China Caucus Blog

Posted by Alex Gray | July 14, 2016

The South China Sea Arbitration Decision: China Fought the Law, And The Law Won….Or Did It? Jacques deLisle, Foreign Policy Research Institute. “When the Permanent Court of Arbitration in the Hague issued its unanimous decision on July 12 in the case that the Philippines had filed against the People’s Republic of China two and a half years earlier, the Court set forth: a stunning repudiation of several of China’s key legal arguments and much of its real-world behavior in the disputed South China Sea; a remarkable affirmation of the core elements of US policy and strategy toward the contested maritime region and China’s claims and actions therein; and a striking assertion of the reach and capacity of international law and formal dispute resolution procedures. Yet, as with so much else concerning the South China Sea, China’s relations with its neighbors, US policy toward China, and international law, the implications of the decision are a good deal more ambiguous and ambivalent. In the aftermath of the decision, China is faced with difficult choices, the US with complex dilemmas, and international law with substantial peril. While most observers expected a significant partial victory for the Philippines, the scope and the sweeping rejection of China’s positions were a surprise. Where the Court initially had found jurisdiction over seven of the Philippines’ claims and reserved judgment on jurisdiction over seven others (and required further briefing on one other), the Court’s final decision asserted jurisdiction over all of the Philippines’ diverse and wide-ranging claims. In doing so, the Court accepted the Philippines’ artful pleading and rejected China’s contrary analysis. It was not persuaded by China’s arguments that various claims would require the Court to resolve questions of sovereignty over contested landforms (an issue that clearly falls outside the ambit of the United Nations Convention on the Law of the Sea, and which provided the basis for the Court’s authority). The Court was equally unmoved by China’s assertions that ruling on the Philippines’ claims would require the tribunal to decide three types of issues that had been placed beyond the Court’s reach by a lawful reservation China had imposed as a condition of subjecting itself to UNCLOS and its dispute resolution procedures: delimiting potentially overlapping maritime zones between China and the Philippines  (of which there were none, given the Court’s finding on the merits that the relevant landforms claimed by China were too insignificant to generate zones large enough to overlap significantly with the Philippines’ maritime zones); passing judgment on military activities (a category that the Court found did not include China's moves to build up landforms into areas with harbors and airstrips used by elements of the Chinese armed forces), or deciding on claims of historic title (given the Court’s conclusion that the type of history-based rights asserted by China were not recognized under the relevant law of the sea).The Court also refused to accept China’s alternative argument that the Philippines was bound by what China claimed was an agreement that informal bilateral negotiations were to be the exclusive means by which the two parties would address their dispute. On the merits of Beijing’s claims to maritime rights in South China Sea areas near the Philippines, China’s defeat was more jarring. The Court declared several of the disputed landforms—including ones on which China had undertaken massive land reclamation and construction of facilities for military use—to be merely low tide elevations (LTE) and thus not entitled to any maritime zone of their own (although some were located close enough to larger landforms to permit a modest extension of maritime zones derived from the latter). The Court concluded that other maritime features were merely rocks (naturally occurring landforms that were above water at high tide), which—even if under Chinese sovereignty—could provide the basis for nothing more than a twelve nautical-mile-wide territorial sea. Such sea areas are far more modest than the vast expanse inside the convex 9-dash line that Beijing has long claimed (albeit with ambiguous and weak legal basis) to mark the extent of its sovereign rights over the bulk of the South China Sea. These conclusions entailed and required one of the more unexpected and controversial determinations reached by the Court: Even Taiping Island / Itu Aba—the most substantial of the naturally occurring landforms in the area—failed (like all the other relevant land forms) to qualify as an island capable of supporting an economic life of its own or human habitation and, therefore, to provide the basis for an exclusive economic zone (EEZ) of up to 200 nautical miles. This decision about Taiping Island is especially fraught, for at least a few reasons. First, Taiping Island is the landform that could most plausibly ground a claim that China (or whichever state other than the Philippines held sovereignty over the island) had maritime entitlements reaching significantly into the areas that the Philippines asserted to the tribunal were part of the Philippines’ EEZ or continental shelf. Second, Taiping Island is the one South China Sea landform controlled by Taiwan, and Taiwan—which was barred from the proceedings because its own disputed international legal status has left it unable to join the UNCLOS regime and participate in its dispute resolution institutions—had submitted an unsolicited amicus curiae brief to the Court that argued strongly for a key position that Beijing (which derives many of its claims from pre-1949 Republic of China claims) and Taipei (as the guardian of the original ROC claims) share: Taiping Island is entitled to full, EEZ-generating status. Thus, the often contentious issues of cross-Strait relations and Taiwan’s state-like status (or lack thereof) were implicated as well. Third, the Court’s decision concerning the application of UNCLOS’s vague language to the facts of Taiping Island at least implies a more general legal interpretation—a precedent in a previously extremely sparse area of law—that casts greater doubt on the status of other, somewhat similar landforms that have been relied upon as bases for disputed or potentially disputed maritime claims around the world. In another of its most striking and not so widely expected decisions, the Court rejected expansive or assertive PRC interpretations of the notorious 9-dash line.  The tribunal declared that China’s claims to maritime areas within the 9-dash line are unlawful to the extent that they are claims of “historic rights” or other “sovereign rights” or purport to have any other basis outside of the ordinary UNCLOS provisions (essentially, territorial sea or EEZ rights based on landforms). And the relevant landforms, in the geographical context of the South China Sea as evaluated by the Court, are mere rocks and LTEs that cannot collectively sustain claims to rights over much of the sea zone enclosed by the 9-dash line. What all of this amounts to is a determination that the South China Sea area that was the object of the Philippines’ arbitration claim is entirely (or almost entirely) part of the Philippines’ EEZ and continental shelf. This, in turn, means—as the Court further found—that many of the controversial actions that China has undertaken, encouraged, or failed to prevent in areas of the South China Sea near the Philippines are improper under the law of the sea and violate the Philippines’ rights and China’s obligations under UNCLOS. This now-declared-unlawful behavior includes: China’s interference (through dispatch of Coast Guard vessels, imposition of fishing regulations and so on) with the Philippines’ exclusive right to control the exploitation of the natural resources of its EEZ and Continental Shelf; China’s failure to take required steps to prevent Chinese fishing vessels from exploiting resources within the Philippines’ EEZ without the Philippines’ permission; China’s interference, after it took control of the area around Scarborough Shoal in 2012, with Filipinos’ exercise of their legally valid “traditional” fishing rights; China’s impermissible destruction or toleration of impermissible destruction of the marine environment in the Philippines’ zones, including through extensive harvesting of endangered species. China’s partly military-use-related land reclamation activities also drew condemnation from the Court. Here, the offenses included, in essence: severe physical destruction of resources that the Philippines was entitled to control; destruction of evidence of the natural condition of landforms, complicating the task of evaluating such landforms’ legal status and, thus, their capacity to provide a basis for lawful claims to maritime zones and related rights; and taking steps (including ones after the case was already pending) that aggravated the dispute between the parties and could impede the execution of an eventual decision by the Court. he sweepingly adverse and unanimous decision puts China to a newly acute set of choices. Beijing can continue its already adumbrated policy of “four noes” toward the Court and its process and verdict: no participation, no acceptance, no recognition, and no enforcement. China can continue to assert that the Court lacked jurisdiction (because issues of territorial sovereignty, maritime zone delimitation, military activities, or historic rights—as defined eccentrically and expansively by China—were involved, or because the Philippines had ostensibly agreed to an alternative method of dispute resolution). The PRC can continue to insist that the views of the content of relevant international law adopted by the tribunal and applied to the facts of the case are simply wrong as a matter of law, and that China’s conflicting interpretations—some of which had support from some other states—are correct. PRC sources can continue to assert or imply that the tribunal was biased. Beijing can continue to undertake or permit—and expand or escalate—the activities that the Court condemned as unlawful in the South China Sea areas near the Philippines. In the run-up to the decision and in its immediate aftermath, this seemed to be a major component of China’s approach. But the meaning and implications of such statements and actions have changed in light of the decision. If China’s approach remains relatively unchanged, it will have doubled down on a posture that had already spawned charges that Beijing was being an international scofflaw and revisionist in its approach to major components of the international legal order. Where Beijing previously could claim it was taking one side in debates over the meaning and application of vague or contested principles of international law, it now must reject an authoritative determination by a major international tribunal. Where the PRC could until recently hope for a mixed verdict from a divided tribunal that could lend credence to post-decision arguments that the issues were close ones and still subject to reasoned disagreement, debate, and challenge, China now had to reject a clear and strong decision nearly in its entirety. Where China might earlier have expected that its uncompromising refusal to participate in the process—even in the very limited and segregable form of appearing to contest the tribunal’s jurisdiction—would undermine the legitimacy of any subsequent decision on the merits, that line of argument now has to coexist with the related counterargument that China was showing itself to be contemptuous of international legal procedures from soup (determining jurisdiction) to nuts (implementing or enforcing a final judgment). And China was taking this stance toward a dispute resolution process to which it had consented—at least in a “wholesale” way—as a party to UNCLOS. It remains possible—and it is to be hoped—that after some initial period of surely strident and likely ardently nationalist reaction, the leadership in Beijing will find it prudent not to make this high-stakes “double or nothing” bet. China still could—and for its own interests and broader regional and international interests should—refrain from a range of provocative and destabilizing activities such as stepping up land reclamation or patrol activities, declaring an Air Defense Identification Zone over the South China Sea, dislodging Filipinos from landforms on which they are stationed, or confronting, in a more threatening or risky way, the United States Navy when the latter engages in operations in the areas the Court has awarded to the Philippines. Further, China might take the outcome of the arbitration and the advent of the newly hard or risky choices it faces—as a reason and an opportunity to turn the page. Beijing might reinvigorate efforts to set aside sovereignty questions and seek cooperation on concrete issues with the Philippines and with the other rival claimant states that are surely contemplating what bringing arbitration claims might now do for them.”

Why The U.S. Should Ratify The Law Of The Sea Treaty. Bonnie Glaser, The Cipher Brief. “Although the United States participated in the negotiations that culminated in the United Nations Convention on the Law of the Sea (UNCLOS), which came into force in 1994, it has not yet ratified the treaty. While it is true that the U.S. recognizes UNCLOS as a codification of customary international law, failure to become a signatory to the Treaty is increasingly harmful to American political, military, and economic interests. UNCLOS provides a legal framework for governing navigation on the sea and use of ocean resources. With the largest Exclusive Economic Zone (EEZ) in the world that contains 3.4 million square nautical miles of ocean, the United States can reap advantages by becoming a signatory. Joining the Convention would enable the U.S. to safeguard its claim to an extended continental shelf (ECS) of over one million square kilometers—an area approximately twice the size of California. International recognition of both its EEZ and ECS would secure U.S. sovereign rights to fishing, mineral, and hydrocarbon resources in those waters. It would also provide legal protection to American companies that seek to invest in deep seabed mining, telecommunications operations, and commercial shipping lanes in the Arctic. By joining the Convention, the U.S. will be better positioned to respond to Russian efforts to exert influence over the new passage that is opening in the Arctic as the ice melts, which will provide a maritime trade route that shortens transit to Asia by over 30 days. Assuming a seat at the UNCLOS table will allow the U.S. to have a voice in establishing ground rules for how the Arctic Ocean will be governed. Ratification benefits the United States militarily as well. The U.S. Navy has long supported and adhered to the treaty, because it preserves navigation and overflight rights and high seas freedoms for its fleet, which remains the largest in the world. UNCLOS grants the right of innocent passage for all vessels on the high seas, including within other countries’ 12nm territorial sea. The U.S. Freedom of Navigation (FON) program that asserts navigation and overflight rights and freedoms globally, including in the South China Sea, can gain further legitimacy and support if the United States is an UNCLOS signatory. Joining the treaty would enable the United States to participate in dispute resolution mechanisms, including an arbitral tribunal under UNCLOS like the one formed to rule on the Philippines' case against China's nine-dash line claim.The U.S. request to send a delegation to observe the hearing in that case at The Hague was denied because it is not a party to the Convention. As a party to UNCLOS, the U.S. would be able to nominate members to the Law of the Sea Tribunal and the Continental shelf Commission, both of which provide a platform to defend territorial claims and discuss freedom of navigation. The Obama administration has rightfully emphasized the importance of establishing a rules-based international order and shaping norms for managing and resolving territorial disputes. Since treaty provisions can become customary law, the U.S. cannot watch from the sidelines while precedents are established that will affect American interests. Ratifying UNCLOS would bolster American moral authority and legitimacy on international maritime issues at an important time. Doing so would eliminate one of Beijing’s justifications for rejecting the July 12 international Arbitral Tribunal ruling against China’s claims in the South China Sea—that the U.S. is hypocritical since it is not a party to the treaty. Frankly, it also confounds America’s allies that the U.S. calls for all nations to uphold the values, principles, and rules-based order that has produced security, stability, and prosperity for all, but refuses to ratify UNCLOS. The Commander of the U.S. Pacific Command, Adm. Harry Harris, noted the cost to America’s reputation in a House Armed Services Committee hearing last February: “I think that in the 21st century our moral standing is affected by the fact that we are not a signatory to UNCLOS.” Becoming a treaty member would help advance U.S. interests in promoting multilateral cooperation on a range of issues globally. For example, it would aid in building coalition partnerships in the Global War on Terrorism and the Proliferation Security Initiative, and help support multinational efforts to combat piracy. Introducing their bipartisan resolution (H. Res. 631) last March, Congressman Joe Courtney (D-CT) and Congressman Don Young (R-AK), rightly stated: “As our country continues to challenge excessive maritime claims in the South China Sea, or jockey for standing in the increasingly competitive Arctic region, we risk being left on the sidelines during these important negotiations unless we are a party to this agreement.” Arguments against the United States becoming a party to UNCLOS are not persuasive given the evident and rising costs of remaining outside the treaty. Reservations based on the deep seabed mining regime, which was the basis for President Ronald Reagan’s rejection of the treaty in 1982, were addressed by the 1994 revisions made to UNCLOS during the Clinton Administration. Other objections are based on concerns that ratification would expose the U.S. to broad liability for environmental damage in international courts; obligate the U.S. to transfer technology; require the U.S. to transfer royalties to the International Seabed Authority and give the United Nations the ability to impose taxes on U.S. citizens; and damage U.S. national security by restricting the ability of the U.S. to conduct activities such as maritime interdiction operations and gathering maritime intelligence. Treaties by their very nature impose some constraints as part of the process of establishing international norms and rules. Presidents Bill Clinton, George W. Bush, and Barack Obama backed the treaty and urged Senate ratification, to no avail. Supporters of UNCLOS ratification include a broad American constituency composed of the U.S. military as well as actors in the energy, shipping, fishing, shipbuilding, and communication industries, as well as environmental groups. The clear benefits of becoming a party to the treaty outweigh the potential costs. It’s well past time to leave the small group of countries that refuse to join treaty, which includes North Korea, Iran, Syria, Libya, and Venezuela, and side with the 167 countries that are UNCLOS state parties.”

The South China Sea Ruling Is Actually Good for Taiwan. Gerrit van der Wees, The Diplomat. “Many in Taiwan termed the July 12, 2016 ruling by the Permanent Court of Arbitration in The Hague on the case of the Philippines against the People’s Republic of China “unacceptable” because in passing the Court also decided that Taiwan-occupied Itu Aba is legally not an “island” but a “rock” – and therefore does not generate an exclusive economic zone (EEZ) or continental shelf. However, a closer look shows that the decision by the Court in the longer run will actually turn out to be good for Taiwan. Here are some of the reasons why: First, the Court decided that there was no legal basis for China to claim historic rights to resources, in excess of the rights provided for by the UN Convention on the Law of the Sea (UNCLOS), within the sea areas falling within the “nine-dash line.” In other words, the nine-dash line has no legal standing under international law. This is of existential importance to Taiwan, as the PRC has even included Taiwan in the area covered by the nine-dash line. The Court has thus rendered China’s claims null and void, which is beneficial for Taiwan and its quest to enhance its international standing. There are those in Taiwan – particularly among the diehards in the right wing of the Kuomintang — who still base the Republic of China territorial claims on the nine-dash line. Suffice it to say that they do not live in reality. The noise from that side of the political spectrum should simply be disregarded. Second, the Court only decided that Itu Aba – and all other features in the Spratlys that protrude above water at high tide — are “rocks” and are therefore not entitled to an EEZ of 200 miles. Under the decision by the Court, Taiwan retains its sovereignty over Itu Aba, including the 12 nm territorial waters zone. Just looking at the map, one gets the idea why the Court made this decision: if Itu Aba – and any other reef or rock feature in the area – would have been declared an island, this would have led to a patchwork of overlapping EEZs with unforeseen complications for a long time to come. As it is, the decisions leads to a number of contiguous 12 nm zones, but such a framework is much easier to handle than a patchwork of EEZs. Such a decision obviously leads to dissatisfaction among the ultra-nationalists of the Kuomintang in Taiwan, but does not entail any “loss” of sovereignty. Taiwan’s sovereignty remains undisturbed and fully intact. What was totally unacceptable in the Court ruling was the reference to “the Taiwan authority of China.” The Presidential Office as well as the Foreign Ministry in Taipei rightly protested against this designation. If the Court had done its homework, it could have easily avoided such blatant error. Also disturbing was the fact that the Court did not consult with Taiwan or invite it to participate in the proceedings, in spite of the fact that Taiwan is a major player in the area, controlling Itu Aba and several features in the Paracel Islands. If there is to be a solution for the complex problem in the South China Sea, it is essential that Taiwan is at the table as a full and equal claimant. So, how does Taiwan proceed? First, it needs to emphasize a peaceful resolution of disputes in the South China Sea through multilateral negotiations, as was done by the Presidential Office in Taipei already. Saber-rattling and sending warships to the region may boost the ego of the ultra-nationalists in Taipei, but would risk serious confrontations with other nations in the region, including China. Second, Taiwan needs to redouble its efforts to engage other nations in the region through bilateral and multilateral contacts, so it could gain a seat at the table in future discussions on how to move forward. If Taiwan wants to achieve this, it needs to follow a reasonable and rational approach that is more in line with the ruling of the Court in The Hague than the initial reactions from Taipei. Third, on Itu Aba itself, life should go on as before. Taiwan is best served by a low-key approach that brings Taiwan closer to its neighbors. Pragmatic and peaceful measures to enhance the benefits of Taiwan’s presence for other nations are key to acceptance by those neighbors. Good medical facilities and adequate emergency relief capabilities at Itu Aba would constitute a non-threatening way to make its presence felt in a positive manner. And last but not least, it is essential that Taiwan avoid any impression that its position is aligned with that of the PRC. If it wants to contribute to peace and stability in the region, there needs to be an increasing distance between Taiwan’s position and the belligerent and irresponsible behavior exhibited by the leaders in Beijing. If it wants to be accepted as a full and equal member in the international community, Taiwan will need to grow closer to like-minded friends and allies in the region – in particular the United States and Japan–and abide by international legal decisions such as the ruling of the Permanent Court of Arbitration in The Hague.”

Beijing Offers To Negotiate In South China Sea Dispute. Jeremy Page and Chun Han Wong, The Wall Street Journal. “China sought to refocus a dispute over the South China Sea on sovereignty over land, rather than historic rights to surrounding waters, after an unfavorable ruling by an international tribunal.  In a detailed response to the verdict in a landmark case brought by the Philippines, China’s cabinet issued a policy paper describing all land features in the area as its “inherent territory” and accusing Manila of illegally occupying some of them. China Vice Foreign Minister Liu Zhenmin, who introduced the paper, also stepped up a barrage of official Chinese invective against the tribunal, accusing its five arbitrators of being biased, ignorant of Asian culture, and working for the Philippine government. But Mr. Liu added that China remained committed to negotiations with the new Philippine president, Rodrigo Duterte, and other governments with competing claims. Beijing’s pairing of harsh rhetoric with offers of talks suggested that while still determined not to comply with the ruling and sensitive to the demands of a nationalistic public, it was wary of escalating a dispute that has already driven some of its neighbors to forge closer defense ties with the U.S.  There was no immediate response to China’s statements Wednesday from Manila or the Permanent Court of Arbitration. The court's tribunal on Tuesday rejected China’s claim to waters within a nine-dash line that Beijing depicts on maps as extending almost to Malaysian Borneo, and to exclusive economic rights around the Spratly Islands. China has vowed not to comply with the ruling. However, there were some signs in the new policy paper that China was seeking to clarify its legal claims, possibly to lay the ground for negotiations with the Philippines and other governments. “The good news is that China is moving towards clarification and reduction of ambiguity,” said Yanmei Xie, senior China analyst at the International Crisis Group. “The bad news is that clarification could also bring calcification of China’s position.” The policy paper spelled out that China claimed sovereignty over all of the Spratlys, the Paracel Islands and two other clusters of islands, rocks and reefs in the South China Sea. Those claims are broadly compatible with the treaty on which the tribunal was based—the U.N. Convention on the Law of the Sea, or Unclos—as it doesn’t determine sovereignty over land, only rights in surrounding waters. “[President]  Xi Jinping seems to be doubling down on the island sovereignty claim,” said Andrew Chubb, an expert on China’s maritime disputes at the University of Western Australia. “By emphasizing that they are not backing down on sovereignty, it gives them some cover to quietly back away from some of the other implied claims” that would have been incompatible with Unclos. Still, vague language in the policy paper raised fresh questions about China’s claims. The paper made no mention of the nine-dash line but said all “the South China Sea islands” China claims have maritime rights allowed by Unclos—including 12-nautical-mile territorial seas and an exclusive economic zone. However, it defined “the South China Sea islands” as including uninhabited reefs and rocks that don’t qualify for an EEZ under Unclos. It was also unclear whether that meant China claims one all-encompassing EEZ, which would be hard to justify under Unclos. “In addition, China has historic rights in the South China Sea,” the paper added, without defining those rights. Unclos allows countries to claim “traditional fishing rights” in others’ territorial waters. Across the board, Chinese officials struck a note of defiance in the wake of the verdict and depicted China as the victim of a conspiracy orchestrated by the U.S. and its treaty ally, the Philippines. Cui Tiankai, China’s ambassador to the U.S., in a speech in Washington on Tuesday, accused the tribunal of “professional incompetence” and “questionable integrity” and said the ruling “will certainly intensify conflict and even confrontation.” Mr. Liu, the vice foreign minister, assailed the tribunal’s composition, saying the five arbitrators—four from Europe and one from Ghana—were unfit to pass an impartial ruling. “Do they understand Asian culture?” Mr. Liu said. “Do they understand Asia’s complex geopolitics?” He directed blame for regional strains toward the U.S., saying tensions had begun around the same time that the administration of President Barack Obama launched its “rebalancing” strategy to focus more military and other resources on the Asia Pacific region. China’s muscle flexing over its national interests has already driven some neighbors away, including ones who have courted warmer ties with Beijing. South Korea, whose president, Park Geun-hye, made a strategic bet on ramping up economic links with China since she took office in 2013, decided last week over Beijing’s objections to let the U.S. place an antiballistic missile system on its territory, a sign of Seoul’s frustration with Chinese policies on North Korea’s nuclear-weapons program. Vietnam, a rival to China’s territorial claims, has also honed closer ties with Japan and the U.S. after Beijing deployed an oil rig in disputed waters off its coast in 2014.”

China Threatens To Impose Air Defence Zone On Disputed Area Of South China Sea. Neil Connor, The Guardian. “China raised tensions in the South China Sea on Wednesday by threatening to declare an air defence identification zone (ADIZ) over disputed waters where a tribunal has quashed its legal claim. The Permanent Court of Arbitration in The Hague ruled on Tuesday that China had “no legal basis” for its “nine-dash line”, which lays claim to almost all of the South China Sea. After considering a case brought by the Philippines, the court ruled against China on virtually every substantive point. President Xi Jingping responded by saying that China would “refuse to accept” the decision. On Wednesday, Liu Zhenmin, the vice foreign minister, said: "If our security is being threatened, of course we have the right to demarcate a [air defence identification] zone.” If such an ADIZ were to be imposed, China would require all aircraft entering the designated airspace to identify themselves. China declared an ADIZ over disputed islands in the East China Sea in 2013, escalating tensions with the United States and Japan. America then responded by sending two B52 bombers through the ADIZ, without identifying themselves to China. A new ADIZ in the South China Sea could provoke a similar response. It would also increase tensions not only with the Philippines, but also with other rival claimants in the South China Sea, including Brunei, Malaysia and Vietnam. The ruling by the court in The Hague provided powerful diplomatic ammunition for China’s Asian rivals in their dispute with Beijing over the South China Sea. As well as declaring that China’s historic claims had no legal standing, the court also denounced the environmental damage inflicted by Beijing’s programme of creating artificial islands in the area. These projects had destroyed coral reefs and disrupted fishing and oil exploration. Nonetheless, Mr Liu insisted that most of the South China Sea, including the Spratly and Paracel island chains, were China’s "inherent territory". He added: "We hope that other countries will not take this opportunity to threaten China and work with China to protect the peace and stability of the South China Sea, and not let it become the origin of a war.” The court in The Hague has no power to enforce its rulings. But the resounding victory for the Philippines could spur other nations to bring their own cases against China. Arthur Ding, a military expert based at Taiwan’s National Chengchi university, said: “China will be watching closely the reaction of other countries – particularly Vietnam.”

Viral Chinese Video: 'South Sea Arbitration, Who Cares?' “The day that the Permanent Court of Arbitration ruled that China had been stealing islands in the South China Sea, the Chinese Communist Party Youth League shared this viral video of young Chinese patriots saying "South Sea arbitration, who cares?" The video is blowing up in China, but it's clearly intended for more than the domestic audience, given that nearly all the words spoken in it are in English. It's also an example of a collapsing online vernacular: the music, editing, and visual elements of this video could have been in an It Gets Better meme or an ALS Icebucket Challenge.”

Indonesia To Deploy F-16 Jet, Drones, Warships Around Natunas After South China Sea Ruling. South China Morning Post. “Indonesia will sharply strengthen security around its South China Sea islands where there have been clashes with Chinese vessels, the defence minister said on Wednesday, a day after Beijing’s claims in the sea were declared invalid. In an interview with AFP, Ryamizard Ryacudu said bolstering defences around Indonesia’s Natuna Islands would involve deploying warships, an F-16 fighter jet, surface-to-air missiles, a radar and drones, as well as constructing new ports and improving an airstrip. The military build-up, which started in recent months, would be completed in “less than a year,” he said. “This will be our eyes and ears,” the retired general said. “So that we can really see what is happening in the Natunas and the surrounding area in the South China Sea.” Unlike several of its Southeast Asian neighbours, Indonesia has long maintained it has no maritime disputes with China in the South China Sea and does not contest ownership of any territory. But Beijing’s claims overlap Indonesia’s exclusive economic zone – waters where a state has the right to exploit resources – around the Natunas, and there has been an upsurge in clashes between Indonesian patrol and navy boats and Chinese fishing vessels and coastguards. Indonesia has become increasingly irate over Chinese incursions into its waters and after a clash last month, President Joko Widodo visited the Natunas on a warship with his cabinet to send a message to China that Jakarta is serious about defending the remote archipelago. As well as the military hardware, Indonesia will send special air force and marine task forces as well as an army battalion to the Natunas, once barracks and housing have been built, Ryacudu said. He insisted that Indonesia was not adding to the growing militarisation of the South China Sea, and suggested it had a right to defend its borders. “It is our front door, why is it not guarded?” he said. A UN-backed tribunal in The Hague ruled on Tuesday against China’s expansive claims in the South China Sea, finding in favour of the Philippines which filed the challenge and is a claimant state in the sea disputes. China has responded furiously, warning its rivals Wednesday against turning the sea into a “cradle of war” and threatening an air defence zone there.”

South Korea’s Message To Xi Jinping. Editorial Board, The Wall Street Journal. “The United Nations tribunal verdict on the South China Sea wasn’t the only setback for China this week. Also stinging in Beijing is South Korea’s decision to deploy the U.S.-made Thaad missile-defense system, which is necessary for protection against North Korea and brings Seoul closer to Washington. In its typically heavy-handed fashion, Beijing had warned Seoul not to take this step in its own defense. “South Korea will sacrifice its fast-developing relations with China if it should be seduced into the [Thaad] defense network, ignoring the protests of the largest economy in Asia,” China’s Xinhua news agency warned in 2014, as the two sides finalized a new trade deal. Chinese President Xi Jinping told South Korea’s Park Geun-hye to “tread carefully,” according to South Korean reports. Yet Beijing has refused to rein in North Korea, which recently carried out its fourth nuclear test and dozens of missile tests. In March an Asan Institute poll found 74% of South Koreans support Thaad deployment. “Growing nuclear and missile threats are a very critical issue where the future of the Republic of Korea and the lives of our people are at stake,” President Park said in explaining her decision this week. “I have an obligation to protect our people and nation.” Beijing condemned the decision but hasn’t retaliated. Shares in some South Korean cosmetics and tour firms fell this week on fears that China will restrict trade or tourism. But its previous acts of economic bullying have backfired. The best thing China can do is reconsider its support for North Korea. The Kim regime keeps the U.S. off-balance, but it doesn’t advance the Chinese goal of weakening U.S. capabilities and alliances in Asia. Thaad is part of growing South Korean cooperation with the U.S. and Japan, which has complementary radar systems and could soon install Thaad interceptors as well. The three countries held their first joint missile-defense exercise last month. South Korean officials say their Thaad batteries will be operational by the end of next year. If by then the system is showing Chinese leaders the self-defeating costs of their alliance with Pyongyang, it’ll achieve even more than defending against rogue missiles.”


Taiwan, After Rejecting South China Sea Decision, Sends Patrol Ship. Austin Ramzy, The New York Times. “Taiwan is an often-overlooked player in the debate over control of the South China Sea, where its emphasis on multilateral negotiations tends to be drowned out by the bold claims of China, which considers Taiwan part of its territory and tries to limit its voice in world affairs. But after an international tribunal broadly rejected China’s claims to the strategic waterway, Taiwan reminded the world that it, too, had a stake in the sea. It denied the tribunal’s findings soon after they were released, and on Wednesday, it sent a warship to patrol the contested region. “The mission of this voyage is to display Taiwan people’s resolve in defending the national interest,” Tsai Ing-wen, the president of Taiwan, said in a speech before the departure of the ship, a La Fayette-class frigate. The patrol had already been scheduled, but the ship’s departure was moved up a day after the tribunal’s announcement. Ms. Tsai said the decision on Tuesday by the tribunal, which was established by the Permanent Court of Arbitration in The Hague, had “gravely harmed” Taiwan’s rights in the South China Sea, which is also claimed in part by Brunei, Indonesia, Malaysia, the Philippines and Vietnam. On paper, Taiwan and China make the same claims to the South China Sea. The so-called nine-dash line that Beijing uses to claim most of the sea is based on a map issued in the late 1940s by China’s then-Nationalist government, which fled to Taiwan in 1949 after losing a civil war to Mao Zedong’s Communists. Since then, Beijing and the government in Taiwan — the Republic of China, as it is formally known — have based their claims on the line, which the tribunal concluded had no basis in law. But in recent years, Taiwan has hedged its support for the line and emphasized that its claims were based on land features in the South China Sea, Lynn Kuok, a nonresident fellow at the Brookings Institution, said in a 2015 paper. Under the United Nations Convention on the Law of the Sea, claims to bodies of water must be based on adjoining land. “There is a basic principle in the Law of the Sea, that land dominates the sea,” Ma Ying-jeou, the president of Taiwan at the time, said in an interview with The New York Times in 2014. “Thus marine claims begin with land.” The most severe blow to Taiwan’s claims in the tribunal’s findings, analysts and government officials said, was its declaration that Itu Aba, the largest land feature in the South China Sea, was not an island that could sustain human habitation or economic activity. Taiwan has controlled the 110-acre Itu Aba, also known as Taiping Island, since 1956. In recent months, Taiwan has actively promoted its presence on Itu Aba, inviting journalists and scholars on inspection trips. Mr. Ma visited shortly before he left office in May. The tribunal’s declaration that it is a rock, not an island, means that Taiwan is entitled to a territorial sea extending for 12 nautical miles around Itu Aba, but not a 200-nautical-mile exclusive economic zone. China, which considers Taiwan to be part of its territory with which it must eventually be united, has largely backed Taiwan’s activities in support of its South China Sea claims. Beijing views Taiwan’s position in the South China Sea as bolstering its own argument that there is one China, to which both the mainland and Taiwan belong. “Chinese people across the strait are duty-bound and obliged to jointly preserve the ancestral land of the Chinese nation,” Lu Kang, a spokesman for the Chinese Ministry of Foreign Affairs, said on Tuesday in a statement responding to Taiwan’s criticism of the arbitration. And Chinese news outlets broadcast Ms. Tsai’s announcement of the navy patrol — an unusual amount of attention for a leader who has faced criticism from Chinese officials and state news media in recent weeks over her unwillingness to express support for the idea of “one China.” The Ministry of Foreign Affairs of Taiwan also objected to not having been formally invited to present its views to the tribunal and complained that the decision referred to it as the “Taiwan Authority of China.” “This inappropriate designation is demeaning to the status of the R.O.C. as a sovereign state,” the ministry said, using an abbreviation for the Republic of China. That aspect of Taiwan’s criticism was not widely acknowledged by China, however. Beijing tries to minimize Taiwan’s international recognition or participation in bodies that would elevate the island’s status and sovereignty. Such pressure has increased under the leadership of Ms. Tsai, who is far more wary of cross-strait relations than Mr. Ma was.”

Ex-Admiral: US Should Defend Reef Off Philippines. Matthew Pennington, Associated Press. “The United States should be willing to use military force to oppose Chinese aggression at a disputed reef off the coast of the Philippines, a former commander of U.S. forces in the Pacific told a congressional hearing on Wednesday. Dennis Blair made the recommendation to a Senate panel, a day after an international tribunal invalidated Beijing's expansive claims in the South China Sea. The objective was not to pick a fight with China at the disputed Scarborough Shoal, but to set a limit on its military coercion, Blair said. "I think we need to have some specific lines and then encourage China to compromise on some of its objectives," he told the hearing. The Philippines is a U.S. ally, but their treaty is ambiguous about whether the U.S. would come to its defense in disputed territory. A 2012 standoff at Scarborough Shoal between Chinese and the Philippine vessels prompted Manila to launch the arbitration case. China has rejected the tribunal's ruling, and on Wednesday warned other countries against threatening its security in the South China Sea. Vice Foreign Minister Liu Zhenmin said Beijing could declare an air defense identification zone over the waters if it felt threatened. China, however, also extended an olive branch to the new Philippine government, saying the Southeast Asian nation would benefit from cooperating with China. Blair, also a former director of national intelligence, said China has alienated its neighbors through its aggressive actions in the South China Sea, including its reclamation of land and construction of airstrips and ports in the Spratly Islands. He advised a careful U.S. approach following the tribunal ruling to give Beijing opportunity to change course. Kurt Campbell, former top U.S. diplomat for East Asia and now an adviser on Asia policy for the presidential campaign of Hillary Clinton, said, "I think over time China will start to adjust its position, because they will realize it's not in their best strategic interests." New Philippine President Rodrigo Duterte wants to revive relations with China that soured after his predecessor launched the arbitration case in 2013. But he also wants to be seen at home as defending the legal victory. President Barack Obama's nominee to be the next U.S. ambassador to the Philippines, Sung Kim, said the U.S. would support China-Philippines negotiations that were free from "coercion and undue pressure." Kim was speaking at his confirmation hearing Wednesday before the same Senate subcommittee on Asia. U.S. officials have said occupation or militarization of Scarborough Shoal by China would be very dangerous and destabilizing. But they have declined to say whether it would invoke the U.S.-Philippines treaty, which calls for the allies to help defend each other if there is an armed attack on their armed forces, public vessels, aircraft or island territories under their jurisdiction in the Pacific.”

Taiwan: Suspected Espionage Ring Busted. Jason Pan, Taipei Times. “A suspected spy ring that was allegedly selling military secrets using the latest digital technology and cloud computing has been busted, the Kaohsiung District Prosecutors’ Office said yesterday. Six suspects — mostly retired servicemen — are suspected of selling military secrets to China, authorities said. Prosecutors allege the operation was headed by a Taiwanese man surnamed Chuang, 33, a former soldier who has been traveling to China to on business over the past four years after his discharge from the military. Chuang recruited five men in their late twenties and who had formerly served in the army, offering up to NT$250,000 (US$7,768) per document. The Kaohsiung District Court has granted prosecutors the right to detain Chuang incommunicado, due to likelihood of fleeing him the nation and tampering with evidence, pending charges on breaching the National Security Act (國家安全法). One suspect surnamed Shih (師), 27, was released without bail, while the other four suspects — surnamed Chen (陳), 28, Liu (劉) 27, Mou (牟), 29 and Chu (諸), 29 — posted bail of between NT$20,000 and NT$40,000 each. A taskforce headed up by Kaohsiung prosecutor Shih Yu-ting (施昱廷), along with Military Police and Criminal Investigation Bureau investigators began surveillance of the suspects after receiving reports of espionage activities and intelligence security threats at military bases in southern Taiwan. Investigators allege that Chuang instructed the five men to gather classified information, photographs and other data on military exercise programs and deployment plans, and that from May to last month he made more than 20 transfers to his Chinese contacts and received more than NT$1 million. Prosecutors allege that Chuang encrypted classified military files and stored them in a cloud for retrieval by his contacts in China. Shih said investigations revealed that Chuang used Skype to communicate with his Chinese contacts, who in turn provided him with designated cloud storage and other network links to send the data. Chuang had served in Kaohsiung-based 8th Army Command. Five suspects were low-ranking soldiers, while one was a lieutenant. Military analysts said this case was a different approach by Chinese agents, as they were likely testing the viability of recruiting from the lower echelons of the military to see if valuable information could be obtained. In the past Chinese have approached high-ranking officers for military secrets, which requires more money. As part of their probe, prosecutors raided 11 locations in southern Taiwan and seized computers, hard disks, and USB storage devices, that they said contained classified military information.”

China Hacked The FDIC - And US officials Covered It Up, Report Says. Jose Pagliery, CNN. “China's spies hacked into computers at the Federal Deposit Insurance Corporation from 2010 until 2013 -- and American government officials tried to cover it up, according to a Congressional report. The House of Representative's Science, Space and Technology Committee released its investigative report on Wednesday. It presents the FDIC's bank regulators as technologically inept -- and deceitful. According to congressional investigators, the Chinese government hacked into 12 computers and 10 backroom servers at the FDIC, including the incredibly sensitive personal computers of the agency's top officials: the FDIC chairman, his chief of staff, and the general counsel. When congressional investigators tried to review the FDIC's cybersecurity policy, the agency hid the hack, according to the report. Investigators cited several insiders who knew about how the agency responded. For example, one of the FDIC's top lawyers told employees not to discuss the hacks via email -- so the emails wouldn't become official government records. FDIC Chairman Martin Gruenberg is being summoned before the Congressional committee on Thursday to explain what happened. The FDIC refused to comment. However, in a recent internal review, the agency admits that it "did not accurately portray the extent of risk" to Congress and recordkeeping "needs improvement." The FDIC claims it's now updating its policies. Given the FDIC's role as a national banking regulator, the revelation of this hack poses serious concern. The FDIC's role is to monitor any bank that isn't reviewed by the Federal Reserve system. It has access to extremely sensitive, internal information at 4,500 banks and savings institutions. The FDIC also insures deposits at banks nationwide, giving it access to huge loads of information on Americans. "Obviously it's indicative of the Chinese effort to database as much information as possible about Americans. FDIC information is right in line with the deep personal information they've gone for in the past," said computer security researcher Ryan Duff. He's a former member of U.S. Cyber Command, the American military's hacking unit. "Intentionally avoiding audits sounds unethical if not illegal," he added. Congressional investigators discovered the hacks after finding a 2013 memo from the FDIC's own inspector general to the agency's chairman, which detailed the hack and criticized the agency for "violating its own policies and for failing to alert appropriate authorities." The report also says this culture of secrecy led the FDIC's chief information officer, Russ Pittman, to mislead auditors. One whistleblower, whose identity is not revealed in the report, claimed that Pittman "instructed employees not to discuss... this foreign government penetration of the FDIC's network" to avoid ruining Gruenberg's confirmation by the U.S. Senate in March 2012. David Kennedy, a computer security expert and former analyst at the NSA spy agency, worries that federal agencies are repeatedly hiding hacks "under the blanket of national security." "With such a high profile breach and hitting the top levels of the FDIC, it's crazy to me to think that this type of information wasn't publicly released. We need to be deeply concerned around the disclosure process around our federal government," said Kennedy, who now runs the cybersecurity firm TrustedSec. This same committee, led by Republican Congressman Lamar Smith of Texas, has previously criticized the FDIC for minimizing data breaches. Several cybersecurity experts -- who have extensive experience guarding government computers -- expressed dismay at the alleged coverup. "It's incumbent upon our policymakers to know about these data breaches so we can properly evaluate our defenses. Trying to hide successful intrusions only makes it easier for the next hacker to get in," said Dan Guido, who runs the cybersecurity firm Trail of Bits.”


Posted by Alex Gray | July 13, 2016

The Hague Has Ruled Against China. Time to Enforce It. Rep. J Randy Forbes, The National Interest. “Today’s ruling of the UNCLOS Arbitral Tribunal on the territorial disputes between the Philippines and China offers two paths forward for China, and the Asia-Pacific region more broadly. How China chooses to respond to the tribunal’s judgement, which sided against Beijing’s claims on key counts, will do much to determine the course of Asian security and the post-1945 international order in the decades to come. Since World War II, the United States and its global partners have sought to cement an international framework that prizes peaceful resolution of disputes, adherence to international laws and norms, and rejects the use of coercive force to achieve national objectives. This order, built out of the ashes of two devastating world wars, has contributed mightily to the growing prosperity of China and the Asia-Pacific region, as well as the absence of open warfare between Great Powers over the past seventy years. Despite China’s repeated claims of wishing to become a “responsible stakeholder” on the world stage, China’s recent behavior represents the most serious threat to this order since the collapse of the Soviet Union. China’s economic clout, expanding military reach and capabilities, and Orwellian insistence that it is always the victim of others’ aggressive intentions pose an especially difficult challenge for an international system. This challenge has been particularly acute in managing Beijing’s territorial disputes with its neighbors. From the East China Sea to the South China Sea to China’s disputed land borders with India, Beijing has undertaken a systematic campaign to change the facts on the ground through coercion. Whether constructing artificial features in the South China Sea to strengthen its claims, declaring illegitimate Air Defense Identification Zones (ADIZ) in the East China Sea, or repeatedly engaging in provocative militarily behavior near the Indian territory of Arunachal Pradesh, Beijing has repeatedly shown itself to subscribe to the “might-makes-right” school of international politics. Today’s ruling is a fundamental rebuke to Beijing, not simply on the facts of the case but simply by the manner in which the decision was reached. The Philippines’ decision to bring its claims before the UNCLOS tribunal is in keeping with the principles and values that have animated the United States and its partners in the postwar world. That a small, developing nation like the Philippines can successfully appeal to international law and norms against the Chinese colossus is a powerful rebuttal to the famous words of China’s former foreign minister, who stated that “China is a big country and other countries are small countries, and that’s just a fact” in justifying Beijing’s belligerency. Should China choose to ignore this ruling, it will show once and for all the hollowness of its pledges to act as a constructive member of the international community. But it will also pose a serious threat to the international order itself: the world’s second-largest economy and largest military openly repudiating the liberal international order, including the peaceful resolution of disputes. The consequences for international security will be profound, and Beijing’s response will be watched intently in Moscow, Tehran and Pyongyang. Now is the time for the United States to stiffen its resolve in preparation for China’s potential refusal to accept the ruling, or perhaps to even seek a military solution to its disputes with Manila. The administration’s dispatch of two Carrier Strike Groups to the region in recent weeks has been the appropriate response thus far. Should China respond rashly to the ruling, Washington should leave no doubt about its intention to stand with our treaty allies and partners to resist aggression and uphold both our values and interests. The tribunal decision is an inflection point in the history of China’s rise, representing the most notable clash yet between the values animating the post-1945 international system and Beijing’s revisionist approach to world affairs. While it is up to China how it chooses to respond to this decision, the United States has only one option: to stand resolutely with our friends in the Philippines and across the region in defense of universal values and the belief that no country, no matter the size of its military or GDP, is above the law.”

ROC Position On The South China Sea Arbitration. “The award rendered by the tribunal at the Permanent Court of Arbitration in the South China Sea arbitration is completely unacceptable to the government of the Republic of China. The tribunal’s decisions have no legally binding force on the ROC, for the following reasons: 1. In the text of the award, the ROC is referred to as “Taiwan Authority of China.” This inappropriate designation is demeaning to the status of the ROC as a sovereign state. 2.Taiping Island was not originally included in the Philippines’ submissions for arbitration. However, the tribunal took it upon itself to expand its authority, declaring ROC-governed Taiping Island, and other features in the Nansha (Spratly) Islands occupied by Vietnam, the Philippines, and Malaysia, all to be rocks that “do not generate an exclusive economic zone.” This decision severely jeopardizes the legal status of the South China Sea Islands, over which the ROC exercises sovereignty, and their relevant maritime rights. That the ROC is entitled to all rights in accordance with the International Law and the Law of the Sea over the South China Sea Islands and their relevant waters is beyond dispute. The arbitral tribunal did not formally invite the ROC to participate in its proceedings, nor did it solicit the ROC’s views. Therefore, the award has no legally binding force on the ROC. The ROC government reiterates that the South China Sea Islands are part of the territory of the ROC and that it will take resolute action to safeguard the country’s territory and relevant maritime rights. The ROC government urges that disputes in the South China Sea be settled peacefully through multilateral negotiations, in the spirit of setting aside differences and promoting joint development. The ROC is willing, through negotiations conducted on the basis of equality, to work with all States concerned to advance peace and stability in the South China Sea.”

Japanese Foreign Ministry Statement on Arbitration. “1. Today, the Arbitral Tribunal rendered the final award in the arbitral proceedings instituted by the Government of the Republic of the Philippines under the United Nations Convention on the Law of the Sea (UNCLOS) as to the disputes between the Philippines and China regarding the South China Sea. 2. Japan has consistently advocated the importance of the rule of law and the use of peaceful means, not the use of force or coercion, in seeking settlement of maritime disputes. 3. As the Tribunal’s award is final and legally binding on the parties to the dispute under the provisions of UNCLOS, the parties to this case are required to comply with the award. Japan strongly expects that the parties’ compliance with this award will eventually lead to the peaceful settlement of disputes in the South China Sea.”

Ministry of Foreign Affairs of Vietnam Statement on Arbitration. “Viet Nam welcomes the fact that, on 12 July 2016, the Tribunal issued its Award in the arbitration between the Philippines and China. Viet Nam will make a statement on the content of this Award. Viet Nam reaffirms its consistent position regarding this arbitration as fully reflected in the Statement of the Ministry of Foreign Affairs of Viet Nam transmitted to the Tribunal on 05 December 2014. Accordingly, Viet Nam strongly supports the settlement of disputes in the East Sea by peaceful means, including legal and diplomatic processes, refraining from the use or threat of use of force in accordance with international law, including the 1982 United Nations Convention on the Law of the Sea, maintenance of regional peace and stability, security, safety and freedoms of navigation and over-flight in the East Sea, and respect for the rule of law in the oceans and seas. On this occasion, Viet Nam, once again, affirms its sovereignty over Hoang Sa (Paracel) and Truong Sa (Spratly) Archipelagoes, its sovereignty over the internal water and territorial sea and sovereign rights and jurisdiction over the exclusive economic zone and continental shelf of Viet Nam as established in accordance with the 1982 United Nations Convention on the Law of the Sea, as well as all Viet Nam’s rights and interests of a legal nature in connection with the geographical features of Hoang Sa and Truong Sa Archipelagoes.”

Singapore Urges 'Self-Restraint' From All Parties After South China Sea Ruling. Channel News Asia. “Following the Hague tribunal's ruling on the South China Sea, Singapore has urged all parties to "fully respect legal and diplomatic processes, exercise self-restraint and avoid conducting any activities that may raise tensions in the region". The United Nations-backed tribunal said Beijing has no legal basis to claim "historic rights" to islands in the South China Sea. Singapore's Ministry of Foreign Affairs' statement is as follows: "Singapore has taken note of the Award made by the Arbitral Tribunal convened under Annex VII to the 1982 United Nations Convention on the Law of the Sea (UNCLOS) on 12 July 2016 on the case between the Republic of the Philippines and the People’s Republic of China. We are studying the Award and its implications on Singapore and the wider region. Singapore is not a claimant state and we do not take sides on the competing territorial claims. However, we support the peaceful resolution of disputes among claimants in accordance with universally-recognised principles of international law, including UNCLOS, without resorting to the threat or use of force. As a small state, we strongly support the maintenance of a rules-based order that upholds and protects the rights and privileges of all states. Singapore values our long-standing and friendly relations with all parties, bilaterally and in the context of ASEAN. We urge all parties to fully respect legal and diplomatic processes, exercise self-restraint and avoid conducting any activities that may raise tensions in the region. Singapore supports the full and effective implementation of the Declaration on the Conduct of Parties in the South China Sea and the expeditious conclusion of a legally-binding Code of Conduct in the South China Sea."

Chinese Ambassador Cui: U.S. Military Moves In South China Sea Are Coercive. John Grady, USNI News. “The Chinese ambassador to the United States said Tuesday’s ruling against Beijing in its dispute with the Philippines by an international tribunal was “a clear attempt use legal instruments for political purposes” and has “taken place with military coercion” as a backdrop. Speaking at a Washington think tank, Cui Tiankai said, “China has to stand up to” the coercion it sees in the presence of American and other military vessels transiting near its claimed reefs in the South China Sea. “We will not yield to any pressure” from the military, media or a legal body, he added in rejecting the ruling on China’s claims over much of the region, using the so-called “9 Dash line” as its justification of historical possession. The line was included in post-World War II maps. In answer to a question, Cui said, “Intensive military action so close to neighboring reefs” or entering those nearby waters could be considered by China as a destabilizing action. He distinguished between the passage of commercial or civilian shipping and military vessels in these disputed territories, saying commerce could pass freely through. Several times, Cui said, in effect, the United States’ “pivot to Asia” has “not brought us enhanced confidence in the region” and has proved to be a source of rising tensions. He also said countries in the region should look at Syria, Iraq and Libya to see the danger in drawing too close to the United States for military protection. “Be careful what you wish for,” he said. “None of us [in Asia] would pivot to any other place in the world.” Cui said, “We don’t have any territorial dispute” nor a strategic rivalry with the United States. A “Cold War mentality will not solve the problems of today’s world.” He said the choice of how to proceed the United States wants to proceed was “extremely important,” alluding to the upcoming presidential election. “We want to see a positive interaction,” one with “no conflict, no confrontation.” He termed the Rim of the Pacific exercise as a confidence-building measure between the two nations’ militaries vital to avoid future miscalculations of intent. The ruling by the Permanent Court of Arbitration on the United Nations’ Convention of the Law of the Sea “probably opens the door to weaken arbitration procedures.” At the same time, the decision “certainly undermines diplomatic efforts” to resolve these disputes. He added China has successfully negotiated land territorial disputes with 12 of its 14 neighbors. “We are actually a community of common destiny” with the Association of South East Asian Nations. Cui said the core issue of territorial disputes was not subject to the law of the sea convention or the Hague tribunal’s jurisdiction. “A failure to recognize that is a matter of professional incompetence.” He added the case itself was “initiated not out of good will or good faith.” In answer to a question, the ambassador said China is open to negotiating with the Philippines to resolve territorial disputes, but “it takes two to tango.” Earlier in his remarks, Cui said, “diplomatic efforts should not be dropped by a scrap of paper or a fleet of aircraft carriers.”

South China Sea Verdict. Editorial Board, The Wall Street Journal. “A United Nations tribunal ruled Tuesday that China’s sovereignty claims over the South China Sea, and its aggressive attempts to enforce them, violate international law. This is a necessary rebuke to Beijing, but it comes with no enforcement measures and Chinese leaders have rejected it. So its effect will depend on how China’s neighbors and the United States respond. International norms can’t survive without democracies willing to defend them. China’s record in the South China Sea belies its promises to pursue a “peaceful rise.” By asserting “indisputable sovereignty” over an area larger than the Mediterranean and encroaching on the territory and rights of others, Beijing has threatened the rules-based order that has given Asia decades of prosperity. Its pillars include freedom of navigation and the peaceful settlement of disputes. Though the South China Sea is the main economic artery of the world’s most dynamic and populous region, the stakes are even broader. As French defense chief Jean-Yves Le Drian noted recently: “If the law of the sea is not respected today in the China seas, it will be threatened tomorrow in the Arctic, the Mediterranean or elsewhere.” Vladimir Putin and other authoritarians are paying attention. The Hague-based Permanent Court of Arbitration found that China’s main claim to the sea, represented by its notorious “nine-dash line” map, has “no legal basis.” It further slammed China’s frequent claims to “historic” rights, confirming that these don’t fly under the U.N. Law of the Sea Treaty, and that there is “no evidence that China had historically exercised exclusive control over the waters or their resources.” The ruling also undercuts China’s claims in the Spratly archipelago, off the Philippine coast, where Beijing has built and militarized seven artificial islands since 2014. It found that no feature in the Spratlys is a natural “island” under the law, so none entitles its owner to a 200-mile exclusive economic zone. That means the only exclusive zone there derives from the coast and belongs to the Philippines, confirming that China has no right to threaten Philippine commercial or military vessels as it has at places like Reed Bank and Second Thomas Shoal. As for China’s artificial islands, the tribunal found that some are built on natural “rocks” that are above water at high tide and thus yield 12-mile territorial seas. But the others are built on underwater features over which no one can claim sovereignty—making China an illegal occupier. The tribunal also confirmed that China violated Philippine rights in seizing Scarborough Shoal, the 2012 incident that drove Manila to file suit. Beijing has since kept Philippine fishermen away from the 60-square-mile area and may want to build an artificial island there, 120 miles from the Philippine navy base at Subic Bay. Starting construction at Scarborough is one way Beijing may express its pique at this verdict, which Chinese spokesmen have denounced as a “farce” and “nothing more than a piece of paper.” China could also deploy additional firepower to the Spratlys and declare an air-defense identification zone over the South China Sea as it did over the East China Sea in 2013. Beijing is also courting new Philippine President Rodrigo Duterte, who took office June 30 promising better relations with China. He wants bilateral talks, Chinese investment and joint resource development in the South China Sea. These can be worthy goals, but when Manila was last this eager, in 2004, then-President Gloria Arroyo signed a secret deal that applied Chinese law to Philippine waters. It also fueled Beijing’s drive to bully its neighbors at sea while trying to buy them off one by one. The better outcome would be a united front of South China Sea claimants (the Philippines, Vietnam, Indonesia, Malaysia, Brunei) negotiating jointly with China. If Beijing continues its abuses, they can file new arbitration cases, as Indonesia and Vietnam have hinted. Then there’s the U.S., the only real enforcement authority. The Obama Administration has made some helpful military moves, flying A-10 attack planes from a Philippine base near Scarborough and operating two carrier battle groups in the Western Pacific. But its much-touted freedom-of-navigation operations have been spare and timid. With the Hague verdict, these operations should increase in frequency and scope. Patrols from Australia and others would help too. Mr. Le Drian, the French defense minister, has suggested European patrols. Most important is to reverse military cuts, protectionism and other self-defeating policies. Curbing Chinese aggression will be a years-long effort. No U.N. tribunal decision can be a victory for the rules-based liberal order if liberal states won’t defend that order. That requires more free trade, bigger navies, and a renewed commitment from Washington to protect its friends, interests and principles around the world.”

Why Law Can’t Solve The South China Sea Conflict. Paul Gewirtz, The Washington Post. “The authoritative voice of law has now spoken clearly and decisively on a South China Sea churning dangerously with military maneuvers and heated rhetoric. But law’s effects on the conflict are highly uncertain. On Tuesday, a tribunal at the Permanent Court of Arbitration in The Hague announced a sweeping victory for the Philippines that found unlawful a broad range of Chinese claims and actions regarding the sea. The tribunal’s words vindicate the Obama administration’s admirable search for law- and rules-based answers to foreign policy disputes. Regarding the South China Sea, President Obama has emphasized our commitment to resolving the dangerous conflicts “peacefully, through legal means, such as the upcoming arbitration ruling under the United Nations Convention on the Law of the Sea.” While this ruling offers a significant positive contribution, law cannot solve all the conflicts in the South China Sea. Tuesday’s decision underscores the limits of law in resolving these disputes in practice, as well as the urgent need to move ahead with negotiations, supported by prudent power politics. The tribunal’s headline conclusion limits the legal scope of China’s notorious “nine-dash line.” At most, the tribunal said, this line can be a claim to sovereignty over the islands inside the line and maritime rights deriving from those land features as provided under the Law of the Sea Convention. Any pretense that the sea is a Chinese lake has been rejected, though sovereignty issues remain unresolved. Just as significant, and potentially creating more immediate tensions, are the tribunal’s decisions that certain Chinese land reclamations unlawfully infringe on the Philippines’ rights and the Law of the Sea Convention’s environmental rules.  These are major legal conclusions, but they will produce no immediate resolution to the conflict. Despite being a signatory to the convention, China refused to participate in the arbitration and has denounced the decision as “null and void.” China is clearly wrong. But its sweeping rejection reveals the practical limits of law in this context because the tribunal has no enforcement powers — no police force, no sanctions system, no ability to levy fines.  Another fundamental limit is that the tribunal lacks legal power to resolve underlying and potentially explosive conflicts regarding sovereignty over land features, such as the dangerously contested Scarborough Shoal, and disputes over maritime boundaries. And of course no court’s decision can fully address the core geopolitical issues at stake: China’s enormous new capacities, widespread uncertainty about China’s regional intentions, and whether China and the United States can find terms of coexistence in the Asia-Pacific. So what is the path forward? The United States and other countries should strongly support the tribunal’s judgment as a binding decision in words and deeds. The United States should criticize China’s statements that it will not comply with the tribunal’s conclusions. And it should continue regular freedom-of-navigation operations, taking advantage of any additional navigation rights produced by the tribunal’s decision. But the Obama administration also must guard against escalation and reach out to other countries for quiet diplomatic discussions of our options. We cannot yet predict China’s range of responses to the tribunal. The possibility exists that a rebuked China will launch new provocations, leading to a crisis that serves no one’s interests — and the United States and its allies must be ready if China seeks to use force to get its way. Additionally, a legally empowered Philippines might ask the United States to use its military to enforce what the tribunal cannot enforce, which would itself create major risks. Instead, the United States should encourage our Filipino allies — with their legal victory in hand — to pursue direct negotiations with China as the best next step in looking for real-world, peaceful solutions. China has long demanded negotiations, so this is the testing hour for China’s good faith.  Neither country should insist on preconditions to such talks. China should not insist that the Philippines renounce the arbitration award, and the Philippines should not insist that China accept the legal rights awarded by the tribunal. Such demands would doom negotiations before they started. The path of negotiations will be uncertain and difficult. But the Philippines’ position will be significantly strengthened by the tribunal’s award. Negotiations should begin with a focus on lowering tensions, looking for trade-offs and pursuing common development projects, even if ultimate questions of sovereignty are temporarily set aside.  The tribunal ruling will also be wind in the sails of other claimants in the South China Sea. Over time, China might conceivably accept terms similar to those it now denounces if they are the product of negotiations rather than a third-party tribunal. These are all potential contributions of legal rules even when legal judgments are not formally enforceable. Negotiating an enforceable, rules-based code of conduct among the ASEAN nations and China should also be a top priority.”

Enforce Law Of The Sea Ruling: Stand With The Philippines Now, Or Later Face China Alone. Anders Corr, Forbes. “The Permanent Court of Arbitration in the Hague ruled yesterday in favor of the Philippines, and against China’s nine-dash line. The United Nations Convention on the Law of the Sea (UNCLOS) ruling delivered an almost-unadulterated victory to the Philippines and a humiliating moral defeat to China. China experts are now calling for U.S. and allied enforcement of the claim. Congressman Randy Forbes (R-VA) wrote “Should China respond rashly to the ruling, Washington should leave no doubt about its intention to stand with our treaty allies and partners to resist aggression and uphold both our values and interests.” One official, who wrote on condition of anonymity, said “We are where we are now because of the World community’s reluctance to confront Beijing 4-6 years ago when it was aggressing Japan in the Senkakus and the Philippines in the SCS.  If we do not confront Beijing now, we will be facing even more severe aggression 4-6 years from now.” China reacted to the court ruling, even before it was made, by saying it was invalid, null and void, and would be ignored. China reiterated this position after the ruling yesterday. This puts the ball back into the court of the law-abiding countries. The U.S. and our allies are the only countries with the power to enforce the PCA ruling. The ruling is in favor of a U.S. treaty ally, the Philippines. Thus it is doubly incumbent on the U.S., since China has refused to abide by the ruling, to organize allied enforcement of the ruling. Not doing so would be to shirk our duties as a member of the international community, as an ally of the Philippines, and ultimately in our own defense. If China succeeds in flaunting international law and territorial claims in this case, neither will they be deterred in 10 or 20 years, when they are much more powerful economically and militarily, from claiming even more. Enforcement of the international ruling is ultimately necessary for the defense of not only Philippine, but U.S. territory. Several steps should be taken to enforce the ruling such that war is averted. First, the U.S. should obtain commitments from allies, including E.U. countries, the U.K., Japan, Australia, India, and South Korea, to assist in a coalition to enforce UNCLOS in the South China Sea. Second, the U.S. and allies should jointly inform China that we intend to enforce the ruling, and thereby give China an opportunity to comply quietly and save face. Third, the U.S. and any other allies who have not ratified UNCLOS, should do so. This will counter China’s argument that the U.S. is not a signatory to UNCLOS, so should not rely on UNCLOS as justification for its actions. Should China continue to refuse to comply with the Court’s ruling, the U.S. and allies should impose economic sanctions on China, the removal of which should be linked to China’s full compliance with the ruling. I expect this would achieve the desired result, as other than stability of Communist Party rule, economic growth is the top concern of Chinese leaders. The U.S. should immediately make clear to China that should China ignore economic sanctions, military force would be used for enforce the Philippine claims legally recognized by the Court. As reprehensible as military conflict is, military resolve is demonstrated not only by words, but in actions that entail a modicum of risk. The U.S. and allies should demonstrate resolve in this case by immediately moving additional military forces to protect Philippine claims, for example at Scarborough Shoal and Second Thomas Shoal. Furthermore, the U.S. and allies should eventually militarily pressure Chinese naval forces at Mischief Reef, 146 miles from the Philippines and within the Philippines’ exclusive economic zone. The Court found that China is illegally building on Mischief Reef, including naval facilities and a military-capable airstrip. The U.S. and allies should militarily protect Philippine oil and gas exploration of Reed Bank, which is within the Philippine EEZ. Until now, China has forcefully interfered with the Philippines exclusive right to develop Reed Bank. In order to decrease the likelihood of military conflict, the U.S. and allies should gradually increase enforcement measures from relatively symbolic economic sanctions to riskier military protection of Philippine economic activities in their EEZ. Military pressure on Chinese forces at Mischief Reef should be a final resort.”

Tokyo And Manila Will Hold Joint Drills Just After A Verdict On The Philippines’ South China Sea Case Against China. Prashanth Parameswaran, The Diplomat. “Japan and the Philippines will conduct a bilateral exercise this week off of Manila Bay just after an international tribunal is expected to announce a much-anticipated verdict on the Philippines’ South China Sea case against China, Philippine officials confirmed Monday. The sixth iteration of the Joint Maritime Law Enforcement (MARLEN) Exercise between the Japan Coast Guard (JCG) and the Philippine Coast Guard (PCG) will be conducted on July 13. The exercise focuses on combating piracy and armed robbery at sea and is meant to enhance the capabilities of both sides, facilitate the acquisition of knowledge and skills, and boost mutual understanding between them as well as other law enforcement agencies. According to a press release by the PCG, during the exercise, delegates of the PCG Maritime Security and Law Enforcement Command together will be present along with other government law enforcement agencies as well as representatives from the United States and Australia, who are participating as observers. On Monday, the JCG vessel PHG02 Tsugaru, a 105.4-meter crude oil tanker of 3,324 gross tons, arrived and docked in Manila ahead of the exercise. Tsugaru will participate in the exercise along with its assets, which include a helicopter and a rigid hull inflatable board for board, search, and seizure procedures. The PCG will also deploy floating and air assets for the exercise, according to the statement that it released. The exercise will occur a day after a verdict on Manila’s South China Sea case against Beijing, which was first filed back in 2013. Even though both sides would claim that the exercises are not directed at China and focus on piracy and armed robbery rather than the South China Sea, their timing will likely feed into media accounts of responses by Beijing and Manila following the ruling. The Philippines has been boosting its defense partnership with Japan over the past few years, with the two sides inking a landmark deal on equipment and technology earlier this year. This year could see Tokyo begin to deliver equipment to Manila, including patrol vessels as well as surveillance aircraft. China has traditionally reacted stridently against any sign of Tokyo’s interference in the South China Sea issue as a non-claimant.”

Can Taiwan Withstand China's Economic Might? Peter Navarro, The National Interest. “On May 20, in its third successful transition of presidential power between parties and best sign yet of a mature and stable democracy, Taiwan inaugurated its new president, Tsai Ing-wen. To the consternation of Taiwan’s electorate—and under the radar of much of the rest of the world—President Tsai’s inauguration speech has triggered a significant escalation of Beijing’s non-kinetic “three warfares” campaign against the island. Beijing’s clear goal in using intense economic, legal and psychological pressures—the three warfares—is to bring it to heel. Over the last week, I met with a variety of government officials, business leaders, politicians, academics and journalists in Taiwan to discuss a situation that is far more serious than is being reported in the western press. In a three-part series for the National Interest, I will look at the economics, politics and policy implications of the escalating cross-strait crisis. The economic situation is important not just because Taiwan’s weak economy makes it highly vulnerable to pressure from its major trading partner. Slow GDP growth and attendant zero wage growth are also prime movers behind the landslide victory of a new president offering Taiwan’s citizenry the hope of a national Taiwanese identify, a continued de facto independence from China and a decoupling of Taiwan’s economic fortunes with that of the mainland. Current GDP growth in Taiwan is in the range of 0.5 percent to 1 percent, and this growth rate is likely to fall over the next year into a flat to recessionary pattern. While the unemployment remains low at around 4 percent (albeit a bit high by Taiwan’s historical pattern), income growth has flat-lined over many years now with little prospect for improvement. Taiwan’s economic woes do not reflect a short-run cyclical phenomenon amenable to the kind of Keynesian stimuli recommended in the standard macroeconomic textbooks. Rather, this is a long-term structural problem associated with the offshoring of Taiwan’s production and the broader forces of globalization. In Taiwan’s case, however, its economic malaise is also being severely exacerbated by the economic warfare Beijing is now waging. On the globalization front, Asia has witnessed three waves of offshoring. In the initial wave from the 1960s through roughly 1990, both Europe and the United States (as well as Japan in the later part of this period) began to offshore their factories in search of cheaper labor, lax environmental regulations and potential new markets. As part of the “Four Tigers” that also included Hong Kong, Singapore and South Korea, Taiwan benefited directly from such foreign direct investment and transfer of technology; and during this First Wave period of offshoring, it experienced rapid income growth as well as robust GDP growth rates. These were indeed Taiwan’s golden decades. The Second Wave of offshoring began in the 1990s and accelerated in the 2000s as much of Taiwan’s new capital investment moved to foreign shores, principally China. While Taiwan’s business interests captured great riches from this Second Wave, thus began the steady erosion of Taiwan’s manufacturing and jobs base and the concomitant fall in the Taiwan’s GDP and downward pressure on wages and income growth. A key strategic mistake made during this period, particularly during the 2008–16 term of President Ma Ying-jeou, was to ignore diversification and effectively hitch Taiwan’s economy to the Chinese wagon. Today, 40 percent of Taiwan’s exports go to China while its critical tourism sector depends heavily on mainland traffic. This is problematic for two reasons. First, China’s economy has downshifted significantly over the past several years from its thirty-year reign of double-digit GDP growth, and this slower growth appears to be the “new normal.” Taiwan’s export trade is suffering accordingly, and the long-term outlook is not reassuring. Second, Taiwan’s heavy reliance on China trade has made it exceedingly vulnerable to precisely the kind of economic warfare now being waged by Beijing’s hard liners. The abiding fact here is that since President Tsai Ing-wen was inaugurated on May 20, China has not just cut many of its diplomatic lines of communication—including the “hot line” between Beijing and Taipei. It has also cut trade in selected sectors such as tourism, fishing and farming. Here, it should be noted—and it was by many of the government officials I talked to—that Beijing’s economic quotas and embargoes are highly sophisticated in their targeting and designed to apply maximum political pressure to the ruling party. In her acknowledgement of Taiwan’s Chinese trade dependence, President Tsai announced in her inaugural address a “New Southbound Policy in order to elevate the scope and diversity of our external economy, and to bid farewell to our past overreliance on a single market.” Tsai’s obvious goal is to expand trade with countries to the south like Indonesia and Vietnam. Of course, there is this big problem: Every time Taiwan tries to expand its trade with other countries through formal mechanisms like Free Trade Agreements (FTAs), Beijing swoops in with its economic warfare to squash any deals. Indeed, it is precisely in this area—and why Taiwan’s economic fortunes seem so despairing—that Beijing’s bullying has often been its most intense and effective. Consider, for example, that while Taiwan did manage to sign FTAs with both Singapore and New Zealand, its efforts at wooing countries as far away as Chile and as near as Malaysia have met with firm Chinese “vetoes.” These vetoes come in the form of massive pressure on, and threats to, any countries that might dare to sign FTAs or expand trade with Taiwan. For example, if Chile moves towards an FTA with Taiwan, China threatens to reduce its purchases of Chilean copper and cut its flow of desperately needed FDI. More broadly, any country with any significant trade with China or reliance on its FDI is exposed to these kinds of Beijing threats. Moreover, China’s economic warfare is not limited to cutting off Taiwan’s trade with the world. It also seeks to deny Taiwan critically needed weapons systems to defend itself, e.g., no country in Europe dares sell urgently needed conventional diesel electric subs to Taiwan for fear of disrupting the trade relationship. The last point to note on Taiwan’s economic front is this: Even if its New Southbound Policy is effectively implemented, it may do little to solve the more fundamental problem of stagnant income growth and associated growing political despair at home. The only way to solve this problem is not to just find new offshoring destinations but rather to restore at least some of Taiwan’s manufacturing base to the island. Such “reshoring” may be difficult, however, given the lack of adequate land on this mostly hilly and crowded island. Nonetheless, one option may be for Taiwan may be to cultivate its own domestic weapons production industry. Here, there is enthusiasm locally to build both aircraft and submarines as part of both Taiwan’s economic and military strategies. The picture that emerges from any sober review of the Taiwan economy is that of an island with a relatively bleak economic outlook for an extended period. Its economic model of offshoring is broken—while it serves the needs of a narrow swath of business interests, there is little trickle down. At the same time, any efforts to expand its trade are met with stiff Chinese resistance. Here, as a riff on the Rime of the Ancient Mariner, Taiwan has “markets, markets everywhere but nary a place to trade” because of Chinese bullying. Most broadly, this grim economic outlook will continue to play a huge part in determining the island’s political destiny. In the meantime, I’d like to close with a tip of the hat to the island’s people who inhabit this midpoint of the First Island Chain with a unique dignity and grace that puts a distinctly Asian twist on Churchill’s courageous “stiff upper lip.”

South Korea Announces Site For US Missile Defense System. Hyung-Jin Kim and Kim Tong-Hyung, Associated Press. “An advanced U.S. missile defense system will be deployed in a rural farming town in southeastern South Korea, Seoul officials announced Wednesday, angering not only North Korea and China but also local residents who fear potential health hazards that they believe the U.S. system might cause. As words of the location for the Terminal High-Altitude Area Defense, or THAAD, spread even before the government's formal announcement, thousands of residents in the town of Seongju, the site for the U.S. system, rallied and demanded the government cancel its decision. A group of local leaders wrote letters of complaint in blood that they plan to give to the Defense Ministry. "We oppose with our lives the THAAD deployment," one of the letters said, according to Seongju local council speaker Bae Jae Man, one of the 10 people who wrote the letter. Seoul and Washington officials say they need the missile system to better deal with what they call increasing North Korean military threats. On Monday, North Korea warned it will take unspecified "physical" measures once the location for THAAD is announced. Seoul's Deputy Defense Minister Ryu Je Seung told a news conference that Seongju was picked because it can maximize the THAAD's military effectiveness while satisfying environmental, health and safety standards. No other details were given, although U.S. military bases are in the area. Ryu said a THAAD system stationed in Seongju would cover up to two-thirds of South Korea's territory from possible North Korean nuclear and missile threats. He said the defense chiefs of the countries approved the decision. China and Russia oppose the system that they believe helps U.S. radar track missiles in their countries. Seoul and Washington say the system targets only North Korea. Many South Koreans worry China, South Korea's biggest trading partner, might take economic retaliatory measures. Residents in Seongju and several other villages previously rumored to be candidate sites for the THAAD system have already launched protests, citing fears that the electromagnetic waves that THAAD radar systems emit can possibly cause health problems. Defense officials have disputed that, saying the system will be located on a mountain, not in a residential area, and is harmless if people stay at least 100 meters (yards) away from it. Seoul and Washington launched talks on the THAAD deployment after North Korea conducted a fourth nuclear test and carried about a long-range rocket launch earlier this year. The United States stations about 28,500 troops in South Korea as deterrence against potential aggression from North Korea. China assisted North Korea during the 1950-53 Korean War, while American-led U.N. troops fought alongside South Korea.”

Posted by Alex Gray | July 12, 2016

Permanent Court Of Arbitration Press Release. “A unanimous Award has been issued today by the Tribunal constituted under Annex VII to the United Nations Convention on the Law of the Sea (the “Convention”) in the arbitration instituted by the Republic of the Philippines against the People’s Republic of China. This arbitration concerned the role of historic rights and the source of maritime entitlements in the South China Sea, the status of certain maritime features and the maritime entitlements they are capable of generating, and the lawfulness of certain actions by China that were alleged by the Philippines to violate the Convention. In light of limitations on compulsory dispute settlement under the Convention, the Tribunal has emphasized that it does not rule on any question of sovereignty over land territory and does not delimit any boundary between the Parties. China has repeatedly stated that “it will neither accept nor participate in the arbitration unilaterally initiated by the Philippines.” Annex VII, however, provides that the “[a]bsence of a party or failure of a party to defend its case shall not constitute a bar to the proceedings.” Annex VII also provides that, in the event that a party does not participate in the proceedings, a tribunal “must satisfy itself not only that it has jurisdiction over the dispute but also that the claim is well founded in fact and law.” Accordingly, throughout these proceedings, the Tribunal has taken steps to test the accuracy of the Philippines’ claims, including by requesting further written submissions from the Philippines, by questioning the Philippines both prior to and during two hearings, by appointing independent experts to report to the Tribunal on technical matters, and by obtaining historical evidence concerning features in the South China Sea and providing it to the Parties for comment. China has also made clear—through the publication of a Position Paper in December 2014 and in other official statements—that, in its view, the Tribunal lacks jurisdiction in this matter. Article 288 of the Convention provides that: “In the event of a dispute as to whether a court or tribunal has jurisdiction, the matter shall be settled by decision of that court or tribunal.” Accordingly, the Tribunal convened a hearing on jurisdiction and admissibility in July 2015 and rendered an Award on Jurisdiction and Admissibility on 29 October 2015, deciding some issues of jurisdiction and deferring others for further consideration. The Tribunal then convened a hearing on the merits from 24 to 30 November 2015. The Award of today’s date addresses the issues of jurisdiction not decided in the Award on Jurisdiction and Admissibility and the merits of the Philippines’ claims over which the Tribunal has jurisdiction. The Award is final and binding, as set out in Article 296 of the Convention and Article 11 of Annex VII. The Tribunal found that it has jurisdiction to consider the Parties’ dispute concerning historic rights and the source of maritime entitlements in the South China Sea. On the merits, the Tribunal concluded that the Convention comprehensively allocates rights to maritime areas and that protections for pre-existing rights to resources were considered, but not adopted in the Convention. Accordingly, the Tribunal concluded that, to the extent China had historic rights to resources in the waters of the South China Sea, such rights were extinguished to the extent they were incompatible with the exclusive economic zones provided for in the Convention. The Tribunal also noted that, although Chinese navigators and fishermen, as well as those of other States, had historically made use of the islands in the South China Sea, there was no evidence that China had historically exercised exclusive control over the waters or their resources. The Tribunal concluded that there was no legal basis for China to claim historic rights to resources within the sea areas falling within the ‘nine-dash line’. The Tribunal next considered entitlements to maritime areas and the status of features. The Tribunal first undertook an evaluation of whether certain reefs claimed by China are above water at high tide. Features that are above water at high tide generate an entitlement to at least a 12 nautical mile territorial sea, whereas features that are submerged at high tide do not. The Tribunal noted that the reefs have been heavily modified by land reclamation and construction, recalled that the Convention classifies features on their natural condition, and relied on historical materials in evaluating the features. The Tribunal then considered whether any of the features claimed by China could generate maritime zones beyond 12 nautical miles. Under the Convention, islands generate an exclusive economic zone of 200 nautical miles and a continental shelf, but “[r]ocks which cannot sustain human habitation or economic life of their own shall have no exclusive economic zone or continental shelf.” The Tribunal concluded that this provision depends upon the objective capacity of a feature, in its natural condition, to sustain either a stable community of people or economic activity that is not dependent on outside resources or purely extractive in nature. The Tribunal noted that the current presence of official personnel on many of the features is dependent on outside support and not reflective of the capacity of the features. The Tribunal found historical evidence to be more relevant and noted that the Spratly Islands were historically used by small groups of fishermen and that several Japanese fishing and guano mining enterprises were attempted. The Tribunal concluded that such transient use does not constitute inhabitation by a stable community and that all of the historical economic activity had been extractive. Accordingly, the Tribunal concluded that none of the Spratly Islands is capable of generating extended maritime zones. The Tribunal also held that the Spratly Islands cannot generate maritime zones collectively as a unit. Having found that none of the features claimed by China was capable of generating an exclusive economic zone, the Tribunal found that it could—without delimiting a boundary—declare that certain sea areas are within the exclusive economic zone of the Philippines, because those areas are not overlapped by any possible entitlement of China. The Tribunal next considered the lawfulness of Chinese actions in the South China Sea. Having found that certain areas are within the exclusive economic zone of the Philippines, the Tribunal found that China had violated the Philippines’ sovereign rights in its exclusive economic zone by (a) interfering with Philippine fishing and petroleum exploration, (b) constructing artificial islands and (c) failing to prevent Chinese fishermen from fishing in the zone. The Tribunal also held that fishermen from the Philippines (like those from China) had traditional fishing rights at Scarborough Shoal and that China had interfered with these rights in restricting access. The Tribunal further held that Chinese law enforcement vessels had unlawfully created a serious risk of collision when they physically obstructed Philippine vessels. The Tribunal considered the effect on the marine environment of China’s recent large-scale land reclamation and construction of artificial islands at seven features in the Spratly Islands and found that China had caused severe harm to the coral reef environment and violated its obligation to preserve and protect fragile ecosystems and the habitat of depleted, threatened, or endangered species. The Tribunal also found that Chinese authorities were aware that Chinese fishermen have harvested endangered sea turtles, coral, and giant clams on a substantial scale in the South China Sea (using methods that inflict severe damage on the coral reef environment) and had not fulfilled their obligations to stop such activities.  Finally, the Tribunal considered whether China’s actions since the commencement of the arbitration had aggravated the dispute between the Parties. The Tribunal found that it lacked jurisdiction to consider the implications of a stand-off between Philippine marines and Chinese naval and law enforcement vessels at Second Thomas Shoal, holding that this dispute involved military activities and was therefore excluded from compulsory settlement. The Tribunal found, however, that China’s recent large-scale land reclamation and construction of artificial islands was incompatible with the obligations on a State during dispute resolution proceedings, insofar as China has inflicted irreparable harm to the marine environment, built a large artificial island in the Philippines’ exclusive economic zone, and destroyed evidence of the natural condition of features in the South China Sea that formed part of the Parties’ dispute.”

Full Award.

PRC Statement On Hague Ruling. “With regard to the award rendered on 12 July 2016 by the Arbitral Tribunal in the South China Sea arbitration established at the unilateral request of the Republic of the Philippines (hereinafter referred to as the "Arbitral Tribunal"), the Ministry of Foreign Affairs of the People's Republic of China solemnly declares that the award is null and void and has no binding force. China neither accepts nor recognizes it. 1. On 22 January 2013, the then government of the Republic of the Philippines unilaterally initiated arbitration on the relevant disputes in the South China Sea between China and the Philippines. On 19 February 2013, the Chinese government solemnly declared that it neither accepts nor participates in that arbitration and has since repeatedly reiterated that position. On 7 December 2014, the Chinese government released the Position Paper of the Government of the People's Republic of China on the Matter of Jurisdiction in the South China Sea Arbitration Initiated by the Republic of the Philippines, pointing out that the Philippines' initiation of arbitration breaches the agreement between the two states, violates the United Nations Convention on the Law of the Sea (UNCLOS), and goes against the general practice of international arbitration, and that the Arbitral Tribunal has no jurisdiction. On 29 October 2015, the Arbitral Tribunal rendered an award on jurisdiction and admissibility. The Chinese government immediately stated that the award is null and void and has no binding force. China's positions are clear and consistent. 2. The unilateral initiation of arbitration by the Philippines is out of bad faith. It aims not to resolve the relevant disputes between China and the Philippines, or to maintain peace and stability in the South China Sea, but to deny China's territorial sovereignty and maritime rights and interests in the South China Sea. The initiation of this arbitration violates international law. First, the subject-matter of the arbitration initiated by the Philippines is in essence an issue of territorial sovereignty over some islands and reefs of Nansha Qundao (the Nansha Islands), and inevitably concerns and cannot be separated from maritime delimitation between China and the Philippines. Fully aware that territorial issues are not subject to UNCLOS, and that maritime delimitation disputes have been excluded from the UNCLOS compulsory dispute settlement procedures by China's 2006 declaration, the Philippines deliberately packaged the relevant disputes as mere issues concerning the interpretation or application of UNCLOS. Second, the Philippines' unilateral initiation of arbitration infringes upon China's right as a state party to UNCLOS to choose on its own will the procedures and means for dispute settlement. As early as in 2006, pursuant to Article 298 of UNCLOS, China excluded from the compulsory dispute settlement procedures of UNCLOS disputes concerning, among others, maritime delimitation, historic bays or titles, military and law enforcement activities. Third, the Philippines' unilateral initiation of arbitration violates the bilateral agreement reached between China and the Philippines, and repeatedly reaffirmed over the years, to resolve relevant disputes in the South China Sea through negotiations. Fourth, the Philippines' unilateral initiation of arbitration violates the commitment made by China and ASEAN Member States, including the Philippines, in the 2002 Declaration on the Conduct of Parties in the South China Sea (DOC) to resolve the relevant disputes through negotiations by states directly concerned. By unilaterally initiating the arbitration, the Philippines violates UNCLOS and its provisions on the application of dispute settlement procedures, the principle of "pacta sunt servanda" and other rules and principles of international law. 3. The Arbitral Tribunal disregards the fact that the essence of the subject-matter of the arbitration initiated by the Philippines is issues of territorial sovereignty and maritime delimitation, erroneously interprets the common choice of means of dispute settlement already made jointly by China and the Philippines, erroneously construes the legal effect of the relevant commitment in the DOC, deliberately circumvents the optional exceptions declaration made by China under Article 298 of UNCLOS, selectively takes relevant islands and reefs out of the macro-geographical framework of Nanhai Zhudao (the South China Sea Islands), subjectively and speculatively interprets and applies UNCLOS, and obviously errs in ascertaining fact and applying the law. The conduct of the Arbitral Tribunal and its awards seriously contravene the general practice of international arbitration, completely deviate from the object and purpose of UNCLOS to promote peaceful settlement of disputes, substantially impair the integrity and authority of UNCLOS, gravely infringe upon China's legitimate rights as a sovereign state and state party to UNCLOS, and are unjust and unlawful. 4. China's territorial sovereignty and maritime rights and interests in the South China Sea shall under no circumstances be affected by those awards. China opposes and will never accept any claim or action based on those awards. 5. The Chinese government reiterates that, regarding territorial issues and maritime delimitation disputes, China does not accept any means of third party dispute settlement or any solution imposed on China. The Chinese government will continue to abide by international law and basic norms governing international relations as enshrined in the Charter of the United Nations, including the principles of respecting state sovereignty and territorial integrity and peaceful settlement of disputes, and continue to work with states directly concerned to resolve the relevant disputes in the South China Sea through negotiations and consultations on the basis of respecting historical facts and in accordance with international law, so as to maintain peace and stability in the South China Sea.”

Taiwan Rejects South China Sea Ruling, Says Will Deploy Another Navy Vessel To Itu Aba. Jermyn Chow, The Straits Times. “Taiwan said on Tuesday (July 12) that it will never accept a ruling by a UN-backed arbitral tribunal in a case brought by the Philippines against China's claims in the South China Sea. Its navy also said it will deploy another coast guard vessel to Itu Aba - a Taiwan-controlled island in the Spratly chain of islands - to patrol its surrounding waters. Taiwan had deployed a 2,000-tonne coast guard vessel on Sunday to the island which it calls Taiping. "We will never accept it (the tribunal's ruling)... it is not legally binding. We will definitely defend our territorial sovereignty and not allow our... interests be harmed," said presidential office spokesman Alex Huang. South China Sea disputes should be resolved through multilateral negotiations, he said. "We would also like, on the basis of equal consultation with relevant countries, to jointly promote peace and stability in the South China Sea," he added. Although Taiwan is not party to the case filed with the Permanent Court of Arbitration (PCA) at The Hague, its claims in the disputed waters are similar to those of China, and Itu Aba island was brought up in testimony during the court hearings. The arbitral tribunal did not formally invite Taiwan to participate in the proceedings, and "has never sought our advice", the spokesman said.”

Vietnam Welcomes Hague Ruling. Vietnam Breaking News. “Việt Nam yesterday welcomed the final ruling issued by an international tribunal in The Hague, which rejected China’s territorial claims in the South China Sea (East Sea). The Ministry of Foreign Affairs’ spokesperson, Lê Hải Bình, said in a statement that Việt Nam would issue a more detailed statement on the content of the ruling later. “Việt Nam once again confirmed its consistent stance on this lawsuit, which was fully reflected in the Statement dated December 12, 2014 that Việt Nam’s Ministry of Foreign Affairs sent to the United Nations Arbitral Tribunal,” he said. Bình also reiterated that “Việt Nam strongly supports the resolution of the disputes in the East Sea by peaceful means, including diplomatic and legal processes and refraining from the use or threats to use force, in accordance with international law.” “On this occasion, Việt Nam continues to assert its sovereignty over the two archipelagoes of Paracels (Hoàng Sa) and Spratly (Trường Sa) islands, over the internal waters and territorial waters,” and its “sovereign rights and jurisdiction over the exclusive economic zone and Việt Nam’s continental shelf”, as well as all the legal rights and interests of Việt Nam related to the geographical structures of the Paracels (Hoàng Sa) and Spratly (Trường Sa) islands. The arbitral tribunal under Annex VII to the United Nations Convention on the Law of the Sea (UNCLOS) yesterday concluded that there was no legal basis for China to claim historic rights to resources within the sea areas enclosed by the “nine-dash” line. There was no evidence that China had historically exercised exclusive control over the South China Sea (East Sea) waters or their resources, said the five-member tribunal of maritime affairs experts at The Hague as they issued the ruling over the case filed by the Philippines to contest China’s claims and activity in the South China Sea. “None of the Spratly Islands are capable of generating extended maritime zones,” and that “none of the features claimed by China were capable of generating an exclusive economic zone,” the ruling said. The tribunal also said that China had contravened international law when it “violated the Philippines’ sovereign rights in its exclusive economic zone” and by failing to prevent Chinese fishermen from harvesting endangered sea turtles and other species “on a substantial scale.” In terms of effects on marine environment, the tribunal found that China had “caused severe harm to the coral reef environment”. Finally, the tribunal found that China’s recent large-scale land reclamation and construction of artificial islands was incompatible with the obligations of a State during dispute resolution proceedings. In 2013, the Philippines brought the case to the UNCLOS tribunal, asking the tribunal to reject China’s claims to sovereignty over as much as 90 per cent of the South China Sea, marked by a “nine-dash line” on official Chinese maps. It also accused China of interfering with fishing, dredging sand to build artificial islands, and endangering ships, among other claims. China has boycotted the tribunal from the very beginning, saying that the panel has no jurisdiction. It has already said it will not “accept, recognise or execute” the decision. Legally, the Permanent Court of Arbitration’s decision will be binding. However, there is no ability to enforce the ruling. The United Nation’s Convention on the Law of the Sea, originally agreed to in 1982, was designed to allow countries to clearly define areas of control off their coastline. An island controlled by a country is entitled to “territorial waters” of 12 nautical miles (22 kilometres) as well as an Exclusive Economic Zone (EEZ) — whose resources, such as fish — the country can exploit, of up to 200 nautical miles (370 kilometres). A rock owned by a state will also generate a 12 nautical mile territorial border but not an economic zone under UNCLOS, while a low-tide elevation grants no territorial benefits at all. Both China and the Philippines are signatories to the UNCLOS, as is Việt Nam.”

Department of State Press Release on Hague Ruling. “The decision today by the Tribunal in the Philippines-China arbitration is an important contribution to the shared goal of a peaceful resolution to disputes in the South China Sea. We are still studying the decision and have no comment on the merits of the case, but some important principles have been clear from the beginning of this case and are worth restating. The United States strongly supports the rule of law. We support efforts to resolve territorial and maritime disputes in the South China Sea peacefully, including through arbitration. When joining the Law of the Sea Convention, parties agree to the Convention’s compulsory dispute settlement process to resolve disputes. In today’s decision and in its decision from October of last year, the Tribunal unanimously found that the Philippines was acting within its rights under the Convention in initiating this arbitration. As provided in the Convention, the Tribunal’s decision is final and legally binding on both China and the Philippines. The United States expresses its hope and expectation that both parties will comply with their obligations. In the aftermath of this important decision, we urge all claimants to avoid provocative statements or actions. This decision can and should serve as a new opportunity to renew efforts to address maritime disputes peacefully. We encourage claimants to clarify their maritime claims in accordance with international law -- as reflected in the Law of the Sea Convention -- and to work together to manage and resolve their disputes. Such steps could provide the basis for further discussions aimed at narrowing the geographic scope of their maritime disputes, setting standards for behavior in disputed areas, and ultimately resolving their underlying disputes free from coercion or the use or threat of force.”

China’s Claim to Most of South China Sea Has No Legal Basis, Court Says. Jeremy Page, Wall Street Journal. “An international tribunal ruled on Tuesday that China’s claims to historic and economic rights in most of the South China Sea have no legal basis, dealing a severe setback to Beijing that could intensify its efforts to establish its control by force. The tribunal at the Permanent Court of Arbitration in The Hague said China couldn’t claim historic rights in all the waters within a “nine-dash” line used by Beijing to delineate its South China Sea claims. That was the most significant element of an unprecedented legal challenge to China’s claims that was brought in 2013 by the Philippines, one of five governments whose claims in the South China Sea overlap with China’s under the nine-dash line. In another blow for Beijing, the tribunal decided that China wasn’t entitled to an exclusive economic zone, or EEZ, extending up to 200 nautical miles from any outcrop in the Spratlys archipelago including the largest, Itu Aba, which is claimed by China but controlled by Taiwan. “This deals a direct blow to China’s most fundamental claim in the South China Sea,” said Shi Yinhong, professor of international relations at Renmin University in Beijing, of the tribunal’s decision on Beijing’s nine-dash line. “The tribunal ruling appears to be overwhelmingly in favor of the Philippines’s claims, even more so than expected.” The ruling, based on a United Nations convention on maritime law, comes after several years of escalating tension in the region as China has alarmed the U.S. and its allies by using its rapidly expanding naval and air power to assert territorial claims and challenge U.S. military supremacy in Asia. The Philippines case is seen as a test of China’s commitment to a rules-based international order which the U.S. and its allies say has been undermined by Beijing’s recent military activities, including construction of seven fortified artificial islands in the South China Sea. China didn’t take part in the tribunal, which it said had no jurisdiction on the case, and Chinese officials have said repeatedly in recent weeks that Beijing won't comply with the ruling. The unanimous ruling by the tribunal’s five judges is legally binding for China and the Philippines but can only be enforced through international pressure. The ruling on Itu Aba is important because the U.N. maritime convention allows countries to build artificial islands in their own EEZs, and all of the seven structures China has built lie within 200 nautical miles of Itu Aba, which Taiwan calls Taiping Island. The tribunal said that neither Itu Aba or any other Spratlys outcrop met the legal definition of a natural island that could support human habitation. That also means that China has no legal claim to an EEZ overlapping that of the Philippines. Shortly after the ruling, China’s Foreign Ministry said China neither accepts nor recognizes it, declaring it “null and void” and without “binding force.” It said China would continue to abide by international law and “basic norms” governing international relations. China’s Defense Ministry said the decision wouldn’t affect its approach in the South China Sea and that it would ”unswervingly protect the nation’s sovereignty, security and maritime rights.” The Philippines welcomed the ruling. Foreign Secretary Perfecto Yasay called it a “milestone” in efforts to address regional disputes and called on “those concerned to exercise restraint and sobriety.” On Chinese social-media platforms, users expressed defiance. “On territorial issues there’s no room for debate. In my view, territory to a country is like life to humanity,” wrote one user. Many echoed the government’s line on the verdict, heaping scorn on the process. “To Chinese people, the South China Sea ruling is just a piece of waste paper—they can take it and throw it directly in the trash,” wrote one. The “waste paper” language had previously been invoked by a veteran Chinese diplomat in a speech in Washington. Numerous users expressed a distinct anger with the U.S., which China views as having pushed the Philippines to bring the suit to advance its own position in the region. The U.S. and its allies, including all of the Group of Seven large industrialized democracies and the 28 members of the European Union, have publicly expressed their support for the arbitration process. In a statement ahead of a meeting between EU leaders and Chinese Premier Li Keqiang, European Council President Donald Tusk raised the issue of the Tuesday ruling. “The rule-based international order is in our common interest and both China and the EU have to protect it, as this is in our people’s best interest,” Mr. Tusk said. An EU official said that following the comments, Mr. Li set aside the planned agenda for Tuesday’s meetings to present the Chinese view on the ruling and on human-rights issues. Those topics were supposed to be discussed Wednesday. Later Tuesday, Chinese President Xi Jinping said Beijing wouldn’t accept any claims based on the ruling, according to state broadcaster China Central Television. In the tense buildup to the ruling, a U.S. aircraft carrier strike group and other navy ships have been patrolling in the South China Sea, while China held military exercises in the area over the last seven days. Just minutes after the ruling was made public on Tuesday, China’s official Xinhua News Agency reported that a government-chartered Cessna CE-680, marketed as a midsize corporate jet, successfully completed test flights to new airports on Mischief Reef and Subi Reef, the two largest of the artificial islands it has built in the Spratlys. In another damaging setback for Beijing, the tribunal ruled that China couldn’t claim 12 nautical miles of territorial seas around Mischief Reef and Subi Reef, which both have airstrips. That means that U.S. and foreign naval ships can legally come within 12 nautical miles of those two structures without restriction. However, the tribunal did rule that China had a right to 12 nautical miles of territorial waters around five more of its artificial islands. The tribunal ruled that China had violated the Philippines sovereignty in its EEZ by building artificial islands, interfering with Philippine fishing and oil exploration, and failing to prevent Chinese fishing boats from operating there. It said China had interfered with Philippine fishing boats exercising their traditional fishing rights around the disputed Scarborough Shoal. It said that China hadn’t fulfilled its legal obligation to stop Chinese fishermen from harming the environment in the South China Sea. And it said China’s island building had violated the obligations of a state during the dispute resolution process. One of the few decisions that went against the Philippines was the tribunal’s ruling that it didn’t have jurisdiction to decide whether China had blocked Philippine ships from relieving marines based on another disputed outcrop, Second Thomas Shoal. The case was brought by the previous Philippine government. New Philippine President Rodrigo Duterte has taken a different stance, suggesting that he might be willing to negotiate directly with China. China says dozens of countries—many of them small, developing nations—support its position, although only a handful of them have issued their own statements explicitly backing Beijing’s right to ignore the tribunal. U.S. officials have warned that China could respond to the ruling by starting land reclamation at another disputed reef near the Philippines, or declaring an air defense identification zone over the South China Sea. China hasn’t announced any such plans, but says it has the right to do both.”

Posted by Alex Gray | July 11, 2016

The U.S.-China 'Thucydides Trap': A View from Beijing. Mo Shengkai and Chen Yue, The National Interest. “China’s rising comes as the most pronounced but complicated feature of the twenty-first century. In the past few years, people over the world, especially in the Asia-Pacific region, have witnessed increasing tensions in U.S.-Chinese relations, from all levels and in a wide range of areas. Graham Allison, a world-famous expert on international security and also the founding dean of the Kennedy School of Government at Harvard University, was the first person to combine the concept of the “Thucydides Trap” with the analysis of China’s ongoing rise, with recent commentaries published in global influential newspapers and websites such as the Financial Times, the New York Times and the Atlantic. In those articles, he warned that over the past five hundred years of human history, twelve of all sixteen cases of global tensions resulted in shooting wars. What’s more, he argued that a Thucydides trap has arisen between the United States and China in the western Pacific in recent years. Thereafter, some world-class masters, including Zheng Yongnian, Robert Zoellick, Zbigniew Brzezinski, Patrick Porter and T. J. Pempel, followed in using this popular term when talking about U.S.-Chinese relations today or in the years ahead, regardless of their personal attitudes toward such a pessimistic term. Its impact was so great that China’s President, Xi Jinping, had to respond to it publicly once again during his state visit to the United States, when he delivered an address to local governments and friendly groups in Seattle. He presented himself as a constructivist IR scholar, in the eyes of skeptical American realists, by emphasizing the importance of mutual intentions and interactions while rejecting the pessimistic prospect of bilateral relations projected by the widespread identification of a so-called “Thucydides Trap” between the two countries. Unfortunately, it is the constructivists that always remind us that either discourse or prediction might be a self-fulfilling prophecy. Most scholars in China reject the so-called metaphor from history and regard this simplistic historical analogy as the newest vision of the longstanding “China Threat Theory.” However, from an academic point of view, theoretical and empirical analysis is still necessary. Objectively speaking, the widespread use of the term “Thucydides Trap” just indicates a period when a rapidly rising power has obviously narrowed the gap between itself and the system’s dominant power, simultaneously stirring up fears and anxieties in other countries that are satisfied with the existing distribution of power. As Allison himself puts it, the two crucial variables are rise and fear. The real risk associated with the “Thucydides Trap” is that business as usual—not just an unexpected, extraordinary event—can trigger large-scale conflict. War is not destined, though risks undoubtedly become very high compared with other periods in the bilateral relationship. Similarly, it implies a period in which all countries, especially emerging and ruling powers, should be very cautious in dealing with their relationships and divergences if neither has any intentions to embark upon a devastating war. We will now illustrate the concrete scenarios of the gathering “Thucydides Trap” between the two giants. Some observers of U.S.-China relations describe the most prominent features of bilateral relations in 2015 as a battle over rules. The most important element of an international system is defined by its key norms and rules. As Allison has pointed out, the defining question of global order in the decades ahead will be whether China and the United States can escape the Thucydides trap. In the eyes of sensitive Americans, China’s ambitious “Belt and Road” strategy was nothing more than a parody of the Marshall Plan. Additionally, China’s global efforts to set up the Asian Infrastructure Investment Bank encountered resistance from an implicit U.S.-Japanese joint-led coalition. Generally speaking, a battle over rules is visible from both the security and economic dimensions. In the dimension of security, the most eye-catching problem is the still escalating dispute over the freedom of navigation (FON) and overflight in the South China Sea. It has been a longstanding dispute between the two countries, and has already caused severe crises in 1994, 2001 and 2009. This time it was reinvigorated by China’s unparalleled artificial island construction in the South China Sea, in response to the deliberate provocations of the Philippines and Vietnam. For China’s part, its actions are justifiable to defend its territorial integrity without any room for retreat, when considering surging public opinion and the very high political audience cost that the Chinese government has suffered. However, on the side of the United States, as the asymmetric theory of IR has suggested and Assistant Secretary of State for East Asian Affairs Daniel Russell has repeated on several occasions, it is not a matter of rocks but rules. U.S. officials believe that its position on FON is universal rather than directed against a specific country, and the United States has been conducting FON operations in many regions, and against many countries of concern, since the 1980s. If it does not react to China’s island construction in the South China Sea with enough toughness, it will consequently send signals to its allies and the world at large that the United States admits its decline and is appeasing China, which will seriously erode the international order built by its overwhelming hegemonic power after World War II and damage its reputation as the leading power of East Asia, not to mention that the Philippines is its formal military ally with clear military obligations. It seems unlikely that either China or the United States will compromise. Given that the United States has promised to continue its cruises and overflight operations within the twelve nautical miles of China’s islands, and that senior military officials have intermittently delivered harsh speeches, the accidental risk of military conflict persists. In the economic dimension, the Trans-Pacific Partnership is a perfect example. Benefiting from its entrance into the WTO, China’s economy has doubled several times since then, while the U.S. economy was exhausted by its two global wars on terrorism. After the 2008 financial crisis, there emerged a widespread perception (perhaps just a misperception) that in East Asia, a dual-center structure was emerging, in which the United States remained the traditional security center while leaving its place to China as the new economic center. Ever since the financial crisis, Americans have been in a state of unconfident anxiety, watching China’s diplomacy turn from keeping a low profile to striving for achievement. To secure its leading position in the region, the Obama administration is eagerly promoting a new free-trade agreement with high standards in the Asia-Pacific, closed to China in the negotiation stage, as an important component of its “Rebalance Strategy.” Therefore, there are two approaches to regional trade and investment liberation, that is, the coexistence of the negotiation processes of both TPP and RCEP, which are strongly backed by the United States and China respectively. The true story of the struggle between TPP and RCEP can be interpreted as a strategic rivalry on economic rules between the two countries. In other words, the two FTAs’ explicit frameworks reflect the implicit dual centers of the power structure in the region. As President Obama expressed publicly in his 2016 State of the Union speech, with TPP, China doesn’t set the rules in the region—the United States does. Of course, the complex effects on U.S. domestic politics make the prospects of this battle much fuzzier than those in the security dimension mentioned above.”

China’s Other Sea Offensive. Editorial Board, The Wall Street Journal. “Chinese encroachment in the South China Sea could earn a rebuke Tuesday when a United Nations court issues its ruling in a case brought by the Philippines. But recent Chinese actions in the East China Sea also deserve attention. “Chinese activity is escalating at sea and in the air,” Japan’s top military commander, Admiral Katsutoshi Kawano, warned last month. From April to June, Japan scrambled fighter jets against Chinese planes approaching its airspace a record 199 times, double last year’s pace. These encounters increasingly occur around Japan’s small and uninhabited Senkaku Islands, which China calls the Diaoyu and claims for itself. On June 17 a pair of Japanese F-15s nearly got into a dogfight with two approaching Chinese Su-30 fighters. Beijing says Japan’s planes used fire-control radar to “light up” the Chinese jets, a move that could signal an impending attack. Tokyo denies this, but its planes apparently did fire infrared decoy flares, a sign they thought they were under attack. In 2013 Japan accused a Chinese frigate of engaging fire-control radar against a Japanese vessel in the East China Sea, which Beijing denied. Another recent episode was like something out of a Tom Clancy novel. Around 1 a.m. on June 9, a Chinese warship for the first time entered the 24-mile zone around the Senkakus, which China previously probed with coast guard ships. A Russian destroyer happened to be there at the same time, having entered hours before from a different direction. At one point the Chinese vessel sailed directly toward an island, as if preparing a landing, until changing course and exiting with the Russian ship around 3 a.m. By that point officials in Tokyo had summoned the Chinese ambassador from his bed. Beijing claims its actions were “reasonable and legitimate” because the waters, like the nearby islands, are Chinese. Moscow says its ship was on routine patrol. Neither side admits to coordinating with the other, but Tokyo suspects otherwise and is justifiably spooked by the prospect of joint Sino-Russian bullying. All this signals a turn from 2014, when China moderated its East China Sea behavior after the U.S. clarified that its defense treaty with Japan covers the Senkakus. As if to punctuate the point, a Chinese fighter jet last month carried out a dangerous intercept of a U.S. Air Force RC-135 reconnaissance plane in international airspace over the sea. Japan has one of the world’s best navies and coast guards and has recently strengthened its ties with U.S. forces. But China increasingly arms its coast guard with retrofitted navy ships and other vessels that dwarf their Japanese counterparts in size and firepower. The Haijing 2901, deployed to the East China Sea last year, is the world’s largest coast-guard vessel at more than 10,000 tons, larger than a U.S. Navy destroyer. As China’s military power increases, so does its appetite for risk. Stronger U.S.-Japan ties, and Tuesday’s likely rebuke from the U.N. tribunal, impose some costs on Beijing’s behavior. But the U.S. and its allies will have to do more if they want to curb Chinese adventurism.”

China Conducts Combat Drills In South China Sea. Wyatt Olson, Stars and Stripes. “Chinese navy ships have conducted combat drills Friday near its most southern province of Hainan and the Paracel islands in the South China Sea, China’s Ministry of Defense said on Saturday. The drills come on the heels of the announcement this week by the United States and South Korea to deploy a THAAD missile defense system in South Korea. China’s Foreign Ministry said it “firmly opposes” that deployment. The drills come just days away from the expected ruling by the Permanent Court of Arbitration on July 12 on a case filed by the Philippines over disputed territory in the South China Sea. China has said it will not abide by the findings of the arbitration court. Ships from China’s northern, eastern and southern fleets took part in the drills, which the state-run news agency Xinhua called an “annual routine military exercise that covered all sorts of combat platforms, including the air arm, submarine, surface vessel and coastal defense force.” The focus was on “air control operations, sea battles and anti-submarine warfare,” Xinhua said.”

Taiwan Pivots Away from China, Towards the South. Kyle Churchman, The National Interest. “Taiwan is laying the groundwork for a major charm offensive towards Southeast Asian nations and India in an effort to gain a strong foothold in these fast-growing economies and to diversify its economic relations away from China. China and Hong Kong together absorb nearly 40 percent of Taiwan’s exports, with exports accounting for 70 percent of the island’s GDP. The Tsai Ing-wen administration’s New Southbound Policy seeks to promote tourism, industrial cooperation and a broad array of exchanges spanning the education, culture and technology fields with the nations of ASEAN and South Asia. It is a creative “people-focused” strategy aimed at knitting Taiwan into the economic and social fabric of these dynamic regions in the absence of official diplomatic ties. It also appears designed to mitigate Taiwan’s economic marginalization in a rapidly integrating region, which is by and large the result of Chinese opposition to Taiwan’s signing of bilateral and regional trade agreements. As indicated in its name, the New Southbound Policy is a novel approach to redirect Taiwan’s trade-dependent economy to other parts of Asia from the Chinese market. Beginning in 1994, then Taiwan president Lee Teng-hui championed a “Go South” policy that urged Taiwan businesspeople to invest in Southeast Asia. The 1997 Asian Financial Crisis and its fallout, however, spooked Taiwan investors away from ASEAN towards China, the latter having begun sweeping market reforms under the stewardship of Premier Zhu Rongji (1998-2003). Lee’s successor Chen Shui-bian attempted to reintroduce Lee’s “Go South” policy in 2002, but this proved largely ineffective as Taiwan investors continued to perceive the Mainland as a more attractive investment destination. Chen’s 2001 decision to lift longstanding restrictions on investment in China combined with explosive Chinese growth throughout the first decade of this century served only to accelerate cross-Strait commercial ties. Whereas these prior initiatives focused almost exclusively on trade investment figures, the Tsai government claims its new Southern-directed strategy is multifaceted in its additional emphasis on soft, people-to-people elements. It is also now targeting South Asian nations, particularly India—the region’s economic powerhouse that is pushing to become a global manufacturing hub under Prime Minister Modi’s “Make in India” scheme. It also envisions ASEAN not merely as a manufacturing base, but as an extension of Taiwan’s domestic market whereby Taiwan products and services meet the consumption needs of region’s burgeoning middle class. Signaling the importance President Tsai attaches to the New Southbound Policy, she named former ROC Foreign Minister James Huang (2006–08)—a close confidante—to head a task force inside the presidential office that will spearhead the initiative and coordinate among Taiwan’s government ministries, relevant industries and educational institutions. This New Southbound Policy Office, whose founding guidelines were approved by Tsai on June 15, will ramp up its operations in in the coming weeks, with Mr. Huang required to periodically brief Tsai on overall strategy and project implementation. Taiwan has already unveiled a number of proposals that help to form the nuts and bolts of the New Southbound Policy. It recently added Cambodia, Laos and Myanmar to the list of Southeast Asian nations it currently offers streamlined visa application procedures, and is even considering the inclusion of all ten ASEAN nations into its visa-waiver program. The Taiwan Ministry of Education will allocate funding for Taiwan youth to conduct internships in Southeast and South Asia, as well as provide scholarships to citizens of ASEAN nations to study in Taiwan. The establishment of a national-level think tank for ASEAN and South Asia studies is also in the pipeline. Asia’s shifting economic landscape undergirds the logic of the Tsai administration’s Southern pivot. India outpaced China as the world’s fastest-growing large economy in both 2014 and 2015, whereas ASEAN nations are poised to experience robust growth in the coming decades thanks to their young populations and the ongoing formation of a single regional market and production base, the ASEAN Economic Community. Meanwhile, rising labor prices in China and the overall Chinese economic slowdown are leading Taiwan corporations to consider alternative locales to build manufacturing facilities. Most notably, Foxconn—one of Taiwan’s largest companies and a key supplier to Apple—announced in August 2015 that it plans to invest $5 billion in a manufacturing plant and a R&D center in the Indian state of Maharashtra. Taiwan’s relatively paltry trade statistics with India and Indonesia—the latter alone accounting for nearly 40 percent of ASEAN’s economic output—demonstrate great potential for growth. In 2015, Taiwan’s exports to India and Indonesia totaled approximately $2.9 billion and $3 billion, respectively. By comparison, Taiwan’s economic archrival South Korea exported $12.2 billion in goods to India and $7.8 billion in goods to Indonesia. These opportunities notwithstanding, Taiwan’s Northeast Asian competitors have been making inroads into ASEAN and India in recent years, lending urgency to the implementation of the new policy. Since 2006, South Korea, Japan and China successively signed free trade agreements with ASEAN; Seoul and Tokyo also inked “economic partnership” agreements with New Delhi in 2009 and 2011, respectively. Seoul in 2009 established the ASEAN-Korea Centre that has served as the principal conduit for its economic and cultural engagement with Southeast Asian nations. The countries of Southeast and South Asia are also poised to play a prominent role in Beijing’s ambitious One Belt, One Road initiative in the coming years. Hence, with Tokyo, Seoul and Beijing all rushing into ASEAN and South Asia, Taipei is endeavoring to make a big push over the next five years to make up for its “late start.”

Beijing Establishes A D.C. Think Tank, And No One Notices. Isaac Stone Fish, Foreign Policy. “Despite its advocacy for Beijing’s controversial and important position in the disputed South China Sea, the Institute for China-American Studies (ICAS) — the only Chinese think tank based in Washington D.C. — has been unable to rise from obscurity. Google their initials and they come up on the third page, behind the Institute of Chartered Accountants of Scotland, the International Council of Air Shows, and the Inupiat Community of the Arctic Slope, a tribe in Alaska. It has all of 46 Twitter followers. While U.S. scholars respect some of executive director Hong Nong’s work on China’s claims in the disputed South China Sea — the focus of the think tank’s five-person staff — ICAS is almost entirely unknown outside a narrow band of China watchers in the U.S. think tank community. Even Patrick Ho, who runs the China Energy Fund, one of the only other Mainland Chinese think tanks active in the United States — the exact number is unknown, but estimates range from two to roughly a dozen — said he has never heard of ICAS. “I don’t know if they [even] have a reputation yet,” said the South China Sea scholar Bonnie Glaser. “They have been pretty low-profile.” On July 12, the Permanent Court of Arbitration, an influential international court in the Hague, will announce its ruling on a controversial case between the Philippines and China over the legality of Beijing’s claims of much of the disputed South China Sea. Beijing has refused to acknowledge the court’s jurisdiction over this case. Instead, over the last year, it has been waging a public relations battle in Washington, trying to convince policymakers that its territorial claims are valid. Many in Beijing feel that either the United States fundamentally misunderstands China’s policies, or that it’s biased against China. Either way, Beijing believes educating the United States about China will improve the perception of the Middle Kingdom in the United States. And that, so the thinking goes, will allow Beijing greater international latitude. ICAS, whichopened in April 2015 with a high-profile conference featuring Henry Kissinger in a pre-recorded, is part of this strategy. “My mission,” Hong said, “is to send a clear message” about China’s claims and policies in the South China Sea. And yet, Beijing has been mostly unsuccessful in building international support for its South China Sea claims. One reason is the perceived weakness of its legal case. Most experts, at least outside of China, seem to agree that the Permanent Court of Arbitration will rule in the Philippines favor. “China’s claim that it can legally ignore the pending arbitral award is not only wrong, it is legally insupportable,” Julian Ku, a professor of constitutional law at Hosftra University, wrote on the blog Lawfare. The other reason is Beijing’s misunderstanding of how U.S. public opinions and institutions work. Just as Beijing disparages Washington’s ignorance of China, the various parts of the Chinese system can be surprisingly daft in their understanding of U.S. institutions and the media ecosystem that surrounds them. And that is the context in which ICAS — an organization whose main reason of existence is to attract attention, influence policymakers, and join the D.C. conversation — has had so little impact. Glaser, a senior adviser for Asia at the think tank Center for Strategic and International Studies (CSIS), doesn’t think it’s because they are spies — a plausible explanation for a Chinese organization that gathers and disseminates information. “Obviously people will suspect that they’re playing some intelligence role. But they’re not very aggressive,” she said. Rather, most of those interviewed for this story — roughly a dozen academics, think tank staff, and China watchers, the kind of people who traffic in acronyms and appreciate the intricacies of relevancy in Washington — have concluded that the problem is ineffectiveness.”

For China, A Missile Defense System In South Korea Spells A Failed Courtship. Jane Perlez, The New York Times. “However isolated North Korea may be, it has long had one major ally: China. But for two years, China’s leader, President Xi Jinping, seemed to be favoring Pyongyang’s neighbor and nemesis to the south. He spent much political capital wooing South Korea’s president, Park Geun-hye, in hopes of drawing the country away from its longtime ally, the United States. He made an elaborate state visit to Seoul while shunning North Korea and its young leader, Kim Jong-un, whom he has yet to meet. Ms. Park returned the favor last year, coming to Beijing for a major military parade at Tiananmen Square, the only leader of an American ally to attend. But on Friday, it became clear that Mr. Xi’s efforts had fallen short. In announcing plans to deploy an advanced American missile defense system in South Korean, Ms. Park’s government showed that it was embracing its alliance with Washington more than ever, and that it would rely less on China to keep North Korea and its nuclear arsenal at bay. In Beijing, the decision was seen as a major setback, one that went beyond its interests on the Korean Peninsula to the larger strategic question of an arms race in Northeast Asia that could impel China — and Russia — to develop more sophisticated weapons. Analysts said the deployment of the so-called Terminal High-Altitude Area Defense system, or Thaad, would reinforce the already high level of mistrust in United States-China relations as the Obama administration nears its end, adding to the raw nerves over disputes in the South China Sea and differences over American business access to the Chinese market. And North Korea, an issue on which there had been some common ground between the two powers — at least when it came to the latest round of United Nations sanctions — is likely to become a greater source of irritation, as China loses an incentive to be tougher on the regime. On Saturday, North Korea test-fired a submarine-launched ballistic missile off its east coast at 11:30 a.m., the South Korean military said. The missile was successfully ejected from the submarine, it said, but failed in the first stage of flight. The North also tested a submarine-launched ballistic missile in April. In announcing the American missile defense system, which has been under discussion for years, the top commander of the United States military in South Korea, Gen. Vincent K. Brooks, said Friday that it was needed to protect South Korea from the North’s nuclear weapons. But Chinese officials have repeatedly said that they do not believe the North Korean threat is the true reason for the American-initiated deployment. Rather, they say, the purpose of the Thaad system, which detects and intercepts incoming missiles at high altitudes, is to track missiles launched from China. Now that the system’s implementation has been confirmed, China will almost certainly consider developing more advanced missiles as a countermeasure, said Cheng Xiaohe, an associate professor at Renmin University in Beijing and a North Korea expert.  “A way to deal with Thaad — a shield — is to sharpen your spear,” Mr. Cheng said. The possibility of the Thaad deployment has bedeviled relations between Washington and Beijing for more than a year. Last month, Mr. Xi and President Vladimir V. Putin of Russia made a point of denouncing the Thaad system during Mr. Putin’s visit to Beijing, equating it with the American-built Aegis Ashore ballistic missile defense system deployed in some NATO countries. The implicit message was that the United States was trying to encircle China in the same way that, according to Mr. Putin, it was trying to contain Russia. Before Mr. Putin’s visit, China’s foreign minister, Wang Yi, expressed the Chinese view that the Thaad system is a strategic game-changer in Northeast Asia. “The Thaad system has far exceeded the need for defense in the Korean Peninsula and will undermine the security interests of China and Russia, shatter the regional strategic balance and trigger an arms race,” Mr. Wang said. China understands South Korea’s “rational need” for defense, he said, “but we can’t understand and we will not accept why they made a deployment exceeding the need.” Chinese analysts have said that they expect Japan to eventually deploy Thaad as well, in what they say would be an American attempt to draw it closer into a three-way alliance with South Korea. So far, Japan has shown little interest in the Thaad system, but Washington and Tokyo are jointly working on a new missile interceptor that is expected to start production in 2017. Talks between Seoul and Washington on the Thaad deployment picked up speed after North Korea conducted its fourth nuclear test in January. After that test, which Pyongyang claimed was of a hydrogen bomb, Ms. Park tried but failed to reach Mr. Xi by telephone, according to South Korean news reports that were later confirmed by Chinese officials. The nuclear test left Ms. Park convinced that Mr. Xi could not rein in North Korea’s nuclear ambitions, and that China was uninterested in her “trustpolitik” strategy of finding ways to engage with the North while responding strongly to provocations, South Korean officials said. In March, South Korea and the United States began formal talks on the Thaad deployment. China tried to persuade Ms. Park to accommodate Beijing’s interests by asking for technical adjustments to the system, under which its radar would penetrate less deeply into China, according to Wu Xinbo, the director of the Center for American Studies at Fudan University in Shanghai. But those adjustments were not made, he said. Some in South Korea have expressed concern that China, the country’s top trading partner, might engage in economic retaliation for the Thaad deployment. Cheong Seong-chang, a senior analyst with the Sejong Institute in Seongnam, south of Seoul, said China could reduce the number of tourists it allows into the country or boycott some South Korean goods. Mr. Wu said Beijing was unlikely to take such measures in this period of slower economic growth. But he said the debate over North Korea among senior Chinese leaders would almost certainly be reshaped, with officials who favor better relations with Pyongyang gaining more influence, after two years of Mr. Xi keeping its isolated neighbor at a distance. “The school in favor of a more balanced approach to North Korea will get more sway,” Mr. Wu said.”

Chinese Language Newspapers In Australia: Beijing Controls Messaging, Propaganda In Press. Kelsey Munro and Philip Wen, Sydney Morning Herald. “It can come in the form of an admonishing phone call, blocking reporters from a public event, via directives for mainland-linked businesses to pull advertising, or even direct investment from Chinese government bodies. One way or another, Beijing has extended its messaging control over almost all the Chinese language media in Australia, Australian Chinese media sources say. Politically sensitive or unfavourable coverage of China and the ruling Communist Party has been effectively stopped outside all but a couple of Chinese language outlets, as the government steps up efforts to filter what the Chinese diaspora consumes. "Nearly 95 per cent of the Australian Chinese newspapers have been brought in by the Chinese government to some degree," said an editor who works at a pro-Chinese government publication in Australia, speaking on condition of anonymity. The terms for the media are clear: "To report the good news about the Chinese government, not the bad news of course," the editor said. The tactics employed involve both stick and carrot, and exploit the commercial pressures small independent publications routinely face. Advertisers, usually Chinese-owned firms or businesses which rely on good relations with the Chinese government, are told by consulate officials to pull advertising from non-compliant media outlets, and are directed instead to divert their dollars to those who toe the party line, the editor said. Consular advertising budgets are directed to friendly media, and Australian Chinese newspapers rely on the income stream from state-owned publications in China paying to place several editorial pages – which are laid out in China – in each edition. The end result, the editor said, is that almost all the Australian Chinese newspapers only publish what the Chinese government wants them to.  An independent Australian Chinese-language newspaper and website in Sydney, which has defied Chinese consular pressure to censor sensitive subjects including the recent anniversary of the Tiananmen Square massacre, told Fairfax Media it has had advertisers pull out after Chinese consular and government pressure. In one instance earlier this year, kitchen appliance manufacturers from Zhejiang Province withdrew their one-year advertising contracts after a Chinese government official visiting Australia saw the ads and asked the companies to do so, the sources say. Fairfax Media has seen emails and text messages from two of the companies terminating their contracts, which say it was necessary "due to urgent instructions from Ningbo Zhejiang government". It is not only Chinese-owned businesses coming under pressure, but businesses that rely on the Chinese market. An independent Australian Chinese-language newspaper told Fairfax Media it had struck a deal to supply its publications to a 5-star hotel, the Sofitel Sydney Wentworth, early last year. Weeks later, following publication of a story about an SBS investigation into organ harvesting in China, the hotel told the newspaper it was cancelling the deal. "Our newspaper was invited by the Sofitel marketing team to be in their lobby as reading material for Chinese travellers," a statement from the media outlet's board of directors says. "However, after a few weeks, Sofitel received a call from the Chinese Consulate asking them to remove our newspaper or face financial consequences. Sofitel does a lot of business with China." A spokeswoman for the hotel declined to comment. The newspapers were removed in March last year. At the Fair Work Ombudsman's launch of its Chinese communications strategy earlier this year at Zilver restaurant in Sydney's Chinatown, two local reporters from the Epoch Times, the US-headquartered, Falun Gong-aligned newspaper which is regularly critical of China's human rights record, were asked by the Ombudsman's office to leave after a Chinese consular official saw them there. A spokeswoman for the Ombudsman said the incident was the responsibility of a "third-party provider" who drew up the invite list. "Unfortunately, as the proceedings were about to commence, the third-party provider advised the Fair Work Ombudsman that Chinese Consular representatives who were assisting with the launch objected to the attendance of The Epoch Times at the function because of issues or disputes unknown to the Fair Work Ombudsman," the spokeswoman said. Both the Ombudsman's office and the "third-party provider" subsequently apologised to the Epoch Times for their treatment, which was "sincerely regretted", she said. Fairfax Media made multiple requests for comment on the allegations to the Chinese Embassy in Canberra and the Chinese consulate in Sydney, but received no response. Chongyi Feng, an associate professor of China Studies at the University of Technology, Sydney founded the short-lived Chinese-language newspaper Sydney Times in 2006. He has first-hand experience of the heavy-handed pressure exerted by Chinese officials. As well as coming under the commercial pressure of advertisements being pulled, he said the Chinese consulate would make thinly-veiled threats about interfering with his academic work by blocking collaboration with Chinese universities and restricting his ability to obtain visas to travel to the mainland. He says his newspaper was not commercially viable once advertisers pulled out and he had to close it.”

More HK People Giving Up Passports. Li Xueying, The Straits Times. “A few months ago, a 36-year-old European national gave birth to a boy in Hong Kong. All went smoothly but she and her husband faced one quandary. Given that the woman is of partial Chinese ethnicity - her mother is a Chinese Malaysian - her son would have been entitled to a Hong Kong passport. China's nationality law allows those of Chinese descent who are born on Chinese soil to get one. But she and her husband decided not to take up the option, even though Hong Kong allows for multiple citizenship. China, she fears, could "lay claim" to her son, such as if "he is in a sticky situation in China and is treated as Chinese rather than European". The recent saga of the five Hong Kong booksellers, who many believe were abducted by mainland agents for trading in gossipy books about Beijing leaders, cemented her decision. One of the booksellers, Mr Lee Bo, holds both Hong Kong and British passports. When Britain sought access to him, China's Foreign Minister Wang Yi's retort was: He is "first and foremost a Chinese citizen". To the European woman, who has lived in Hong Kong for eight years, the situation is "just too precarious for me to want my child to be a Chinese citizen", she told The Straits Times. A sense of disquiet about Hong Kong's future is giving both locals and parts of the overseas community here pause for thought, as they ponder what lies ahead for themselves and their families. Questions are being raised about whether the "one country, two systems" framework that allows the special administrative region to operate autonomously from the mainland is being eroded. Signs indicate increasing interference by Beijing: Mr Lee, the bookseller, was reportedly nabbed by mainland agents within Hong Kong in what would then be a breach of the formula. His colleague Lam Wing Kee said he was denied access to lawyers and family during his eight-month detention on the mainland. Partly driven by such fears, an increasing number of Hong Kongers are giving up their Hong Kong passports, reported local media. In the first quarter of this year, 56 people renounced it, compared to 33 per quarter in the past five years. Immigration agencies also say an unprecedented number of Hong Kongers are contemplating emigrating, since the 1997 handover from British rule. This is in line with a recent survey that shows that nearly half would leave if they could, many also citing quality of life issues such as unaffordable housing . Ms Mary Chan of Rothe International Canada says a key turning point was the 2014 Occupy movement, when protesters tried - and failed - to agitate for more freedom to elect their leader. The number of enquiries she received doubled from a daily average of one or two. Other agencies, Paul Bernadou & Co and Luxe Legal Group, report similar trends. The actual numbers remain low though, compared to the exodus after the bloody crackdown on Tiananmen Square protests in 1989, leading up to 1997. Statistics from the Security Bureau show that in 1995, 43,100 Hong Kongers emigrated. Last year, just 7,000 did so - a small increase from 6,900 the previous year. The top three destinations are the United States, Australia and Canada. Mr Paul Bernadou, the founder of the migration consultancy, explains that the most recent figures reflect a lag as families take time to finalise their decisions and wait for the applications to be processed. A 40-year-old man, who wants to be known only as Mr Cheung, is among those applying to emigrate. He began the process last June and expects to move his family to Canada next year. While firmly part of the city's middle class - he and his wife, both public servants, have a joint monthly income of HK$160,000 (S$27,800) - he believes that prospects for their children, aged six and three, are dim. He reels off a litany of concerns: education, property prices, food safety, overcrowding. He also fears Hong Kong's freedoms are being stifled, citing the booksellers episode. "The freedoms of the Hong Kong people are diminishing," he asserts. "When people speak up, Beijing thinks its authority is being challenged. And it will take steps to make you shut up." He adds: "Before, we loved Hong Kong. Now we are just disappointed about what it's become." Such perceptions are also creating jitters among foreigners here who hold the dark-blue Hong Kong passport with the People's Republic of China emblem, as well as their original passports. While China does not allow for dual nationality, Hong Kong does. And the Hong Kong passport remains a highly desirable one, ranking 20th, with visa-free access to 154 countries. It also grants easy access to mainland China, a burgeoning economy. But the booksellers episode has raised an issue that is rarely discussed: To what extent are dual nationals accorded the diplomatic protection of their second passport when in China, including Hong Kong? It varies according to the country, says law professor and associate dean (research) Simon Young, of the University of Hong Kong.”

Taiwan's "Cyber Army" Plan. Paul Huang, Project 2049 Institute. “Taiwan's new Minister of National Defense Feng Shih-kuan (馮世寬) recently confirmed the intention of the new government to create a "Cyber Army" (網軍) as the fourth branch of Taiwan's armed forces. The announcement followed the plan outlined in the Defense Policy Blue Papers published earlier by the Democratic Progressive Party (DPP), which specifically called for the "[Integration of] existing military units and capacities of IT, communications, and electronics to establish an independent fourth service branch alongside the current Armed Forces consisting of the Army, Navy, and Air Force."[1] Looking ahead, it will be fruitful to observe what the new Cyber Army can add on top of Taiwan's existing cybersecurity and cyberwarfare structure. It is easy to see where the impetus for establishing a Cyber Army came from; for many years Taiwan has been on the frontlines of the battle against the ever-intensifying cyber attacks from China. This has reached such an extent that observers and even Taiwanese officials acknowledged Taiwan as a "testing ground" for China's cyber army and state-sponsored hackers. The case of the 2015 hacking of the U.S. Office of Personnel Management (OPM) further illustrates the ambitions and capabilities on the part of the Chinese hackers and the dear consequences of failing to stop such an attack.  Similar organizations dedicated to cybersecurity and combined defensive and offensive cyberwarfare capabilities have been established in other countries, such as the United States Cyber Command (USCYBERCOM) and South Korea's National Cyber Command (NCC). Moreover, President Obama ordered the creation of the Commission on Enhancing National Cybersecurity earlier this year. Though the Commission serves only as an advisory role, it is yet another move by the administration to address the ever-more prominent issue of cybersecurity. Taiwan's plan for a Cyber Army however, will make it the first country to assign equal importance to cybersecurity as to the other branches of the armed forces.  It should be noted that Taiwan already has a fairly sophisticated cybersecurity and cyberwarfare structure in place. Currently the principle agency in Taiwan specifically tasked with conducting combined defensive and offensive cyberwarfare operations is the Information and Electronic Warfare Command that reports directly to the Ministry of National Defense (MND)'s General Staff Headquarters. Commanded by a Major General with about 2,400 staff under its jurisdiction, the Information and Electronic Warfare Command performs just about every function one can expect of a Cyber Army. In addition, the National Security Bureau (NSB), Taiwan's principle intelligence agency, also operates a 7th Department as the National Cybersecurity Department, with the primary responsibilities of monitoring and safeguarding Taiwan's civilian cyberspace and to help defend against national security threats.  It is expected that the new Cyber Army will directly appropriate the Information and Electronic Warfare Command together with other agencies under the MND that are related to the operations and managements of signals or electronic intelligence - such as the Office for Communications, Electronics and Information under the MND's General Staff Headquarters. It has also been reported that the size of this new Cyber Army will reach 6,000 strong and become fully operational by 2019 at the latest. The promotion of a "fourth branch" among the existing armed forces raises some implications.  Currently there are only eight full (three star) Generals in Taiwan's military, which include the three Chiefs of the Command Headquarters of Army, Navy, and Air Force, Minister and two Deputy Ministers of Defense, Chief of the General Staff, and Deputy Chief of the General Staff. The creation of a Cyber Army branch would necessitate the promotion of another three star General to head its Command Headquarters, or to transfer an existing one to the position. It is likely that the Cyber Army General will be one that has a Signal Corps background or otherwise has extensive experience in commanding information related units or staff offices. The new Cyber Army also makes it official that the military's priority is no longer just safeguarding its internal network, but the whole civilian internet as well. Just as many other militaries around the world, Taiwan's military relies on an intranet network (known as the "military network") that is physically separated from the civilian internet (the World Wide Web) for obvious security reasons.  Many computers and networking devices used inside Taiwan's military bases and installations likely have also been altered to accept only connections that conform to the military network protocol. As such, the new Cyber Army will likely be divided to handle two categorically distinctive areas - that of the Internet network (civilian) and that the of Intranet network (military). Depending on the Tsai administration's policy it might also be possible for Taiwan's Cyber Army to provide some form of real-time intelligence sharing on cyber threats with the United States, although any joint cyber operation is unlikely to take place any time soon due to the sensitive political nature involved. Observers have long noted that no country has more experience than Taiwan in dealing with the cyber threats coming out of China, and closer cooperation between the two countries on this area would no doubt benefit the United States' own cybersecurity efforts.  So far the plan to establish a new Cyber Army has been met with mixed receptions in Taiwan. While it has been hailed by many as an indication that the new government is taking the cyber threats Taiwan faces seriously, some have questioned the need to treat cybersecurity as a fourth branch in the service. Lan Ning-li (蘭寧利), a retired Vice Admiral of the Taiwanese Navy, was quoted in the news commenting  on the existing Information and Electronic Warfare Command as already functioning in full strength as a Cyber Army and thus he does not see an urgent need to make it more prominent than it is now. This raises the question of whether Taiwan's new Cyber army actually has a more ambitious, offensive strategic design in mind than what has been discussed on the surface. Many observers have been calling for Taiwan to adopt more asymmetric means to help deter Chinese threats, and cyber is no doubt one of the areas where Taiwan excels at and has a potential to offset Chinese superiority in conventional arms. After all, maybe the best deterrence against threats coming from the cyber is the ability to strike back, and the new, elevated Cyber Army would be a good starting point for Taiwan to increase that capacity.”

Why China Says No To The Arbitration On The South China Sea. Fu Ying, Foreign Policy. “The Hague tribunal in the much-discussed South China Sea arbitration case between China and the Philippines has notified the world that it will issue a final verdict on July 12. Many Western countries seem to think they already know the result of the arbitration — that China will lose. They have already started urging China to accept the ruling. But Beijing’s position is clear: no acceptance, no participation, no recognition, and no implementation. There is solid international legal basis for China to oppose this case. And by doing so, China is not only safeguarding its national interests, but also protecting the integrity and legitimacy of the international maritime order. Why does China refuse to accept and participate in the proceedings of this tribunal, being heard at the Permanent Court of Arbitration in The Hague? Because China, as a sovereign state, is entitled to choose its preferred means of dispute resolution — a legitimate right under international law. Moreover, the Philippines’ case is inherently flawed and illegitimated by such irregularities as the country’s abuse of the dispute settlement procedures, its distortion of concepts, and its deliberate disguise of the real nature of the disputes. The Philippines’ arbitration relates to the dispute over the sovereignty of islands and reefs in the South China Sea, and to maritime delimitation. But these territorial issues are not regulated by — and therefore beyond the scope of — the U.N. Convention on the Law of the Sea (UNCLOS). And in 2006, China declared it would exclude “disputes concerning maritime delimitation” from compulsory arbitration, under Article 298 of UNCLOS. Second, the Philippines’ unilateral initiation of compulsory arbitration did not meet UNCLOS preconditions for such initiation. The “no arbitration without the existence of a dispute” principle requires that before resorting to compulsory arbitration, there must have existed a real dispute between the parties. However, China has not yet presented specific claims with individual islands: Instead, it has always treated them as part of its Zhongsha Islands or Nansha Islands in the South China Sea. UNCLOS also stipulates that the Philippines must exchange views related to the arbitration over the dispute with China. But the Philippines has never consulted with China on the subject matters of the arbitration. And it was not telling the truth when it reported an “impasse” with China in “the bilateral exchanges” and “the great many subsequent exchanges.” In fact, it was China that tried in vain to engage in meaningful dialogue with the Philippines. Therefore, the Philippines’ unilateral initiation of arbitration has fallen short of meeting the UNCLOS conditions. Besides, by unilaterally initiating the arbitration, the Philippines has violated an earlier agreement it reached with China: Both countries previously stated their commitment to bilateral negotiations and consultations as the means to settle disputes. Why does China find it impossible to recognize and implement the tribunal’s upcoming decision? Although Article 288(4) of UNCLOS stipulates that the tribunal should decide whether it has jurisdiction, the application of this provision is not unconditional. Indeed, there is no such thing as absolute power in international law. This tribunal, whose authority and power are conferred by states, is an international dispute settlement mechanism under UNCLOS. If the tribunal abuses its power, China — along with any other members in the international community — would have the right to reject its decisions. And in this case, the tribunal has acted in a reckless and arbitrary fashion. In doing so, it has violated the basic principles of international rule of law and undermined China’s and other nations’ faith in UNCLOS. We don’t yet know the outcome, but we do know that the tribunal failed to fully understand and investigate the real dispute between China and the Philippines. It disregarded the essence and purpose of the Filipino claims in filing the case, deliberately regarding it as a mere issue of the interpretation and application of UNCLOS — but in fact, the submissions handled are far beyond this scope. There is deep concern in China that the tribunal is failing to consider the specific geographical framework and situation in the South China Sea where the maritime claims of the two countries potentially overlap. I hope it is not hard to understand why China has decided not to recognize and implement the tribunal’s ruling. More than 60 countries have voiced their support for China’s position on resolving the South China Sea issue through negotiations and consultations. China, as a state party to UNCLOS, supports and respects the treaty’s principles and spirit. What China opposes is not UNCLOS and compulsory arbitration, but the tribunal’s abuse of power in handling the case. Today, most disputes are resolved through negotiations between the countries directly involved. The prerequisite for such negotiations, whether bilateral or multilateral, is the agreement or consent of those countries. China’s claim and position in the arbitration case are consistent with the basic spirit of international law, as well as state practice in international relations. This arbitration cannot resolve the disputes between China and the Philippines in the South China Sea. Instead, it will only increase tensions and undermine peace and stability in the region. If the coastal countries in the South China Sea region do not intend to aggravate tensions, they have to return to the path of seeking resolution through negotiation. China and the countries in the Association of Southeast Asian Nations (ASEAN) have agreed to handle the issue through a dual-track approach — in other words, to resolve disputes through peaceful negotiations. Consultations on the code of conduct in the South China Sea region are making progress. The momentum should not be interrupted. As President Xi Jinping said, China is committed to upholding international justice and is opposed to forcing one’s will upon other people. The handling of the South China Sea issue has a bearing on justice as well as peace and stability. Countries in this region need to work together to build rules-based cooperation. The international community should support the efforts made by China and other littoral states to manage and resolve disputes in a peaceful manner, respect China’s choice of using negotiations as the means to settle disputes, and protect the legitimacy and fairness of international mechanisms — especially UNCLOS.”

Posted by Alex Gray | July 08, 2016

U.S. Navy Destroyers Stalk China's Claims In South China Sea. David Larter, Navy Times. “U.S. Navy destroyers have been quietly stalking some of China's man-made islands and claims in recent weeks ahead of a ruling on contested claims in the South China Sea. Over the past two weeks, the destroyers Stethem, Spruance and Momsen have all patrolled near Chinese-claimed features at Scarborough Shoal and in the Spratly Islands, according to two defense officials. “We have been regularly patrolling within the 14 to 20 nautical mile range of these features,” one official said, who asked for anonymity to discuss diplomatically-sensitive operations. The distance is important because if the ships patrolled within 12 miles, the Navy would handle it as a freedom of navigation operation that asserts U.S. rights to freely operate in waters claimed by other countries. Those FONOPS patrols must be approved at very high levels, but these close patrols outside of 12 miles are in international waters. Experts say the tactic serves as a message of resolve to the Chinese and U.S. allies in the region and is a deliberate show of force ahead of a major international ruling on the legality of some of China’s claims; Beijing claims nearly all of the South China Sea, setting up conflicts with its neighbors and the U.S. A spokesman for U.S. Pacific Fleet said the patrols were part of the Navy’s “routine presence” in the region. “Patrols by U.S. Navy destroyers like Spruance, Momsen and Stethem — as well as the USS Ronald Reagan Carrier Strike Group — are part of our regular and routine presence throughout the western Pacific. U.S. Navy forces have flown, sailed and operated in this region for decades and will continue to do so,” said Lt. Clint Ramsden. Pacific Fleet declined to discuss the patrols and what message they were trying to send with them, citing security concerns. “We won't discuss tactics, specific locations in the South China Sea or future operations anywhere in the region due to operational security,” Ramsden said. “All of these patrols are conducted in accordance with international law and all are consistent with routine Pacific Fleet presence throughout the western Pacific.” The carrier Ronald Reagan has also moved into the South China Sea along with her escorts, the second carrier group to be dispatched to the region this year. The carrier John C. Stennis spent the bulk of its planned seven-month deployment patrolling the South China Sea, spending nearly three months there before leaving June 5. On Wednesday, the Navy had seven ships in the region including Reagan, two cruisers and four destroyers, a Navy official said. The Virginia-class submarine Mississippi is also patrolling in the western Pacific, according to a recent press release announcing a port visit to Busan, South Korea, but the Navy does not comment on the location or movements of its submarines. The heavy show of Navy hardware in the South China Sea, which includes a carrier air wing and hundreds of missile tubes on the destroyers, is likely part of both the Navy’s continuing presence operations in the area and an anticipation of the international Permanent Court of Arbitration’s ruling on the legality of China’s claims in the South China Sea, said Jerry Hendrix, an analyst with the Center for a New American Security. The Philippines brought China to court after its 2012 seizure of Scarborough Shoal, which is located within the 200-mile exclusive economic zone of the Philippines. Chinese vessels have been spotted surveying the area, activity that was a precursor to previous island-building projects; no construction is believed to have been started to date. The case will likely rule on the legality of China’s claims surrounding artificial islands in the Spratly Islands, built atop of rocky outcroppings and reefs, and will also take up what exactly China is owed under the international laws of the sea. China claims almost all of the South China Sea as its territorial waters and has embarked on the island building project to bolster its claims. The ruling from the tribunal in The Hague, Netherlands, is expected to be released July 12. “The Navy is trying to very strongly assert freedom of navigation and freedom of the seas,” said Hendrix, who is a retired Navy captain. “There is also, I think, some anticipation of The Hague’s ruling on China’s claims. “I anticipate that China will take additional actions after the Hague tribunal, and I think there is a desire to show that after that happens there is not going to be a ramp-up of U.S. forces in the region: that they are already there.” The U.S. has not taken a formal position on the Chinese claims but has said it will abide by the Hague’s ruling. China has dismissed the case as irrelevant and has said the court does not have the jurisdiction to rule on the matter. The Chinese have taken proactive steps ahead of the ruling, including declaring a 38,000-square-mile “no-sail zone” near its Hainan Island while it conducts military exercises between July 5 and 11, the day before the ruling. Significantly the Chinese no-sail zone includes the Paracel Islands chain, where in January the destroyer Curtis Wilbur conducted a freedom-of-navigation patrol. DefenseOne first reported the no-sail zone, which was posted on a Chinese government website. The stepped-up patrols of Chinese islands, as well as the persistent presence of a U.S. carrier strike group in the region, is part of an enhanced U.S. presence in the South China Sea, said Bonnie Glaser, a China expert at the Center for Strategic and International Studies in Washington. Glaser said U.S. ships spent more than 700 days in the South China Sea in 2015 and are on track to spend more than 1,000 days there in 2016. “On any given day you are seeing two or more ships operating in the South China Sea,” said Glaser, who directs the China Power Project at CSIS. Glaser said the increased presence in the South China Sea is an indication that fleet leaders, including U.S. Pacific Command head Adm. Harry Harris, have been successful in pushing a more comprehensive strategy for presence in the area. In April, Navy Times reported that Harris was pushing for a more assertive approach in the South China Sea that aimed to stop China's island-building and bullying of its neighbors. Leaders in the White House were cautious about that approach, seeking to get Beijing’s cooperation on a host of other policy priorities, including the recently signed Iran nuclear deal and a major trade agenda the Obama administration has been pressing. A congressional staffer familiar with the regional issues said the Navy’s increased presence operations were welcome on Capitol Hill. "The enhanced level of maritime and aviation presence in the South China Sea over the last three months is a welcomed development on the Hill where there has been a sustained skepticism that the administration was willing to create any type of real friction in the relationship that might actually deter Beijing,” the staffer said in an email. Hendrix, the CNAS analyst, said the Navy has been leading the discussion on how to approach China’s claims in the South China Sea. “This has been a situation of the Navy leading the policy discussion because of the level of persistence they’ve shown in the area,” Hendrix said. “I still believe there is hesitance on the part of the political leadership but the operational leadership is taking the opportunity to show its interest in the region.”

China Issues Threat After Philippine Activists Resupply The Sierra Madre In The South China Sea. Andrew Corr, Forbes. “A Philippine activist group, Kalayaan Atin Ito (KAI), made their third “patriotic voyage” in the South China Sea in less than a year – this time on a resupply protest to a former U.S. naval vessel, the Sierra Madre. The Sierra Madre is now in active service with the Philippine Navy, and purposefully marooned on Ayungin Shoal (also known as Second Thomas Shoal, Reed Bank, Bãi Cỏ Mây, Jen-ai’ Chiao, Ren’ai Reef, and 仁爱礁). 12 KAI activists skirted Chinese Coast Guard (CCG) ships to arrive at the shoal on June 29. Two days after the protest, China threatened to tow the Sierra Madre in response to the upcoming Philippine legal case against China at the Hague. The Permanent Court of Arbitration (PCA) in the Hague announced that it will decide the case on July 12. The Sierra Madre could be an important fact on the ground in support of a Philippine claim on the shoal, and to keep the shoal from getting dredged and built upon by China. China dredged and built artificial islands with military air strips on other shoals in the South China Sea starting in 2014. The Philippines claims a 200-mile exclusive economic zone per the U.N. Convention on the Law of the Sea (UNCLOS). China disputes the Philippine claim based on a 1946 map with a 9-dash line. Yet in the 1940s, China only claimed the islands within the 9-dash line, not the high seas. Chinese vessels, including one large Chinese Coast Guard (CCG) cutter (bow number 3307), and at least two civilian boats, are pressuring the Philippine sailors of the Sierra Madre to abandon ship. The Cutter set its course to intercept the activists on the Alexander, a 25-foot banca boat (wooden fishing vessel with two outriggers and an outboard motor) on their way to resupply the marines. The Chinese cutter blew its horns as it approached, and made a menacingly close pass to about 50 meters. Kalayaan is the Filipino name for the Spratly Islands. The name of the activist group translates as, “Kalayaan is ours.” They claim that the civilian leadership of the Aquino government did not do enough to maintain the structural integrity of the Sierra Madre, and to resupply the dozen or so marines stationed there. The Philippines purposely sailed the Sierra Madre, built in 1944, aground onto the shoal in 1999, in response to China’s occupation of Mischief Reef in 1994. The lack of resupply and maintenance disadvantages the Philippine marines, according to activists. The marines could be forced to leave the Sierra Madre as it becomes even less safe for habitation. Attempts to reach the current and former press secretaries of the Philippines were unanswered. The Chinese civilian vessels photographed by activists near Ayungin Shoal do not look like fishing vessels, and activists claim they carry Chinese divers.  Activists say that the rear of the Chinese civilian boats do not contain normal fishing gear, such as large piles of nets prominently visible on normal fishing boats. China has developed, as early as 2004, a strategy of an armed civilian “maritime militia”. As an armed force not strictly under military control, it will likely be highly dangerous to sailors, activists, and non-Chinese fishermen in the region. According to KAI activists, Chinese fishermen are using cyanide for fishing near Ayungin Shoal, which kills the coral. Activists provided me with video and photographs of the coral, which appears white and lifeless. Additional photographs provided by the activists illustrate that the Sierra Madre continues to rust and deteriorate, with gaping holes clearly visible near the waterline. According to activists, the graffiti-festooned ship only stands because of occasional steel and concrete reinforcement smuggled past the Chinese Coast Guard on small boats by the marines. A former U.S. official confirmed to me that the Chinese have in the past blocked Philippine attempts to resupply the Sierra Madre. China issued a veiled threat against the Sierra Madre two days after the Sierra Madre protest by KAI. A spokesman from the Chinese Foreign Ministry, Wu Qian, spoke to a reporter from the People’s Daily, China’s official party newspaper. The paper linked potential towing of the Sierra Madre by China to the outcome of the PCA case to be decided on July 12. According to the People’s Daily article, "During the conference, Wu was asked by a reporter that [sic] the People’s Daily, official newspaper of the CPC, published a commentary Monday which said that China has the ability to tow away the old warship of the Philippines from the Ren’ai Reef. Will the PLA take the actions after the Permanent Court of Arbitration (PCA) issues the award on July 12 on the South China Sea case? According to the People’s Daily, Mr. Wu replied “that China has indisputable sovereignty of China’s Nansha Islands and their adjacent waters, which [sic] the Ren’ai Reef [Ayungin Shoal] is included. The PLA has the determination and ability to safeguard sovereignty and territorial integrity of the country.” Ayungin Shoal is only 105 nautical miles from Palawan, Philippines, well-within the Philippines’ 200 nautical mile exclusive economic zone. However, it is also within China’s claimed 9-dash line. China has stated that it intends to disregard the PCA ruling on features in the South China Sea. Ayungin is 622 nautical miles from China’s closest point to the shoal, which is located on Hainan Island. KAI formed Sea Access For International Law (SAIL) in 2016 to help organize international volunteers. Both organizations now boast a combined 10,000 supporters, including about 20 full-time volunteers. Most members are in the Philippines, where Nicanor Faeldon started the group in 2006 by lecturing at universities in all 81 provinces. But SAIL now also includes members in the U.S., U.K., Japan, Taiwan, Vietnam, and Brunei. I’m a SAIL supporter, giving me access to photographs and informal interviews with KAI activists. Both groups support a boycott of Chinese consumer goods that has half-a-dozen organizational sponsors. KAI activists arrived on Palawan on two flights from Manila on June 23 and June 24. The first attempt to sail to Ayungin on June 26 failed due to high waves. Activists returned to Palawan and waited two days for better weather. While waiting, activists slept on The Alexander about 20 yards from the shore. In an emailed comment from Vera Joy Ban-eg, the leader of KAI, she explained the trip once the weather cleared. “We sailed to Ayungin Shoal [on] June 28 at 2.30pm and reached Ayungin at 9.30am [on] June 29, 2016.” The grueling overnight trip on the small fishing boat took 19 hours. Activists remained at the shoal for several hours, provided food, drinks, a live goat, activist t-shirts, and other supplies to the marines, took photos and video, swam, sang the national anthem on the Sierra Madre with the marines, and then returned to Palawan. In addition to Ms. Ban-eg, the following Philippine activists took part in the protest: Sigrid Dickerson, Jeremiah Dickerson, Andrei Villato, Loubert Grace Carreon, Joart Marzal, Vivien Leal, Ansgar Niño, Francis de Gracias, Lourd Wyrlou Medina, and Jessa Matugas. The Australian photojournalist Benjamin Bohane joined the voyage on assignment from ABC Australia.”

Decision, Maybe Momentous, Nears in Case China Has Tried to Ignore. Jane Perlez, The New York Times. “Five judges and legal scholars from around the world presided over a hearing last fall in an elegant, chandeliered room in The Hague. Arranged before them on one side of the chamber were lawyers for the Philippines, armed with laptop computers and notepads. On the other side were three empty chairs. For more than three years, China has refused to participate in the proceedings of an international tribunal considering a challenge to its expansive claims in the South China Sea, arguing that the panel has no jurisdiction to rule on the dispute with the Philippines. But with a decision scheduled to be announced next week, Beijing seems to be getting nervous. In a show of strength, it kicked off a week of naval exercises in the South China Sea on Tuesday near the disputed Paracel Islands, where the Chinese military has installed surface-to-air missiles. And in recent months, it has mounted an arduous campaign outside the courtroom to rebut the Philippines and undermine the tribunal, enlisting countries from Russia to Togo to support its claim to waters that include vital trade routes and may hold oil and other natural resources. The flurry of activity is a sign of how much is at stake in what was once an obscure legal case before an obscure arbitration panel. The outcome could alter the dynamics of the South China Sea conflict, shifting it from a race to establish physical dominance over the waters to a conspicuous test of Beijing’s respect for international law and multilateral institutions. China has pulled ahead in the physical race, dredging sand to build one island after another over the objections of its neighbors and the United States, and equipping many of the islands with airstrips and radar. But if the tribunal rules in favor of the Philippines on key issues, it could put President Xi Jinping of China on the defensive — or, some worry, push him into a corner. “This is a matter of wider significance than the South China Sea,” said Bilahari Kausikan, a Singaporean ambassador at large, noting that China has signed the United Nations Convention on the Law of the Sea, which is the basis of the Philippine complaint and the tribunal’s deliberations. “The importance of the issue is whether international rules will be obeyed,” Mr. Kausikan said. China, he added, “cannot pick and choose which rules to follow or only comply when convenient.” Sensing an opportunity, the Obama administration has begun a diplomatic push of its own, backing the tribunal and persuading allies to speak out for a “rules-based order at sea” and the use of international law to settle territorial disputes. Neither Washington nor Beijing paid much attention when the Philippine foreign secretary, Albert del Rosario, began the case before the Permanent Court of Arbitration in 2013, not long after China wrested control of an atoll known as Scarborough Shoal from the Philippines. The State Department’s senior diplomat for East Asia, Daniel R. Russel, has said he was unaware of the Philippine case at the time. The Chinese leadership quickly dismissed the tribunal without extensive consultation with the foreign policy establishment, several Chinese scholars said. Beijing’s position has not changed. Because the sovereignty of scattered reefs, rocks and islands in the South China Sea is in dispute, it argues, the tribunal cannot rule on competing claims to the waters surrounding them. The Convention on the Law of the Sea says nothing about the sovereignty of land. But the Philippines has been careful to frame its complaint in a way that sidesteps the question of who has sovereignty over the islands and reefs. For example, it has asked the tribunal to declare that nine specific reefs and rocks, including some that China has built into artificial islands, are too small to be used to assert economic rights to the waters around them, regardless of who controls them. The Convention on the Law of the Sea allows a nation to exercise sovereignty over waters up to 12 nautical miles from its coast, and it grants economic rights over waters on a nation’s continental shelf and to 200 nautical miles from its coast. But the treaty says reefs that are entirely submerged at high tide and artificial islands cannot be used to justify any maritime rights. Philippine officials have asked the tribunal to find that China has violated the treaty by building islands in the Philippines’ economic waters, interfering with its fishermen, endangering its ships and damaging the marine environment. The Philippines’ most sweeping demand is for the tribunal to reject China’s claim to sovereignty over waters within a “nine-dash line” that encircles almost all of the South China Sea. China seeks to justify the nine-dash line by citing what it calls historical evidence, including maps published in the 1940s and ’50s that show the dashes. But it has never drawn a continuous line clearly marking its claim, nor has it been specific about what rights it is asserting in the area. Critics say the Chinese government gave up any special claim to the sea when it signed the United Nations treaty in 1996, during a period when it sought respectability on the global stage. Now, Beijing may believe it has enough clout to ignore the treaty. It has labeled the arbitration court a “law-abusing tribunal” and its proceedings a “farce.” Chinese diplomats have suggested that the government may even renounce the treaty. “We will not accept it or recognize it,” a Foreign Ministry spokesman, Lu Kang, said of the coming ruling. That position has made some in China uncomfortable, including foreign policy experts who have privately criticized the government’s position, saying that China has ceded the moral high ground in its rivalry with the United States. The United States signed the United Nations treaty but never ratified it. The Obama administration has struggled to deter Beijing from building islands and military outposts in the South China Sea, with increased naval patrols and stronger alliances in the region having little effect. But it concluded last year that the tribunal case presented an opening to push back in a different way. When President Park Geun-hye of South Korea visited Washington in October, President Obama said he expected Seoul to speak out on the need for China to “abide by international laws and rules.” Mr. Russel, the assistant secretary of state for East Asia, was sent to Germany, where he made the case at a prominent public policy school in Berlin. “The Chinese are fond of saying that the Pacific is big enough for both of us,” he told the audience. “What that does not mean is that they can draw a line in the center of the Pacific and say, ‘You stay on the east, and we’ll have control over everything west of the nine-dash line.’ That’s unacceptable.” The administration also persuaded the Group of 7 nations to issue two joint statements on the South China Sea, drawing a complaint from Beijing that the group should stick to economic policy. A State Department official, Robert Harris, even traveled to landlocked Laos to explain the Philippine case. China’s Foreign Ministry says that dozens of countries have endorsed its position, and reports about foreign politicians denouncing the tribunal appear in the state-run news media almost daily. But Beijing has adopted a broad interpretation of what it means to have won over a country. Russia, for example, agrees that the tribunal should not resolve the dispute, but it has been silent on the Chinese buildup, in part because of its close relationship with Vietnam, which also claims part of the sea.”

Taiwan Starts Designing Home-Built Attack Submarine. South China Morning Post.  “Taiwan’s military said on Thursday it has already begun the process of designing a long-sought-after domestic attack submarine, hoping to complete it in 2024. Navy Command Headquarters Chief of Staff Vice Admiral Mei Chia-shu told a legislative committee session: “We plan to complete the design by 2019 and complete the construction by 2024.” Defence Minister Feng Shih-kuan said “outside pressure” was the biggest factor and challenge for the project, referring to mainland China. The mainland considers Taiwan a breakaway Chinese province that should be reunited with the rest of the country. The submarine is part of the navy’s 15-year plans to rebuild its military might and strengthen the island’s defence industry. The plan was first announced in 2014 and the ministry established a task force last month to help push the project forward. No countries have been willing to provide Taiwan with a design blueprint, mainly due to fears of political consequences from mainland China. Mei said the navy was planning to obtain the design blueprint from the Netherlands, the country that designed and built two of the island’s diesel-powered submarines. Mei said the navy signed a contract with a Dutch company earlier this year to extend the lifespan of the two subs so Taiwan could use the design blueprint as the basis for the construction of the first home-built submarine. The navy is planning to commission the Ship and Ocean Industries R&D Centre to be mainly responsible for the design and the National Chung-Shan Institute of Science & Technology for the integration of the combat system. Mei did not reveal who the builder would be, but a report obtained by Kyodo News showed the navy was planning to award the contract to CSBC Corp Taiwan. The report also indicated that Taiwan was capable of building 70 per cent of the turbine system of the submarine, 50 per cent of the outer hull, 30 per cent of the motor system and 30 per cent of the combat system. Besides obtaining the design blueprint from the Netherlands, the navy also needs the support of other countries capable of building submarines, according to Deputy Chief of the General Staff Admiral Pu Tze-chun. Pu declined to specify which countries have been contacted. Other countries that have the capability of building submarines include France, Germany, Sweden, India, Japan and the United States. The United States, which agreed in 2001 to sell Taiwan eight non-nuclear submarines, has promised to help Taiwan build attack submarines. However, since then the deal has failed to move forward due to technical and political constraints. Citing Australia’s recent agreement to engage a French defence firm to construct submarines for its navy, Democratic Progressive Party Legislator Lo Chih-cheng warned Taiwan’s navy not to repeat the same “failure”. Lo said Australia spent a significant amount of money on the contract after wasting time and money trying to build domestic vessels.”

The Real Significance Of Tsai Ing-wen’s Visit To Central America. “Tsai Ing-wen, Taiwan’s new president, has wrapped up her first overseas visit to Latin America since taking office on May 20. Contrary to a popular misconception, the visits of Taiwan’s leaders to the island’s diplomatic allies are not a waste of the taxpayers’ hard-earned money. Rather, these journeys are important on several levels. First, they help bolster Taipei’s position that the Republic of China (ROC) still exists as a sovereign and independent state in the global community. To be sure, Taiwan’s president meets only with the leaders of countries located in what is now described politely in the academic community as “the global south.” Most are impoverished nations. With the exception of the Vatican, these are the only entities that recognize the government in Taiwan. They are better than nothing. Second, these face-to-face meetings enable Taiwan’s leaders to pressure counterparts in foreign governments to speak up for Taipei in international forums. Taiwan is locked out of most of the world’s important intergovernmental organizations (IGOs).  But its “little friends” can be advocates for Taiwan’s interests in the United Nations and other global bodies. And some – not all – do speak up for Taiwan. Third, the diplomatic junkets provide Taipei’s top leadership with a convenient rationale (excuse) for making “transit stops” in the US while journeying to a final destination located somewhere in the backwater of world politics. These “rests” in major US cities are likely to be approved by Washington so long as they remain low key (toward the end of his second term as Taiwan’s president, Chen Shui-bian was allowed to stop only in Alaska) and enable Taiwan’s president to conduct business in the United States. For example, during a 24-hour layover in Los Angeles in January 2014, President Ma Ying-jeou received pledges of support for Taiwan’s participation in important economic forums during telephone conversations with 10 members of Congress.  He also spoke over the phone with Bill Clinton, Hillary Clinton, Condoleezza Rice, and Donald Rumsfeld. And during President Tsai’s visit to Miami, she had a face-to-face meeting with Sen. Marco Rubio (R.-Florida), the charismatic former candidate for the Republican Party’s nomination as president. This marked the first visit on US soil of a sitting US senator with a ROC president since 2003. Finally, the global journeys undertaken by Taiwan’s leaders serve an important domestic political purpose. Public opinion polls show most people in Taiwan support raising the island’s international profile and such travels give an appearance that a president is actively working toward this objective. Normally, an administration will go to some length to put a positive “spin” on a presidential trip. For example, while it might appear humorous (even ludicrous) to most foreigners, Taiwan Today, a government-sponsored news service, carried a story about Tsai receiving a “Medal of Honor” from Paraguay as its lead news story. In other words, the international travels of Taiwan’s leaders really are meaningful. Tsai’s visit was important in another respect, however: it is significant that China permitted the trip to happen. During Tsai’s travels to Latin America, questions were raised about her plane’s flight path from Florida to Panama. It seems that the aircraft flew over Cuban airspace and Beijing could have easily asked Havana to block such a route. When questioned about the flight path and China’s role in the route being approved by Cuba, Tsai said, “It is not clear to me if China was involved in the case … if China did play a role, that could be seen as a kind of goodwill.” But there is more involved here than a flight path. Following Ma Ying-jeou’s election as ROC president in 2008 and Taiwan’s return to the “1992 Consensus” (an arrangement whereby Taipei and Beijing appear to accept the principle of “one China,” but differ over the meaning of “one China”), Taipei and Beijing agreed to a diplomatic truce. The two sides agreed to stop poaching each other’s diplomatic allies. As China has continued to grow in economic, political, and strategic importance, however, more and more of Taiwan’s diplomatic allies  approached Beijing and asked to establish relations with it (and to dump Taipei). According to cables released by Wikileaks on Aug. 30, 2011, China has refused the requests by countries – including Paraguay and Panama – to switch diplomatic recognition to Beijing. Despite the smiles and friendly faces that Tsai encountered in Central America, it would be delusional to think that the leaders of Panama and Paraguay will not drop Taiwan in a heartbeat if provided an opportunity. If President Xi Jinping had wanted to humiliate President Tsai and derail her first overseas visit he needed only to pick up the telephone and call Asuncion and Panama City two days before her scheduled departure from Taipei and that would be the end of her visits. And without a tour in Central America, Taipei’s request for a “transit stop” in Miami and Los Angeles would make no sense and likely be denied. Tsai would be all dressed up with nowhere to go. Much has been made of Beijing’s declaration on June 25 that it has suspended cross-strait talks with Taipei. This is a worrisome development. Taiwan’s recent accidental launch of a supersonic “anti-aircraft carrier” missile toward China underscored the need for communication channels to remain open. But most of the mainstream media missed the significance of Beijing’s low-key response to Tsai’s overseas junket. It is unclear exactly what this means. Perhaps it’s a signal to Tsai that stating plainly that she will adhere to the “1992 Consensus” will yield dividends. In other words, Taiwan will retain its diplomatic allies and she will be able to travel to Latin America (and the US). One might be tempted to describe this as a “carrot” in China’s cache of “carrots and sticks.” Or there could be more going on here. At a minimum, however, Tsai’s recent journey is significant primarily because it actually happened. In that respect, Beijing has shown a lot of goodwill.”

The United States And China Can Get Along In The South China Sea. Christopher Yung and Wang Dong, War on the Rocks. “To many observers, China and the United States appear to be irreconcilably butting heads in the maritime domain, especially in the South China Sea. This was recently illustrated at the 2016 Shangri-la Dialogue in Singapore when China’s representative, Admiral Sun Jianguo, the Deputy Chief of the Joint Staff, and the U.S. representative, Secretary of Defense Ashton Carter, provided vastly different portrayals of what was needed to promote stability and security in the South China Sea. Differences are also likely to surface in the upcoming weeks as The Hague-based Permanent Court of Arbitration renders its verdict on the case between China and the Philippines. Despite these recent differences between the two countries, it may come as a surprise to learn that the maritime arena holds the most promise for China and the United States to cooperate. Compared to other strategic domains in which the two major powers interact, such as space and cyber, both countries are well aware of the specifics of their respective national maritime interests. While this clarifies areas of agreement and disagreement, the enormous interests involved and the potential for the two powers to confound one another make the task of arriving at cooperative measures daunting. China and the United States share interests in the principle of freedom of navigation (FON). Although they disagree over what FON entails, it offers both sides tangible benefits from maritime-related economies, good order and stability at sea, and the use of the sea to foster and protect national security interests. This is not to deny the notable differences in their respective maritime priorities. For the United States, the entire international trading and economic order is dependent on a secure maritime domain.  Additionally, the ocean serves as both an initial barrier to threats to the homeland and as a highway for the United States to project power abroad. Finally, because the Washington sees the prevention of regional hegemons as vital to its own national security interests, the United States is able to take action to balance that emerging threat or, if necessary, defeat it through a secure maritime domain. China’s interests in the maritime domain center on safeguarding national unity and territorial integrity, defending maritime rights and benefits, and protecting China’s rapidly expanding overseas interests which include trade to and from China and access to needed natural resources. During wartime, China also wants to be able to deny or deter other powers’ ability to pose either threats within its strategic maritime zones or layers of Chinese defenses that are defined by the first and second island chains. Chinese and U.S. perspectives diverge when it comes to how the two countries define their respective national interests, what they believe to be appropriate means of displaying good and bad intentions, how the two sides view the sea, and how they interpret international law and the protection of maritime sovereignty. China and the United States have fundamentally different philosophies about the nature and meaning of the sea. Historically for modern China, the sea is first and foremost a means of access by enemies to threaten and humiliate the country. In contrast, the United States views the sea as a potential barrier to foreign threats and simultaneously a means for the United States to push out and advance its own interests. This explains the tension over U.S. Navy surveillance and reconnaissance operations (SRO). The United States regards as its right the ability to fly surveillance aircraft or sail surveillance ships within China’s exclusive economic zone but outside China’s territorial waters and contiguous zone. China, however, sees U.S. SROs as an affront to Chinese sovereignty, intrusive in nature, and potentially threatening to China’s security. Complicating this divergence of interests and perspectives is the security dilemma involved when a hegemon is confronted by a rising challenger — the so-called Thucydides Trap. An additional complication is the vexing fact that all the present hot spots or potential conflict scenarios between the two countries reside in the maritime domain. There remains the possibility that China and the United States could tangle with each other over a crisis emerging from a Taiwan, a South China Sea, or an East China Sea scenario. Nevertheless, there are enough overlapping interests in the maritime domain to warrant serious thought about deepening and strengthening cooperative programs already in existence. The convergence of interests is substantial enough that new programs that can foster habits of cooperation and reduce tensions deserve consideration. During President Obama’s visit to China in November 2014, the two sides signed memoranda of understanding on encounters at sea. The annex on air-to-air encounters was signed during President Xi’s state visit to the United States in September 2015. Now both sides should ensure that all parties adhere to the agreements. They could even consider conducting joint or separate training sessions for sailors and pilots from both sides. The United States and China should build on existing cooperative activities between their respective coast guards, while sustaining and, if possible, extending cooperation on anti-pollution measures, ocean observation, marine scientific research, and prevention of marine hazards. Moreover, the two powers could expand on the military-to-military cooperation that has taken place within the maritime domain over the past few years. In particular, the United States should consider inviting China to exercises such as the Cooperation Afloat Readiness and Training (CARAT) exercise that it conducts annually with Southeast Asian militaries. China and the United States should also work to establish a working group at ASEAN to discuss maritime security cooperation and dialogue. Cementing these cooperation efforts would ensure that although Chinese and American maritime interests may vary, the joint interest in preserving stability remains paramount.”

Posted by Alex Gray | July 06, 2016

Beijing Takes Its South China Sea PR Campaign To Washington. Dan DeLuce, Foreign Policy. “Facing a potentially damaging ruling from an international court in its dispute with the Philippines, China has cranked up a public relations offensive to defend its stance in the court of world opinion. The sledgehammer-subtle PR campaign came to Washington on Tuesday, with a former top Chinese official warning that Beijing will reject the tribunal’s authority and cautioning the United States to tread carefully in the contested waters. Dai Bingguo, former Chinese state councilor, said the tribunal’s ruling on the South China Sea dispute, scheduled to be released next Tuesday, “amounts to nothing more than a piece of paper.” Speaking at a conference at the Carnegie Endowment for International Peace, Dai urged countries not to carry out the court’s decision and warned that his government would not tolerate any further “provocation” from the Philippines. “Otherwise, China would not sit idle,” Dai said. The former senior diplomat, now chairman of Jinan University, accused the United States of raising tensions with its naval and air patrols in the region and allegedly encouraging Southeast Asian countries to take a more confrontational approach with Beijing. “We in China would not be intimidated by the U.S. actions, not even if the U.S. sent all 10 aircraft carriers to the South China Sea,” he said. “The risk for the U.S. is that it may be dragged into trouble against its own will and pay an unexpectedly heavy price.” The Chinese Foreign Ministry promptly posted the full text of Dai’s speech after he delivered it. The speech, which repeated Beijing’s frequent talking points on the issue, was the latest salvo in China’s PR blitz on the South China Sea, where it has built up an array of artificial islands through vast dredging operations in recent years. Beijing claims that up to 60 countries have endorsed its view of the case before the Permanent Court of Arbitration in The Hague. But the Wall Street Journal found the charm offensive has mostly fizzled. Only eight countries have issued public statements backing up China on the issue, and a number of governments denied Beijing’s claims of support, the Journal reported. The countries backing China are not exactly maritime powers in Southeast Asia: Afghanistan, Gambia, Kenya, Niger, Sudan, Togo, Vanuatu, and Lesotho. The United States and most governments in the region have called on both sides to abide by the court’s decision, but the tribunal has no way to enforce its writ. The Philippines took its complaint to the Permanent Court of Arbitration in 2013 after a series of confrontations with China around the disputed Scarborough Shoal off its coast. The U.N. Convention on the Law of the Sea, which China has ratified, provides for the tribunal as a way of settling maritime disagreements. Manila, like other countries, has questioned China’s far-reaching claims to the South China Sea, contested its claims that various reefs, atolls, and rocks qualify as islands, and argued that Beijing’s tough tactics toward Philippine fishing boats and Coast Guard vessels violate international law. It’s unclear how China will react to the court’s decision when it comes, but Dai’s remarks in Washington will feed speculation that Beijing might decide to launch dredging work around Scarborough Shoal. Such a move would ramp up tensions and possibly trigger a confrontation with Manila, which could then turn to the United States for military assistance, experts say.  The newly elected president of the Philippines, Rodrigo Duterte, said earlier Tuesday that his country would be ready to hold talks with China and avoid conflict after The Hague court issues its verdict. “When it’s favorable to us, let’s talk,” he said. “We are not prepared to go to war; ‘war’ is a dirty word.” China, which claims most of the South China Sea, indicated it would be open to starting negotiations with Manila as long as the Philippines ignores the court ruling. Along with its public relations efforts, China is flexing its naval power. On Tuesday it launched a week of military exercises around the disputed Paracel Islands in the South China Sea.”

Japan Denies Its Jets Were Provocative In Chinese Encounter. Mari Yamaguchi and Didi Tang, Japan Today. “Japan on Tuesday denied an allegation by China that its fighter jets were provocative in an encounter with Chinese warplanes last month over disputed waters in the East China Sea, rejecting Chinese accusations that the incident could pose a threat to regional stability. China said Monday that two Chinese Su-30 jets were conducting a routine patrol when two Japanese F-15 fighters approached at high speed and locked fire-control radar on the Chinese planes. It said in a statement that the Chinese pilots took “tactical measures” before the Japanese planes dropped an infrared decoy and fled. It gave no details of the measures taken by the Chinese. “Such provocative acts by the Japanese jets could easily cause accidents in the air, harming personal safety on both sides and destroying the peace and stability in the region,” the Chinese statement said. “We demand Japan to cease all provocative acts.” Japan denied that its fighter jets took any provocative actions during the encounter, saying they were scrambling against Chinese aircraft. Deputy chief Cabinet secretary Koichi Hagiuda said Japan’s Air Self-Defense Force dispatched the F-15s after spotting two Chinese warplanes approaching the disputed waters. “There is absolutely no evidence of provocative actions against the Chinese military aircraft by the Japanese side as in the Chinese defense ministry announcement,” he said. “There is no evidence whatsoever that fire-control radar was locked on.” The use of fire-control radar in “search mode” to grasp each other’s location is common in case of scrambling, Hagiuda said, adding that it is used to avoid accidents and should not be considered provocative. In the Chinese-language version of its statement, Beijing did not use the phrase “lock on” but said the Japanese jets used the radar to “shine on” the Chinese aircraft. Still, Beijing called the act “provocative.” Citing unnamed government sources, the Japanese newspaper Yomiuri Shimbun said last week that the Chinese aircraft refused to retreat despite being warned and that jets from both sides flew at each other several times. To avoid danger, a Japanese jet then launched an infrared decoy against potential missile attacks and left the area, the newspaper said. The June 17 encounter took place near a set of barren islets claimed by both countries called Diaoyu in China and Senkaku in Japan. China in 2013 set up an air defense identification zone that covers the islands and overlaps with Japan’s claim of air space for defense. The Japanese defense ministry said Tuesday that Japan scrambled against Chinese military planes about 200 times in April, May, and June, up more than 80 from last year in the same period. Tokyo has expressed concerns over China’s increased military activities in the region. In mid-June, a Japanese surveillance plane spotted a Chinese intelligence ship entering Japan’s territorial waters, described then as the first report of a Chinese navy vessel doing so in more than a decade. In that instance, Japan expressed concern to China that the incident and other recent Chinese military activities were escalating tensions. Earlier last month, Japanese officials summoned China’s ambassador to protest the sailing of a Chinese navy ship near the disputed islands.”

Philippines Ready To Talk To China After Tribunal Ruling. Teresa Cerojano, Associated Press. “The Philippines' new president said Tuesday that Manila is ready to talk to China, not go to war, if an arbitration tribunal rules in its favor in a case it brought against Beijing's claims in the South China Sea. President Rodrigo Duterte said the Philippines "remains optimistic that the tribunal will rule in our favor." But if the ruling is not favorable, then the Philippines will accept and abide by it, he added. "When it's favorable to us, let's talk," he said. "We are not prepared to go to war, war is a dirty word." But he said the country will proceed accordingly after it obtains a copy of the judgment, and will base decisions on the Philippines' greater interest. The official China Daily reported Monday that China is ready to start negotiations with the Philippines if Manila ignores the tribunal ruling, which is expected to be issued on July 12. The Philippines brought its long-simmering disputes with China in the South China Sea to international arbitration in January 2013 after Beijing took control of disputed Scarborough Shoal following a standoff. At his first Cabinet meeting after taking office last week, Duterte expressed the need for the Philippines to fully study the impact of the ruling, whether favorable or not. New Foreign Secretary Perfecto Yasay made sensitive remarks about the territorial disputes that were broadcast live by the state-run TV network before it abruptly cut away from its coverage of the Cabinet meeting. Yasay spoke about an apparent wish by some foreign governments for Manila to issue a stronger statement about the dispute if the tribunal rules favorably. "I am adverse to that idea," he told Duterte and fellow Cabinet members. "There are lots of nuances that we do not know as yet," Yasay said. "But the bottom-line question is what will happen if the decision is in our favor," Yasay said, adding that China could potentially "dig in and put us to a test." If that happens, he said, "there is no point for us to yell." In Washington, a former top Chinese official delivered a tough message Tuesday, warning against countries seeking to implement the tribunal's decision. Dai Bingguo, former Chinese state councilor, called for the case to be stopped, saying the tribunal's ruling "amounts to nothing more than a piece of paper." "If the tribunal insisted on its way and produced an 'award,' no one and no country should implement the award in any form, much less force China into implementation. And the Philippines must be dissuaded from making any further provocation. Otherwise, China would not sit idle," Dai told a conference at the Carnegie Endowment for International Peace think tank. Dai also called for the United States to scale back what he described as its "heavy-handed intervention" in the South China Sea, including its reconnaissance and freedom of navigation operations. "We in China would not be intimidated by the U.S. actions, not even if the U.S. sent all 10 aircraft carriers to the South China Sea," he said. But Dai said China would never resort to force unless challenged with armed provocation, and remains committed to peaceful resolution of disputes through negotiations and consultations with those directly concerned. Dai met later Tuesday with Susan Rice, the U.S. national security adviser. A senior U.S. administration official, who was not authorized to speak publicly about the meeting and requested anonymity, said Dai and Rice discussed the future development of U.S.-China relations.”

The Fate Of China’s Freest City Could Depend On This One Frail Bookseller. Nash Jenkins, Time. “Very rarely does footage released by Chinese authorities qualify as good cinema, and the video released on Tuesday of Hong Kong bookseller Lam Wing-kee in Chinese detention apparently enjoying his time in a prison cell is not an exception to this rule. It is bad because its star is unconvincing: we see the 61-year-old prisoner slurping noodles, reading books, and willfully confessing to his crimes. “Because I have breached China’s legal provisions, I am very remorseful,” he says to an off-camera interlocutor. “I hope the Chinese government will be lenient to me after this incident.” Lam is not a very good actor, though there’s no reason he should be. He is one of five affiliates of a Hong Kong publishing house who disappeared late last year and resurfaced in the custody of mainland Chinese police. Four of his colleagues are believed to still be in China, with one, publisher Gui Minhai, still in detention, but Lam is out on bail, home in Hong Kong, where he has spoken openly about his harrowing eight-month incarceration — a story that is more credible than the one spun by his jailers. Lam and the other four were arrested for their work at Mighty Current Media, printing and selling lurid books that speculated gleefully about the political antics and bedroom lives of Beijing’s political elite. Their clientele largely comprised tourists who came to Hong Kong from the mainland, eager to get their hands on the sort of unpatriotic pulp that is outlawed at home. Mighty Current and its flagship bookstore set up shop in Hong Kong because Hong Kong is the only place in China where speech and press are nominally free. In the 20th century, as communist China cemented its status as the world’s least tolerant superpower, British colonial rule fashioned Hong Kong as a lively metropolis where democratic freedoms (if not democracy itself) flourished. When the British lease on the tiny territory expired in 1997, they relinquished it to China under a constitutional dynamic known as “one country, two systems,” designed to shield Hong Kong’s freewheeling political spirit from Beijing’s authoritarian impulse by giving the former a “high degree of autonomy.” Today, state censors in the mainland block access to Facebook, seeing it as a tool of political mobility; in Hong Kong, citizens log on to troll the page of Chief Executive Leung Chun-ying, the territory’s top political leader widely vilified here as Beijing’s compliant puppet. (Leung is an avid gardener; he once posted a black-and-white picture of a tulip that has received more than 5,000 “Angry” reactions to date.) Thus it is easy to envision the shock that rippled through Hong Kong’s collective psyche when people here learned that five of their own had been arrested for mere political impishness — and arrested not by their own police but by authorities in China who have no jurisdiction in the enclave. Lam and two colleagues were arrested while traveling in China. Gui was abducted from his holiday apartment in Thailand. But it was the snatching of the fifth associate, British citizen Paul Lee, also known as Lee Bo, by mainland agents from the streets of Hong Kong that has traumatized Hong Kong the most. All of a sudden, the Kowloon Hills that have always acted as a psychological if not physical barrier between Hong Kong and its seething hinterland seemed all too pathetically breached. For the first time in living memory, the kinds of Hongkongers who would attract Beijing’s unfavorable notice — the writers, and activists and outspoken academics — began to feel unsafe. “I don’t think the Chinese government realizes how seriously this incident is affecting the fate of people in Hong Kong,” says Jonathan Man, a prominent human-rights lawyer who helped represent Edward Snowden during the whistle-blower’s stint as a refugee here. “It will make people afraid to express themselves, and that’s the worst thing.” The case of Lam and his colleagues marks the most flagrant violation of the territory’s autonomy to date, and suggests to some that its precious freedoms are easily subdued in the face of Beijing’s caprice. In hindsight, it makes the then unprecedented tremors of the Umbrella Revolution — the audacious pro-democracy protests that brought Hong Kong to a standstill for three months in late 2014 — seem like a teatime squabble at the territory’s iconic Peninsula hotel. “There has been no single incident that has so expressly invalidated ‘one country, two systems,'” says Man. “Hong Kong people used to know they could enjoy these books, but now, something that’s legal in Hong Kong but illegal in China means you can be subject to Chinese law. That’s what scares people the most.”

Western Retreat Makes Room for Chinese Advance. Andrew Browne, The Wall Street Journal. “As the West retreats from globalization—the Brexit vote was just the latest and the most startling manifestation of a populist trend—expect a new force to fill the gap. China has been rehearsing for this moment for years. In a global economy starved of growth and investment, it has both momentum and deep pockets. Its leaders are energized by the kind of international ambition that possessed the U.S. when it reshaped postwar Europe with the Marshall Plan. President Xi Jinping has tossed aside decades of foreign-policy diffidence and come up with a new activist motto: “Strive for achievement.” Today, with the West turning in on itself, partly in response to what many see as out-of-control immigration on top of the terror threat, the question isn’t so much whether globalization has run its course as where China wants to take it. “What kind of a world order does China want?” asks Jean-Pierre Cabestan, a veteran China-watcher at Hong Kong Baptist University, writing in the publication China Perspectives. If the West won’t seize the initiative, China will. It was once the poster child for globalization. With remarkable timing, Chinese leaders threw open their economy in the late 1970s just as the latest great wave of globalization gathered pace. Freer flows of capital, goods and technology proved to be transformative. Hundreds of millions of Chinese escaped poverty, many joining a global workforce that assembled toys and sneakers and, later, higher-value products such as mobile phones and laptops. The backlash against globalization in America and Europe represents a severe challenge to the Chinese economy, but it won’t be fatal. Again, China’s timing has been shrewd: Since the 2008 financial crisis, when global trade collapsed, it has been weaning itself off exports. Domestic consumption is now the main growth driver. Once China gets over the financial shock waves from Brexit it will find a Europe more desperate than ever for Chinese money, its countries less inclined to work together to counter Chinese trading practices they find unfair and too distracted to push back when China challenges global rules it doesn’t care for. Theresa Fallon, a senior associate with the European Institute for Asian Studies, believes the first test will come on July 12, when a United Nations-backed tribunal in The Hague is likely to rule against China’s sweeping maritime claims in the South China Sea. China has vowed to ignore the ruling. Will the European Union publicly back the U.S. and its Asian allies on a vital question of international law? Or will it hesitate to avoid offending China? “China often plays one EU member state against the other to influence EU policy,” Ms. Fallon writes in a paper for the Asan Forum. Europe’s economy is in long-term decline; China’s is rising. Europe is shedding jobs; China is adding them—at a faster pace now that it is focused on labor-intensive services. Chinese companies, armed with almost limitless credit, are marching overseas. The Rhodium Group calculates that between 2000 and 2014 they invested more than $50 billion in Europe, part of a surge in outbound investment. It forecasts China’s global assets will reach almost $20 trillion by 2020, a tripling in just five years. And while Europe is consumed by its internal agenda—staving off political fragmentation is the new priority—and fumbles for solutions, Chinese leaders are thinking globally and executing on a strategic plan. Mr. Xi has thrown his energies into trying to create a new axis of prosperity along ancient trade routes between China and Europe. Countries along the way in Central Asia, the Middle East and Africa are competing for Chinese-funded port facilities, nuclear-power stations and high-speed rail lines. Beijing has earmarked some $3 trillion for the “One Belt, One Road” initiative. That compares with the Marshall Plan’s approximately $120 billion, in current dollars. Much can go wrong. Unstable countries like Pakistan may prove to be a black hole for investment funds. China’s enterprises have taken on far too much debt. Chinese leaders may lose their nerve and fail to implement the painful economic overhauls needed to support a consumption-driven growth model. There is a risk, too, that protectionism in the West could deliver a new jolt to the global economy. China doesn’t help its own cause by pushing a nationalist economic agenda that is squeezing out foreign technology suppliers and crushing media players. Donald Trump blames U.S. economic problems on a “leadership class that worships globalism over Americanism.” He’s threatened trade cases against China. Yet China has powerful leverage. Those who expected that globalization would lead to the triumph of free markets and liberal values everywhere will have to reconcile those hopes with Chinese state capitalism and a heavy dose of political authoritarianism. Increasingly, an illiberal China will set the rules. That is the price the West will pay for its shaky finances and shrinking global vision.”

Is Thailand Now Serious About Submarines from China? Prashanth Parameswaran, The Diplomat. “Over the past few days, reports have surfaced that Thailand may now be getting serious about purchasing three submarines from China as part of a billion-dollar deal. In July last year, Thailand’s defense minister Prawit Wongsuwan had said that Bangkok would be putting a hold on its newly announced submarine purchase from China, which had come as a surprise to many and had led to some domestic opposition. The move meant that the country’s dream of acquiring a capability it has lacked for more than six decades had once again been deferred. But now reports have indicated that Thailand will be moving forward with the purchase. The latest round of media excitement stems from responses by defense minister Prawit Wongsuwan to journalist questions on Friday that the Royal Thai Navy (RTN) had already decided to buy submarines and that the first one would be purchased using the budget from fiscal year 2017. To some, that indicated a certain finality to the deal since the project had already been listed as a line item in the 2017 budget and the defense minister had approved of its inclusion. “The Navy has already decided to buy submarines. Initially, it will use the budget of the 2017 fiscal year to buy the first one,” Prawit, who is also deputy prime minister, said according to The Nation. In his responses to reporters, Prawit also defended the decision to go with Chinese submarines. He said that the RTN had already taken a close look at the various bids and determined that Chinese submarines were the best option. He added that the price for the submarines would not be that high since payment can be made in installments of up to ten years. Prawit’s own support for the project is no surprise – as I’ve noted before, he has long been recognized as one of the most ardent supporters of Thailand acquiring a submarine capability. But to the extent that his comments could be read to constitute a confirmation of Thailand’s submarine purchase decision, they are only significant if they indicate a reworked plan that addresses the range of concerns that arose after the initial one. For instance, deliberately choosing to make payments in ten year instalments – a longer period than initially was the case – would be one way of countering arguments that the purchase would be too expensive for Thailand. The Bangkok Post cited a RTN source as saying that given that it had met the defense ministry’s request that the payments for submarines be spread over eleven rather than seven years as earlier proposed, Prawit is now likely to support the project when it is submitted to the cabinet for approval. According to the source, the first submarine would be purchased at the cost of 13 billion baht between 2017-2021, and the second and third submarines would be purchased during the emainder of an eleven year period. “Considering the indications from Gen Prawit and the prime minister, we are confident that they support the purchase plan and recognize the necessity to buy the submarines, though the plan may have to wait for the right time before it is brought before the cabinet,” the source reportedly said. “The current government understands the importance of maritime security operations and, if the navy cannot buy the submarines during this government, there is no knowing whether it will be able to buy them when the next government comes to power,” the source added. However, at the same time, Prawit did not elaborate about how other concerns may or may not have been addressed if indeed Thailand is seeking to go through with its earlier decision. Despite Prawit’s reassurances, suspicions about the reliability of submarines from Beijing are well known. Furthermore, as I have written elsewhere, the move could also potentially complicate Thailand’s alliance with the United States, especially since growing Chinese access to Thai military equipment and facilities may also mean proximity to U.S. technology as well as knowledge about Washington’s relationship with Bangkok. Many also continue to remain unconvinced about the need for Thailand to acquire a submarine capability in general due to various factors including the shallowness of the waters of the Gulf of Thailand as well as the lack of immediate and serious maritime threats. This is despite the RTN’s release of a nine-page white paper on the case for Chinese submarines last year which spelled out Thailand’s requirements as well as the desirable features of Beijing’s submarines, such as their double hull which makes them safer. Addressing those concerns is important because, irrespective of Prawit’s views or the RTN’s decision to purchase the submarines, it will have to be approved at the cabinet level before going through. As of now, there is little clarity as to when this will occur and if it will be approved by Prime Minister Prayut Chan-o-cha. In a hard-hitting editorial released July 5, The Bangkok Post urged Prayut to once again reject the defense ministry’s proposal, calling it a “terrible mistake.” “The public never has favored the purchase of submarines and opposition has only grown,” the newspaper said. “It would be good for the public’s morale, and for his own image as leader, if Gen Prayut ended the suspense and called off this unnecessary purchase.”

America Has A Chance To Beat Back China's South China Sea Strategy. Tuan Pham, The National Interest. “Ahead of the looming International Tribunal ruling on the Philippine-initiated arbitration case against China’s contested maritime sovereignty claims in the South China Sea (SCS), Chinese diplomats and government officials are conducting an aggressive PR campaign throughout the region and across the globe to influence world opinion and present China and its legal and political positions as correct, through the publication of various comments by sympathetic world leaders, legal scholars and international relations experts. They want to highlight the positive aspects of Beijing’s maritime security comportment and accentuate the benevolent features of its growing presence in the SCS, while peddling the same familiar public-diplomacy themes—the United States as the destabilizing aggressor; China as the virtuous but hapless victim; and the source of all regional trouble as Washington’s arm-twisting of its allies and partners in Manila, Hanoi and Kuala Lumpur—and steadily messaging that it does not recognize the jurisdiction and authority of the International Tribunal of the Permanent Court of Arbitration (PCA) at the Hague to rule in this case. All in all, this PR shift may be part of a larger adjustment by Beijing of its assertive actions in the SCS in response to the mounting unfavorable geopolitical conditions and regional trends. If so, what does the PR shift reveal about Beijing’s maritime strategy, and more importantly, what can Washington do to shape and influence that evolving strategy? There are three possible motives why China may have taken a more forceful PR posture. First and foremost, anticipating an unfavorable PCA merits ruling, Beijing wants to occupy the moral high ground in support of its public-diplomacy stance, while portraying Washington as the destabilizing aggressor to uphold its maritime sovereignty claims, preserve its strategic positions and mitigate impact to its national interests. Second, China has certainly taken notice that its unilateralism the past few years has alarmed its neighbors (and fellow SCS claimants) and driven them in varying degrees toward the United States, undermining its ultimate goal of regional preeminence (and possibly global primacy). Hence, President Xi Jinping is now touting a new kinder, gentler and more tolerant foreign policy toward China’s neighboring countries. He apparently wants cooperative international relations, a network of global partners, and a regional security outlook characterized by “consultation, common construction, sharing, and a security governance model with Asian features” to counter the United States’ rebalance to the region. Third, Beijing may have made the rational calculation that it has already achieved significant gains and that for now, it needs to simply exercise strategic patience to consolidate those gains. China’s land reclamation and militarization of its various geographic features have given it the capability and capacity to monitor and control much of the SCS. Thus, while China occupies a position of regional advantage and strength, it must take care not to risk its advances through needless acts of aggression. Otherwise, it invites the erosion of its strategic positions and further delays in its strategic timetables. All Beijing really needs to do is to sustain discrete and steady assertiveness through words, in order to safeguard its strategic interests without indulging in overreaching actions that could encourage stronger responses by Washington and its allies and partners in the region and/or collective actions by the other SCS claimants. As tensions ebb and flow in the SCS, China has kept its eye on the bigger picture: developing comprehensive maritime power. In early March, Beijing ratified an outline of its thirteenth Five-Year Plan (2016–20). This was Xi Jinping’s first major influence on the direction of China’s national strategy, and maritime issues featured prominently therein. This was also another substantive glimpse of what an emerging Chinese maritime strategy may look like. Beijing Sees Beyond the SCS. China’s activities in the SCS are driven by its strategic vision of the ocean as “blue economic space and blue territory” crucial for China’s development and security. The SCS is the current hotspot—the crisis du jour—but Beijing’s focus will undoubtedly shift in the future. Next may be a return to the East China Sea in search of new gains, into the Indian Ocean or even into the Arctic. Indeed, tensions appear to be rising again in the East China Sea, as evidenced by China’s growing agitation with and distrust of newly elected Taiwanese president Tsai Ing-wen, and its provocative maritime incursions into Japanese-claimed territorial waters around the Senkaku Islands.”

Is China’s Mysterious New Satellite Really A Junk Collector—Or A Weapon? David Axe, The Daily Beast. “China just boosted a high-tech, mysterious new satellite into orbit. It might be a weapon. It might not be a weapon. There’s no way to be certain, either way—and that’s a problem for all spacefaring countries. Especially the United States and China. Washington and Beijing are lofting more and more of these ambiguous satellites into orbit without agreements governing their use. In failing to agree to the proverbial rules of the orbital road, the two governments risk ongoing suspicion, or worse—a misunderstanding possibly leading to war. The Roaming Dragon satellite rode into space atop a Long March 7 rocket that blasted off from Hainan in southern China on June 25. Officially, Roaming Dragon is a space-junk collector. Its job, according to Beijing, is to pluck old spacecraft and other debris from Earth’s orbit and safely plunge them back to the planet’s surface. For sure, orbital debris poses a real hazard to the world’s spacecraft. In the summer of 2015, astronauts aboard the International Space Station—including two Russians and an American—sought shelter inside an escape craft when a chunk of an old Russian satellite appeared to be on a collision course with the station. Luckily, the debris missed the space station. All the same, NASA and other space agencies have voiced their concern over the accumulation of manmade junk in space—and have taken initial steps to remove the most dangerous chunks. Hence Roaming Dragon’s official mission. “China, as a responsible big country, has committed to the control and reduction of space debris,” Tang Yagang, a scientist with the China Aerospace Science and Technology Corporation, wrote on the Chinese space agency’s website. But the Roaming Dragon’s design—specifically, its maneuverability and its nimble, extendable robotic arm—mean it could also function as a weapon, zooming close to and dismantling satellites belonging to rival countries. Stephen Chen, a reporter for the Hong Kong-based South China Morning Post—which has historically has been critical of the Chinese central government in Beijing—quoted an unnamed “researcher with the National Astronomical Observatories in Beijing” calling into question the satellite’s purported peaceful mission. “It is unrealistic to remove all space debris with robots,” the anonymous researcher allegedly stated, implying that Roaming Dragon would, in reality, be doing something else up there in orbit. But there’s no way to prove that Roaming Dragon is a weapon until it actually attacks another satellite. And at that point, the world would surely have much bigger problems than mere spacecraft taxonomy, as an orbital ambush would almost certainly be a prelude to a much more destructive conflict on the surface. “Space robotic arms, like many other space technologies, have both military and non-military applications, and classifying them as a space weapon depends on the intent of the user, not on the inherent capabilities of the technology,” Kevin Pollpeter, deputy director of the Study of Innovation and Technology in China Project at the University of California, San Diego, wrote in a widely cited 2013 research paper. “China’s space robotic arm technology is thus a case study in the challenges of defining ‘space weapon’ and the difficulty in achieving space arms control,” Pollpeter added. It’s an old problem, by space standards. Jeffrey Lewis, a strategic-weapons expert who blogs at Arms Control Wonk, pointed out in an email to The Daily Beast that NASA’s space shuttle, which first launched into orbit in a dramatic test in 1981, inspired the same worry in Moscow that Roaming Dragon could inspire in Washington. Specifically, Russian analysts questioned the purpose of the shuttle’s famous “Canadarm”—the Canadian-made “Shuttle Remote Manipulator System” that prominently appears in many photos of the now-retired shuttle’s cargo bay. American analysts are not wrong to point out the potential military applications of Roaming Dragon’s robotic arm. But “the Russians said the same thing about the Canadian arm on the space shuttle,” Lewis told The Daily Beast. As far as we know, the space shuttle, which last flew in 2011, never attacked another spacecraft. Nor, apparently, have any of the many other spacecraft that possess arms and maneuverability similar to Roaming Dragon—the majority of which, it’s worth noting, are American. The proliferation of these spacecraft underscores a failure on the part of the world’s governments to agree to orbital codes of conduct. “All the spacefaring countries are developing small satellites capable of conducting so-called autonomous proximity operations—and there are absolutely no rules about this,” Lewis explained. “If China wants to build an inspector satellite to shadow one of our warning satellites, that’s just ducky as far as space law is concerned. In such an environment, even innocent programs will engender suspicion and initiate the basic arms race dynamics that threaten the use of space for everyone.” That suspicion is already having a very real effect on the U.S. defense establishment. Growing ever more fearful of a possible ambush in space, in early 2015 Deputy Defense Secretary Bob Work instructed John Hyten, the four-star general in charge of U.S. Air Force Space Command, to prepare his space operators and their satellites for a possible war in orbit. But to a great extent, the paranoia is unjustified, according to Brian Weeden, a former Air Force space operator who is now a technical adviser to the Secure World Foundation in Colorado. “A lot of the so-called space weapons technologies that have been hyped by pundits or the media for decades are not actually very good weapons,” Weeden told The Daily Beast in an email. For starters, it’s hard for a killer satellite to sneak up on one of America’s own spacecraft, what with NASA and the Air Force constantly monitoring Earth’s orbit via radar and telescope. “We would notice it maneuvering to match orbits with the target hours [or] days in advance,” Weeden said. For that reason, “there are better, faster, or cheaper ways to accomplish the same goal” of knocking out a satellite, Weeden added. Ground-based rockets, for example. The same boosters that propel satellites into orbit can, if aimed carefully, strike and destroy spacecraft in certain orbits. China famously tested a so-called direct-ascent satellite-killing rocket in 2007, striking an old weather sat and scattering thousands of pieces of debris—ironically, the same kind of debris Roaming Dragon ostensibly was designed to help clean up. “I still worry a lot more about China’s direct-ascent ASAT,” Lewis said, using a popular acronym for an anti-satellite weapon. Contrary to the South China Morning Post’s reporting, it’s entirely possible that Roaming Dragon is what Beijing claims it is—an orbital trash-collector. “It’s not crazy to think about trying to pull large pieces of junk out of high-traffic orbits, since those are potential sources of thousands of pieces of deadly smaller debris if the piece breaks up,” Gregory Kulacki, a space expert with the Massachusetts-based Union of Concerned Scientists, told The Daily Beast in an email. And to China’s credit, it apparently has been fairly transparent about Roaming Dragon—more transparent, in fact, than the United States is with many of its own spacecraft. Weeden said Chinese officials could go a step further in reassuring the world about Roaming Dragon’s mission. “They could release details of its orbit and provide advance notification of any maneuvers. That would set a very good example for other countries testing similar capabilities to follow, including the United States.” As long as there’s such a fine line between war and peace in space, bold acts of transparency are the only way to prevent suspicion and conflict. That applies to Roaming Dragon and any other satellite—be it Chinese, American, Russian, or other—that can transform from an instrument of science to a weapon of war with the flip of a few switches. “We should probably try talking to each other about it,” Lewis advised.”

Posted by Alex Gray | July 05, 2016

Beijing Launches Naval Drills In The South China Sea Before Key Maritime Ruling. Charlie Campbell, Time. “An international court is expected to rule July 12 on Beijing's maritime dispute with the Philippines. In the final days before a landmark court decision over disputed territory in the South China Sea, Beijing has announced it will conduct military drills in the busy trade corridor, raising tensions ahead of a ruling that Chinese officials have already vowed to ignore. On Sunday, China’s Maritime Safety Administration published plans for naval exercises, to be held from July 5 to 11 in an area reaching from China’s Hainan Island down to the nearby Paracel Islands, which are claimed by China, Vietnam and Taiwan. A ruling on a complaint issued in 2013 by the Philippines, which, along with China, claims both the Spratly Islands and Scarborough Shoal in the South China Sea, is expected July 12 at the International Court of Arbitration at the Hague. “The drills are a very symbolic expression of China’s resolve,” Zhu Feng, dean of the Institute of International Affairs at Nanjing University, tells TIME. “It is definitely also responding to the recent American warships patrolling in the South China Sea.” Washington is a defense-treaty ally of Manila and has recently accelerated troop rotations on Philippine military bases. The U.S. Navy has also ramped up “freedom of navigation” exercises in the South China Sea, of which almost 90% is claimed by Beijing in an area demarcated by the so-called nine-dash line. Protracted disputes with various Southeast Asian nations have escalated since China’s construction of military bases and landing strips on reclaimed islands in the waterway, through which $5 trillion in trade passes annually. The drills are also likely intended to assuage domestic chauvinism. “It is very important for the Xi Jinping leadership to keep an eye on nationalist emotions in the lead to the court’s decision,” says Linda Jakobson, director of Australia’s China Matters think tank and visiting professor at the University of Sydney. The Hague is expected to rule in Manila’s favor, yet China has repeatedly said any decision would be illegitimate and has refused to participate in proceedings. Chinese officials instead advocate bilateral talks. “China will not accept an invalid arbitral award,” China’s ambassador to the Netherlands, Wu Ken, told China’s state Xinhua news agency in May. “Such an arbitration should not be recognized or supported in any manner.” Sunday’s announcement of drills effectively underscores that existing stance. However, according to Zhu, it is significant that the military exercises are to take place at the Paracel Islands, which though disputed are entirely under Chinese control, rather than the Spratlys, where the Philippine military retains a presence. “It shows [China] doesn’t want to cause a lot of concern or make a bigger bang,” he says. China doesn’t really need to. Even though the court at the Hague is expected to rule against Beijing, its scope is limited. The court is not allowed to arbitrate in a specific territorial dispute — such as who legitimately controls the Spratly Islands — but is instead to rule on the legality of China’s nine-dash line. The Philippine position is that even if the Spratlys were China’s rightful dominion, Beijing should only be allowed control of waters in a 12-mile radius. China, in turn, argues that it should get a 200-sq.-mi. exclusive economic zone. However, Manila says that in either case the total territory would be far less than what Beijing currently claims under the scope of the nine-dash line. Crucially, the court has zero powers to enforce what is probably the highest-profile decision in its 117-year history. Beijing is also busy working to secure the support of other — generally developing — nations to buttress its position. “The court does not have a military at its disposal so this would be a moral and political victory if the ruling is favorable to the Philippines,” says Jakobson. “There is a lot of room for China to maneuver politically.”

China Declares A No-Sail-Zone In Disputed Waters During Wargame. Echo Huang Yinyin, Defense One. “China will conduct military drills in the contested South China Sea this week over a massive area of water that’s larger than the U.S. state of Maine. In a brief online statement issued over the weekend, Beijing said the exercises will run from today (July 5) until July 11, finishing one day before a UN-backed tribunal issues a ruling on China’s sweeping territorial claims. China has long said it will ignore the ruling, and it refused to participate in the case, which began in 2013. The statement gave precise geographic coordinates of the drills, which will cover an area running east of China’s Hainan Island down to and including the Paracel Islands, which are controlled by China but also claimed by Vietnam. The latter’s foreign ministry protested against the drills yesterday (July 4). No other ships would be allowed in the area, Beijing said, which has a perimeter of just over 1,300 sq km, and encompasses a little over 100,000 sq km (38,610 sq miles). The US state of Kentucky is about 40,000 square miles, in comparison, and the state of Maine is 35,000. The largest island in the Philippines, Luzon, home to some 48 million people, is about 110,000 sq km. The area where China is conducting drills is near, but not in the center of, the high-traffic shipping lanes that carry some $5 trillion a year in trade through the area. Some Chinese netizens seemed to be thrilled about the military action, deeming it a good time to show the power of China, while others expressed concern in comments posted on Sina News Weibo and FT Chinese. The starting date is “the Independence Day of the United States. And the ending day of the military action would be July 11th, next to which would be the day of the international court ruling result. The timing is so delicate,” commentator “Dr_Wei” wrote.”

China Says It Wants Peace After Newspaper Warns On South China Sea Clash. Ben Blanchard and Megha Rajagopalan, Reuters. “China's government sought to downplay fears of conflict in the South China Sea after an influential state-run newspaper said on Tuesday that Beijing should prepare for military confrontation in the area. The joint editorials in the Chinese and English editions of the Global Times were published as tension mounted ahead of a July 12 ruling by an international court hearing competing claims of China and the Philippines in the South China Sea. The newspaper said the dispute had already been complicated by U.S. intervention and now faced further escalation due to the threat posed by the tribunal to China's sovereignty. "Washington has deployed two carrier battle groups around the South China Sea, and it wants to send a signal by flexing its muscles: As the biggest powerhouse in the region, it awaits China's obedience," the Global Times said. China should speed up developing its military deterrence to give the U.S. a bloody nose if it intervened in the dispute by force, the newspaper added. "China hopes disputes can be resolved by talks, but it must be prepared for any military confrontation. This is common sense in international relations." Asked about the editorials and whether conflict could break out in the South China Sea, Chinese Foreign Ministry spokesman Hong Lei said the government was committed to peace. "China will work with ASEAN countries to safeguard the peace and stability of the South China Sea," he told a daily news briefing, referring to the Association of Southeast Asian Nations. "We've pointed out many times recently that as for the relevant dispute, China does not accept any decision imposed by a third party as a means of resolution, nor any solution plan that is forced upon China." The Global Times is published by the ruling Communist Party's official People's Daily, and while it is widely read in policy-making circles it does not have the same mouthpiece function as its parent and its editorials cannot be viewed as representing government policy. It is also well-known for its extreme nationalist views. China, which has been angered by U.S. patrols in the South China Sea, will be holding military drills in the waters there starting from Tuesday. China's Defence Ministry said the drills are routine, the official China Daily reported. Manila has sought to dial down tensions with its powerful neighbor ahead of the decision but resisted pressure to ignore the ruling. "The reality is that nobody wants a conflict, nobody wants to resolve our conflict in a violent manner, nobody wants war,” Philippines Foreign Minister Perfecto Yasay told ANC television on Tuesday. "It is my understanding that the President would like to maintain stronger, better relationships with everybody, including China, including the United States, including Japan and all," Yasay said, referring to President Rodrigo Duterte, who was sworn into office last week. He added that a "special envoy" was needed to help resolve the dispute with China. U.S. officials have expressed concern that the ruling by the court in the Hague could prompt Beijing to declare an air defense identification zone, or ADIZ, as it did over the East China Sea in 2013, or step up the pace of reclamation and construction on its holdings in the disputed region. What response China takes will "fully depend" on the Philippines, the China Daily added, citing unidentified sources. "There will be no incident at all if all related parties put aside the arbitration results," one of the sources told the English-language publication. "China has never taken a lead in ... stirring up regional tension," another of the sources added. About $5 trillion in ship-borne trade passes every year though the energy-rich, strategic waters of the South China Sea, where China's territorial claims overlap in parts with Vietnam, the Philippines, Malaysia, Brunei and Taiwan.”

Taiwan’s Deadly Misfiring Of Supersonic Missile Jolts Military Rival China. Ralph Jennings, LA Times. “Taiwan’s navy misfired a supersonic anti-ship missile Friday, killing the captain of a fishing boat, in the second anger-provoking incident in a week for Taiwan’s defenses and further irritating military rival China. Personnel aboard a navy corvette fired a Hsiung Feng III missile around 8.15 a.m. local time into the Taiwan Strait from near the southern city of Kaohsiung. It flew north about 40 nautical miles north and hit a Taiwanese fishing boat 25 minutes later. The captain was killed, and two Southeast Asian crew members were injured. The incident comes a week after three marines in Taiwan hanged a dog and videotaped its struggle at the end of a chain before throwing its body into the sea. The animal cruelty outraged thousands of netizens in Taiwan, prompting apologies from the marines involved and pledges from the military to prosecute them. Friday’s missile misfire, which drew a public apology from the Ministry of National Defense, alarmed China at a time when relations are at their most strained in more than eight years. China claims sovereignty over Taiwan despite seven decades of self-rule on the island and has threatened to take it by force, if needed. Taiwan’s 300,000 active military personnel regard China as their chief rival, and most of their drills and tests are designed to resist an attack from Chinese. Although the missile did not approach China, Beijing’s Taiwan policy chief, Zhang Zhijun, was quoted in Taiwanese media demanding an explanation for an incident he said would “severely affect” relations. China is 99 miles from Taiwan, across the strait at its narrowest point. Military spokesmen called the missile incident a breach of standard operating procedures likely caused by human error. However, the navy acknowledged a simulated target was in the direction where the missile flew. The government’s China policymaking body said it had informed China of the launch. “The government is dedicated to safeguarding peace and stability in the Taiwan Straits, and that hasn’t changed,” the agency said in a statement. “We believe in facing this kind of incident, it’s obviously important to have communication with China to avoid unnecessary misunderstandings and miscalculations.” China will continue to fret but likely won’t retaliate, analysts in Taiwan say. “Certainly China will be on alert and pay greater attention,” said Andrew Yang, secretary general with the Chinese Council of Advanced Policy Studies think tank in Taiwan. But he said that given earlier tensions, it’s unlikely the two sides will establish a hotline to use in case of military accidents. Taiwan President Tsai Ing-wen has irked China since she took office May 20 by not agreeing to China’s conditions for dialogue that had taken relations to all-time highs over the past eight years. Tsai disputes Beijing’s precondition that both sides belong to a single China. Last month, apparently in response, China said it had called off even informal exchanges with Taiwan.”

Thailand Grows Closer to China With Submarine Buy. Reuters. “Military-ruled Thailand will buy three submarines worth around $1 billion from China, the defense minister said on Friday, a move that signals warming ties with the regional superpower as relations with the United States cool. Thailand's army seized power in a May 2014 coup following months of street protests, toppling the remnants of the civilian government led by Yingluck Shinawatra. Since then, the military government has sought to improve ties with China which has stepped into the vacuum left by Western governments that have kept the junta at arms length and called for a rapid return to democratic government. That has come as Beijing and Washington jostle for power and influence in Southeast Asia, where China's disputed maritime claims in the South China Sea have has caused tension in recent years. The purchase of 36 billion baht ($1.03 billion) worth of Chinese-made submarines next year was confirmed on Friday by Deputy Prime Minister and Defense Minister Prawit Wongsuwan, after the navy put the plan to the cabinet. Thailand has never had submarines and has tried, since the 1990s, to sign deals with several countries, including South Korea and Germany. Thailand put the deal with China on hold a year ago to review the cost and capabilities of the vessels. Warming ties with China have seen the two countries work toward a massive rail project and holding joint air force exercises. Thailand's defense spending is set to rise to around 214 billion baht ($6.10 billion) in 2017, up 16.6 percent from 2014.”

Aide To China's Former Leader Gets Life In Prison For Bribes. Didi Tang, Associated Press. “A former top presidential aide and consummate Chinese political insider was sentenced Monday to life in prison for taking bribes, illegally obtaining state secrets and abusing his power in a downfall set off by an alleged cover-up of his son's death in a speeding Ferrari. A court in the northern port city of Tianjin delivered the verdict against Ling Jihua nearly one month after the trial, which was held behind closed doors because the case involved state secrets, the official Xinhua News Agency said. Ling told the court he would not appeal, Xinhua said. "I accept all charges and the verdict," Ling told the court in comments broadcast on China's main evening news. "I will not appeal the judgment pronounced by the chief judge." Ling headed the ruling Communist Party's General Office under former President Hu Jintao, a position comparable to chief of staff for the U.S. president. His fall has been a blow to the Youth League bloc within the party, which had centered around Hu and is seen as a contending force for Hu's successor, Xi Jinping. Members of the bloc in the top leadership have seen their powers diminished since Xi took over, said Willy Lam, an expert on Chinese elite politics at the Chinese University of Hong Kong. After the verdict, Ling made a "humble apology to the party and the authorities that have handled my case," according to video from the courtroom broadcast by state-run China Central Television. He was shown expressing his gratitude to the court for "offering humanitarian care" of him. Chinese courts are controlled by the Communist Party. Ling fell out of political favor in 2012, just ahead of a once-in-a-decade power transition, when he was allegedly involved in the cover-up of his son's death in a speeding Ferrari with two nude or half-dressed women as passengers. In September of that year, shortly before Xi Jinping replaced Hu as party chief, Ling was transferred to the party's United Front Work Department in what was widely seen as a demotion. Soon afterward, Ling lost his remaining positions within the party's upper echelon. In 2013 he was made a vice chairman of the powerless advisory body to China's ceremonial parliament. While working at the United Front Work Department and on the parliament's advisory body, Ling obtained a large amount of state secrets through his contacts at the General Office, violating China's rules on state secrets, Xinhua said. The Xinhua report on the verdict made no mention of Ling's brother, Ling Wancheng, who is believed to have fled to the United States with sensitive information about China's leadership and could deliver an intelligence windfall should he defect. The New York Times reported that the Obama administration has rebuffed Chinese requests for Ling Wancheng's repatriation and has warned China about covert agents seeking his whereabouts on U.S. soil. Lam, the political analyst, said Ling Jihua apparently had cooperated with the authorities and might have promised not to further divulge the secrets he obtained, since he was given only five years for illegally obtaining state secrets. "The lenient treatment is in return for his cooperation not to divulge state secrets he might have given to Ling Wancheng," Lam said. Ling was sentenced to life imprisonment for taking $11.57 million in bribes, either directly or through his wife and son, Xinhua said. Those who bribed Ling included provincial party chiefs and prominent businesspeople. Ling also was given four years in prison for having used his powers to obtain favors, such as job changes, promotions, and property purchases, for his associates, Xinhua said. He came under investigation in late 2014 and was formally arrested in July 2015. He was indicted in May.”

Japan Trawlers Driven Out Of East China Sea By Chinese Boats.  Yo Noguchi, The Asahi Shimbun. “Japanese trawlers are being squeezed out of the East China Sea, vastly outnumbered by Chinese vessels that are reaping the riches of one of the world's most fertile fishing grounds. Around 1950, there were 800 Japanese trawling boats operating off Yamaguchi Prefecture or areas further west. In 1997, the figure dropped below 100. Since 2001, only 10 to 20 Japanese trawlers operated in those waters. This year, there are only eight boats from two Nagasaki-based fishing companies. The sharp drop in Japanese trawlers is partly due to the lack of interest among young people in working in the fishing industry. But the key reason is the influx of Chinese vessels into those waters. The Fisheries Agency in May decided to provide subsidies for the first time to help upgrade trawling boats to counter the competition from Chinese fishermen in the East China Sea. In China, demand for seafood is growing in tandem with the country's rising prosperity. A bilateral fisheries pact reached in 2000 specified where Japanese and Chinese fishermen can both catch fish in the East China Sea. Today, those waters are awash with Chinese vessels. According to fisheries organizations, up to 100 or so Chinese vessels often work in tandem to catch fish. In what is known as bottom trawling, a large net is dragged along the sea floor, trapping everything in its way. Japanese fishermen are unable to trawl for fish when a large number of Chinese vessels are operating in the same waters. The number of Japanese fishing boats operating in the Sea of Japan is also on the decline as a result of greater competition from South Korea. But a Fisheries Agency official said the drop is “most pronounced in the East China Sea.” The decline of the fisheries industry could impact the local economy. The catch by trawlers in the East China Sea accounts for 10 percent of the total in Nagasaki. Thirty or so companies operate plants in Nagasaki and surrounding areas to make “kamaboko” processed food from fish caught there.”

North Korea Sold $30M Of Fishing Rights To Chinese Vessels. Elizabeth Shin, UPI. “North Korea's latest policies might be behind the increased presence of Chinese boats in or near South Korean waters. The cash-strapped Pyongyang regime, under heavy international sanctions in 2016, sold $30 million worth of fishing rights to more than a 1,000 Chinese vessels, The Korea Herald reported Friday. The number of licenses issued has tripled from previous years, said Lee Wan-young, a South Korean lawmaker of the ruling Saenuri party, after a meeting with the National Intelligence Service. "North Korean people, too, are unhappy because it has shrunk the catch and caused common complaints with their southern counterparts regarding worsening environmental damage such as from fuel oil sludge at sea," Lee said. Lee Cheol-uoo, another ruling party lawmaker present at the closed-door briefing, said he was told the latest round of sanctions has had a minimal effect on the regime's financial sector, News 1 reported. Key exports, though, are dwindling, according to the NIS. "At present coal accounts for about 40 percent of all North Korean exports, but after sanctions the coal trade declined by about 40 percent, and arms exports dropped by about 88 percent," the lawmaker said, quoting the spy agency's findings. The NIS also stated Pyongyang is expected to continue firing Musudan midrange ballistic missiles, and a missile fired last week reached about 250 miles before falling into waters below. North Korea said Tuesday its military is "only waiting for the command to launch," less than a week after test-firing midrange ballistic missiles into the sea.”

Is The South China Sea The Stage For The Next World War? Zidny Ilman, The National Interest. “China seems to believe that the U.S.-led regional order is based on the U.S.-led political security regional order. This political security order in turn is based on the U.S. regional alliance system, which is known as hub-and-spoke system, encompassing Japan, South Korea, Australia, the Philippines and Thailand. This alliance system grants the United States access to forward bases that ensures her ability to rapidly project her power throughout the region whenever crisis erupts. Without such bases, the United States won’t be able to effectively project forces and, therefore, will have only marginal influence in a crisis. Thus, curtailing the United States’ capability to respond to a regional crisis means much less U.S. influence upon regional order. So, as the logic goes, breaking this alliance system will lead to a breakup of the U.S.-led regional order. Thus, the question now becomes: how can China break up the U.S. alliance system? Alliance, by its nature, means an insurant. By inking an alliance, the United States has assured her allies that she will help defend them in times of crisis. Just like a commercial insurance company, the success of the business rests on the insurer’s credibility. As long as U.S. allies believe that Washington will fulfill her words, the alliance system will hold up. However, if U.S. allies do not believe her words—thereby doubting the credibility of her words—the alliance system will unravel. A new question emerges as a consequence: how can China damage U.S. credibility so much that it will lead to the unraveling of its regional alliance system? For sure, there is no better way to damage one’s credibility than proving that one is unable to fulfill one’s words. Put it another way, China must show U.S. allies that the United States will not come by their side when they need her. That means instigating a conflict with U.S. allies, making sure they will call for U.S. assistance and, at the same time, making sure that the United States will not fulfill her insurance policy. It is a dangerous game to play for sure. Beijing must do its best to make sure the United States will not come by her allies’ side or else it will face a war with the United States—a grim possibility given both sides’ possession of nuclear weapons. In order to succeed, China must be sure that the conflict she is instigating is important enough for U.S. allies that they will call for U.S. assistance, but that the conflict per se is not important enough from the U.S. perspective, making it highly unlikely for her to fulfill her insurance. Put it simply, China must make sure that the conflict per se represents high stakes from U.S. allies’ perspectives while a negligible one from the U.S. perspective. A bunch of uninhabited rocks in the South China Sea (and East China Sea) will do just fine. It is a matter of sovereignty and territorial integrity—which can hardly be compromised—from the perspective of U.S. allies. While from the U.S. perspective, those rocks represent no more than what they are; that is, rocks. Those rocks have little strategic value and, thus, in themselves have little relevance for U.S. national interests. Entering the fourth year of China’s surge of assertiveness, it seems that China’s strategy has achieved some success. In South China Sea, U.S. responses are lackluster while showing a degree of indecisiveness. Arguably, the most infamous among those is the United States’ failure to properly assist the Philippines in protecting its sovereignty in Scarborough Shoal. However, responding to such a crisis with more resolve entails more risks. For sure, a lower-risk option is available in the form of accommodating China’s aspiration by trying to develop some form of joint leadership in the Asian region. While it is not too late for the United States to reverse the negative trend, she surely has much to do.”


Posted by Alex Gray | July 01, 2016

Taiwan Navy Accidentally Fires Anti-Ship Missile, Killing Fisherman. Austin Ramzy, New York Times. “A Taiwan Navy vessel accidentally fired an anti-ship missile during a training exercise Friday morning, killing the captain of a fishing boat and injuring three crew members, officials said. The Chin Chiang, a 201-foot patrol ship, fired the Hsiung Feng III missile, which is designed to destroy ships and has a range of about 185 miles, while undergoing an inspection during the exercise at its base in Kaohsiung in southern Taiwan, a Taiwan Navy official said. The supersonic missile flew for about two minutes toward the Penghu Islands, in the direction of China, but did not cross the midway line in the Taiwan Strait between Taiwan and China, said the official, Vice Adm. Mei Chia-shu. The missile hit a Kaohsiung-registered fishing boat, killing the captain, said Chen Chung-chi, a spokesman for Taiwan’s Ministry of National Defense. The captain was from Taiwan, and the three injured crew members were from Taiwan, Vietnam and the Philippines, Chen Chu, the mayor of Kaohsiung, wrote on Facebook. The missile’s targeting system tracked the fishing boat, which happened to be in its path, causing a direct hit, Admiral Mei said. But the missile, which has a delayed fuse to increase damage to large vessels like aircraft carriers, ripped through the small boat without exploding, he said. The missile was fired on the day that China was honoring the 95th anniversary of the founding of the Communist Party. China considers Taiwan to be part of its territory that must eventually be unified. China has put increasing pressure on Taiwan in recent weeks after Tsai Ing-wen took office as president of Taiwan. She is far more cautious toward cross-strait ties than her predecessor, Ma Ying-jeou. Ms. Tsai, who is also commander in chief of the armed forces, was on a state visit to Paraguay, one of the few nations that recognizes Taiwan and the only one in South America that does, when the missile accident occurred. Admiral Mei said that Taiwan’s Navy has no direct communication links to China’s Navy and so relayed information about the launch to the Ministry of National Defense to contact the Chinese side.”

Japan Says Chinese Military Activity In East China Sea Escalating. Tim Kelly, Reuters. “Chinese military activity is escalating in the East China Sea, Japan's top military commander said on Thursday (30/06), with Japanese emergency scrambles to counter Chinese jets almost doubling in the past three months. Japanese air force jet scrambled around 200 times in the three months ending on Thursday compared with 114 times in the year-earlier period, he said. Detailed figures for the period will be announced next week. "It appears that Chinese activity is escalating at sea and in the air," Admiral Katsutoshi Kawano, chief of the Japanese Self-Defense Forces, said at a regular press briefing in Tokyo. Japan is embroiled in a dispute with China in the East China Sea over ownership of a group of islands which lie about 220 km (140 miles) northeast of Taiwan known as the Senkakus in Tokyo and the Diaoyu islands in Beijing. Japan is worried that China is escalating its activity in the East China Sea in response to Tokyo's pledge to support countries in Southeast Asia, including the Philippines and Vietnam, that oppose China's territorial claims in the South China Sea. Kawano said that Japan was "very concerned," about how China will react to a ruling by The Hague-based Permanent Court of Arbitration in a case brought by the Philippines on China's claims. The ruling is due on July 12. Manila is contesting China's claim to about 90 percent of the South China Sea, arguing it violates the UN Convention on the Law of the Sea and restricts its rights to exploit resources within its exclusive economic zone. China has refused to recognize the case.”

Chinese Statement Rejects Any Ruling Over South China Sea Dispute.  Erik Slavin, Stars And Stripes. “China has delivered a new statement rejecting any ruling by an international court over its actions in the South China Sea, potentially putting Beijing at odds with the United States and Asia-Pacific nations. In a post on China’s Foreign Ministry website Thursday, Beijing argued that the Philippines’ case against it to the Permanent Court of Arbitration “breaches international law” because its disputes aren’t being resolved bilaterally. A Philippine win on some of the 15 claims in the case, which will be ruled upon July 12, would bolster U.S. arguments that some of China’s actions, which include building up and militarizing artificial islands, have no standing under international law. U.S. Navy ships and aircraft have repeatedly transited near the islands occupied by China, in areas which Washington considers part of the global commons under the U.N. Convention on the Law of the Sea. China has labeled such operations a violation of its sovereignty. The new statement delivered by Foreign Ministry spokesman Hong Lei argues that the PCA, a 121-nation dispute resolution body, has no jurisdiction over the case. “With regard to territorial issues and maritime delimitation disputes, China does not accept any means of third-party dispute settlement or any solution imposed on China,” Hong said. The court agrees to an extent; it doesn’t make rulings on who rightfully owns any of the islands in the South China Sea, which are claimed by China, Taiwan, Vietnam, Malaysia and the Philippines. However, in an earlier motion, the court ruled that it did have jurisdiction to hear several Philippine arguments. Perhaps the most controversial argument would declare China’s “nine-dash line” in conflict with the Law of the Sea convention. China has never clarified what the line means on its maps; however, it has inferred that the line covering 90 percent of the sea is a territorial boundary. That line also cuts through the 200-mile exclusive economic zones of multiple nations, including the Philippines. Chinese and Philippine ships have engaged in low-level showdowns at sea over territory and fishing rights. Such actions concern the U.S., which is allied to the Philippines under a defense treaty. It remains unclear how the court will rule on the nine-dash line, but other aspects appear to be in the Philippines’ favor, Paul Gewirtz, constitutional law professor and director of the Paul Tsai China Center at Yale, wrote in a Brookings report in May. One such argument is that Fiery Cross Reef, an artificial island where China has built a military-grade airfield and added self-propelled artillery, doesn’t gain some of the economic and territorial benefits associated with islands and continental shelves. Gewirtz dismissed Beijing’s assertion that the disputes could only be settled privately between it and Manila. “The agreements with the Philippines that China has invoked are vague political statements,” he said. “The arbitration tribunal has already rejected China’s arguments based on this exception, and properly so.” Although China hasn’t agreed to participate in the case, it has issued public position papers the court has considered in its deliberations. China reiterated Thursday it would not consider any ruling from the court as valid. The U.S., which the court considers a member state, disagrees. Defense Secretary Ash Carter noted during his talks with Singaporean leaders on June 4 that the “ruling on the Philippines-China claims will be binding on both parties,” Pentagon spokesman Peter Cook said in a statement.”

Satellite Imagery Suggests China Is Secretly Punishing North Korea. Josh Rogin, The Washington Post. “Is China secretly punishing Kim Jong Un for his nuclear mischief? Following North Korea’s latest nuclear test, in January, trade over the China-North Korea border dropped dramatically, according to newly released satellite imagery. The revelation has led experts to conclude that Beijing has been quietly punishing Kim by cutting off the flow of funds to his regime. There’s no question that the China-North Korea relationship has been strained since Kim assumed power in 2011. Against Beijing’s wishes, the young leader has revved up North Korea’s pace of missile tests and detonated two nuclear devices, one in 2013 and then again this January. In 2013, Kim executed his uncle Jang Song Thaek, who had been China’s main contact in Pyongyang. After the latest nuclear explosion, which Pyongyang claimed was a hydrogen bomb, Secretary of State John F. Kerry publicly called on China to end “business as usual” with North Korea. Publicly, Beijing rejected being told by the United States how to handle its client state. Behind the scenes, it appears Beijing was doing just that. “It is apparent that shortly after North Korea did the fourth nuclear test in January, China took unilateral measures to drastically curtail trade interaction along their border,” said Victor Cha, director for Asian affairs at the National Security Council during the George W. Bush administration. Cha, now at the Center for Strategic and International Studies (CSIS), led a team of researchers that procured and analyzed the new satellite imagery as part of their project Beyond Parallel, a website and database dedicated to demystifying what’s going on inside the world’s most secretive state. The project launched Thursday. Cha’s conclusion, that Beijing decided to punish North Korea after the nuclear test but didn’t disclose that to the world, is backed up by anecdotal reports of Chinese officials telling Western interlocutors that President Xi Jinping had decided to “take action” against the Kim regime, behind the scenes, out of anger over the nuke test. “It shows that China pursues things in their own way when it comes to North Korea, not because the U.S. or the U.N. tells them to,” said Cha. “The good news is that they are squeezing them more than we were led to expect.” CSIS worked with imagery analysts at the commercial satellite firm DigitalGlobe to collect and examine satellite photos of several key trade-related areas on both sides of the China-North Korea border, including the Sinuiju railroad station and customs area on the North Korean side, the Dandong railroad station and customs area on the Chinese side, and the Sino-Korean Friendship Bridge that links the two countries. They compared activity at the sites year over year, first by examining imagery from January and March of 2015 and then comparing that with imagery collected this February, just after the latest nuclear test. The images showed a “substantive reduction of economic activity on the Sino-North Korean border” as evidenced by a huge drop in the number of rail cars at the stations, trucks in customs areas, trucks on the bridge and undocked boats in the Yalu River. At the Sinuiju rail station, most of the train cars appeared to be in storage early this year, with no engines attached to the freight cars. In the Sinuiju customs area, there were 111 trucks shown in the satellite image from January 2015, but in the February 2016 image, there were only five. On the Chinese side, there were 32 trucks spotted in the Dandong customs area in March 2015, but by this February there were only six. Official trade data regarding North Korea is notoriously unreliable, and Cha said comprehensive data on economic activity over the China-North Korea border does not really exist. But his team has been briefing U.S. and South Korean government agencies on what they found, and he said both governments have shown interest in pursuing the research. In March, China signed on to a new United Nations Security Council resolution imposing fresh sanctions on North Korea in response to the January nuclear test, showing that Beijing was in fact upset with Kim’s actions. But the new data may show that Xi was much more upset than he let on and more than he wanted the rest of the world to know. “The Chinese don’t feel like they need to get credit for punishing North Korea and they don’t want to be seen as [if] they are being pressured by the U.S. to do it,” said Cha. The question going forward is whether Chinese economic pressure on North Korea, which will surely hit at Kim’s coffers, will compel the young ruler to think twice before his next dangerous provocation.”

Xi Jinping Pledges Return To Marxist Roots For China’s Communists. Lucy Hornby, Financial Times. “The Chinese Communist party is going back to its Marxist roots, Xi Jinping pledged on Friday, as he stressed ideological purity in a speech to mark the party’s 95th anniversary. Communist orthodoxy is hard to come by in an increasingly prosperous and materialist China where a growing wealth gap is generating class tensions. But the president stayed well within the careful choreography of party ceremony as he urged its 88m members not to “betray or abandon” Marxism. “The whole party should remember, what we are building is socialism with Chinese characteristics, not some other -ism,” Mr Xi said in an 80-minute address in Beijing’s Great Hall of the People. The speech was live-streamed on the website of state news agency Xinhua as well as on YouTube — a site banned in China. Mr Xi has used an anti-corruption campaign within the party and a crackdown on media and civil society to silence dissenting voices as he promotes the “Chinese dream” of a domestically unified and internationally powerful nation. The push for a disciplined and united party has seen greater controls on academics’ work and travel combined with activities, such as hand-copying the Chinese constitution, that are designed to focus the minds of party members in a society that has become more diverse and independent thanks to decades of economic reforms. This week a Beijing court ruled that the editor of an influential magazine must publicly apologise for a 2013 article disputing the facts behind a favourite party propaganda story — the tale of a group of five Communist martyrs who leapt off Mt Langya in eastern China rather than surrender to Japanese soldiers. Promotion of Mr Xi’s Chinese dream has not been limited to a Chinese audience. A series of videos designed to spread China’s vision of itself to global young people includes a rap video released this week by the Communist Youth League that says China’s problems are unfairly amplified by western media organisations. Mr Xi also defended the country’s international stance during a time of friction along its maritime borders. China has drawn closer to Russia while sparring with Southeast Asian nations as friction increases over the resource-rich waters of the South China Sea. An arbitration ruling in The Hague is expected this month on a Philippine challenge to Beijing’s claims. “China doesn’t covet other countries’ interests, nor does it envy other countries’ development but we won’t give up our rightful interests,” he said. “The Chinese people don’t fear trouble but don’t seek trouble. Other countries should not expect us to trade away our core interests nor should they expect us to swallow circumstances that harm our sovereignty, security and developmental interest.” He also spoke out strongly against Taiwanese independence, in one of his first public remarks on the subject since the election of Taiwanese president Tsai Ing-wen, who is less friendly to Beijing than her predecessor. Taiwan has been self-ruled since the Communists won the Chinese civil war in 1949 but Beijing still views it as a renegade province. “No matter who and no matter in what form, no splittism can be accepted by the 1.3bn Chinese people,” he said, to a round of applause. On Friday morning Taiwan’s navy said it had accidentally fired a supersonic anti-ship missile from a naval base in southern Taiwan, describing it as an “operational error”. Ms Tsai, who is also commander-in-chief of the armed forces, was travelling overseas.”

Tens Of Thousands Protest In Hong Kong As China Tensions Simmer Over Booksellers. Venus Wu, Reuters. “Tens of thousands of Hong Kong residents marched in protest on the 19th anniversary of the financial hub's return to Chinese rule on Friday as tensions simmer against Chinese authorities over the abductions of Hong Kong booksellers. Some waved banners criticizing Beijing for the cross-border abductions as acts of a "totalitarian" regime, as well as calling for the release of leading dissidents, chanting for democracy and for Hong Kong leader Leung Chun-ying to step down. Several hundred scuffled with police outside Government House, with police using pepper spray to keep them back. Organizers said 110,000 people took part in the march, while police put the figure at 19,300. The July 1 protests are considered a barometer of public sentiment toward Beijing, with the former British colony due to hold citywide elections in September. The city has been unnerved over the past year by the disappearances of five booksellers who specialized in works critical of Chinese leaders. One of the men, Lam Wing-kee, who was detained for eight months by Chinese agents and released last month, criticized Beijing for "violating Hong Kong's rights" through illegal cross-border enforcement operations. The tactics have raised fears of Communist Party rulers in Beijing eroding the so-called "one country, two systems" formula, granting Hong Kong a high degree of freedom and autonomy since its 1997 return from British to Chinese rule. China has denied wrongdoing. "This is a very grave threat to the safety of Hong Kong residents that an unknown force is spying on people," said pro-democracy lawmaker Cyd Ho at the rally. "The Hong Kong government has to follow up with the central government on what's really happening behind the scenes." Hundreds of police were also deployed to guard China's main representative "Liaison Office" in Hong Kong, after activists who advocate independence from China posted plans on social media for a "black mask" evening protest to besiege the skyscraper. Scores of young people, some dressed in black T-shirts with the words "HK is not China", were searched by police in the area and roads were blocked off with metal barricades to prevent trouble. Lam, who had been due to lead the July 1 march that each year draws tens of thousands, pulled out, citing safety concerns after being followed by two unknown strangers, a lawmaker said. "He feels increasingly concerned about his own personal safety," said pro-democracy lawmaker Albert Ho. A senior Chinese official, Wang Guangya, who heads the Hong Kong and Macau Affairs Office in Beijing, said the booksellers had "destroyed" the one country, two systems formula by publishing banned books in mainland China. Chinese President Xi Jinping, however, said in a speech on Friday that "no matter what the difficulties and challenges, our confidence and determination towards one country, two systems will not waver". Xi added Hong Kong would continue to enjoy a high degree of autonomy and Beijing would strictly adhere to the law. A 79-day "umbrella revolution" in late 2014 demanding Beijing allow full democracy in Hong Kong brought chaos to the streets.”

China June PMIs Fall To 4-Month Low. CNBC. “Manufacturing momentum in the world's number two economy skidded to a four-month low in June, according to twin surveys released on Friday. The government's manufacturing Purchasing Managers' Index (PMI), a survey that tracks the health of large and state-owned companies, came in at 50.0 last month, versus 50.1 logged in May and April. The report was bang in line with Reuters' estimates and marked the weakest result since February's 49.0 figure. From March-May, the survey logged results above the key 50 level, which separates expansion from contraction. In the seven months before March, the survey remained stuck below 50. Caixin's China June manufacturing PMI, which tracks smaller-scale private firms compared to the official gauge, also recorded the fastest rate of deterioration in four months. The index reported a 48.6 reading for June, compared with 49.2 in May. Markets showed little reaction to both surveys, with the Australian dollar flat and mainland equities half a percent higher. "Overall, economic conditions in the second quarter were considerably weaker than in the first quarter, which means there has been no easing of the downward pressure on growth. Against the backdrop of a turbulent external environment, and in order to avert a sharp economic decline, the government must strengthen its proactive fiscal policy while continuing to follow prudent monetary policy," said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group. The latest numbers are likely to trigger a debate on whether more monetary support can be expected from the People's Bank of China (PBOC), especially given tepid expectations for second quarter growth. Strategists widely anticipate gross domestic product (GDP) growth in the April-June quarter, due on July 15, to come in unchanged. GDP expanded 6.7 percent on-year in the first three months of the year, the slowest pace since the global financial crisis but still in line with Beijing's official 2016 target range of between 6.5-7 percent. "China has largely been ignored during the Brexit crisis, but it has managed to weaken its currency substantially throughout the period. Focus will turn again to how its stimulus efforts are faring today with the release of its May PMIs," commented Angus Nicholson, IG market strategist, ahead of the release. While Friday's results were concerning, they may not produce urgent monetary action, according to Tony Nash, founder of analytics firm Complete Intelligence. He doesn't believe cutting interest rates will immediately bolster the economy on the back of overall weak loan demand, but added that he does expect improved economic activity going into August. Outside of manufacturing, Friday's data flood wasn't entirely bad. A third survey painted a slightly more uplifting outlook for the country's service sector, which now accounts for the bulk of GDP. The official services PMI rose to 53.7 in June, better than May's 53.1 figure. Fraser Howie, an independent analyst, cautioned reading too much into one month's reading. "The trend is more your friend. What it's telling us is the economy is bumbling along at best...there's clearly no signs of any strong recovery," he told CNBC's Squawk Box. He doesn't anticipate this pattern to change anytime soon, predicting little change in the economy by year-end.”

Posted by Alex Gray | June 30, 2016

Arbitration Panel To Rule July 12 In South China Sea Dispute. Associated Press.  “The Permanent Court of Arbitration said Wednesday it will deliver an eagerly awaited ruling on July 12 in a case filed by the Philippines contesting Beijing's sweeping claims to most of the South China Sea. Beijing has rejected the international arbitration and says it will ignore the panel's decision. In an unusual move, the court announced the date of the ruling ahead of time, saying it will be sent to the countries involved July 12 and published the same day. Outgoing Philippine President Benigno Aquino III said his government decided to bring China to international arbitration in January 2013 after China took effective control of a disputed shoal and later reneged on a U.S.-brokered arrangement for Manila and Beijing to simultaneously withdraw their ships from the fishing area. Aquino's successor, Rodrigo Duterte, has called on China to comply with the tribunal's ruling but said he is ready to hold talks with the Chinese government if it ignores the decision. Duterte, who is to be sworn in as president on Thursday, has shown readiness to mend frosty ties with China. Six governments have overlapping territorial claims in the South China Sea - China, Vietnam, the Philippines, Taiwan, Malaysia and Brunei. In addition, China's broadly drawn nine-dash line, which demarcates its ambitions for maritime boundaries, overlaps waters nearly 2,000 kilometers (1,240 miles) from the Chinese mainland that are part of Indonesia's internationally recognized exclusive economic zone. Washington takes no sides in the competing claims in the South China Sea, a crucial waterway for trade, but has declared it is in the U.S. national interest for the disputes to be peacefully resolved and that freedom of navigation and overflight should not be impeded.”

Washington Sends Allies Mixed Signals With PLA Navy Role In RIMPAC. Bill Gertz, Asia Times. “The US government is sending mixed signals to American allies in Asia by opposing Chinese territorial encroachment while allowing China to take part in a regional military exercise. Five naval vessels from the People’s Liberation Army Navy (PLAN) recently met up with US warships in preparation for the latest biennial international naval war games known as Rim of the Pacific, or RIMPAC. The exercise, held every two years, include navies from 27 nations along with 25,000 military personnel, 45 ships, five submarines and more than 200 aircraft. Chinese state media gave prominent coverage to the five PLAN warships that were met by US vessels in the western Pacific on June 20 in the run up to the naval exercises that begin June 30. On the same day, the US Navy publicized the transit of two aircraft carrier strike groups in the Philippine Sea in a major show of military strength that Chief of Naval Operations Adm. John Richardson said was a meant as a sign of US resolve in support of local allies. The four-star admiral said during remarks at a Washington conference that such dual carrier operations are rare but were an important “signal to everybody in the region that we’re committed, we’re going to be there for our allies, to reassure them, and for anybody who wants to destabilize that region, we hope there’s a deterrent message there as well.” The “anybody” was a veiled reference to China since the CNO, following softline policies of the Obama administration, was seeking to play down the growing challenge posed by China. During his remarks at the conference, Richardson appeared to minimize China’s growing high-technology weapons capabilities, known as anti-access and area denial systems that include long-range precision guided missiles. He called the weapons “sort of an aspiration” and “really nothing new,” suggesting China could not really use the weapons effectively. Others in the Pentagon, however, are much more worried than the admiral about China’s growing weapons capabilities that have been built up over the past several decades with the strategic goal of driving US forces out of Asia. That strategy is now playing out in destabilizing Chinese territorial claims in the South China and East China Seas. China’s increasing asymmetric warfare capabilities – like its long-range anti-ship ballistic missiles, anti-satellite weapons, and cyber warfare capabilities – pose strategic threats to US forces that are difficult to match. “In all areas of these niche weapons capabilities, the Chinese are either equal to the United States or are rapidly catching up,” said a Pentagon official. Analysts say the strategic message of US commitment to regional stability and security is undermined by allowing China to gain international prestige with its naval participation in RIMPAC. China’s RIMPAC participation comes at the same time Beijing is engaged in a long-term campaign of island-building that is viewed as a covert effort to take over the South China Sea. China also has targeted reclaiming control of Japan’s Senkaku Islands in the East China Sea, that China calls its Diaoyudao. China stepped up its coercive diplomacy over the Senkakus earlier this month by sending a warship within 24 miles of the islands. “We are worried that this action raises tensions to a higher level,” Japan’s Chief Cabinet Secretary Yoshihide Suga told reporters in Tokyo after the incursion. The Pentagon made no protests or statements of support for its Japanese allies. A Pentagon spokesman, asked about the Chinese naval action, dismissed it as a regional matter between Beijing and Tokyo despite the fact the Pentagon has said several times in the past that any Chinese military action against the Senkakus would trigger a US response under the US-Japan mutual defense treaty. Technically, there are concerns China will use its participation in RIMPAC for valuable intelligence gathering that could give the PLAN an edge in a future crisis or conflict. A Pentagon spokesman also told reporters that the PLAN participation will be strictly limited under US law that prevents the sharing of sensitive war-fighting information with China during exchanges and drills. “The U.S. Navy has operational security safeguards to protect US technology and [US] tactics, techniques and procedures from disclosure,” said Navy Capt. Jeff Davis, the spokesman. “That’s the case for all nations that participate in RIMPAC.” One of the clearest signs that the US Navy is concerned about its mixed signals was seen in its daily news clipping service, widely distributed throughout the Pentagon and private sector that blacked out all coverage of the recent US-China naval rendezvous. And no major news media reported on it as well. Behind the sensitivities is the Navy’s embarrassment from China’s last participation in RIMPAC, in 2014, when the PLAN took part in the war games as a participant, but also sent one of its intelligence-gathering ships to spy on the exercises – undermining what proponents have said is the key US objective of its engagement with the Chinese military — trying to build trust.”

State Department Emphasizes 'Ongoing' Chinese Espionage. Rudy Takala, Washington Examiner. “An internal State Department document is placing an emphasis on the fact that Chinese espionage is "ongoing," contrary to the way it has been characterized in the media. “While media reporting has emphasized this alleged decrease in malicious activity, cases of Chinese espionage campaigns against the U.S. private sector are ongoing," according to the document issued by the Overseas Security Advisory Council, a State Department agency that describes itself as a 34-member public-private partnership. The report follows a June study released by cybersecurity firm FireEye finding that Chinese hackers targeting American companies had diminished in number to 13 primary entities, down from 72 in previous years. The U.S. in September entered into a non-aggression pact with China intended to end commercial espionage. FireEye analysts said at the time that Chinese hacking had gone down as part of a broader decline over the years, and that the agreement seemed to reinforce that impression. The State Department's three-page report, which was obtained by the Washington Free Beacon, noted that the most damaging hacks took place last year. "At a higher level, paramount attacks against various U.S. organizations continued in 2015, and Chinese hackers exceeded other nation-state actors for consistency, volume and severity of cyberattacks during the past year," the report said. It also noted that last year's biggest hacks seemed geared towards obtaining personal data. "This included intrusions into healthcare systems Anthem and Premera, and the Office of Personnel Management, collectively compromising the sensitive data of over 100 million U.S. citizens," the document stated, "[suggesting] some China-based hacking groups may have shifted their focus from data theft for economic gain to national security interests and personally identifiable information." The report also called into question the efficacy of FireEye's methods, which are based in part on studying some of the Fortune 400 companies that FireEye is contracted to defend. "China-based network intrusions are still ongoing, only a fraction of which may be detected by researchers," the report said.”

Japan Plans July Fighter Jet Tender Seen Worth $40 billion As Tensions With China Simmer. Siva Govindasamy, Japan Times. “Japan will launch a tender for fighter jets as soon as midmonth, the Defense Ministry said, in a deal seen worth up to $40 billion (¥4.12 trillion) as Tokyo seeks to bolster its air defenses amid creeping tension with China over disputed maritime borders. In one of the biggest fighter jet contracts up for grabs in years, a ministry spokesman said Japan will contact foreign and domestic defense contractors soon after a July 5 deadline for expressions of interest in the tender for about 100 warplanes. People familiar with the matter said U.S. firms Boeing Co. and Lockheed Martin Corp. have been invited to take part in the project, dubbed the F-3 fighter jet program, alongside Mitsubishi Heavy Industries Ltd., the prime domestic contractor. A final decision is likely in summer 2018, the people said, with deployment due at the end of the 2020s at the earliest. They declined to be identified because the matter was confidential. According to the estimate provided by these people, the F-3 program will dwarf most recent fighter jet deals in value, likely attracting global contractor interest. But analysts say Japan’s preference for an aircraft that can operate closely with the U.S. military, given close Washington-Tokyo ties, makes a non-U.S. option a long shot. The project launch comes as Japan seeks a plane to maintain air superiority over China, now asserting itself in regional maritime disputes. China’s warplanes still lag aircraft used by the U.S. and its allies, but Beijing has been building its capability, military experts say, fueling Japan’s more muscular security agenda under Prime Minister Shinzo Abe. Touted as a replacement for the existing Mitsubishi F-2 multirole fighter jet, the new homegrown aircraft will operate alongside Lockheed F-35 fighters that Japan has on order, as well as Boeing F-15Js jets that it is upgrading. A spokeswoman for MHI said the company doesn’t comment on individual projects. Japan is open to importing existing fighter jets directly from Western suppliers, producing them under license at home, like the F-15Js, according to the people familiar with the matter. “We are certainly interested in another potential opportunity to bolster our long-standing partnership with Japan,” Lockheed Martin said via email. “We look forward to learning more about Japan’s F-3 plans as discussions progress.” In an emailed response to a request for comment, Boeing said: “We are constantly looking for ways to . . . increase our presence in Japan, and are open to discussions with the customer to see how we can help meet their security needs.” Japan has a long-standing interest in acquiring a twin-engine stealth aircraft with long-range capability and internally stowed missiles, according to the people with knowledge of the F-3 program. The only aircraft now in service that meets those requirements is Lockheed’s F-22 — but that jet is no longer in production and the U.S. has not made it available for export despite Tokyo’s interest. That makes Japan more likely to design and make the F-3 fighter at home, according to the people with knowledge of the matter, ramping up the project’s cost. High development costs could be a barrier for Japan as it weighs its national budget, though its move to lift a decades-long ban on arms sales last year could potentially pave the way for future export sales to ease the cost burden. Beyond Boeing and Lockheed, other potential partners include the Eurofighter consortium — a European joint venture between Airbus Group, BAE Systems PLC and Leonardo Finmeccanica SpA that produces the Typhoon fighter jet — and Sweden’s Saab AB, which recently unveiled the latest variant of its Gripen warplane. On behalf of the Eurofighter consortium, an Airbus Defense and Space spokesman said, “We are in regular contact with Japan and Japanese industry to discuss our capabilities and potential collaboration opportunities.” A Saab spokesman said the company was unable to comment on the tender.”

China To Tolerate Weaker Yuan, Wary Of Trade Partners' Reaction. Kevin Yao, Nathaniel Taplin, and Lu Jianxin, Reuters. “China's central bank is willing to let the yuan fall to 6.8 per dollar in 2016 to support the economy, which would mean the currency matching last year's record decline of 4.5 percent, policy sources said. The yuan is already trading at its lowest level in more than five years, so the central bank will aim to ensure a gradual decline for fear of triggering capital outflows and criticism from trading partners such as the United States, said government economists and advisers involved in regular policy discussions. Presumptive U.S. Republican Presidential nominee Donald Trump already has China in his sights, saying on Wednesday he would label China a currency manipulator if elected in November. Investors keep a close watch when the yuan is in decline. A surprise devaluation of the yuan last August sent global markets into a spin on worries the world's second-biggest economy was in worst shape than Beijing had let on, prompting massive capital outflows as investors sought safe havens overseas. "The central bank is willing to see yuan depreciation, as long as depreciation expectations are under control," said a government economist, who requested anonymity due to the sensitivity of the matter. "The Brexit vote was a big shock. The market volatility may last for some time." Other emerging market currencies have also fallen in the wake of Britain's vote to leave the European Union, but the yuan is the weakest major Asian currency against the dollar this year. The currency CNY=CFXS fell as low as 6.6549 per dollar following the Reuters report, near a 5-1/2 year intraday low on Monday. State-owned banks were suspected of intervening to sell dollars, currency traders said. At the low, the yuan had fallen about 2.4 percent this year. After the report, the People's Bank of China, the central bank, said China had no intention to promote trade competitiveness through depreciation of the yuan, a comment that has also been made repeatedly by Chinese Premier Li Keqiang. Without citing any media by name, it said on its website that some media continuously published "inaccurate information" on the yuan's exchange rate. These reports interrupt the normal operation of the market and help "speculative forces" short - or bet against - the yuan, it said. Currency dealers said the dollar's strength and weakness in China's economic growth, which hit a 25-year low in 2015, justified a decline in the yuan. But a significant decline is likely to leave investors and trading partners concerned in the wake of August's devaluation and another sharp decline in the currency over a matter of days in January, which analysts said was engineered by the central bank. In the past decade, China has also faced criticism from Western lawmakers who say it held back the appreciation of the yuan. Earlier this month, U.S. Treasury Secretary Jack Lew said it would be "problematic" if the yuan only went down over time and Trump has said he would take a hard line on trade disputes with China if elected. Labeling China a currency manipulator "should've been done a long time ago," he said on Wednesday. China's Foreign Ministry said on Wednesday the exchange rate was not the reason for unbalanced trade with the United States, which runs a goods and services trade deficit with China. However, the sources acknowledged the diplomatic risks of a steep fall in the yuan. "The pressure from the United States could rise if China allows sharp depreciation," said a government source. China has the biggest global exports market share of any country since the United States in 1968, so the yuan's exchange rate acts as a bellwether for other exporting countries. While a South Korean finance ministry official said "we are concerned" about the yuan's slide, a person familiar with Japan's currency diplomacy said the yuan's decline didn't seem out of line considering the dollar's strength. "I don't think Japan has much to complain about," this official said. The officials of these major exporters declined to be identified given the sensitivity of the issue. "We should gradually let market forces play a bigger role. The market believes that the yuan is under pressure, so our foreign exchange policy should follow this trend," said a researcher with the Commerce Ministry. "China needs to safeguard its economic growth and trade but also make sure we don't create competitive devaluation." Julian Evans-Pritchard, China economist at Capital Economics, said in a note last week that a sharp fall "could set off a renewed bout of fears over renminbi depreciation and a pick-up in capital outflows." The yuan is also known as the renminbi. But he said the central bank would want to avoid "panic" so was likely to intervene to stabilize the currency if need be. The PBOC has been trying to reform the way it manages the yuan by making it more market-driven and transparent. It sets the yuan's daily mid-point versus the dollar based on the previous day's closing price, taking into account changes in major currencies, analysts and officials said. This year, the PBOC has been guiding the yuan lower by pegging it to the dollar when the U.S. currency weakens and pegging it to a basket of currencies when the dollar rises, they said. The currency regime gives the central bank more room to allow two-way swings in the yuan versus the dollar, deterring one-way bets on the currency. The CFETS RMB Index, a trade-weighted exchange rate index that was unveiled by the central bank in December, fell 5.6 pct between the end of 2015 and June 24 of this year, although the central bank has pledged to keep the yuan basically stable against the basket.”

Is The EU On The Same Page As The United States On China? Theresa Fallon, ASAN Forum. “The European Union needs China, first and foremost, as an economic partner and, second, also for addressing international and regional crises. China uses its leverage and lobbies the European Union to stay out of the South China Sea dispute. As a result the European Union tries to avoid this issue, leaving the United States to fight on its own for freedom of navigation there. Will the United States be able to sway the European Union into supporting its position? China backs changes in global governance as a strategic objective. It is slowly reweaving the international fabric of interrelations and governing structures. In contrast, the European Union behaves as if geopolitics and power politics no longer exist. It often prefers to see Chinese actions as benign, which breeds complacency. Robert Kagan famously compared Europe to Venus and the United States to Mars. But, as Robert Cooper wrote in 2003, “Most of the rest of the world lives in a modern world of states competing for power, or in a pre-modern world of failed states.”1 To paraphrase Tolstoy, Europe’s postmodern approach leads some to declare that they are not interested in geopolitics—but geopolitics is always interested in them. A powerful visual on how the European Union and the United States are not always on the same page can be found in a video of the keynote address by Gunnar Wiegand, the European Union’s managing director for the Asia-Pacific for the European External Action Service (EEAS) made at the Center for Strategic and International Studies (CSIS) on February 18, 2016.  Somewhat ironically, the event was held to highlight the results of a two-year study project funded by the EU delegation in Washington, DC on strengthening EU-US Cooperation in the Asia-Pacific.2 After the usual exchange of pleasantries, Wiegand declared that the “European Union does not do geopolitics.” To emphasize his point he raised his hand in a gesture of stop, surprising the audience. What happened to this EU-funded project on EU-US approaches to Asia: Lack of communication? The establishment of the China-led Asia Infrastructure Investment Bank (AIIB) the previous year? A change in the strategic landscape? The introduction of China’s Belt and Road initiative two years prior to Wiegand’s surprise statement? China is a very important economic partner both for the United States and for the European Union. For the European Union, China is possibly even more important, as it is perceived as both a trade partner and a source of investment with the potential to stimulate the sagging European economy. In regard to trade, China is now the European Union’s second trading partner behind the United States, while the European Union is China’s biggest trading partner. In 2015, according to EU figures, imports from China amounted to EUR 350.4 billion and exports to China to EUR 170.5 billion, with a sizeable EU trade deficit of EUR 179.9 billion. China exports to the European Union not only low-cost manufactured goods but also, increasingly, high-end products such as telecommunications equipment. The European Union finds in China a vital outlet for its quality, manufactured products, including motor vehicles, agricultural products and luxury goods. In November 2013, both announced the launch of negotiations of a comprehensive EU-China Investment Agreement, which would provide for progressive liberalization of investment and the elimination of restrictions for investors to each other’s market. Negotiations are ongoing. Despite this mutually beneficial trade relationship, one issue that has caused friction between the European Union and China is China’s Market Economy Status (MES). MES affects the way that anti-dumping duties are calculated. Such duties typically affect steel and other metals, glass, and chemical products. In these fields there is global overcapacity, and industries in EU producer countries are keen on protection from cheap Chinese imports. Thousands of jobs are at stake. If an exporting country is considered a market economy, the extent of dumping and the relevant duties are calculated based on actual prices in the country in question. If the exporting country is considered a non-market economy, calculations are made based on prices in a similar country where market conditions are deemed to prevail. Recent studies have shown that anti-dumping duties against non-market economies are on average 13 percent higher than against market economies. When China joined the World Trade Organization (WTO) on December 11, 2001, the terms of accession included a provision for MES. However, the legal meaning of this provision is disputed. Until a year ago, it seemed clear to all that WTO members should grant China MES at the latest 15 years after China’s accession, i.e., by this date in 2016. Subsequently, some international lawyers have put forward a different interpretation that would allow WTO members to consider China a non-market economy even after that date. The United States supports this interpretation, as do many EU member states and the European Parliament, which, in May 2016, adopted a resolution against granting China MES. Based on its own legal analysis, the EU executive branch, the European Commission, seems inclined to grant China MES, with the support of a majority of EU member states including Germany. The announcement would be made at the July 2016 EU-China Summit, but would be accompanied by new measures to afford stronger protection to EU industries as needed. China already announced that it would take to the WTO dispute settlement body any WTO member that refused to grant it MES by mid-December. Since all other WTO members have already granted China MES, if the European Union also granted China MES the United States would be left alone facing legal action by China. In this case, Washington would probably express its disappointment to the European Union, but would be unlikely to take any punitive measure against it in the field of trade, including Transatlantic Trade and Investment Partnership (TTIP), or in any other area of EU-US cooperation.”

Indonesia-China Tensions In The Natuna Sea: Evidence Of Naval Efficacy Over Coast Guards? Lyle Morris, The Diplomat. “A third incident involving the arrest of a Chinese fisherman by Indonesian authorities operating near Natuna Island – this time leading to an injury of one Chinese fisherman – has ratcheted up tensions between Beijing and Jakarta. The June incident featured the second recent occurrence – the other one occurring in May — of the Indonesian Navy opening fire to force Chinese fishing vessels to comply with Indonesian demands to cease operations and allow Indonesian authorities to detain the vessel. This is of course not the first time the Indonesian Navy has been involved in use of force against foreign fishing vessels operating in Indonesian exclusive economic zone waters. On September 19, 2005, the Indonesian Navy pursued and arrested the Chinese fishing vessel “Fu Yuan Yu 132” that was illegally fishing off Papua Province. During the operation, the naval vessel opened fired against the fishing boat, killing one and injuring two Chinese crew members. Yet the June incident is notable because it marked the second instance of the Indonesian Navy taking the lead in patrolling the Natuna EEZ to combat increasing incursions by Chinese fisherman – an area that had previously been patrolled primarily by Indonesian maritime law enforcement vessels. The recent deployment of Indonesia’s Navy to Natuna appeared to replace, to some extent, the Ministry of Marine Affairs and Fisheries (MMAF) vessels that had been protecting Natuna waters from foreign fishing violations, in particular after a Chinese coast guard vessel provocatively rammed and forced free a Chinese fishing boat that was being towed back to Natuna under the protection of the MMAF in March 2016. Soon after that incident, the Indonesian Navy was tabbed by Indonesian policymakers to patrol Natuna, presumably as a more forceful deterrent against the Chinese. In contrast to the March incident, in the May incident – the first major confrontation between the Indonesian navy and Chinese fishing vessels near Natuna in several years – the Chinese coast guard on the scene appeared not to interfere with the operation of the Indonesian Navy as it arrested a Chinese fishing trawler and later towed it back to Natuna. China’s cautious approach prompted an Indonesian naval spokesperson to draw the following comparison between the March and May incidents: ‘[A]t the time, the pursuit [of the fishing vessels] involved a tiny patrol boat belonging to the KKP [the Ministry of Maritime Affairs and Fisheries]. But this time [the Chinese coastguard vessel] did not dare to interrupt because the chase involved a frigate.’  This statement gives voice to a perception among some policymakers in Southeast Asia that navies are more effective deterrents than coast guards in combating illegal maritime activity. It also highlights an important and under-analyzed tension in the region over whether navies or coast guards offer more appropriate platforms for carrying out policing functions at sea, especially as it relates to countering the aggressive behavior of China’s fisherman and coast guard. Until recently, the notion that states in Southeast Asia should employ coast guards as opposed to navies to manage, regulate, and enforce domestic and international maritime laws and conventions had been gaining currency.  Coast guards, for one, present a less escalatory face of state power than navies. Their status as a civilian maritime law enforcement agency signals an intent on the part of the state to enforce activities that may impact the maritime environment, safety, and protection of marine resources of a coastal state. Finally, coast guards offer a wider array of non-lethal means of enforcement that dampen the potential for inadvertent escalation to war in disputed territory, in particular in the South China Sea. The trend toward greater utilization of coast guards as front line defenders of maritime rights and interests has been on display not only in Indonesia, but also in the Philippines, Malaysia and Vietnam over the last five years. The coast guard fleets of most countries in Southeast Asia, however, lack sufficient  capacity to adequately deal with the formidable maritime threats along their coast and in disputed waters in the South China Sea. Navies are often viewed as the preferred asset for far seas enforcement because of their capacity to operate at long range from shore facilities. Also, most naval officials in the region strongly promote the view that navies offer a more effective deterrent than their civilian maritime law enforcement counterparts. Navies, like all bureaucratic actors seek relevance and funding, and thus most seek status as the vanguard of a nation capable of safeguarding all forms of threats in the maritime domain. Yet navies are generally ill-suited for many lower-end contingencies, such as counter-IUU (illegal, unreported, and unregulated) missions. The platforms, personnel, use of force doctrine, and basis in domestic and international law of navies are sufficiently distinct from coast guards as to be inappropriate to meet the wide array of law enforcement duties required by modern maritime states. Navy platforms and personnel are tailored for military campaigns and equipped for high-kinetic environments not always appropriate for civilian law enforcement patrols. To deploy a warship to arrest fishermen, for example, may unnecessarily convey lethality and intimidation. This dynamic is exacerbated when navies attempt to employ firepower to disable non-compliant vessels leading to causalities, or when navies stumble into crises involving civilian or government actors in territorial disputes. Regardless of the domestic policing function of the naval asset itself, both scenarios present the potentially problematic optics of a warship employing lethal force against unarmed or civilian actors. Despite these factors, as we learned recently from the case of Indonesia, the deterrent effect of navies combating illegal foreign fishing activities continues to offer compelling rationale for policymakers in the region to deploy navies on the front lines of counter-IUU operations in disputed waters.”

Posted by Alex Gray | June 28, 2016

Chinese Warships Now Training With U.S. Carrier Strike Group. Sam LaGrone, U.S. Naval Institute News. “Five ships from the People’s Liberation Army Navy are training with a U.S. carrier strike group ahead of next month’s Rim of the Pacific 2016 exercises, a Navy official confirmed to USNI News on Monday. Last week the five ship PLAN flotilla linked up with the strike group – centered on carrier USS John C. Stennis (CVN-74) – met near Guam and steamed toward Hawaii ahead of July’s international exercises. According to a list of ships China intended to send to the exercise released by U.S. 3rdFleet, the PLAN flotilla includes Type 052C guided missile destroyer Xi’an (153), Type 054A guided missile frigate Hengshui (572), fleet oiler Gaoyouhui, the hospital ship Peace Ark and the submarine logistics vessel Changxingdao. The Stennis CSG includes one Ticonderoga-class guided missile cruiser and several Arleigh Burke-class guided missile destroyers and has mostly been operating in the South China Sea since April before heading to Hawaii. While underway, the close to a dozen ships conducted low-intensity division tactics (DIVTACS) – ships maneuvering in large formations – the official said. Secretary of Defense Ash Carter previewed the exercises earlier this month during the Shangri-La Dialogue in Singapore. “In fact, the United States and China plan to sail together from Guam to Hawaii for RIMPAC, conducting several exercise events along the way, including an event to practice search-and-rescue,” Carter said in a speech on June 4. Later in the speech, Carter used the example of the exercises and China’s participation in RIMPAC as proof the U.S. is looking to expand military to military cooperation with the PLA. “America wants to expand military-to-military agreements with China to focus not only on risk reduction, but also on practical cooperation. Our two militaries can all also work together, bilaterally or as part of the principled security network, to meet a number of challenges – like terrorism and piracy – in the Asia-Pacific and around the world.” While Beijing and Washington – and its allies – are at odds over territorial claims in the South China Sea, military to military relations between the PLA and the Pentagon have been largely good since 2014 when Chinese ships joined the multinational RIMPAC for the first time. When asked by USNI News, U.S. Navy officials did not say if the PLAN had sent a signals and electronic intelligence spy ship along with the invited Chinese flotilla this year. In 2014, along with five warships, the Chinese sent a Dongdiao-class auxiliary general intelligence (AGI) ship ships designed to gather electronic and communication data from surrounding vessels and aircraft that monitored the exercise.”

China Holds Firm Ahead Of UN's South China Sea Ruling. Ching Yee Choo, Nikkei Asian Review. “The ambassadors of China and the Philippines have crossed pens in a local newspaper ahead of a ruling this week by the United Nations' court of arbitration at The Hague in the Netherlands over a simmering territorial dispute in the South China Sea. Huang Huikang, China's ambassador made a 2,000-word contribution to The Star that was both a history of regional relations and an outline of China's present perspective. He described the dispute as "hyped up" because of "high-profile interference and the manipulation by some powers outside the region.” China has already made it clear that it does not recognize the UN court's jurisdiction and will not participate in its arbitration efforts. Huang labeled the Philippine petition to The Hague as a unilateral move – "illegal arbitration" – and advocated "amicable consultations" as the appropriate solution. Huang's contribution elicited a flurry of responses, including an 1,100-word letter from J. Eduardo Malaya, the Philippine ambassador. Malaya said the "arbitral ruling will bring much-needed clarity to these complex matters.” He also said it was not the last word in bilateral relations between the two countries. The exchange followed a miscommunication from the Malaysian foreign ministry after foreign ministers from the Association of Southeast Asian Nations met recently in Kunming with their counterpart from China. A statement from Malaysia on the tension in the South China Sea was subsequently retracted without clarification. The South China Sea is the most significant point of friction between ASEAN and China. Brunei, Indonesia, Malaysia, the Philippines, and Vietnam have overlapping claims in the region. China's claim is based on its so-called Nine-Dash Line, which sets a boundary stretching from Taiwan to the Natuna Islands off Borneo in Indonesia. The disputed waters are rich in marine life and natural resources, including oil deposits, and form one of the world's most heavily used shipping lanes. The Philippines petitioned The Hague against China's expansionism in January 2013 under the United Nations Convention on the Law of the Sea (UNCLOS). The tension has not been confined to Kuala Lumpur and Manila, however. Last week, the Indonesian navy fired on a fishing boat from China in a disputed fishery of the Natuna Islands. A few days later, President Joko Widodo chaired a cabinet aboard a warship in the same area. Some months ago, Indonesia attempted to detain another vessel from China in the same waters. Although the confused signals from Kunming suggested divisions within ASEAN, three academics from Singapore's S. Rajaratnam School of International Studies – Bhubhindar Singh, Shawn Ho, and Henrick Z. Tsjeng – saw greater signs of unity. "If not for the relatively unified stance that ASEAN took at this special meeting in rejecting China's 10-point 'consensus', there could well have been another instance of China unilaterally declaring that a 'consensus' had been reached with ASEAN at the press conference," they said.”

Taiwan Ship Seized By Solomon Islands For Alleged Illegal Fishing. Tai Ya-chen, Chen Cheng-wei, Kuo Chu-chen and Lilian Wu, Central News Agency. “A Taiwanese fishing ship was seized by the Solomon Islands in April for allegedly fishing illegally, the Ministry of Foreign Affairs confirmed for the first time Tuesday after the incident was reported by local media. Ministry spokeswoman Eleanor Wang (王珮玲) said the Jing Man No. 666 (勁滿666號), registered in Liuqiu Township in Pingtung County, entered the port of Noro in the Solomon Islands on April 1 for maintenance and resupply. The ship was seized on April 3 when the Pacific island country's customs authorities found illegally harvested shark fins on the ship, and the case is now being handled by the country's prosecutors. Wang said the Taiwanese captain, surnamed Hung (洪), and 10 Indonesian crew members who were working on the ship are in good health and have freedom of movement. The case has now entered the judicial process, and Taiwan's embassy at the Solomon Islands will stay on top of the latest developments to provide assistance as necessary, Wang said. In Pingtung County, Captain Hung's wife said the Solomon Islands will hand down a verdict on July 1. She said the ship has been seized for almost three months and has suffered substantial losses. Huang Hung-yen (黃鴻燕), deputy director of the Fisheries Agency under the Ministry of Agriculture, said that although the Taiwanese ship was seized for illegal fishing, it was an isolated case and will not have a direct impact on the EU's view of Taiwan's fishing sector. The European Union (EU) issued a yellow card to Taiwan on Oct. 1, 2015 warning that it risks being identified as an uncooperative country in the fight against "illegal, unreported and unregulated (IUU)" fishing and could issue a red card if the country's practices do not improve. The Foreign Ministry called on deep-sea fishing operators not to engage in illegal fishing to protect marine resources and uphold the long-term interests of Taiwan's deep-sea fishing industry. The Liuqiu District Fishermen's Association said that if the Jing Man No. 666 has indeed illegally fished shark fins, it will face fines and disciplinary action from the Fisheries Agency after returning home even if it is fined by the Solomon Islands. Both the Liuqiu and Donggang fishermen's associations have urged the government to speed up the revision of the Fisheries Act, and impose steep fines on illegal operators to avoid getting hit by a red card from the EU. The associations said that if the EU issues a red card, then not only will Taiwan's catches be barred from entering the EU market, Taiwanese fishing ships may also be prohibited from entering the harbors of other countries to be repaired, resupplied or maintained.”

Why the US Navy Should Fear China's New 093B Nuclear Attack Submarine. Dave Majumdar, The National Interest. “Is China’s new Type 093B nuclear-powered attack submarine on par with the U.S. Navy’s Improved Los Angeles-class boats? At least some U.S. naval analysts believe so and contend that the introduction of the new People’s Liberation Army Navy (PLAN) submarines is an indication of just how quickly Beijing is catching up to the West. “The 93B is not to be confused with the 93. It is a transition platform between the 93 and the forthcoming 95,” said Jerry Hendrix, director of the Defense Strategies and Assessments Program at the Center for a New American Security—who is also a former U.S. Navy Captain. “It is quieter and it has a new assortment of weapons to include cruise missiles and a vertical launch capability. The 93B is analogous to our LA improved in quietness and their appearance demonstrates that China is learning quickly about how to build a modern fast attack boat.” Other sources were not convinced that Beijing could have made such enormous technological strides so quickly—but they noted that the topic of Chinese undersea warfare capability is very classified. Open source analysis is often extremely difficult, if not impossible. “Regarding the question on the Type 093B, I really don’t know, anything is possible I suppose, but I doubt it,” said retired Rear Adm. Mike McDevitt, now an analyst at CNA’s Center for Naval Analyses. “I have no doubt that the PLAN has ambitions to at least achieve that level of capability and quietness.” Though the Seawolf and Virginia-classes have surpassed the Improved Los Angeles-class as the premier U.S. Navy attack submarines, such older vessels will remain the mainstay of the service’s undersea fleet for many years to come. If the People’s Liberation Army Navy’s newest boats are able to match the capabilities of the U.S. Navy’s shrinking undersea fleet, Washington could be in serious trouble. Indeed, the U.S. Navy already anticipated that it could be facing-off against a Chinese submarine fleet that is nearly twice its size, but not as technically capable. The U.S. Navy—which has roughly 52 attack submarines—is on track to have 41 attack boats by 2029. The Chinese, meanwhile would have “at least 70, and they’re building,” Vice Adm. Joseph Mulloy, the service’s deputy chief of naval operations for integration of capabilities and resources told the House Armed Services Committee’s seapower and projection forces subcommittee on February 25.  “You get back into the whole quality versus quantity issue, but at the same time the Russians are also building...and they build much higher-end submarines.” In a 2016 report to Congress, the Pentagon noted that Beijing continues to upgrade and expand its submarine fleet: “China continues to improve its SSN force, and four additional SHANG-class SSN (Type 093) will eventually join the two already in service. The SHANG SSN will replace the aging HAN class SSN (Type 091). These improved SHANG SSNs feature a vertical launch system (VLS) and may be able to fire the YJ-18 advanced anti-ship cruise missile (ASCM). Over the next decade, China may construct a new Type 095 nuclear-powered, guided missile attack submarine (SSGN), which not only would improve the PLAN’s anti-surface warfare capability but might also provide it with a more clandestine land-attack option.” The problem, however, is if Hendrix’s assessment is correct and future Chinese submarines are only slightly less capable than the Virginia or Seawolf-class vessels, the Navy could be in trouble. The technological edge the U.S. Navy—which is already woefully short on attack boats—is counting on might not be sufficient to counter Chinese numerical superiority. However, the service is continuing to improve the performance capabilities of its submarines on a continual basis. Nonetheless, one former U.S. Navy undersea warfare officer suggested that the service would come to regret having truncated the high-performance submarine-hunting Seawolf-class at three boats and focusing instead on the more multi-role Virginia-class. Aware of the coming attack boat shortfall, the U.S. Navy is hoping to boost its attack submarine fleet by continuing to build two Virginia-class vessels per year even while it builds the next-generation Ohio Replacement Program ballistic missile submarine. However, if the Chinese are truly catching up technologically, Congress might consider accelerating the attack submarine build rate to the maximum capacity of America’s two nuclear-capable shipyards. At the same time, the U.S. Navy might have to accelerate the development of the next-generation successor to the Virginia-class, which has been tentatively designated the SSN(X) program and is scheduled to enter service in 2044.”

China-India Relations After The NSG Plenary. Deep Pal, The Diplomat. “Few analysts following developments at the Nuclear Suppliers Group (NSG) plenary in South Korea expected India’s membership bid to sail through. As the dust settles, what is clear is that Xi Jinping’s China differs considerably from Hu Jintao’s China. The latter did not want to stand alone; the former is on the path to establishing China as the challenger in the global order – and understands that such a project is necessarily a lonely pursuit. Beyond the arguments of whether or not joining the NSG accords India additional advantages, what stood out over the past month is the Modi government’s impressive ability to set a concrete objective, and pursue it with great coordination. While Foreign Secretary S Jaishankar was leading India’s charge in Seoul, the prime minister himself brought up the issue with Xi in Tashkent. This ability to strategize and cogently act is a key takeaway and must be utilized moving forward. For India, what transpired in Seoul is much more than just a reflection of China’s attitude towards India’s aspirations – it is about how India is seen as a power by others around the globe. While China raised the bogey of “due procedure,” some others reportedly saw logic. Some among them, like Switzerland had promised support to India as recently as a few weeks ago; others included Brazil, India’s partner in BRICS. While this is not the first time that China has taken a stand inimical to Indian interests, this time is markedly different. It is now unequivocally clear that China objects to Indian aspirations of being a bigger player in the global order. There are indications that it is concerned about how India will react – the Chinese Foreign Ministry has unilaterally claimed that developments in the NSG meeting won’t affect the relationship. In the NSG meeting though, it expended little political capital blocking India. The challenge ahead for India then, is two-fold: First, manage the relationship with China, which is likely to begin immediately. For example, in multilateral forums where the two work together, such as BRICS, the Shanghai Cooperation Organization, climate talks, or the World Trade Organization, India will be especially cognizant that China will pursue a strategy to primarily benefit itself. It is likely that Indian representatives will be extra vigilant against making concessions, and pursue their own negotiations, possibly independent of China’s initiatives. This brings us to the second challenge: The need to project the image of a confident India by removing ambivalence about how it sees its place in the world. Going by reports from Seoul, there is work to be done on this front. India has no time to be coy and equivocal anymore; to be granted exceptions, it will have to demand them as a principal rising power in the 21st century. India may be less powerful than China economically and militarily but it will continue to be a substantial power throughout the coming years. Additionally, its enduring appeal will continue to be in its democratic policy, and the fact that it allows a multiplicity of views and opposing political opinions. If Modi indeed believes all that he says about India’s stature in the world, it needs to reflect not only in his speeches, but also in his foreign policy. For India to accomplish this, two prior conditions need to be fulfilled. First, the economy must be allowed to grow at the current pace without systemic shocks. Second, as anyone with the slightest exposure to Indian foreign policymaking knows, the country has been its own greatest enemy by being hesitant and postponing taking hard decisions. While changing this overnight is difficult, the foreign policy elite will now need to act decisively, and cease fence-sitting. Only by presenting itself as a smart and confident power in the its neighborhood will India be able to come across as a sure-footed global player. To begin with, India will have to understand that China’s approach to foreign policy based on the concept of leverage. During Rajiv Gandhi’s seminal 1988 visit, China signaled that it was keen on developing the relationship without working to resolve the border issue immediately. China believed that India was keen to resolve the matter, which it gave it leverage. It is now incumbent on India to do the same by inserting itself in situations where China has high stakes – situations that challenge its aspirational move toward the top of the global order. India must do this with finesse, ensuring it does not spite China directly. For one, rebuilding the relationship since the 1980s has been useful in many aspects (like managing the border question) – letting all that slip is unwarranted. Second, unlike other powers, most notably the United States, India occupies the landmass contiguous to China, which comes with an additional motivation to calibrate its actions. With these caveats in place, India should approach its China policy with eye on three timeframes: immediate, mid-term, and long-term. In the immediate term India must not lose any opportunity to integrate itself with China’s neighborhood in Asia. An opportunity is going to present itself in early July when the verdict for the Philippines’ arbitration case on the South China Sea comes out. India must utilize the opportunity to integrate itself with Southeast Asian nations and squarely back the rule of law and international norms. India must emphasize that the question of “due procedure,” used with great dexterity by China in Seoul, cannot be applied selectively. It must also once and for all abandon the question of maintaining equal distance from the United States and China. As is evident, as a big, rising economy, India is unlikely to get concessions that China benevolently doles out to smaller players in the region. Under these circumstances, India must step up its cooperation with the United States. This does not necessarily mean losing its ability to make independent policy decisions – as the last decade and a half has demonstrated, the Indian establishment is capable of maintaining strategic autonomy in policymaking while stepping up engagement with the United States. While the NSG plenary meeting was underway, the Indian finance minister was in Beijing seeking Chinese investment. Established processes like this, including the functioning of frameworks set in place for issues like trade or border management, must continue seamlessly. Simultaneously though, India can start remedying its vast trade deficit by introducing non-tariff barriers against unimportant items, and gradually expanding the list. It can instead ramp up Chinese investment in the country in big projects, such as in the infrastructure sector, developing leverage in the process by tying them to Chinese support for India on important international issues.”

Taiwan ‘To Test-Fire Missiles In US’ In Move Likely To Upset Beijing. South China Morning Post. “The test of the US-made Patriot Advanced Capability-3 (PAC-3) system would be launched at the White Sands Missile Range, in New Mexico, in early July, a defence ministry source said, in a move likely to irk Beijing even though it was arranged before the island’s new president Tsai Ing-wen took office. According to the source, the test will be conducted in the US to avoid Beijing collecting information about it, and due to space restrictions in Taiwan. Taiwan seeks stronger support from US to counter pressure from Beijing AIT, the de facto US embassy, would not comment on the test, which was also reported in Taiwan’s Liberty Times newspaper. Despite having no official diplomatic ties with Taipei after recognising Beijing in 1979, the US is still Taiwan’s greatest ally and main arms supplier. The missile system was purchased in 2008 and the test was approved by the US last year, according to the Liberty Times. Taiwan bought the new PAC-3 – a system designed to intercept incoming ballistic missiles near the end of their trajectory – as part of a US$6.5 billion arms sale by the US in 2008, which infuriated Beijing at the time. The Taiwanese missile unit involved in the July drill will fire two missiles to intercept a missile launched by the US military, which simulates an incoming mainland Chinese ballistic missile, the Liberty Times reported. Japan has also tested the PAC-3 on US soil. Beijing insists self-ruling Taiwan is part of its territory awaiting reunification, by force if necessary, even though the two sides split in 1949 after a civil war. According to Taiwan’s defence ministry there are 1,500 Chinese missiles aimed at the island.”

What Is China and Russia's 'Eternal Friendship' Worth? Catherine Putz, The Diplomat. “Russian President Vladimir Putin and Chinese President Xi Jinping mutually highlighted the importance of their bilateral relationship during the Russian leader’s weekend visit to Beijing, his fourth visit to China since 2013. “President Putin and I have unanimously decided that the more complicated the international situation, the more determined we should be, guided by the spirit of strategic cooperation and the idea of eternal friendship,” Xi said said in a press statement following their talks. “Russia and China have very close or almost identical views on international developments,” Putin said. This (over)emphasis on strategic closeness was presaged by comments stemming from the Kremlin. TASS quoted Russian presidential aide Yuri Ushakov ahead of the visit as saying, “Russia and China adhere to largely similar or close positions literally on all key issues on the international agenda.” Increasingly, in geostrategic terms Russia and China have drawn closer, if only vis-a-vis their relations with the United States and the West, more broadly. In early 2014 Russia annexed Crimea and the West imposed sanctions, thus giving any deals between Russia and China an added geopolitical flavor. Buoyed by big energy and trade announcements, such as the May 2014 Power of Siberia pipeline deal (a decade in the making and worth $400 billion), the synergy between Moscow and Beijing looks obvious if you don’t look too closely. Alexander Gabuev, writing for ChinaFile in September 2015, began like this: “After a year of intense flirtation, the Sino-Russian relationship is beginning to look like a one-sided love affair.” That remains largely true nine months later. It’s worth pointing out, as Gabuev did, the history of Russian-Chinese trade promises. In 2011, following bilateral talks with then-Chinese President Hu Jintao, then-Russian President Dmitry Medvedev set hugely aspirational trade goals: “[W]e have set very substantial figures as our benchmarks for the future: trade between our countries will reach $100 billion by 2015 and $200 billion by 2020.” Russia-China trade had, indeed, been growing at awesome rates. Gabuev cited a memo from the Russian Ministry of Economic Development as saying that “between 2003 and 2012, trade between the two countries grew at an average of 26.4 percent per year.” But those gains have been decimated to the point where Xi, in his remarks after the recent talks, spoke glowingly of a 2.7 percent increase. “From January to May 2016, bilateral trade amounted to $25.8 billion; it ceased to decline and grew by 2.7 percent compared to the same period last year.” In January, The Moscow Times ran a headline declaring “Russian-Chinese Trade Plummets in 2015.” Nonetheless, $200 billion by 2020 is still the plan, according to Foreign Minister Sergei Lavrov in May – even though China and Russia missed the $100 billion-by-2015 goal by some $35 billion. Putin left Beijing after overseeing the signing of more than 30 agreements, as reported by Xinhua, in areas as predictable as trade and energy, and as diverse as technology, media, and sports. The Russians claim 58 “business initiatives” were signed to the tune of $50 billion. A political cartoon published by the New York Times illustrates the issue at hand perfectly. Xi is shaking hands with an ever-smaller matryoshka, in the form of Putin, labeled “Russian economy.” Despite attesting to their “eternal friendship,” the hard economic returns on the China-Russia political alignment are a long time coming.”

The Caucus Brief is a daily publication for Members of Congress and Hill Staffers on China news and information compiled by the office of Congressman Randy Forbes, Founder of the Congressional China Caucus.  Email with tips, comments, or to subscribe/unsubscribe.

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