War between China and Taiwan could lead to a break of undersea communications cables and costly delays in moving shipping containers through the region, according to a think tank report made public Monday.
The report warns that the Chinese military, the People’s Liberation Army, has “planned extensively” for an invasion of the self-governed island state located about 100 miles off the Chinese mainland coast.
“The potential effects of a Chinese invasion of Taiwan on the U.S. economy are far greater than those of the Russian invasion of Ukraine,” the report by George Mason University’s Mercatus Center states. “Container shipments to and from major ports in the region, as well as digital flows, would be at direct risk.”
The report is based on an open-source analysis of Chinese data revealing hundreds of potential targets, including both military facilities and key digital infrastructure such as submarine cable landing stations.
As part of an attack on Taiwan, the PLA could cut undersea cables or attack landing stations on land to disrupt both civilian and military data and communications.
The target points were identified by New Kite Data Labs, which obtained them from an unguarded Chinese internet protocol address owned by Hangzhou Alibaba Advertising Co. Ltd., identified by cybersecurity analysts as a sham internet service provider operating over a million IP addresses for third-party users.
“This evidence may indicate the kind of documentation PLA is gathering, and it underscores the risks to U.S. goods trade and digital trade with and through Taiwan in the event of a crisis in the strait,” the report said.
The IP address was linked to multiple cybersecurity incidents between Oct. 2019 and Oct. 2021 that targeted the United States, including the Mirai malware attack involving software that infected smart devices and turns them into remote “bots” that hackers used to launch large “denial of service” cyberattacks.
The Chinese database contains 294,100 points of interest or potential targets in Taiwan, with latitude, longitude, postal address, telephone numbers and other information.
Not all are likely of military interest. But spread among the database are the locations of key Taiwanese military facilities and public infrastructure that “are strategically important and vulnerable in a kinetic conflict,” the report said.
A total of 183 sites were military, including bases, schools, and camps. Listed were the Taiwan navy’s ammunition depot known as the Haifeng Brigade and the military police command headquarters.
The Chinese also have identified 341 transportation targets, including airports, train stations, and seaports. Information and communication technology targets include 550 potential sites, including telecommunication nodes and internet service providers and undersea cable landing stations, including Chunghwa Telecom facilities, Taiwan Mobile facilities, Qualcomm Taiwan Corp. headquarters and other service provider offices.
A total of 2,397 government sites were included, including the National Security Bureau, the main Taiwanese intelligence agency and a village government office on Orchid Island, east of the main island of Taiwan.
“The [points of interest] are comprehensive, and their locations are spread across Taiwan’s territory, including in areas that are sparsely populated,” the report said. “The data suggest that at least one Chinese entity, possibly a government-affiliated entity, is paying close attention to a variety of economically and militarily critical locations on the island.”
Tensions between China, Taiwan and the United States rose this month following the visit to Taiwan by House Speaker Nancy Pelosi.
Chinese military forces carried out large-scale exercises that analysts say appeared to be preparation for an attack on the self-ruled island that China insists is part of its territory.
Two U.S. Navy cruisers transited the Taiwan Strait on Sunday in a show of support for a key regional U.S. ally. The aircraft carrier USS Ronald Reagan, however, has not made a passage through the 100-mile-wide strait as some U.S. officials said was likely. The Reagan was deployed south of Taiwan in the Philippine Sea several days ago.
The report said the effects of a conflict or Chinese blockade of Taiwan would impact every major economy and hurt the U.S. economy.
Taiwan also is a central stopping point for trans-oceanic undersea cables that move internet and telephone traffic.
The report said Taiwan is connected to 15 undersea fiber optic cables that come ashore at three on-shore stations in Taiwan.
“These landing stations connect high-capacity cables in which U.S. technology companies have made significant investment,” the report. “For instance, the Pacific Light Cable Network is owned by Google and Meta and became ready for service in January 2022.”
Undersea cables are not clearly protected under international law, making them vulnerable targets in a conflict.
The report estimates that disruption of digital communications on Taiwan would cost the island’s economy $55.63 million per day or $1.69 billion per month.
The report said diverting extensive container shipping that currently passes through the Taiwan Strait would increase both insurance and shipping costs by tens of millions of dollars for each ship.
Vital shipping to the United States, Japan, the Philippines, South Korea, and Vietnam would be forced to take new routes to avoid a Taiwan Strait conflict.
“Costs of rerouting all traffic around the Straits of Malacca have been estimated between $279 million per month (if rerouting through Indonesia) and $2.82 billion per month (if rerouting through Australia),” the report said.
The report did not address the impact to the world economy caused by a Taiwan war by a disruption of computer microchips, a key Taiwanese export and an item that usually is transported by air.
Air transport, like shipping, would be disrupted by a Taiwan conflict, the report said.
The report, “Submarine Cables and Container Shipments: Two Immediate Risks to the US Economy if China Invades Taiwan,” was written by Christine McDaniel and Weifeng Zhong.
The New York Times reported this week that China is working on capabilities to blockade Taiwan as a way to cut off the island in its efforts in the event of conflict.
The recent war games showed that the PLA can encircle Taiwan with military power. The PLA fired 11 missiles over and near the island, U.S. officials said of the bid to coerce and intimidate the Taiwan government.
But the PLA’s ability to conduct a full invasion of Taiwan right now is not clear.