According to one analyst, the biggest risk for Asia this year will be China’s tension over Taiwan.

D.J. stated that Beijing views any action by Washington regarding Taiwan as offensive or violative of its interests. Peterson is president of Longview Global Advisors (a research company).

That is very high risk. I believe Asia will be at the forefront of this in 2022. It is very much a “Cold War 2″ relationship right now,” he said to CNBC’s Streets Signs Asia on Tuesday.

Late last year, President Joe Biden signed into lawThe National Defense Authorization Act (NDAA), a defense bill for the fiscal year 2022. Peterson claimed that the bill has caused further tensions between the two nations.

The Beijing is not happy with the NDAA, which was recently signed. It also includes these overtures towards Taiwan. Any overtures by any country to Taiwan is seen as a zero sum loss for Beijing — and they respond very harshly,” he noted.

Specifically on China,  the legislation includes a Pacific Deterrence initiative that sets aside $7.1 billion. The legislation also contains a congressional support declaration for Taiwan’s defence.

China claims TaiwanIt has been trying to make the democratic island accept it as part of its territory.

Peterson stated that the greatest challenge for Asian nations will be how to navigate competing interests from the U.S.A and China.

“The challenge for Taiwan and for regional players in 2022 is: How do countries balance … the geopolitical interests, the trade interests, the technology and supply chain interests with China, as well as with the United States?” He highlighted the following:. He stated that an upcoming cold war scenario would “raise the stakes substantially”.

Peterson stressed that China had “upset” many of its Asian partners and that the upcoming Winter Olympics in Beijing will play a significant role in its global image.

He stated, “The Olympics are going to be an interesting story.” Will it be seen by China as another achievement and an opportunity to partner and cooperate? Will it cast a negative light on China, and bring out the risks and failures of the future?

The December issue of the U.S. announced a diplomatic boycottBeijing Winter Olympics over human right abuses Although U.S. athletes are still allowed to compete, no official delegation from the Biden Administration will be sent.

China’s foreign minister condemned the action, calling it “a violation of international law.” “travesty of the Olympic spirit,” Beijing has stated that it will implement the necessary and determined countermeasures.