From New York Times:
China launched two days of military exercises around Taiwan on Thursday, in what it called “severe punishment” against its opponents on the self-ruled island, after Taiwan’s new president vowed to defend its sovereignty .
Map taken from the article:
This is the disposition of US naval forces, approximate as of May 20, 2024.
Source: USNI FleetTrackeraccessed 23 May 24.
Monthly Caldara and Iacoviello GPR Index for Taiwan (until April):
Source: Caldara and Iacoviello Index (2022).
The presidential election took place in January. May estimate not included.
Blackrock has its own index, but the last publication was a month ago.
Source: BlackRock, April 25, 2024.
Assessing the market impacts of higher risk:
Source: BlackRock, April 25, 2024.
Unfortunately, in the absence of high frequency GPR (like we have for the world, from Caldara and Iacoviello), we will have to wait until next month to know the impact on the measured risk.
As discussed in this joba blockade is much more likely than an outright invasion (at least in the near future), while still achieving the goal of causing enormous economic damage.
