A conflict with China over Taiwan would impact the global economy 'in ways that we cannot imagine,' US Defense Secretary warns

• US Secretary of Defense Lloyd Austin had some harsh words for his Chinese counterparts on Saturday.
• At Asia's top security summit, Austin said a possible US-China conflict over Taiwan could "affect the global economy in ways that we cannot imagine."

US Secretary of Defense Lloyd Austin spoke at Asia's top security summit on Saturday, issuing a warning that a potential escalation of tensions with China in the Taiwan Strait could have dire economic consequences.

It would "affect the global economy in ways that we cannot imagine," he told the audience at the Shangri-La Dialogue in Singapore, according to a Bloomberg report.

"The whole world has a stake in maintaining peace and stability in the Taiwan Strait, the whole world," said Austin. "The security of commercial shipping lanes and global supply chains depends on it."

The comments were part of a broader address that saw Austin rebuke China for not engaging in military talks. They come after Austin's Chinese counterpart — Minister of National Defense Li Shangfu — declined a meeting at the summit, although the two did briefly shake hands at a dinner on Friday. The US and China remain at an impasse as a territorial dispute over Taiwan continues.

"I am deeply concerned that the PRC has been unwilling to engage more seriously on better mechanisms for crisis management between our two militaries," Austin said at the meeting, according to Reuters.

Shangfu did hit back at Austin, saying "China-US military relations are faced with difficulties and the responsibility lies entirely on the US side."

Not long after Austin's comments on Saturday, Reuters said a US and Canadian warship sailed through the Taiwan Strait, a routine occurrence that has nonetheless rankled Chinese officials in the past.

Concerns around the Taiwan situation have escalated in recent months. Matthew Pottinger, who served as deputy national security adviser in the Trump administration, said in April that there's a more than 50% likelihood that China will invade Taiwan in the next 10 years. In a widely watched CNBC interview last month, mega-billionaire Tesla CEO Elon Musk said a US-China conflict over Taiwan "should be a concern for everyone."