[UPDATED ROLLING ANALYSIS] China-Taiwan: A new week

NOTABLE WEEKEND UPDATES:

CHINA

TAIWAN

US

Analysis details (07:17)

RHETORIC SINCE PELOSI'S LANDING: 

ECONOMIC MEASURES TAKEN BY CHINA:

CHINESE MILITARY DRILLS (extended to Monday from Sunday):

 

 

 

 

 

 

Analysis at 09:07

LONG-STORY-SHORT: Tensions have escalated between the world’s two largest economies over the visit of US House Speaker Pelosi to Taiwan. The move has struck a nerve in Beijing with recent rhetoric from China of a military nature. The visit will likely not lead to any joint economic policies between Taipei and Washington during the brief visit, however, it will cause China to question the US’ acknowledgement of Beijing’s “One China principle” which does not see Taiwan as a sovereign nation, with Pelosi being the highest-ranking US official to visit the island since 1997. Desks have also flagged the timing of the visit - August marks the 95th anniversary of the founding of the People's Liberation Army (PLA), and thus a visit to Taiwan from the US comes at a sensitive time for Beijing. From the US side, some officials, including National Security Advisor Sullivan, have warned against the trip as it escalates the risk of a conflict. However, heading into the US midterms in November, “many Republicans, and a few Democrats, have urged Pelosi to proceed, arguing that any decision to postpone or cancel would be capitulating to China”, according to the FT.

BEIJING RETALIATION:


  1. Sending warplanes to Taiwan Air Defence Identification Zone (ADIZ)

  2. Flying across the median line – a buffer zone the US established in 1954 which China denies (see figure below) - and/or flying over Taiwan.

  3. Deploying warships in waters near Taiwan.

  4. Conducting missile tests in waters near Taiwan.

MARKET IMPACT

08 Aug 2022 - 07:12- Fixed IncomeEconomic Commentary- Source: Newsquawk

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