Britain ‘is catching the economic fallout from China’s invasion of Taiwan’ amid supply chain fears

British officials are studying the economic fallout of a possible Chinese invasion of Taiwan amid rising Beijing hostility to the democratic island nation.

Foreign Office officials are concerned about the conflict in a key trade area involving the world’s second largest economy and how it could affect Britain.

President Xi Jinping’s administration has stepped up efforts to intimidate Taiwan by flying fighter jets and bombers near the island and firing missiles into the sea.

Nearly two dozen Chinese military planes and ships were spotted in the Taiwan Strait Monday morning.

Key concerns include the impact on supply chains, including for microchips, which are vital to a wide range of electrical devices from computers and phones to washing machines, the Guardian reported.

It comes as former Chancellor Philip Hammond makes a startling intervention in strained Sino-British relations.

Mr Hammond used an article in the China Daily newspaper – run by the communist regime – to urge the UK to increase trade ties with Beijing.

The ex-MP also pointed out that recent crises, including a crackdown on Hong Kong democracy and the ethnic cleansing of Uyghur Muslims in Xinjiang, have been “background noise for this relationship over the past three years (which) have been challenging”.

State Department officials are concerned about the conflict in a key trade area involving Taiwan — pictured is a Taiwanese honor guard for a meeting of Taiwanese President Tsai Ing-wen and Paraguayan President Mario Abdo Benitez today

President Xi Jinping’s administration has stepped up efforts to intimidate Taiwan by flying fighter jets and bombers near the island and firing missiles into the sea.

Mr Hammond used an article in the Communist China Daily newspaper to urge the UK to increase trade ties with Beijing.

“Post-Brexit Britain has not yet set out its plan for the future and articulated how it intends to make a living and maintain its prosperity,” he wrote.

“But I do know one thing: there is no credible plan for a prosperous future for a trading nation the size of Britain that is to turn its back on the world’s second largest economy.

“Let’s focus not on what divides us, but on what unites us – standing up for free and fair trade, fostering mutual openness to investment and working together to fight climate change.”

China on Thursday imposed trade and investment sanctions on Lockheed Martin and part of Raytheon over arms sales to Taiwan, stepping up efforts to isolate the island democracy claimed by the ruling Communist Party as part of its territory.

Lockheed Martin and Raytheon Missiles and Defense will not be allowed to import goods into China or make new investments in the country, the Commerce Department said.

They have been included in the “unreliable companies” list of companies whose activities are restricted because they may threaten national sovereignty, security or development interests.

It was not clear what impact the penalties could have. The United States bans most sales of weapons-related technology to China, but some military contractors also have civilian deals in aerospace and other markets.

Taiwan and China separated in 1949 after a civil war. The island of 22 million people was never part of the People’s Republic of China, but the Communist Party says it is committed to uniting with the mainland by force if necessary.

Source: | This article originally belongs to Dailymail.co.uk