Whitehall officials have strategised a series of scenarios about the economic fallout that could follow if China were to invade Taiwan, sources have told the Guardian.
Concerns about the major disruption to global supply chains and consequences of any coordinated western response have been examined by civil servants as part of what is said to be routine “forward-scanning” exercises.
Foreign Office insiders said there was no change to the scale or urgency of the work, though they conceded Russia’s full-scale invasion of Ukraine last year had given it renewed prescience.
Ahead of an update to the UK’s defence and security strategy, known as the integrated review, the prime minister, Rishi Sunak, is facing pressure from China hawks in his party to re-classify the country as a “threat” instead of a “systemic challenge”.
On Friday, his predecessor, Liz Truss, is set to give a speech in Japan, which will be viewed as an attempt to push Sunak to take a tougher stance against China amid the clamour over a “spy balloon” shot down in the US, recent incursions against democracy and alleged human rights abuses.
The Guardian has learned that Whitehall officials have been sketching out the implications of an invasion of Taiwan by the People’s Liberation Army. Concerns about such a conflict have grown recently, and predictions about when it could take place range as far into the future as 2049.
China’s government claims Taiwan as a province and its authoritarian premier, Xi Jinping, is set on what he terms “reunification”.
A UK government source said officials were looking at “what we would do, and what that would mean for our economy” should China launch an invasion that prompted retaliatory economic and trade sanctions by western countries.
The response would probably be markedly more complex than the asset seizures and other moves taken against Russia and figures close to president Vladimir Putin.
“You would have to think in a different way than just matching what you did somewhere else,” said a second government source. “It’s no secret that the supply chain problems would be greater, but just because it’s complicated that doesn’t mean it’s impossible.”
Of particular concern is disruption to the distribution of microchips, which Taiwan dominates the manufacturing of and which are already in short supply.
It was stressed that the invasion of Taiwan was one of a number of scenario plans for “black swan events” that are regularly rehearsed by the UK government, and that the work was “theoretical”.
Alicia Kearns, a Conservative MP and chair of the foreign affairs select committee, said she welcomed the recognition of “the seriousness of the threats against Taiwan to global economic security”.
She added: “I hope this results in those concerns being reflected in the integrated review and a recognition of the need for urgent deterrence diplomacy.”
Though Sunak entered office in November by signalling the end of a “golden era” of relations with China, he has been notably less hostile towards Xi’s administration than Truss.
During last summer’s Tory leadership contest, Sunak said that “China and the Chinese Communist party represent the largest threat to Britain and the world’s security and prosperity this century” – language he has since backed away from using.
Truss was said to have initiated a revision of the integrated review to reclassify China as a threat. But sources suggest the Sunak administration’s update – which is being pencilled in for publication on 7 March – will not go that far.
In the latest of a series of interventions designed to rehabilitate her political career after becoming the shortest-serving prime minister, Truss is expected to speak at the Inter Parliamentary Alliance on China (Ipac) symposium in Tokyo on Friday.
She is said to be planning to put pressure on Sunak to take a more hawkish approach to foreign policy, and voice concerns that efforts to counter the threat from China have been too weak.
In her Mansion House speech as foreign secretary last April, Truss said “we must ensure that democracies like Taiwan are able to defend themselves”. She also called for an “assertive approach” to “constrain our rivals” – who she branded “pariahs and outliers” for not respecting sovereignty.
Relations with Beijing are likely to come under growing scrutiny given the discovery of a “Chinese spy balloon” in the US, and the UK’s Ministry of Defence has launched its own security review of what it called a recent spate of “airspace intrusions”.
A Foreign Office spokesperson said: “We recognise China poses a systemic challenge to our values and interests – a challenge that grows more acute as it moves towards even greater authoritarianism.
“We have brought in new powers to block any Chinese investments that risk our national security and we are currently updating the integrated review, which will take into account the evolving challenges posed by China.”
