If you care at all about the fate of the world, you should be concerned about Taiwan.

Without downplaying the unfathomable tragedy unfolding in Ukraine, the biggest risk to global peace and security centers around Xi Jinping’s reunification dream, which he intends to realize one way or another. Peaceful reunification seems unlikely, and Taiwan isn’t Hong Kong. Usurping the island’s democracy will require force and at this point, it seems reasonably clear the US would be prepared to defend Taiwan in the event the PLA decided to commandeer the island.

Over the weekend, China sent nearly three-dozen jets and a handful of naval vessels toward Taiwan following the approval in Washington of a half-billion dollar arms deal. At least 20 of the craft crossed into Taiwan’s air defense identification zone or ventured over the median line.

Encroachments, simulated blockades and demonstrations of preparedness by the PLA are, of course, a regular occurrence. Earlier this month, China conducted drills and banned Taiwanese mangoes after vice president and presidential frontrunner Lai Ching-te, who Beijing calls a “troublemaker,” visited the US. Taiwan’s foreign affairs minister poked fun at Xi during the drills. “China should hold its own elections,” he joked, accusing the Party of interfering in the island’s democratic process. “I’m sure its people would be thrilled.”

Defiance aside, there are obviously questions as to Taiwan’s capacity to defend itself in the face of a full-on invasion. A US congressional research report released last week fretted over the island’s many vulnerabilities, described Taiwan’s civil defense preparedness as “insufficient” and said the military “struggles to recruit, retain and train personnel,” for example.

In addition to serving as a geopolitical canary, Taiwan is also a macro canary, which is why I make a habit of documenting monthly industrial production, manufacturing and export data from the island.

As regular readers are apprised, all of those metrics are mired in a protracted downturn. Although the situation improved slightly in the latest updates, the YoY declines remain pronounced. Industrial production fell 15.2% in July, the latest figures, released last week, showed.

Manufacturing output dropped nearly 16%. Both the IP index and the manufacturing subindex (which comprises around 90% of the overall IP gauge) rose from June, but July marked the 14th consecutive month of YoY declines.

Notwithstanding some cloud- and A.I.-related improvement in a subindex for computing and optoelectronics, the figures continued to suggest global demand is subdued. The latest export data suggested the same.

Shipments abroad fell 12% YoY in July. That was actually the shallowest 12-month decline since October, but nevertheless counted as a continuation of what’s now an 11-month slump.

This is (easily) the worst stretch since the financial crisis, at least in terms of depth.

If you’re a glass half-full type, you might suggest the narrower decline means the worst is over. If you’re inclined to pessimism, you could just call it what it is: An ongoing malaise.

Taiwan now expects the economy to expand just 1.6% in 2023, in what would be the slowest pace in eight years.