Taiwan's representative to Singapore pushed back this week against Malaysian Prime Minister Anwar Ibrahim's recent suggestion that force could be justified to preserve national unity — warning that such remarks obscure an economic catastrophe that would fall hardest on Southeast Asia itself.
Tung Chen-yuan, who leads the Taipei Representative Office in Singapore, called Anwar's framing "disturbing" in a Facebook post published alongside a data infographic. Tung argued that drawing a parallel between Taiwan and a secessionist Malaysian state "risks oversimplifying a highly complex historical, political, and international issue" — and that rhetoric perceived as legitimizing force in the Taiwan Strait ultimately undermines regional peace.
Malaysia Faces RM790 Billion Hit, Singapore's Chip Stake at Risk
The economic stakes, Tung wrote, are severe and immediate. A June 2026 study by the International Institute for Strategic Studies estimated that a hypothetical one-year military conflict in the Taiwan Strait could cost Malaysia roughly RM790 billion — equivalent to 41% of its GDP — and put 2.6 million jobs at risk. Even a Chinese economic quarantine of Taiwan, short of open war, would erase 4.1% of Malaysia's GDP. At peak intensity, a full conflict could reduce global trade by as much as 50%, the study found.
Singapore faces equally direct exposure. Its sovereign wealth fund GIC held a 2.08% stake in Taiwan Semiconductor Manufacturing Co. as of the first quarter of 2026 — a tangible financial link to the chip ecosystem underpinning modern AI and global supply chains. Taiwan manufactures roughly 70% of the world's semiconductors, while about 50% of global commercial container traffic transits the Taiwan Strait daily, then-U.S. Secretary of State Antony Blinken noted in July 2023.
A Shock Worse Than COVID and the 2009 Financial Crisis Combined
Bloomberg Economics modeled the full toll in a January 2024 analysis: a Taiwan Strait conflict would shrink Southeast Asia's GDP by 20.1% and cost the world approximately US$10 trillion — a 10.2% deviation from the global GDP trend that exceeds the combined shocks of the COVID-19 pandemic (-5.9%), the 2009 Global Financial Crisis (-5.9%), and the 1991 Gulf War (-1.0%).
A disruption to TSMC's production alone could cost the global economy between US$600 billion and over US$1 trillion annually in the early years of a conflict, former U.S. Director of National Intelligence Avril Haines testified in May 2023.
Lee Hsien Loong: "Trouble for the Whole Region and the World"
Singapore Senior Minister Lee Hsien Loong framed the stakes plainly at the Regional Outlook Forum on January 8, 2026: trouble across the Taiwan Strait would be trouble "not just for Taiwan and China, or the US and China, but for the whole region and for the world."
Tung argued that ASEAN governments need not choose political sides — but they can no longer treat potential Chinese military action against Taiwan as a distant geopolitical dispute. The economic, technological, and supply-chain consequences, he wrote, would land directly across Southeast Asia.
