IDG Connect: ‘South China Sea conflict could be IT’s Black Swan’

August 15, 2016

Escalating tensions over China’s advancement in the South China Sea ‒ one of the world's key trade routes ‒ could have a major impact on consumers and businesses alike, experts say. IDG Connect, an online publication by International Data Group (IDG), the world’s largest technology media company, interviewed Clark University’s Srinivasan Sitaraman, associate professor of political science, about the ramifications of China’s building artificial islands in the Spratly archipelago.

“The risk of disruption may be more of a Black Swan ‒ a low-probability, high-impact event for which there is no reasonable way to prepare. Shifting manufacturing to another part of the globe, or even ‘reshoring’ it to the U.S., would be a multi-year, expensive undertaking. …

“But if something were to happen ‒ a miscalculation, a mistake by a sea captain, a rocket launch ‒ the consequences could be severe.

“It is estimated that $5.3 trillion in trade passes through the South China Sea, with the U.S. accounting for more than a trillion of it, said Srini Sitaraman, associate professor in Clark University’s political science department.

“ ‘The economic repercussions of a large-scale naval conflict in the region are not only worrisome because of its escalatory impact, but the economic consequences could be severe and could potentially halt our way of life as it works right now,’ said Sitaraman.”