China’s live-fire military exercises in Taiwan Strait pose threat to global economic activities
By Belle Carter // Aug 10, 2022

Trading was disrupted and shipments were delayed as China conducted live-fire military exercises in Taiwan Strait. The military exercises were China's response to House Speaker Nancy Pelosi's controversial visit to the Taiwan.


It was bad news for cargo shippers as delays would extend shipping time and reduce effective vessel capacity, which in turn could increase freight costs.

"The Taiwan Strait is one of the busiest straits in the world," said Maersk CEO Soren Skou. If it were to close, Skou noted that it would have a dramatic impact on shipping capacity as everybody would have to divert around Taiwan, adding to the length of the voyages.

"That would absorb significant capacity. But I have to say that there seems to be no suggestion that this is where we're going," he said.

Peter Williams, a trade flow analyst at VesselsValue, a market intelligence service for the maritime and offshore sectors, said: "With China conducting significant military drills and military tests around Taiwan, there is potential for substantial disruption to trade in the region."

According to Bloomberg, almost half of the world's container ships and 88 percent of larger container ships transited the Taiwan Strait this year. Additionally, some liquefied natural gas carriers have already rerouted or slowed speed in response to the coming military exercises.

Maritime insurer Swedish Club said the live-fire exercises are very close to Taiwan's major commercial ports, including Keelung, Su-ao, Taipei, Kaohsiung, Anping, Hoping and Hualien.

Aftermath of Pelosi's high-profile visit to Taiwan is not looking good

The pending disruption of commercial trade due to the military firing exercise in the trade-busy strait could drastically cause the country's economic collapse. All of this is due to the highly controversial visit of U.S. Speaker, Nancy Pelosi. (Related: China surges forces toward Taiwan, conducts live-fire drills as Speaker Nancy Pelosi visits.)

Her trip was not officially sanctioned by the Biden Administration, but he did not publicly dissuade her from going.

China frequently reacts vehemently over foreign visits to Taiwan, which it claims is a Chinese territory that it will soon retake.

The Guardian reported that its countermeasures rarely exceed some People's Liberation Army (PLA) jets flying in and out of Taiwan's large air defense identification zone (ADIZ).

"Analysts warned that this time looked different. Beijing's protests were louder and more threatening and gave little room for either it or the U.S. to retreat without losing credibility. This time, it would have to follow through with something bigger," the report said.

Shelley Rigger, a professor of political science at Davidson College, said the key takeaway from Pelosi's visit is that it was "ultimately about U.S. domestic politics and People's Republic of China domestic politics, and Taiwan was the pawn caught in the middle."

"Initially, Pelosi's goal was almost certainly to do a little cheerleading for Taiwan, show that the U.S. cares about it, that we are paying attention, and that it is an important friend and partner – that kind of thing," Rigger said.

She added that this does not benefit Taiwan, probably does harm to Taiwan's security and has insured that U.S.-China relations are worse than they were before.

"We may have a much more difficult time recovering than we thought three weeks ago," she noted.

Pelosi addressed the Taiwanese parliament and met the president, senior ministers, dignitaries and other officials on August 3. The following day, there were multiple Chinese warplane incursions into the ADIZ and cyberattacks targeting the websites of Taiwan's ministries of foreign affairs and defense.

Signboards at railway stations and in-store screens at 7-Eleven were also hacked, displaying messages calling Pelosi a warmonger in the simplified Chinese text language.

The PLA then fired almost a dozen Dongfeng ballistic missiles the same day and made dozens of incursions over the highly symbolic median line. Japan said at least five missiles landed within its exclusive economic zone, and some had flown over Taiwan's main island, just south of Taipei.

Taiwan sent navy vessels to the median line to drive away the PLA, and deployed jets and land-based missile systems to monitor the situation. The country's President Tsai Ing-wen called for international condemnation.

Watch the below video that talks about Pelosi's reckless Taiwan junket.

This video is from the What is happening channel on

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Sources include:

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