China's state media may have brushed off the Taiwan phone call debate, by saying it just shows that Donald Trump and his team have 'zero' diplomatic experience. But, as Eve Johnson reports, investors are worried it could be bad news for Asian stocks.
He might be new to the game.... but Donald Trump already seems to be rewriting the rules when it comes to China - US ties. Just days after his controversial call with Taiwan's leader last week.... ....the president-elect took to Twitter .... slamming Beijing over currency manipulation, trade.... and its quote "massive military complex" in the South China Sea. ..signalling a new hardline approach to the world's OTHER superpower. (SOUNDBITE) (English) RESEARCH DIRECTOR AT CITY INDEX, KATHLEEN BROOKS, SAYING: "There are going to be big risks for that diplomatic relationship going on and we think that if the diplomatic relationship between and the U.S. does deteriorate that could be bad news for Asian stocks generally, but particularly Chinese stocks." China may be playing it safe with Trump....but Taiwan is another question. State media on Monday publishing an opinion piece looking at the different ways Beijing could punish Taipei for the call. (SOUNDBITE) (English) JOHN RUWITCH, REUTERS REPORTER, SAYING: "One was stealing away some of Taiwan's remaining diplomatic allies. Taiwan has very few diplomatic allies, and they take a few away that would be a blow to their diplomatic standing, their standing on the world The second is to beef up its military posture in regard to Taiwan. A third possibility is that when in the past when the government in Beijing has been unhappy with developments in Taiwan politically, they've staged military exercises" Experts say Taiwan is THE hot button political issue for China..... Some warning that while Trump's actions might kick up waves today.... ....they could potentially set off a storm once he's sworn in as president.