Instability flashpoints ring China's periphery

Outlook

Most of the regional flashpoints for instability in the next twelve months involve China -- either within the country or around its borders.

Beijing feels threatened by rising nationalism in Japan, Taiwan and (for the first time) Hong Kong, and its own nationalism, but prefers to limit border confrontations to one at a time. This is not fully within its control, particularly where Pyongyang is concerned, but for now the South China Sea looks the most likely target of Chinese pressure.

Impacts

• Non-cyber retaliation against a cyberattack would set a dangerous precedent.
• The Philippines bucks a negative trend, with a new administration that is reaching out to China.
• Retirements of senior leaders next year should strengthen President Xi Jinping by letting him promote his supporters.