Beijing has cautioned against Nancy Pelosi, the speaker of the US House of Representatives, visiting Taiwan.
Tuesday's decline in Asian stock prices was attributed to escalating hostilities between Beijing and Washington ahead of Speaker of the US House of Representatives Nancy Pelosi's anticipated trip to Taiwan.
Pelosi would make a more than the 25-year-long journey to the island, which China views as a part of its sovereign territory, as the highest-ranking elected US politician to do so. Beijing threatened the trip with "severe consequences" if it proceeds.
The Chinese financial markets crashed as a result of the escalation, with the Shanghai Composite and Hong Kong's Hang Seng Index both losing roughly 3% on Tuesday.
The key indices in Japan, South Korea, and Australia all had early trade losses between 0.5 and 1.6 percent, while Taiwan's TAIEX fell by more than 2 percent throughout the day.
As part of her five-leg Asia tour, which also takes her to Singapore, Malaysia, South Korea, and Japan, Pelosi will allegedly spend Tuesday night in Taiwan.