Hu Xijin, a commentator at the highly-influential Chinese state media, Global Times, tweeted out on Tuesday, “based on what I know, in response to Pelosi's possible visit to Taiwan, Beijing has formulated a series of countermeasures, including military actions.”

This comes as diplomatic tensions mount ahead of an expected Taiwan visit by US House of Representatives Speaker Nancy Pelosi this Tuesday.

Also read: China bans over 100 Taiwanese food factories from importing products

Market reaction

The market mood remains risk averse, as investors refrain from placing bets on high-beta assets amid escalating tensions between China and Taiwan over the planned visit by Pelosi to Taipei. The US S&P 500 futures are down 0.52% on the day while AUD/USD is facing a double-whammy from a less hawkish RBA rate hike and China concerns, falling towards 0.6950.