Sea Transportation: August 14, 2005


Taiwan recently ran a large scale training exercise off two of its major ports; Tsoying and Kaohsiung. The exercise assumed that China was going to use submarines and aircraft to shut down the ports, cripple the economy and force the government to surrender. Taiwanese air and naval forces searched for submarines, and ran mock air battles overhead. Taiwan fears that China might try to force it to surrender its independence by attempting to shut off sea access to the island country. This wouldnt be hard to do, because shipping companies would stay away from Taiwan if China just declared an embargo. At that point, the rates for insurance carried by merchant ships would skyrocket. This would force Taiwan to pay much more for shipping costs, thus making their products less competitive, or surrender to China. A third option is to do the same to several major Chinese ports. This would apply the same economic pressure to China, which, for political reasons, might be less able to withstand a naval blockade than Taiwan.


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