In a move that will no doubt cause grave concern underwriters with exposures in the region, China has underlined its preference for “reunification” with the island of Taiwan.
Taiwan is a major cause of concern for the marine (re)insurance market, which has repeatedly raised a red flag over possible accumulation risks from any escalation in tensions in the region – a major world shipping route.
Property fac writers also have considerable exposure to Taiwan given that it is one of the world manufacturing hubs for semiconductors.
Chinese President Xi Jinping told US President Joe Biden as part of talks this week that Taiwan was the biggest, most dangerous issue in US- China relations, a senior US official said, according to a report by Reuters.
The official quoted Xi as saying China’s preference was for peaceful “reunification” with the Chinese-claimed island of Taiwan, but that he went on to talk about conditions in which force could be used.
Xi was trying to indicate that China is not preparing for a massive invasion of Taiwan, but that does not change the US approach, the official said.
“President Xi … underscored that this was the biggest, most potentially dangerous issue in U.S.-China relations, laid out clearly that, you know, their preference was for peaceful reunification but then moved immediately to conditions that the potential use of force could be utilised,” the senior US official said.
Biden responded by assuring Xi that Washington was determined to maintain peace in the region.
“President Biden responded very clearly that the long-standing position of the United States was … determination to maintain peace and stability,” the official said.
“President Xi responded: look, peace is … all well and good but at some point we need to move towards resolution more generally,” the official said.