By any measure, China’s four main choices for forcing unification with Taiwan—subversion, quarantine, blockade, or invasion—would all have far-reaching consequences for Beijing and the wider Indo-Pacific. While the scenarios vary in intensity, they share outcomes: a breakdown in order in China, widespread economic harm and a shattering of regional peace.
The notion of Taiwan giving up without a fight is improbable to anyone who understands the history of its people. Escalating coercion against Taiwan carries risks that are not easy to assess for China. For major Indo-Pacific economies, such as Australia, Japan and the United States, the clear imperative must be to ensure none of these scenarios ever eventuates—through deterrence, collective effort and early action.
This is the last of four articles reporting the results of ASPI wargaming of the scenarios. The earlier articles described the scenarios, likely warning signs and the initial events we could expect.
Subversion
The lowest-intensity scenario, subversion, may appear surgical, designed to avoid open conflict. But the strategy could unravel even within the first week, especially as the international community challenged what would be Beijing’s obviously bogus story.
China would say it had to deploy a peacekeeping force for stabilisation; this would be framed as a police action rather than aggression. At first glance, this scenario is Beijing’s most plausible play: engineer unrest, install a puppet regime under the guise of a ‘Taiwan Autonomous Emergency Authority’ or some such, and claim peaceful unification without firing a shot. But even in this softest of scenarios, China is assured of blowback. Taiwan would resist Chinese military moves to seize airports, ports and government leadership. Any sabotage would harden the resolve of Taiwan, which would call on security partners for assistance. Countries would be faced with the immediate choice of whether to place economic sanctions on China.
Quarantine
The next possible scenario is quarantine—a grey-zone tactic in which China would restrict Taiwan’s imports and exports under the pretence of law enforcement or customs checks. It’s not declared war, but it could lead to some minor military event that could lead to war. Within the first week, regional shipping routes would be disrupted, leading to longer transit times, increased costs and shipping delays. Airlines would not fly near the Taiwan Strait, insurance premiums would spike, and economies with deep exposure to China and Taiwan—such as those in Southeast Asia, was well as Australia, Korea and Japan—would begin to feel loss of markets and supply.
The world would understand that China was trying to achieve Taiwanese submission while staying below the threshold of war. While Beijing might seek to quickly normalise shipping if Taiwan agreed to a set of political demands, the economic shock would be felt globally. The Indo-Pacific’s most important sea lanes would become theatres of intimidation. And Beijing’s hopes of avoiding escalation would be dashed by mounting pressure for a coordinated regional response.
Blockade
If China instead chose blockade—general curtailment of exports from and imports to Taiwan—it would have chosen an act of war. By day seven, regional order would be under severe strain. Global container traffic (nearly half of the world’s container fleet flows through the strait) would face long delays and diversions. Taiwan’s semiconductor exports would stop cold, throwing global tech and manufacturing into crisis. Approximately US$565 billion in Taiwanese value-added trade would be at high risk of disruption from a blockade.
Financial markets would nosedive. China itself would face a severe economic shock as supply chains broke and foreign investors fled. Even with no shots fired, Beijing would already be facing the prospect of international sanctions, a collapsing currency and growing domestic unrest. The longer the siege continued, the more likely a military clash with Taiwan—or with the United States and its allies.
Invasion
The invasion scenario is the most dangerous. Catastrophe would unfold quickly.
Within a week of launching missiles and amphibious assaults, China would be embroiled in the largest war in the region since 1945. Taiwan’s military would be fighting back in urban warfare. Civilian casualties would mount. Global news would be filled with images of burning ships and bombed cities.
Within hours, commercial shipping and air travel in the region would cease. Regional stock markets would likely close. A conflict in the Western Pacific over the Taiwan question could result in an estimated 25 percent GDP contraction in Asia. Oil shipments to East Asia would be diverted or halted.
And China would enter economic freefall. Foreign reserves could be frozen. If applied, sanctions would sever China’s links to Western finance and critical technology. The likelihood of social unrest in China would rise. And, if the United States entered the fight, China would be at war with the world’s most advanced militaries, and its hopes of a quick victory would disintegrate.
What ties these four scenarios together is how quickly they spiral beyond Beijing’s control. China’s doctrine on escalation management overestimates its ability to control conflict. It’s reliance on academic doctrine and limited real-world crisis experience encourage overconfidence. The Chinese Communist Party may imagine that it can calibrate risk, strike surgically and intimidate Taiwan into submission. But by the end of week one, the regional and global consequences may already be uncontrollable. China’s leaders might face a reality where, no matter the method, the cost of action has vastly outweighed any political reward. Instead of unification, they would have got global isolation, a broken economy and the prospect of military failure and a loss of legitimacy.
How Taiwan’s partners can prevent these scenarios
First, deterrence must be visible, credible, and multilateral. Australia, Japan, the US and others must ensure that Beijing sees a united front, one that is willing to impose costs even in grey-zone scenarios like a quarantine. The development of joint frameworks, such as those proposed by former US assistant secretary of defense Ely Ratner, would facilitate deeper regional security integration. Combined military exercises by Taiwan’s friends, coordinated scenario planning and real-time intelligence sharing should all be part of the playbook now—not after a crisis begins.
Second, economic resilience must be built now. If Beijing believes the region depends too much on its trade to respond meaningfully, it will be emboldened. Australia should continue diversifying supply chains away from exposure to China, particularly in such sectors as energy, rare earths and high tech.
Also, Taiwan must be treated as a partner, not a problem. Quiet but steady support—ranging from cybersecurity cooperation to training exchanges—strengthens deterrence without crossing Beijing’s red lines. Publicly reinforcing Taiwan’s role as a responsible stakeholder in the region helps challenge Beijing’s propaganda and counters its attempts to isolate Taipei.
Finally, messaging matters. China must understand that no scenario, no matter how dressed up in lawfare or maritime euphemisms, would go completely unanswered. The clearer and earlier Taiwan’s partners detail what is happening on the ground, as the US did just before Russia’s 2022 full-scale invasion of Ukraine, and articulate the consequences of aggression, the more deterrence will hold. This requires unity, not just among allies but within domestic politics. Beijing bets on Western division; coordinated clarity should be the response.
The world must convince China that the road to Taipei is lined with peril, not prizes. If Beijing acts, it faces the wrecking of its global standing. Preventing conflict is not Taiwan’s burden alone. For countries like Australia, the task is clear: help raise the costs of aggression high enough that they never have to be paid.
