Abstract: The economy of Taiwan began to take shape after the occupation of the island by Japan under the peace treaty with the Chinese Qing Empire in 1895. After that, Tokyo began to actively invest in the development of a new territory: railroads, factories and defense enterprises were built. In this way, an industrial base was created that Taiwan uses to this day. After Japan’s defeat in World War II, the island briefly returned to the Republic of China. However, there was a civil war in the country between the communists and nationalists, who rallied around Chiang Kai-shek, who eventually lost and withdrew to Taiwan with his associates. Taipei officially named the new state the “Republic of China” and has declared and continues to declare claims against the entire territory of China. Beijing, on the other hand, regularly declares that Taiwan is part of the People’s Republic of China and has announced its reunification with the “rebellious island”. The article deals with the economic consequences for the world economy resulting from the potential crisis between China and Taiwan. The subject is inspired by the dependence of the economies of many countries, including the United States and the European Union, on products supplied from the region of East Asia, especially by Taiwan, which in the event of a crisis in relations between conflicted countries may create threats to the international economic security.
Key words: China, Taiwan, economic security, supply chain, value chain, semiconductors, Taiwan Strait