The Trump administration has made bold gestures in support of Taiwan, including more frequent movement of U.S. ships in the Taiwan Strait. They come at a time of growing anxiety about the U.S.-China relationship.
Domestic politics in China, political trends in Taiwan, and changing U.S. policy toward Taiwan are increasing the risk of a cross-strait crisis in the coming months. The United States should take steps to help avoid and, if necessary, mitigate a confrontation.
East Asia (China, Japan, and the NIEs) ran a $600 billion current account surplus in 2017. "Official" (central bank and sovereign fund) outflows accounted for about half of that. Asia's foreign exchange market intervention isn't as overt as it once was, but also hasn't entirely gone away.