Stocks in Asia plummeted overnight as it became clear that House Speaker Nancy Pelosi would be visiting Taiwan on Tuesday.
Pelosi landed in Taiwan Tuesday morning for a meeting with Taiwanese President Tsai Ing-wen. The move has inflamed tensions with China, which has long claimed ownership over Taiwan despite the island being self-governed.
Markets across mainland China and Hong Kong slid as it became clear Pelosi would make the visit on Monday.
The Shanghai Composite fell 2.26%; the Shenzhen Component dropped 2.37%; the Hong Kong Hang Seng Index dipped 2.36%, and the Hang Seng Tech index plummeted 3.01%.
Pelosi’s trip has placed her in a unique political position, with Republicans on Capitol Hill urging her to go through with the plan, while President Joe Biden advised her not to.
“We cannot allow Chinese threats to deter a mere visit by a member of Congress to Taiwan,” Sen. Tom Cotton, R-Ark., told Fox News last week.
“If Joe Biden prevents Nancy Pelosi or any other member of Congress from traveling to Taiwan, it will create a major foreign policy crisis,” he added
News of Pelosi’s potential trip to Taiwan leaked last week. She will be the highest-level U.S. official to visit the island since House Speaker Newt Gingrich in 1997.
China has warned the U.S. that it will react with “firm and resolute measures” if Pelosi goes through with the trip, but the country has made a habit of such threats for similar visits in the past.
“To the Taiwanese people, Chinese threats have never stopped in the past decades. It’s happening every day,” Taiwanese lawmaker Wang Ting-yu told reporters last week..
“Taiwan needs to be on guard, but Taiwan will not cave in to fear,” he added.