Trial now
FED

VIEW: BNP Paribas: Faster Tapering

US EURODLR FUTURES

Some Light Selling Seen

CHINA RATES

China Repo Rates Fall on Wednesday

CNH

USD/CNH Bears Eye Key Support

Sign up now for free access to this content.

Please enter your details below and select your areas of interest.

In a town hall event overnight, US President Joe Biden, in answer to a question regarding the potential US defence of Taiwan in the event of a Chinese invasion, responded "Yes, we have a commitment to do that." Later, the White House appeared to try to walk back Biden's comment, stating that the administration was "not announcing any change in our policy and there is no change in our policy".

  • Nevertheless, the comments have understandably gained traction in Beijing. The Chinese Foreign Ministry has stated that China has 'no room for concessions in its core interests' and that the United States should 'avoid sending wrong signals' to Taiwanese independence forces.
  • The comments from Biden come at a time of already-heightened tensions in the region. China's PLA airforce has flown a record number of sorties into Taiwanese airspace in recent weeks, while mass naval exercises by the US and its allies in the Pacific and Indian oceans will not have gone unnoticed in Beijing. Outright conflict in the short term remains extremely unlikely, but stretching into the medium-to-long term the prospect of war over Taiwan cannot be discounted.
Graphic. Chinese Military Aircraft Incursions into Taiwan's ADIZ

Source: AFP, Taiwanese Ministry of National Defense