$2.6tn could evaporate from global economy in Taiwan emergency

TOKYO — A report on the impact of possible Western economic sanctions on China in the event of a Taiwan emergency sent shock waves among people concerned in the State Council, China’s cabinet, in Beijing in April.

The report analyzed what would happen if the U.S., Europe and Japan imposed sanctions on China to contain its economy, as they did to Russia over its invasion of Ukraine. “If the U.S. and allies move to slap sanctions, our country will return to a planned economy closed off to the world,” the report said.