Taiwan

Geopolitical tensions appear to be heating up with the Japanese government's recent decision to accord official names to a group of 39 uninhabited islands, of which four belong to the Diaoyu or Tiaoyuisland chain, naming conventions provided by China and Taiwan respectively. Presently, the islands remain under the administration of Japan but both Taiwan and China lay claim to it. The string of islets has long been a persistent source of friction between the three countries given the purported oil and gas reserves that surround the territory. We expect this to be nothing more than political rhetoric, and a major escalation in tensions are unlikely to materialise.

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