A possible war over Taiwan would cost the world economy 10% of GDP, or about $10 trillion, Bloomberg reports.

The publication writes that this "dwarfs the impact of the war in Ukraine, the Covid pandemic and the global financial crisis," so "even those most dissatisfied with the status quo have reasons not to risk" with the start of such a war.

However, Bloomberg believes that the conditions for a crisis exist: China's growing economic and military power, Taiwan's growing sense of national identity, and the difficult relationship between Beijing and Washington. A potential hot spot will be the election in Taiwan on January 13, where relations with China are key for the main candidates.

The high economic costs of a possible conflict are due to the fact that Taiwan produces most of the world's advanced semiconductors and chips.

In the event of war, production lines for laptops, tablets, and smartphones would stop. The automotive industry and many other industries would be hit hard.