So far, China's response to the whole ordeal has been relatively mild and calm. It is what one could expect but the next few days are going to be crucial to see if Xi is willing to let all of this go with just a slap on the wrist for the US.
Starting from Thursday to Sunday, China have already announced that they will be conducting live-fire drills and military exercises in six regions around Taiwan:
Those are areas marked by the rectangle boxes but at the same time, they will also be conducting "special military operations" within Taiwan's internal waters i.e. purple line. For some context, the closest of these operations will be just 9 nautical miles from the island. Here's an illustration of what exactly that distance means:
This could all be a warning signal by the Chinese military but I'm sure we can all remember how Russia's invasion of Ukraine also started with military exercises and "special operations" as well.
So far, markets are breathing a little easier after having seen Pelosi safely reached Taiwan yesterday. However, the coast isn't clear yet and there will still be nervous eyes watching the scene in the days ahead surely.
