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What would a Taiwan conflict cost China? DW examines the risks

Rhodium Group analyst Charlie Vest warns that an escalation would damage China's economy as well as Taiwan's, with consequences far beyond the strait.

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DW News Story of November 3, 2026Trari Newsroom

Why this story? One of DW News's most watched videos since yesterday, with 108,516 views.

How costly could war be for China? | DW News

China's military buildup comes with an economic vulnerability: a major escalation over Taiwan could inflict severe losses on China itself, according to DW News's explainer with Rhodium Group analyst Charlie Vest.

The report moves from the cost of preparing for war to the potential cost of fighting one. It contrasts Beijing's announced defense budget with higher independent estimates, then examines investment in maritime forces and China's naval capacity. Military spending, however, is only part of the calculation.

Vest warns that a major escalation in the Taiwan Strait would be extremely costly for the global economy. DW presents a possible worldwide economic hit of $10 trillion, citing Bloomberg. That is a conflict scenario, not a loss that has occurred.

The risks also extend beyond an outright invasion. Vest describes grey-zone actions, including AI-driven hacking aimed at Taiwanese targets. He identifies Taiwan's dependence on trade shipping and energy shipments as vulnerabilities in an escalation.

DW's central distinction is between what Beijing spends on military capability and what using that capability could cost. Its report argues that the economic consequences would not stop at Taiwan's shores, or spare China.

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