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Ken Griffin says a 'rupture' around Taiwan could spark a new Great Depression

Photo of Citadel founder Ken Griffin
Citadel CEO Ken Griffin warned that a "rupture" over Taiwan would be "catastrophic" for the US and Chinese economies.PATRICK T. FALLON/AFP via Getty Images
  • Ken Griffin told CNBC that a "rupture" around Taiwan could spark a new Great Depression.

  • The billionaire warned any conflict would be "catastrophic" for both the US and Chinese economies.

  • Taiwan is a vital supplier of semiconductor chips for the rest of the world.

Citadel founder and CEO Ken Griffin has warned that a "rupture" around Taiwan could spark a new Great Depression.

Speaking on CNBC's "Squawk on the Street" at the MFA Network conference in Miami on Tuesday, Griffin said: "If there were a rupture around Taiwan, it would be catastrophic to both the Chinese and the American economy.

And by catastrophic I think you're looking at Great Depression circumstances," he said.

The billionaire said that the US would face a drop in GDP of between 8% to 10% if it lost access to Taiwanese semiconductors, with the island producing reportedly around 90% of the world's advanced microchip supply.

"If we lost access to Taiwanese semiconductors, how many weeks until Tesla stops making cars? Or GM? Or Ford? Or Boeing stops making planes? Those chips are used in every part of our economy," Griffin told CNBC.

"It's really important as a matter of national economic security that we're able to maintain peace in that region of the world," he added.

Tensions over Taiwan have been growing in recent months, with the self-governing nation recently electing pro-sovereignty candidate Lai Ching-te as president, likely angering Beijing.

China has always maintained that Taiwan is a breakaway province that will be reunited with the mainland, either peacefully or by force — and Chinese leader Xi Jinping reportedly reiterated that message to Joe Biden at a recent meeting.

Any war over Taiwan would be highly destructive and economically damaging, with Bloomberg forecasting that it could have a bigger impact on the US economy than the COVID-19 pandemic did if Washington were to be drawn into the conflict.

January 31, 2024: This story was updated to clarify Ken Griffin's remarks. He said maintaining peace around Taiwan was a matter of "national economic security" for the US but did not give a specific example, like a Chinese invasion, of what a breakdown in peace might entail.

Read the original article on Business Insider