Chinese and US flags fly near the Bund, before the US trade delegation meets its Chinese counterparts for talks in Shanghai, China on July 30, 2019.
Song of Aly | Reuters
The strained relationship between the United States and China over Taiwan will be the main risk for Asia in the coming year, according to a political risk analyst.
Beijing views any action by Washington on Taiwan as negative or detrimental to its interests, said DJ Peterson, chairman of Longview Global Advisors, a research firm.
âIt’s really the highest risk, I think in Asia in 2022. If you look at the relationship between the United States and China right now, it’s really a ‘Cold War 2’ type relationship,â he told CNBC’s “Streets Signs”. Asia “Tuesday.
Late last year, President Joe Biden enacted a defense bill known as the National Defense Authorization Act (NDAA) for fiscal year 2022. Peterson said this had further eroded relationships. between the two countries.
“The law, the NDAA which was signed just recently, contains several provisions that Beijing does not like, including these openings to Taiwan. Any opening by any country to Taiwan is considered a zero-sum loss to Beijing. – and they respond very harshly, “he noted.
Specifically on China, the legislation includes a Pacific deterrent initiative that sets aside $ 7.1 billion. It also includes a statement of congressional support for the defense of Taiwan.
China claims Taiwan as part of its own territory and is pressuring the democratic island to accept its rule.
The biggest challenge for Asian countries will be how to deal with the competing interests of the United States and China, Peterson said.
âThe challenge for Taiwan and regional players in 2022 is: how do countries balanceâ¦ geopolitical interests, business interests, technology and supply chain interests with China, as well as with United States ? Â»He underlined. Adding a Cold War-type scenario “dramatically raises the stakes,” he said.
Peterson also pointed out that China has “shaken up” many of its partners in Asia and that the upcoming Winter Olympics in Beijing in February will be important in assessing its image on the world stage.
âThe Olympics are going to be a very interesting story,â he said. “Will it be seen as a sign of another Chinese achievement and an opportunity for partnership and cooperation?” Or will it shed a harsher light on China and highlight the risks and disappointments going forward?
In December, the United States announced a diplomatic boycott of the Beijing Winter Olympics over human rights violations. While American athletes will always participate, the Biden administration will not send any official representation to the games.
The Chinese Foreign Ministry condemned the move, calling it “a parody of the Olympic spirit,” and said Beijing would take the necessary and resolute countermeasures.