and naval ports. Conversely, Cambodia and Laos, long reliant on Chinese economic patronage, would likely remain silent or offer tacit support to Beijing.

India, increasingly at odds with China over its Himalayan border, would view an invasion of Taiwan as confirmation of Beijing’s revisionist agenda but would likely sit atop the proverbial fence watching how things play out. Unlikely to commit troops, New Delhi could boost military readiness along its northern frontier and deepen security partnerships through the Quad alliance with the US, Japan, and Australia.

US, Allied military response

Washington’s response meanwhile would very likely be immediate and forceful. The US has no formal treaty obligation to defend Taiwan, but the Taiwan Relations Act of 1979 obliges it to help the island maintain a credible defence. In recent years, US arms sales to Taiwan have grown more sophisticated, and its warships frequently transit the Taiwan Strait to assert freedom of navigation.

A Chinese invasion would more than likely trigger a swift deployment of US carrier strike groups from Guam and Japan, backed by submarines and air power. Bases in Okinawa, Guam, and even northern Australia would serve as forward operating points. Cyber and space assets would be activated to disrupt Chinese command-and-control systems.

How and even if the ever unpredictable occupant of the White House, President Donald Trump, would react is anyone’s guess.

Australia, a long-standing US ally and increasingly assertive regional power, would likely lend naval and intelligence support. Canberra, which recently acquired nuclear submarine capabilities through the AUKUS pact, would treat Chinese aggression in the Indo-Pacific as a direct challenge to wider regional stability.

European diplomacy and economic blowback

Though geographically distant, the European Union too would not sit on the sidelines. France, Germany, and the UK have already conducted freedom of navigation patrols in the Indo-Pacific and would see a Taiwan invasion as a threat to international law and open trade routes. Diplomatic condemnations would be swift, and economic sanctions on China, possibly coordinated with the US, would follow.

Such sanctions could include cutting China off from key financial systems, banning technology exports, and freezing overseas assets of Chinese political and military leaders. These would be devastating to China’s economy, which, unlike Russia’s, remains deeply intertwined with Western markets.

However, European consensus may prove fragile. Countries like Hungary and Serbia have close ties with Beijing and would resist a unified front. Moreover, Europe’s dependence on Chinese goods and markets, particularly in sectors such as electric vehicles and rare earths, would create economic and political tensions at home.

Global economic shocks - plural

A Chinese invasion of Taiwan would also trigger immediate turmoil in global markets. Taiwan is the world’s leading manufacturer of advanced semiconductors, particularly through its flagship firm, TSMC. Any disruption to this supply chain would paralyse the global electronics industry, from smartphones to automotive manufacturing.

Shipping lanes through the Taiwan Strait, South China Sea, and East China Sea which are some of the busiest in the world would become warzones. Energy prices would spike, insurance premiums for cargo vessels would soar, and companies would scramble to reorient supply chains away from China and the region. Over time this would cripple the Chinese economy.

Stock markets would plunge globally, and inflation could surge, particularly if the war disrupted exports of high-tech goods and industrial components. Developing economies in Asia dependent on both Chinese investment and trade with the West would be caught in the crossfire. Tourism to the region – a key factor in the economic makeup of a number of nations across Southeast Asia – would crumble.

A war without winners

Because of all this, a Chinese invasion of Taiwan would not only be a military and diplomatic disaster for Beijing, it would mark the end of China’s peaceful rise to power and alienate much of the world.

Even if Chinese forces succeeded in occupying the island, holding it would be another matter entirely. Resistance, both from within Taiwan and across the globe, would endure for years, if not decades.

There have already been rumblings in Taiwan that self destruction of key infrastructure would be preferential to Chinese takeover.

For the rest of Asia, the war would be a tragic confirmation that peace with China cannot be taken for granted. Regional alliances would harden, defence spending would surge, and the dream of Asian cooperation would be overshadowed by strategic suspicion.

For Taiwan, now strengthening its defences through annual military drills like Han Kuang -ongoing at time of typing - the stakes could not be higher. The island remains a vibrant democracy, a tech superpower, and a symbol of resistance to authoritarian expansion. While it hopes for peace, it is preparing- practically and psychologically - for the possibility of war.