TheeconomicconsequencesforChinaofanewKoreanWar

By Danny Lam

Kim Jong-un welcomed the new year stating that “the nuclear launch button is on his desk,” and that North Korean nuclear missiles can reach the US. A “last ditch” diplomatic effort to resolve the crisis jointly organized by the US and Canada is to take place in Vancouver on January 16.

Allies using force to resolve the North Korea problem will be the defining event of the 21st century, with a range of possibilities from a limited “surgical” strike to nuclear war between Western allies and China and/or Russia. Anticipating and positioning for economic consequences of war on the global economy will be the most consequential investment decision of the year. Depending on what China under President Xi Jinping does, the war could devastate the Chinese economy.