The “One China” policy maintains that there is only one sovereign state that includes Taiwan. Pelosi’s visit to Taipei was seen to undermine this policy, with the House Speaker telling President Tsai that the US “will not abandon Taiwan.1
In response, Beijing announced live-fire drills in the vicinity of Taiwan which ended on 10 August. This was a worrying development given that China has previously refused to rule out using military force to gain control of Taiwan, as expressed in an official government paper.2 Furthermore, China implemented a halt on exports of sand to Taiwan and imports from Taiwan of citrus fruits and some types of fish. Having overtaken the US to become Taiwan’s largest export partner in 2004 (see Chart 1), China has the potential to damage the Taiwanese economy through trade restrictions.