China Caucus Blog

Posted by Alex Gray | August 03, 2016

Xi’s China: Command And Control. Charles Clover, Financial Times. “When Xi Jinping arrived in camouflage fatigues for a visit to the Chinese military’s new joint command centre in April, the president was sending a message to the political elite. Previous Chinese leaders had always worn a green Mao suit on such visits to the People’s Liberation Army, observing a sartorial separation between the military and civilian roles of the Communist party. Wearing fatigues was something new, heralding a different attitude to the PLA under Mr Xi, who has made the military central to his presidency and the main pillar of his personal authority. “Xi was breaking that tradition on purpose,” says Dennis Wilder, former CIA deputy assistant director for East Asia and an expert on the PLA who now teaches at Georgetown University. “He was saying not only do I represent the party, but I’m one of you.” In the nationally televised event, the president chatted with officers in the Beijing facility, gazing at screens of real- time operational data. Tai Ming Cheung, a specialist on China’s military at the University of California, San Diego, says the broadcast showed “a level of engagement with the military at an operational level, a hands-on approach that is not characteristic of recent Chinese leaders”. The announcer also revealed that Mr Xi had a new rank, referring to him as the PLA’s “commander-in-chief” of joint operations, a title last used in 1949-54 by Zhu De, the revolutionary general under Mao Zedong. While a formality — Mr Xi already chairs the Central Military Commission, giving him supreme power over the PLA — it reinforces his symbolic authority with a military rank in addition to a party one. The Chinese president is not the first politician to use rank and uniforms to buttress his image as a strong leader, but the pageantry, taken together with other episodes such as a huge military parade last September, appear designed to identify Mr Xi with the military in a way not seen since Mao or Deng Xiaoping led the country. “Even Mao wasn’t commander-in-chief. This is a whole new thing,” says Christopher Johnson, an expert on Chinese politics at the Washington DC-based Center for Strategic and International Studies. More importantly, Mr Xi was using the visit to drive home his victory in a battle to reform the PLA, observers say. An often brutal process, it has led to the purging of hundreds of senior officers over the past two years — part of the broader Xi anti-corruption campaign — and will see troop levels cut by almost 300,000. The opening of the joint command centre showcased the sophisticated technology but it also heralded a new order. It broadcast the moment when the dominance of the ground forces in the PLA ended, and the elevation of its navy, air force and strategic rocket divisions began as they prepare to fight 21st century battles. The corruption purge had the side effect of “softening up” the PLA, in the words of one analyst, for a reform that would rip it apart and put it back together under Mr Xi’s direct command. “Breaking political factionalism within the PLA has been one of the major goals of the anti-corruption campaign,” says Liu Bojian, a researcher at the East Asian Institute, of the National University of Singapore. He says the purge of senior ranks has so far felled at least 37 major generals, all of whom have been tried. The reforms, seen as the most pervasive since the revolution of 1949, involve the rewiring of the PLA’s reporting structure, placing it under Mr Xi’s personal command and stripping some of its power. The purges have been aimed at reinforcing his authority by weeding out opponents. By confronting vested interests in the military Mr Xi is taking a gamble as great as any leader over the past four decades. It was Mao who declared political power “comes from the barrel of a gun” and since his death few have dared to interfere in the tense PLA-Communist party ties that form the bedrock of the state. Over the past 40 years, however, the PLA has developed a reputation for factionalism, corruption and thumbing its nose at its political masters. Previous leaders have tolerated this behaviour but Mr Xi evidently sees it as one of the priorities for change. “Relations with the PLA is always something the leader has to figure out,” says Mr Wilder, who uses the term “conditional compliance” to describe PLA-party relations. “It is something they have to be very careful with — the PLA is the real source of the party’s power.” While officially subordinate to the party, Mr Wilder says the PLA “in truth is only ever subordinate to one party official, the chairman of the CMC [Mr Xi]. His relationship with the PLA sets the tone for the entire political system right now.” Vasily Kashin, a specialist on China’s military at the Higher School of Economics in Moscow, puts it more bluntly: “Xi is transforming the PLA into a political power base.” The delicate balance between the PLA and the party is being revised at a critical moment — as the US and China square off in the South China Sea. Following an arbitration court’s decision against China’s claims in the area this month, the PLA held a series of massive military and naval manoeuvres to remind rivals that it does not accept the court’s judgment. Some western analysts say they worry that the PLA may be lobbying for a more confrontational approach as a way to gain domestic political leverage. “The PLA’s political clout has taken a severe hit in the face of a comprehensive retooling of its force structure and Xi’s anti-graft crackdown,” says Mr Johnson. “The noises they are making suggest they may be looking to the South China Sea for redemption.” The purpose of the reforms is to have a military capable of challenging the US — meeting or surpassing it in technological and operational capabilities by 2030. It will not be easy: Washington still spends three times China’s estimated $200bn annual defence budget, despite double-digit increases in percentage terms nearly every year for the past quarter of a century. The PLA, meanwhile, is notoriously low tech. It fought its most recent war, a disastrous 1979 border conflict with Vietnam, wearing sandals and soft hats, and using signal flags for battlefield communications. And while a new generation of high-tech weapons such as aircraft carriers, nuclear submarines and stealth fighters are rolling out of factories, experts say it will be years if not decades before China is capable of using them effectively. Experts say they doubt the PLA’s current capability to win a war against even a smaller regional opponent like Japan, let alone the US, and that the political consequences of such a loss could be catastrophic: “If you lose a war to Japan it’s game over for the CCP [Chinese Communist party],” says Mr Johnson. The PLA began life in the 1920s as a peasant guerrilla army, which became one of the two pillars of the state after it defeated nationalist forces in the 1949 civil war to bring the Communist party to power. Following the chaos of the Cultural revolution in the 1960s the PLA emerged as one of China’s few functioning institutions. Having expanded to an estimated 7m people, the army had become a state within a state. Following Mao’s death, Deng sought to do something about its power and cut troop numbers by 1m. “Xi saw how Deng put the PLA in its place after the Vietnam campaign,” says Mr Wilder. “Now Xi is using the same playbook: you knock them on the head, say ‘you’re no good, you’re corrupt, but its OK because I’ll fix you’,” he says. Another motivating factor for Mr Xi was the relationship his predecessor, Hu Jintao, had with the PLA. The defining moment came in January 2011 when the air force conducted the first test flight of its homegrown stealth fighter at the same time that Robert Gates, the then US defence secretary, headed into a meeting with Mr Hu in Beijing. Mr Gates said later that he believed Mr Hu had been surprised by the test and humiliated in front of his foreign guest. “Over the last several years we have seen some signs of . . . a disconnect between the military and the civilian leadership,” Mr Gates said at the time. “Xi’s view of the military would have been conditioned by witnessing first hand the problems of Hu’s relationship with the military during the time that Xi was being groomed for leadership,” says Mr Cheung of San Diego University. Within months of coming to power Mr Xi struck the first blow, announcing in November 2013 long-term troop cuts and deep structural reforms. He has effectively dismantled four major departments: logistics, the general staff, the political works unit and the one responsible for armaments — the pillars of the PLA since its creation. They still exist but their influence has been dramatically diluted. “The Communists trace their lineage to this organisation created during the civil war, and these departments are all two decades older than the People’s Republic of China itself,” says Mr Kashin of Moscow’s Higher Economic School. “Now they are effectively dismantling them. That is a huge move.” The overall impact has been to fundamentally change the nature of power in the military. All departments are now directly under the control of the CMC headed by Mr Xi, rather than the army led general staff. They share power with 11 agencies — some newly created, others reconfigured — but all under the commission’s direct administration. In parallel the anti-corruption purge led to the arrest of a number of senior officers including General Xu Caihou, former head of the army’s political department, and General Guo Boxiong, a senior military figure and former vice-chairman of the CMC, who were both accused of taking bribes in exchange for promotions. Xu died of cancer before he could be imprisoned, while Guo was this week sentenced to life in prison. Ni Lexiong, a naval expert at the Shanghai University of Political Science and Law, says behind the scenes resistance continues from within and outside the military. “This is often the case with reforms — it will be met with friction from within from backward forces,” he says, jokingly using the Marxist term for counter-revolutionaries. While some in the military support the reforms — especially younger officers tired of corruption — the overhaul has met opposition. A number of articles published in the military press over the past year have called for loyalty to the party — something that would not be needed if the authorities were confident they had that support, say observers. The resistance is most pronounced in the ground forces, historically the dominant arm of the PLA. They now have the most to lose as the shift towards the navy, air force and strategic rocket forces gathers pace. “If you wear green you don’t like this reform,” says Mr Johnson at the Center for Strategic and International Studies. The other overriding factor will be the economic impact of the restructuring of the armed forces, Mr Ni adds. More than anything, the regime fears social unrest and the Xi administration will have to balance laying off 300,000 people at a time when the economy is sputtering and some industries are already cutting thousands of jobs. “Local governments have to deal with the pressure of arranging jobs for the recent retirees,” says Mr Ni. “They may have to introduce new openings to an already saturated system.” The reforms are unlikely to make China’s neighbours sleep any easier — with fears of a looming confrontation in the South and East China Seas. Beijing’s headlong pursuit of a better military “certainly sends a signal to the rest of the region”, according to a diplomat from a neighbouring country. Due largely to simmering tensions between China and its neighbours, military spending has shot up. In the Asia and Oceana regions, defence spending in 2015 rose the fastest in the world, by 5.4 per cent, according to a study by the Stockholm International Peace Research Institute. That beats even the oil-fuelled defence budgets of the war-torn Middle East. The question now is what Mr Xi plans to do with his newly remodelled, modernised but untested fighting machine. Yanmei Xie of the International Crisis Group in Beijing says Mr Xi’s hardline image and attention to the military is swinging the country towards nationalism. “There is this belief that Xi is nationalist, that he wants to project an assertive hardline image, and so officials and bureaucrats down the line are calibrating their rhetoric and behaviour accordingly,” she says.” https://next.ft.com/content/dde0af68-4db2-11e6-88c5-db83e98a590a

China Reins In Communist Youth League, And Its Alumni’s Prospects. Chris Buckley, The New York Times. “President Xi Jinping of China in effect wrote an epitaph to the shrunken influence of his predecessor and former rivals this week when the Communist Party announced major changes to its once-powerful Youth League, a training ground for many officials who have been marginalized under Mr. Xi. The Communist Youth League served as a cradle for generations of Chinese leaders, who rose through it into the high ranks of the party. Mr. Xi’s predecessor as China’s top leader, Hu Jintao, was among the most prominent. Others have included Premier Li Keqiang, Vice President Li Yuanchao and Ling Jihua, the former head of the party’s general office. But a reorganization of the Communist Youth League laid out in the state news media on Tuesday indicated that its glory days as a finishing school for China’s political elite may have passed. The overhaul promised to shrink the Youth League’s central leadership, put it under firmer party control and return it to its grass roots to try to win over the country’s young people. “Its ranks will undergo shrinkage at the top and replenishment below,” an unnamed Youth League leader said in People’s Daily, the party’s main newspaper, on Wednesday, explaining the reorganization. “In the face of major changes in the social environment and youth population, there are many areas of the Youth League’s development and work that are ill-adapted or unsuitable.” The prominence of Youth League experience in the résumés of many party officials has led some analysts to refer to a Youth League faction or clique, a coalition of cadres who came up through the organization, owed their loyalty to it and each other, and shared a political agenda that was vaguely populist. But officials who emerged from the Youth League were never as cohesive as some assumed, and the circumstances that made the league an incubator of political talent had diminished before Mr. Xi took power in late 2012, said Li Datong, a former editor at China Youth Daily, the league’s newspaper. The latest changes made it clear that this group had little influence, he said in an interview. “Under Hu Jintao you could maybe make a strained argument that there was some kind of Youth League faction, but not now,” Mr. Li said. “It’s ceased to exist.” “The criticisms of the Youth League show that its influence has run its course,” he said. “It’s become a political zombie.” The announced changes indicated that the Youth League’s alumni are unlikely to win many promotions into the topmost ranks when Mr. Xi and other leaders settle on a new national leadership lineup to be revealed late next year, said Bo Zhiyue, a professor of political science at Victoria University of Wellington, New Zealand, who studies elite Chinese politics. “The fact that they’re conducting these serious reforms is trying to undermine the legitimacy of the Youth League as a supply pool of future leaders,” Professor Bo said by telephone. “It’s an implicit attack on the power base of the so-called Youth League faction.” Before the changes were announced, the league had been stained by corruption and criticisms that it had fallen out of touch with the youthful idealism it was supposed to inspire. The Youth League traces its inception to the formation of the Chinese Communist Party in the early 1920s, to serve as a bridge to students, young workers and other potential inductees into the Communist revolution. By the end of last year, it had 87.5 million members, many of them university students who hope to eventually join the party. The maximum age is about 28 for ordinary members, although officials in the league can be much older. The Youth League won particular prominence as an incubator for future leaders in the 1980s. That was partly because the party leader for much of that decade, Hu Yaobang, was a former Youth League leader. Perhaps more important, the party also faced a talent gap at the time. In the late 1970s, after the Cultural Revolution and its radical supporters were swept away, party veterans such as Deng Xiaoping returned to power. But they knew that age would soon catch up with them and made plans to nurture potential successors. The Youth League became an important training ground for that, Professor Bo said. The high tide of its prominence came under Mr. Hu, formerly the first secretary of the league, who was handpicked by Deng to be China’s top leader. Party insiders said that Mr. Hu, in turn, favored Li Keqiang, another former head of the league, to succeed him as president and party general secretary. But instead, Mr. Xi won those posts, and Mr. Li took the more junior job of premier. Since Mr. Xi came to power, he has assumed more influence than his recent predecessors. Meanwhile, officials who spent long parts of their careers in the league have languished. Mr. Li has been less powerful than his predecessors. Li Yuanchao, the vice president, has become an ornamental figure, shadowed by anticorruption investigations that have felled former subordinates. Most spectacularly, Mr. Ling, the former head of the party’s general office, was expelled from his posts in July last year after being charged with corruption. He appeared to have had hopes for promotion into the top echelons until March 2012, when his son fatally crashed a Ferrari Spider. Two young women were also injured, one of whom later died. Last month, Mr. Ling was convicted of taking bribes, abusing his office and illegally obtaining state secrets and was sentenced to life in prison. Mr. Hu, the former president, has remained quiet in retirement, giving no signs that he has the will or the influence to shape politics, even when his former protégés have fallen. Months before the changes to the Youth League were announced, the party’s discipline enforcement agency issued a long, unusually scathing account of problems in the organization, including an aloof leadership. In response, league leaders promised in April to “aggressively erase ‘aristocratic’ tendencies.” The Youth League may still help to identify and nurture future party leaders, but they will have to demonstrate more hands-on experience than previous league alumni who rose up, Professor Bo said. “One of the criticisms of this organization has been that you spend too much time sitting in an office trying to get yourself promoted without any actual practical experience,” he said.” http://www.nytimes.com/2016/08/04/world/asia/china-communist-youth-league.html?ref=world&_r=0

Philippines Warns Fishermen To Steer Clear Of Disputed South China Sea. AFP. “Manila: The Philippines told its fishermen on Wednesday to steer clear of a fishing ground in the disputed South China Sea to avoid harassment from Chinese authorities. The warning came despite a recent ruling by a UN-backed tribunal in favour of the Philippines, as it dismissed China's territorial claims to large swathes of the waters. Beijing angrily rejected the court's judgement and on Wednesday it announced penalties for "illegal" fishing in its waters including the disputed areas. "We are aware that China is occupying Scarborough Shoal, so let us wait for clarity on how our fishermen can return there without being subjected to harassment anymore," Manila's foreign affairs spokesman Charles Jose told reporters. Jose said that while the tribunal ruling was clear, the "reality on the ground" was different. "The reality is that China is there so we must discuss this," he said. Asked if this meant Filipino fishermen should avoid the shoal for now, Jose said: "This is for the safety of everyone." Manila's position is likely to anger critics of President Rodrigo Duterte's new government, which has been accused of taking a soft line with Beijing. The question of who has the right to fish in the disputed South China Sea has been a major bone of contention between Beijing and Manila, which brought the case to the Permanent Court of Arbitration in The Hague. Manila lodged the case under its previous government in 2013, saying that after 17 years of negotiations with Beijing it had exhausted all political and diplomatic avenues to settle the dispute. Vietnam, Malaysia, Brunei and Taiwan also have claims to the sea, through which over USD five trillion in annual trade passes. In 2012 China took control of the Scarborough Shoal, 230 kilometres from the main Philippine island of Luzon after a stand-off with the country's navy. It has since driven away Filipino fishermen attempting to fish in the area, sometimes using water cannons. Duterte has said he wants to repair relations with China that were battered during the term of his predecessor Benigno Aquino. Duterte, who assumed the presidency on 30 June, said he would send former president Fidel Ramos to Beijing as an envoy to negotiate on the issue. "This is one of the priority issues that we must take up when we go into direct talks with China," Jose said on Wednesday.” http://www.firstpost.com/world/philippines-warns-fishermen-to-steer-clear-of-disputed-south-china-sea-2932132.html

Indonesia Says No Dispute With Beijing In South China Sea. Saifulbahri Ismail, Channel News Asia. “Indonesia will not change its position on the South China Sea, maintaining that it does not intend to become a claimant state in the disputed territory. At a forum on Tuesday (Aug 2), an Indonesian senior government official denied the country had any dispute with Beijing. Jakarta is also upholding its position as a non-claimant state in the South China Sea. “We’re not claiming any islands so we’re not a claimant state. If we want to become a claimant, then we need to declare which islands we need to claim,” said Indonesia's Deputy Coordinating Minister of Maritime Affairs and Resources Arif Havas Oegroseno. But Indonesian President Joko Widodo is facing a growing call to abandon this neutral stance. He visited the Natuna islands in June to send a strong and clear message to China that the country is serious about protecting its sovereignty. His visit came on the back of clashes between Indonesia's navy and Chinese vessels in the resource-rich Natuna waters, which China maintains are its traditional fishing grounds. Analysts said the continued presence of Chinese fishing vessels in Natuna waters reveals the limits of Jakarta's non-claimant position. Some also suggest that China's presence in those waters is its way of laying claim to the area. Such actions have caused confusion. Professor Hasyim Djalal, an expert in International Maritime Law, said: “Does China really want us to be a claimant, or be a party to the dispute? So far, we do not consider ourselves as a party. China kept telling us ‘we have no problem with you’ … and therefore it is enigmatic to me why these kind of incidents happened.” Indonesia has since sent hundreds of fishing vessels to Natuna to exert its sovereignty. It is believed that these boats will also act as surveillance, helping to alert authorities against any foreign vessels entering Indonesian territory. “The case in Natuna islands since March has made the Indonesian government understand that the question of the South China Sea and its surrounding waters is very important, and Indonesia needs to strengthen its presence in our outer islands in Natuna,” said Phillips Vermonte, executive director of the Centre for Strategic and International Studies. “That’s why we hear that the Indonesian government is trying to increase its presence.” In June, after the latest skirmish with the Chinese vessels, Indonesia set up a special task force to find a peaceful solution to the Natuna waters issue. The team is said to comprise international maritime law experts, headed by Prof Hasyim. However, Prof Hasyim said he has not been given instructions yet on what the team is supposed to do.” http://www.channelnewsasia.com/news/asiapacific/indonesia-says-no-dispute/3007476.html

Despite Pact With U.S., China Continues To Steal Intellectual Property. Bradley Barth, SC Magazine. “A new report released today from the Institute for Critical Infrastructure Technology (ICIT) warns that China's five-year plan for the years 2016-2020 is heavily reliant upon the digital theft of Western nations' intellectual property, despite the 2015 Sino-U.S. pact to eliminate cyberattacks against corporate assets. Entitled China's Espionage Dynasty: Economic Death by a Thousand Cuts, the paper looks to paint a comprehensive portrait of China's cyberspy program through the aggregation of reports from the U.S. government, cybersecurity firms and independent sources. The ICIT will present its findings in Washington D.C. on July 28 before an audience of federal agencies and critical infrastructure private-sector organizations. In September 2015, the U.S. and China publicly agreed not to digitally spy on each other for commercial gain. “While it is possible that China has reduced its targeted attacks against American organizations, it seems more likely that it restructured its cyber operations to assert greater control over its operatives,” the report concludes. In other words, the report states, China may have reined in its most obvious threats, while continuing to infiltrate Western businesses with more advanced, virtually undetectable advanced persistent threat (APT) attacks. “I think that the only part of Chinese hacking that has slowed down are the independent patriot script kiddies,” said author Scott, a senior fellow at the ICIT, in an interview with SCMagazine.com. “I believe that since that ‘agreement,' the Chinese have moved forward with a more targeted attack model and have replaced much of the 'smash and grab' hacking they are known for, with an attempt to be more covert and stealthy.” The paper claims that China's ongoing APTs are designed to help the country achieve the objectives of its latest five-year plan, which places a heavy emphasis on “cutting-edge technology and socioeconomic reform.” It then goes on to profile 15 known state-sponsored Chinese APT groups that allegedly steal intellectual property and spy on various Western organizations in order to stay economically competitive. In another section that could prove controversial, the report's authors issued a warning about Chinese Student and Scholar Associations (CSSAs) – organizations that help Chinese students studying abroad to acclimate to Western university life. The report contended that at least some these organizations are acting on behalf of the Chinese government by asking often unwitting students to report details of their research, which can later serve as actionable intelligence.” http://www.scmagazine.com/icit-report-despite-pact-with-us-china-continues-to-steal-intellectual-property/article/508767/

Why U.S. Tech Companies Can’t Figure Out China. David Pierson, The New York Times. “Uber’s abrupt decision to sell its China operations to chief rival Didi Chuxing on Monday adds to a growing list of U.S. technology firms that have failed to flourish in the world’s second-largest economy. The list, which reads like a corporate all-star team, includes Google, EBay, Amazon.com and Facebook. Each company set out to seize on China’s breathtaking size and potential. Each has been disappointed. What makes China such a challenging market for so many U.S. tech stalwarts? For one, it operates like an alternate Internet universe with established homegrown versions of Google (Baidu), Twitter (Sina Weibo) and YouTube (Youku Tudou). Many Chinese firms can innovate safe in the knowledge they don’t have to face foreign competition thanks to government bans on popular platforms such as Twitter, Facebook and YouTube. For the foreign companies that do make it in, they are often pitted against local companies as the non-Chinese option — no small detail against a backdrop of heightening nationalism. Just last month, Chinese Internet users were posting pictures of their smashed iPhones to protest Washington’s objections to Beijing’s territorial claims in the South China Sea. And that was for Apple, considered the most successful foreign tech brand in China. “There’s a home-field advantage,” said Arthur Dong, a professor at Georgetown’s McDonough School of Business. “Whether it’s state function of government policy or a less formal policy, foreign companies are at a great disadvantage.” That’s in line with Beijing’s desire to cultivate so-called national champions, large domestic companies hoped to one day become China’s most recognizable multinational brands. The goal is to wean the country’s now slowing economy off exports and infrastructure investment and ensure that the most lucrative opportunities go to Chinese firms. “Since President Xi Jinping took office, they have increasingly switched from an economic strategy that emphasizes attracting foreign direct investment to one that favors indigenous innovation and Chinese-owned firms,” said Robert Atkinson, president of the Information Technology and Innovation Foundation. One of the easier places to do this is on the Internet, Atkinson said, because it doesn’t require the cutting-edge technology or knowhow of, say, the aerospace or automotive sectors. And China’s Internet market is so big that it offers an ideal environment for massive Chinese firms such as Tencent, owner of WeChat, to establish itself before going global. At 668 million, the number of Internet users in China outnumbers the U.S. population by 2 to 1 — with plenty more room to grow. That size, experts say, means it’s very difficult for a foreign firm to come in and dominate. Take Groupon, the group buying e-commerce site, which launched in China to great fanfare in 2011 only to discover that it was up against 200 clones of its service. Within months, Groupon closed its offices in China. The case underscores how often U.S. companies are unprepared for the differences in China. EBay, for example, was undone by Alibaba’s Taobao, which offered free listings and appealed to Chinese users with little details like naming moderators after characters from famous kung fu novels. The lesson: A premium service doesn’t always make sense in an emerging market. For Uber, the challenge was keeping up with a bigger and scrappier competitor in Didi. The San Francisco ride-hailing giant was losing $1 billion a year fighting a local rival that served more cities and was agnostic about what set of wheels its drivers chose to use, be it a taxi, a car or a bus. The battle wasn’t going to get easier for Uber, which was the second-most-popular ride-hailing service in China with about 8% market share compared with Didi’s 85%. That’s because in making ride-hailing legal last week, the Chinese government also stipulated an end to subsidies that made rides artificially cheap for the sake of grabbing more customers. Without subsidies, Uber’s chances of unseating Didi were daunting at best. “I don’t know if that’s clear evidence the government has its thumb on the scale again, but you’ve got to think it hurts Uber more than it does Didi,” said Atkinson of the Information Technology and Innovation Foundation. The odds were also stacked against Google after it ran afoul of the Chinese government and pulled out its China operations in 2010. The search giant said it left because of censorship and because it was the target of cyberattacks in the country. But analysts say Google didn’t just lose to Baidu because of government meddling. The U.S. company could never overcome the perception that Baidu was made for a Chinese audience and Google for a foreign one. It took years for Google to realize that many Chinese couldn’t pronounce its name. The company ultimately had to rebrand itself GuGe in China. Even then, many people still chose to call it GoGo. Given the abject failures of most U.S. tech companies in China, Uber’s deal with Didi doesn’t look bad to some observers. Uber, after all, isn’t leaving China, and it still has a sizable stake in the growing ride-hailing space — not that the bar was particularly high. Microsoft, for instance, isn’t giving up on China even though at one point an estimated 95% of all copies of its Microsoft Office in the country were pirated. “They’re the first international Internet company that didn’t lose,” William Bao Bean, a Shanghai-based partner at SOS Ventures and the managing director of Chinaccelerator, said of Uber. “They fought to a draw. And for an American Internet company, that’s as good as a win.” http://www.latimes.com/business/technology/la-fi-china-american-tech-20160801-snap-story.html

South China Sea: It's Not Just About The Rocks, It's Also About The Fish. Wallace Gregson, The National Interest. “The South China Sea remains politically roiled. It has been almost a month since the UN Tribunal’s announcement. Chinese rhetoric attacks both court and verdict, military demonstrations continue and ASEAN’s foreign ministers issued a decidedly equivocal statement following their meeting. Secretary of State John Kerry’s request for a reference to the decision of the UN’s Permanent Court of Arbitration failed. China’s diplomatic efforts to moot the verdict, and by extension moot the UN Convention on the Law of the Sea (UNCLOS), achieved an early success. This dispute now enters a new—and not especially encouraging—phase. China’s nationalist ambitions mandate the recovery of lost territory, specifically including islands, rocks and low-tide elevations deemed—by China—to be Chinese from ancient times. The July 12 judgment by the UN Tribunal was a stunning rebuke to this goal. All nations on the East and South China Sea littoral and the United States are directly affected. But the stakes of the affected nations vary widely, as do capabilities and vulnerabilities. Standing alone there is little hope that the nations of the region can come to an acceptable, viable and enduring solution. The gaps among various national interests, stakes and capabilities must somehow be bridged. The United States seeks to fly, sail and operate our forces wherever international law allows, and peaceful settlement of disputes. Japan is tied to the United States by virtue of our strong alliance, a geography that defines the East China Sea, current issues there, Chinese air and sea territorial intrusions and China’s continued vilification. Directly opposed to this is China’s often stated “indisputable sovereignty over the islands in the South China Sea and the adjacent waters, and . . .  sovereign rights and jurisdiction over the relevant waters as well as the seabed and subsoil thereof.” This is now part of their nationalistic narrative demanding reversal of past violations of Chinese sovereignty. Smaller nations along the South China Sea littoral, members of the Association of Southeast Asian Nations, are vitally concerned with free and secure access to traditional fishing areas in their territorial waters and exclusive economic zones. For most, fish is the major source of protein for growing populations. The smaller nations fear losing their major source of food. Potential oil and gas reserves, although unproven, add even more contention. Asia recalls well that resource competition leads to conflict. An effective international strategy to protect free and secure access for all requires some unifying principle or goal capable of gaining support from the ASEAN nations, others along the East and South China Sea littoral, the United States, Japan, international organizations and public opinion. Prevention of a catastrophic collapse of the East and South China Sea fisheries may be part of such a unifying principle. An effective strategy, carefully and skillfully coordinated and executed, can ensure that the recent court decisions become part of a trend. We must make it part of a “line” and not a discrete event, a “dot,” and thus quickly forgotten. July was a remarkable month. The court’s judgment was not the only disappointment for China. The Republic of Korea (ROK) agreed to the deployment of U.S. Theater High-Altitude Area Defense capability despite vigorous objections from China and North Korea. The ROK took this action in response to the most recent North Korean nuclear and missile tests. The ROK also closed the Kaesong Industrial Complex, one of the few and certainly the most significant instruments of cooperation between north and south. In response China threatened economic retaliation. In Korea, President Park promised government support to any Korean business damaged by Chinese punitive economic actions. On July 12, the UN’s Permanent Court of Arbitration (PCA) announced its unanimous decision in the case filed by The Philippines over two years ago. Included in the decision:

• The Nine Dash Line was rejected as a basis for South China Sea claims

• The court rejected the vast majority of Chinese claims and real-world behavior in the South China Sea

• China was found in violation of the rights of Philippine fishermen

• China was found to have “…caused devastating and long-lasting damage to the marine environment”. This included the mining of coral that experts deem will take centuries to recover, if ever.

• China was cited for providing armed protection for vessels engaged in illegal harvesting of marine life

The UN decision may provide a foundation for settlement of disputes and the development of South and East China Sea resources—fossil fuels and fish—or it may become just a step on the way to continued coercion, escalation and conflict. Most likely is continued struggle, at a higher level. Japan has aptly termed this “Grey Zone Conflict,” a competition involving military and naval forces, civilians, maritime auxiliary forces, law enforcement, coercive diplomacy and information. China already has de facto control over the South China Sea. Proximity brings many advantages. China’s extensive coastline, washed by both the East and the South China Seas, offers numerous ports and airfields supporting direct and immediate access of Chinese military, maritime auxiliary forces and fishing vessels to the seas. China’s massive investment in rockets and missiles distributed throughout their massive geographic sanctuary signals an intent to affect sea control and impose area denial from the land. Their pursuit of maneuvering ballistic missile warheads to attack large moving targets is another indicator of intentions. China’s vast fishing fleets, increasingly under state sponsorship and control, are always close to their support structure. These vast fishing fleets, in cooperation with Chinese Coast Guard and Maritime Auxiliary resources threaten to shoulder Vietnamese, Philippine and other nation’s fishermen out of their fishing areas. China’s South China Sea land building efforts demonstrate China’s ability and will to act as they wish in the South China Sea. Their new port and airfield outposts come at the cost of the destruction of vast coral reefs, the essential nursery of marine life, with as-yet uncalculated cost to sustainability of South China Sea and Pacific marine life. These new features testify to China’s ability to do what they please, their disregard for the welfare of others and their ability to exercise ever greater control. Support for military sea and air forces, maritime auxiliary and fishing fleets has now been extended well into the South China Sea and into the territorial seas of the other littoral states. China’s traditional fishing grounds are severely depleted or even collapsed. Fisheries in the South and East China Seas are under increasing pressure. Fishermen range far from their nearby seas in search of catch. In 2013 and 2014 encounters in Korean waters between Chinese fishermen and Korean Coast Guard forces resulted in the death of a Korean Guardsman and a Chinese fisherman in separate incidents. Without some respect for sustainable fishing practices we will see more deadly competition and ever more pressure on already damaged fish populations Experts predict major fisheries collapse in the area, leading to mass starvation. Professor John McManus of the National Center for Coral Reef Research at the University of Miami calls for an international protected zone similar to Antarctica. In his words, without this or some similar arrangement, “we are headed toward a major, major fisheries collapse . . .  that will lead to mass starvation.” China moved much earlier to counter any adverse PCA verdict by creating and asserting their version of international law through the establishment of Chinese jurisdictions complete with local courts with claims that international law authority over vast areas of the South China Sea. If this gambit succeeds, UNCLOS will no longer have any authority in the South China Sea because it is no longer “sea” as understood in international law—it will be declared Chinese territory with China enforcing their version what they will call international law. China’s Maritime Militia, managed by PLA military commands and funded by local and provincial governments, is successful and growing, as are armed Chinese fishermen. It is the world’s largest such organization. It was employed in the 2009 Impeccable incident, at Scarborough Shoal in 2012, and in support of exploration drilling in Vietnamese waters 2014. It has a publicly declared presence on new artificial features in South China Sea. China seized control of the dominating narrative, at least where it counts—with their own population and those of their South China Sea neighbors. Repeated assertions of undisputed historical sovereignty, officially in communications with the UN and publicly in hyper-nationalistic media, raise the stakes considerably. The United States is consistently portrayed as the threat to regional peace and stability and as a violator of Chinese sovereignty. The United States is charged with “containment.” Challenges to ships and airplanes are becoming more aggressive. Surveillance missions, conducted lawfully from international waters and airspace now endure unprofessional “close aboard” intercepts and acrobatics. PLA Navy and Air Force units in the vicinity are gaining strength over time. The Chinese narrative may now be driving the situation instead of describing it. Today’s situation in the South China Sea is increasingly identified with the Chinese Communist Party’s (CCP) mission to recover Chinese territory lost to the west—and to Japan—during the “Century of Humiliation” from the mid-nineteenth century Opium Wars to the CCP’s victory over the Nationalists in 1949. Victory over Nationalist, Japanese and Western forces coupled with economic growth since the rise of Deng Xiaoping largely form the justification of continued CCP rule. Given today’s economic challenges in China, including increasing violent unrest, the recovery of lost territory assumes even greater importance. In 2009, the Chinese declared: “China has indisputable sovereignty over the islands in the South China Sea and the adjacent waters, and enjoys sovereign rights and jurisdiction over the relevant waters as well as the seabed and subsoil thereof.” Since then, this claim has been repeated often and at all levels. In a November 2015 speech to the Singapore National University Xi Jinping himself stated “The South China Sea islands are China's territory since the ancient times.” It is no surprise that “sovereignty” is a prominent part of China’s response to the tribunal verdict. Applying the term “historical sovereignty” to almost the entire South China Sea embeds this issue in the Chinese Communist Party’s mission to recover territory lost to the West and other powers during the Century of Humiliation. This elevates the South China Sea to a survival-level interest for China’s leadership. The Chinese leadership cannot compromise, let alone back down, without risking severe damage to domestic stability, including nationalist protests and even the survival of the regime itself. The fates of the Qing Dynasty and the Nationalist regime are well remembered, and major leadership changes are due next year. Since May 2015, when we asserted our right to “fly, sail and operate anywhere international law allows,” we performed three very-well-telegraphed “Freedom of Navigation” operations. But “Innocent Passage” rules were reportedly followed, and the message became confused. Operations of U.S. naval and air forces are a critical, necessary response in this situation. They must be continued and even increased, and done without publicity and fanfare. But they are not, by themselves, sufficient. A much more difficult challenge is assuring the access of all claimants to the resources of the sea, both animal and mineral. This will require maritime law enforcement means as well as some agreed-upon system for responsible and sustainable resource management. For our part, our much-discussed “pivot” to Asia is incomplete. Defense and security initiatives are moving forward deliberately but the centerpiece of our engagement with Asia, the Trans-Pacific Partnership (TPP), is stalled. Our quadrennial election rhythms and requirements have overtaken TPP progress. The Republican and Democratic presidential candidates are both now solidly antitrade—ironically an area of agreement in this dismal political process. An end of the year push for ratification in a lame duck Congress will be risky, as the president-elect as well as much of the electorate is sure to be dead set against it, if we take each at his or her word. At best, perhaps we can get a “reset” but that will require—if not major rewrite and time-consuming referral back to the signatories—major “trade adjustments” at home to protect threatened constituents before Senators can support ratification without career change. Far from a tangential issue, TPP purgatory damages our prestige when we need it most. The TPP’s ever-pending status sends a message that our “pivot” is solely about militarizing our Asian policy. The longer the “pivot” is perceived to be only about the military, the longer we will be hampered in our diplomacy, the longer the “containment” myth will be perpetuated and the longer our friends will be left hanging. Given China’s often declared and well signaled intentions, our position in the region must be founded on an undoubted deterrent capability centered on the defense of Japan and other nations in the First Island Chain and bordering the South China Sea. “Given rapid advances in Chinese military capabilities, the consequences of conflict with that nation are almost unthinkable and should be avoided to the greatest extent possible, consistent with U.S. interests. It is therefore critical to achieve the right combination of assurance and dissuasion and to maintain a favorable peace before conflict occurs. At the same time the ability of the United States to work with both allies and partners to achieve those peaceful ends will depend on the perceptions both of allies and partners and of China of the U.S. ability to prevail in the event of conflict.” This is especially important to deterring a seizure, or a blockade, of additional features. Allied and partner nations need to fully contribute to the security of threatened territory. Unilateral U.S. action is not a viable course of action. Japan’s skillful and determined actions in the East China Sea provide a powerful precedent. In addition to military capabilities, and perhaps even more urgent, is the creation of powerful maritime surveillance and maritime law enforcement capabilities. Our allies and partners need to be able to counter illegal activities in their own seas. Coupled with this might be an aggressive diplomatic effort to create a system to manage marine resources—primarily fish, but also seabed minerals. Any purposeful destruction of the common environmental heritage of the global commons must bring a severe political and reputational price. Supporting and advocating a marine conservation and restoration effort should allow us to regain a bit of dominance in the ongoing competition over the narrative. Perhaps non-governmental environmental organizations can find their voice again if a preservation and restoration effort gets started. The creation of a system that establishes and enforces rules of conduct over fish and minerals can be a positive for those industries. This problem is not confined to the South China Sea. China’s raids on the coral resources in Japan’s Ogasawara islands about one thousand kilometers south of Tokyo has generally passed without comment in much of the global media. Ubiquitous surveillance capability including details of fishing boat locations, with real time public results, must be deployed. The Asia Maritime Transparency Initiative at the Center for Strategic and International Studies provides a very compelling early prototype that should be expanded in both detail and coverage. A system of radars, coast watchers, expanded law enforcement, dispute resolution forums and social media exposure of Illegal, Unregulated and Unreported—the so-called IUU—fishing with pictures, identification and geolocation may also be helpful. Port and airfield infrastructure construction along the littoral would aid commerce as well as law enforcement. Funding could be through loans, foreign aid and mutual development projects by the United States, Japan, Australia and India. Conversion of civil aircraft and ships to Coast Guard and Fisheries Enforcement craft would aid surveillance and enforcement efforts. Other actions we might consider include maritime coalition activities without declarations. Quiet but effective cooperation among the United States, Japan, Australia and India would be very helpful. Trade deals do not have to wait for us to sort out the TPP again. Our industries, our states and our municipalities can be far more adept at the retail level than the federal government. Sister city, sister county, and similar arrangements are guaranteed to have more local salience than something designed in Washington to fit all. We already have significant activity underway, especially in agriculture. This new phase in the South and East China Seas calls for a new, broader, stronger, approach. It’s no longer just “fly, sail and operate” with military and naval forces, although that is the foundation. It’s protein and energy for growing populations in all of Asia. The challenge moves to new levels and we must move with it—or preferably ahead of it. Within a framework of undoubted deterrent capability, we must counter “grey zone” challenges with compelling strategies to enhance the common welfare of all affected nations. We must make the “global commons” real. It must be an offer no nation can refuse. Our active leadership must be brought to the building of support across many diverse interests.” http://nationalinterest.org/feature/south-china-sea-its-not-just-about-the-rocks-its-also-about-17206

China's Unique Space Ambitions. Dr. Namrata Goswami, The Diplomat. “China’s space ambitions and goals are unique. Unlike the space rivalry between the United States and the former USSR, which was mostly about “who got where first” (prestige and status) as well as geopolitical rivalry, China’s space ambition is to harness the vast resources available in space to benefit and sustain its economic rise. When Sputnik burst into the skies on October 4, 1957, it took the United States by surprise. For one, the U.S. considered itself to be the leaders in science and technology; for another, the U.S believed that the USSR was a poor, peasant-based economy, incapable of cutting-edge space technology. Sputnik was a shocker as it showcased the Soviet Union’s high-end technology, skyrocketing its international prestige and aggravating U.S. fears that the USSR could now use rockets to transfer inter-continental ballistic missiles (ICBMs) to space, from where the U.S would be an easy target. Almost all space endeavors after the Sputnik moment between the U.S and USSR were informed by prestige-seeking behavior, jealousy, and Cold War rivalry. Unlike Cold War geopolitics and space politics, China’s space program, which achieved technological prowess in the early 21st century, is venturing beyond simply seeking prestige and status. While it is prestigious to show off one’s technological capabilities in space, China’s space program exhibits a long term vision to explore space for harnessing resources from the moon, asteroids, and establishing a permanent presence. There are three areas in particular where China’s space activities are focused at this point in time: Space-Based Solar Power (SBSP), lunar and asteroid mining, and establishing its own space station. SBSP has the potential to harness solar power in space, where the rays of the sun are constant, and beam that energy from satellites by the use of microwave technology to receiving stations on earth. This energy is clean, renewable, and constant. China’s space solar ambitions were outlined in a report by its leading space agency, the China Academy of Space Technology (CAST). The report stated, “In 2010, CAST will finish the concept design; in 2020, we will finish the industrial level testing of in-orbit construction and wireless transmissions. In 2025, we will complete the first 100kW SPS demonstration at LEO; and in 2035, the 100mW SPS will have electric generating capacity. Finally in 2050, the first commercial level SPS system will be in operation at GEO.” An SBSP station would need to clear many technological hurdles: the discrepancy between the station’s weight (10,000 tons) compared to what rockets can lift today (100 tons); the problem of transferring energy from space via microwaves; precise attitude control as well as on-orbit manufacture/assembly/integration (MAI). Significantly, however, China has recognized that investing in SBSP research and development is to think big long term in order to ensure a seamless energy flow for future generations. Thus China is committed to start working on building space solar infrastructure in orbit, especially in low earth orbit (LEO) and geostationary Earth orbit (GEO) 22,000 miles above earth. China’s energy consumption levels grew from 18 quadrillion Btu in 1980 to 37.1 quadrillion Btu in 1996. It is projected to be 98.3 quadrillion Btu by 2020. China is also projected to become the world’s largest economy by 2028, both in Purchasing Power Parity (PPP) and Market Exchange Rate (MER), and its energy demands have to sustain its economy, According to Lt. General Zhang Yulin, deputy chief of the Armament Development Department of the Central Military Commission, China will be developing space technology to exploit the earth-moon space to harness solar energy once its space station is built by 2020. Zhang stated that “The earth-moon space will be strategically important for the great rejuvenation of the Chinese nation.” China’s next big space ambition is to exploit resources like titanium, helium-3, and water from the far side of the moon. Its Chang’e lunar exploration program, launched on Long March rockets, is an ongoing robotic mission to the moon led by the China National Space Administration. The Chang’e 1, launched in 2007, was primarily aimed at building the basic infrastructure required for exploration of the moon; analyzing the distribution of resources like helium-3 on the lunar surface; as well as obtaining three dimensional images of the moon. Chang’e 2, launched in 2010, has now reached the Lagrangian point L2 about 1.5 million km from Earth, “where gravity from the sun and Earth balances the orbital motion of a satellite.” The Chang’e 3, launched in 2013, was China’s first moon soft lander, carrying Yutu, the moon rover. In 2017, China plans to launch the Chang’e 5, which will be a sample return mission aimed at getting 2 kg of lunar soil and rocks back to earth for research. Resource-rich asteroids are the next big step. For example, Asteroid Ryugu, made up of tons of nickel, iron, cobalt, is estimated to be worth $95 billion. And there are millions of asteroids in space waiting to be harnessed, carrying resources like gold and platinum. In July 2015, an asteroid rich in platinum worth $5.4 trillion flew 1.5 million miles from earth. While the Outer Space Treaty of 1967 prohibits any country from appropriating space territory as sovereign territory, the treaty is rather vague with regard to space resource ownership; if it is “first come, first serve” — as was the case with the moon rocks that the U.S. astronauts brought back with them after the moon landing in 1969 — China could fundamentally follow the same principle. The Chinese are understandably intent on racing ahead with both lunar and asteroid exploration programs due to their future energy needs. Ye Peijian from CAST stated that China is investing in research in both Mars and asteroid exploration. Hexi Baoyin, Yang Chen, and Junfeng Li at Tsinghua University in Beijing have published findings on how to nudge an asteroid into Earth’s orbit. The idea is to capture a Near Earth Object (NEO) or asteroid with low energy orbit and place it on earth’s orbit temporarily in order to develop the capacity and technology to extract resources from NEOs. China, prevented from participating in the International Space Station (ISS) by an Act of the U.S. Congress since 2011, has invested heavily in developing its own space station by 2020, named Tiangong (Heavenly Palace). China launched the Tiangong 1 in 2011. The Tiangong 2 is to be launched in September this year and the Tiangong 3 in 2020. The Tiangong orbital space station, consisting of a 20 ton core module as well as two research modules, will support three astronauts for a long term stay. Given the ISS is scheduled to retire by 2025, the Tiangong may be the only human space station we are left with. Here too, China’s space ambition is different from both the United States and Russia. It is focused on creating a long term, permanent presence in space. Despite stated goals by former U.S. President George W. Bush and President Barack Obama to work toward cementing the U.S. presence in space, the NASA budget has been declining over the years, the Apollo space shuttle program has retired, and U.S. space activity appears to lack both inspiration and imagination. Only private parties like Planetary Resources have shown interest in asteroid mining. On the other hand, China is investing heavily on its official space program. China has long term ambitions for deep space exploration as well as a mission to Mars. Most importantly, its space program is not focused primarily on geopolitical rivalry, resulting in short stays as was the case with the U.S and former USSR (now Russia). Rather, China is focused on long term activities to generate resources and establish a permanent space presence. The ambiguity of international space law with regard to ownership of property in space will work to China’s advantage as it will be based on “first come, first serve.” The rules of the game therefore needs to be crafted within the next five years to create a level playing field in space, the common heritage of humankind.” http://thediplomat.com/2016/08/chinas-unique-space-ambitions/

Posted by Alex Gray | August 02, 2016

F.B.I. Employee Pleads Guilty To Acting As An Agent Of China. Benjamin Weiser and Megan Jula, The New York Times. “The federal authorities on Monday secured a guilty plea from a longtime employee of the Federal Bureau of Investigation accused of lying about his relationship with a Chinese technology company and various Chinese associates, including some people with ties to the Chinese government. The government charged that the F.B.I. employee, Kun Shan Chun, had “expressed a willingness to facilitate the passage of sensitive United States government information” to his Chinese associates, including some with connections to the Chinese government. Federal prosecutors in Manhattan said that Mr. Chun had also made a series of false statements to the bureau regarding his contact with these Chinese nationals and a firm based in China, Zhuhai Kolion Technology Company, “as part of a longstanding and concerted effort to conceal these relationships.” Mr. Chun, who is known as Joey and who works in the F.B.I.’s New York office, pleaded guilty on Monday before a federal magistrate judge in Manhattan to one count of acting in the United States as an agent of China. The count carries a maximum term of 10 years. Mr. Chun, 46, had been charged with four counts, according to the complaint, including making false statements in a written questionnaire submitted to the F.B.I. in connection with his security clearance. Mr. Chun’s federal public defender, Jonathan Marvinny, said in a statement after the hearing: “Today Joey Chun accepted responsibility for some mistakes in judgment that he deeply regrets. The truth is that Mr. Chun loves the United States and never intended to cause it any harm. He hopes to put this matter behind him and move forward with his life.” According to the complaint, Mr. Chun was born in Guangdong, China, around 1969, entered the United States around 1980 and became a naturalized American citizen in 1985. Mr. Chun had worked at the F.B.I.’s New York field office as an electronics technician assigned to the bureau’s technical branch, the complaint said. He has had a “top secret” security clearance since 1998. The F.B.I. and the United States attorney’s office in Manhattan each had no immediate comment on the case. The complaint was signed by F.B.I. Special Agent Jason Levitt, who wrote that the focus of his counterintelligence work had been to investigate the foreign intelligence activities of the People’s Republic of China. The complaint was approved by two federal prosecutors in Manhattan and two trial lawyers from the Justice Department’s Counterintelligence and Export Control Section in Washington.” http://www.nytimes.com/2016/08/02/nyregion/fbi-employee-pleads-guilty-to-acting-as-an-agent-of-china.html?_r=0

Japan Defense Report Stresses Growing Threat From China. Seth Robson, Stars and Stripes. “China’s military build-up in an “increasingly severe” Far East security environment is a major focus of Japan’s annual defense report. The 484-page white paper, approved Tuesday by the nation’s cabinet, devotes more words to China than other regional powers like North Korea and Russia. “There has … been a noticeable trend among neighboring countries to modernize and reinforce their military capabilities and to intensify their military activities,” says the report, which details Chinese activities in the South China Sea where it is involved in territorial disputes with a number of Southeast Asian nations. Last month, an international court ruled against China’s claims to artificial islands on which it is building military facilities near the Philippines in the sea where $5 trillion in global trade transits annually. China’s state-aligned Global Times newspaper described the ruling as a “piece of trash.” Chinese incursions into waters around the Japanese-administered Senkaku Islands in the East China Sea, including one in June by a Chinese naval ship, are also detailed in the report. “It was the first case by Chinese Naval combatant ship to enter that contiguous zone,” the white paper says. Also in June, and for the first time in 12 years, a Chinese intelligence ship sailed in Japanese waters near Kuchinoerabu Island, according to the report. Japan’s Air Self-Defense Force scrambled jets 873 times in fiscal year 2015, including 571 sorties against Chinese aircraft, up by 107 against the Chinese the previous year, the report says. The paper also notes that China’s defense budget has recorded double-digit annual growth consistently since 1989. “China is currently carrying out reforms of the [People’s Liberation Army] which some see as being the largest in the country’s history,” the report says. “Recently the reforms have taken place at a rapid pace.” A section on North Korea says the regime, which conducted its fourth nuclear test in January and sent a satellite into orbit the following month, might be able to produce a nuclear weapon small enough to launch on a long-range missile. “North Korea’s nuclear weapons development is a grave and imminent threat to the area including our country and international security,” the report says. “It simply cannot be accepted as it seriously affects peace and stability.” The paper also notes President Obama’s visit to Hiroshima in May, describing it as an “extremely important historical opportunity, which will boost international momentum again for a world without nuclear weapons.” http://www.stripes.com/news/pacific/japan-defense-report-stresses-growing-threat-from-china-1.421981

China Developing Naval Aviation Wing To Operate From Aircraft Carriers. K.J.M. Varma, Livemint. “China, which is developing two more aircraft carriers, is building up a naval-aviation division to safeguard the country’s maritime interests amid escalating tensions over the disputed South China Sea. China commissioned its first aircraft carrier Liaoning in September 2012 and launched a specially designed J-15 fighter jets to operate from its deck. Although it’s only about three years since the unit came into being, the carrier-borne force has already trained several groups of J-15 pilots, senior captain Dai Mingmeng, commander of the 2.3-million strong People’s Liberation Army (PLA) Navy’s carrier-based aviation force was quoted as saying by state-run ‘China Daily’. “It will not take long for us to attain full operational capability on the aircraft carrier,” he said. China is developing two more aircraft carriers. Chinese media reported for the first time the crash of one of J-15 jets during the landing exercises on the ground in April this year in which its pilot was killed. One of the J-15s crashed after its computers reported a malfunction in the flight-control system. An investigation concluded that the pilot had tried unsuccessfully to save the plane and he had no option but to eject from the cockpit before the fighter aircraft crashed, the report said. Because the plane was at a relatively low altitude, there wasn’t time for the pilot’s parachute to be fully deployed before Zhang hit the ground. He was rushed to a nearby hospital but died as a result of serious internal injuries, it said. The Chinese military suspended carrier-based jet fighter pilot training for nearly two months after a fatal crash, the Hong Kong-based ‘South China Morning Post’ reported. J-15s are the core jets for China’s aircraft carrier, the Liaoning, and other more advanced domestic carriers which are reportedly under construction. The development of navy’s aviation division came as Beijing strongly defended its claims over the disputed South China Sea (SCS) in the aftermath of international tribunal’s verdict striking down China’s claims over the area. Last month, a UN-backed international tribunal struck down China’s claims over the South China Sea, saying Beijing has no “historic rights” in the disputed area. The tribunal struck a blow to China’s claims over almost all of the SCS, saying that Beijing’s much touted nine-dash line had no legal basis. China has rejected as “null and void” the verdict and said it “neither accepts nor recognizes” the ruling of the tribunal. China claims sovereignty over almost all of SCS based on historic rights, including reefs and rocks in the sea as well as hundreds of miles from Chinese shores.” http://www.livemint.com/Politics/nMFZpE7frII8Lc7OGfnLOP/China-developing-naval-aviation-wing-to-operate-from-aircraf.html

South China Sea: Beijing Vows To Prosecute 'Trespassers'. James Griffiths, CNN. “China has sent a clear warning to foreigners who enter contested areas of the South China Sea -- stay away or you'll be prosecuted. The warning came in a detailed explanation of last month's Hague ruling, which found that China's territorial claims in region have "no legal basis" under the U.N. Convention on the Law of the Sea. China claims almost all of the South China Sea, including islands more than 800 miles (1,200 kilometers) from the Chinese mainland, despite objections from neighbors including the Philippines, Malaysia, Brunei and Vietnam. On Tuesday, the Chinese Supreme People's Court issued a regulation on judicial interpretation saying there was a "clear legal basis for China to safeguard maritime order, marine safety and interests, and to exercise integrated management over the country's jurisdictional seas." Michael C. Davis, a law professor at Hong Kong University, told CNN the supreme court's statement was "worrisome." "This is kind of an ominous suggestion that they will be prosecuting people who enter the waters that China claims," he said. The Hague ruling found that China had no historic title to the waters and had breached the sovereign rights of the Philippines, which brought the case. The court also ruled that many purported islands controlled by China are not in fact, islands, but instead reefs or rocks, which do not generate territorial rights. China's top court did not directly reference the Hague ruling, but said that "judicial power is an important component of national sovereignty." China fiercely guards what it regards as its territorial waters, attacking and arresting foreign fishermen who work near islands controlled by Beijing. The supreme court said Chinese citizens or foreigners who engage in illegal hunting or fishing in the waters will be criminally prosecuted. It classified several situations as "illegally entering Chinese waters," including remaining or reentering waters "after being warned and driven away," that could result up to a year in prison. In May, Vietnamese fishermen told CNN how Chinese-flagged vessels raided their boats and stole equipment in the waters near the Paracel Islands. Davis warned that the direction could mean Filipino fishermen operating in waters the UN tribunal ruled belong to the Philippines could be apprehended by Chinese vessels and be "prosecuted in direct contradiction of the (Hague) ruling." The supreme court also said that Chinese fishermen who violate environmental protection laws in the South China Sea could be prosecuted. Davis said that this could be "a signal they will require their fishermen to adhere to environmental standards, which they haven't in the past." The Hague tribunal found that Chinese fishermen and reclamation projects had caused "irreparable harm" to the region's marine environment. In recent months, Beijing has reacted angrily to U.S. and Australian freedom of navigation operations in the region, scrambling fighter jets and boats and denouncing the nations' navies as "threatening Chinese sovereignty." Last week, state-run Chinese newspaper Global Times accused Australia of making itself "a pioneer of hurting China's interest with a fiercer attitude than countries directly involved in the South China Sea dispute." Canberra was one of the first governments to voice support for the Hague ruling and encourage others to abide by it. However, while the ruling is considered legally binding, there is no mechanism to enforce it.” http://www.cnn.com/2016/08/02/asia/south-china-sea-supreme-court/

Australia Set To Gather Intelligence On Military Drills Between China And Russia. David Wroe, The Sydney Morning Herald. “Australia is likely to have military assets in the South China Sea to gather vital intelligence on a joint drill between Chinese and Russian forces next month, Fairfax Media understands. The exercise between Chinese and Russian ships and planes is intended to send a signal of defiance to the West but defence sources and experts say it will also provide a gold mine of intelligence on how the major powers' militaries work together. A Defence source told Fairfax Media that assets were expected to be used to collect information, though the source declined to say what kind. "It would be foolish for Defence to miss an opportunity like this," the source said. The deployment of a Collins Class submarine would be one option. The simplest way to observe the drills would be with the RAAF's P-3 Orion surveillance planes, which routinely fly over the South China Sea as part of Operation Gateway. Surface warships could also observe from over the horizon though this is less likely because they are committed elsewhere. This overt observation is more likely to be undertaken by the US Navy, Fairfax Media has been told. The Australian Defence Force has in the past adjusted the timing of Operation Gateway patrols to match events of particular interest. Defence has previously said it varies the path of such patrols depending on what is worth observing, including whether to devote more effort for example to the South China Sea rather than the Indian Ocean. Peter Jennings, executive director of the Australian Strategic Policy Institute, said it would be "routine business for Australia to want to observe such an exercise with its P-3 maritime surveillance aircraft". "I imagine there would be a great deal of interest from us and the Americans in how effectively the Chinese and Russians are able to operate together," he said. Mr Jennings, a former senior Defence Department official, said the joint exercise was "more about political show than genuine military co-operation". "Increasingly [Russian President Vladimir] Putin and [Chinese President] Xi [Jinping] identify each other as like-minded countries that are prepared to push against the established international system," he said. "It's a marriage of strategic convenience which is designed to create maximum discomfort for the US and its allies." Retired Royal Australian Navy rear admiral James Goldrick said it would "certainly be worthwhile" to observe the drills. Planes or ships would not need to get too close, but rather could observe from over the horizon and pick up signals and radar signatures. "It wouldn't be a matter of having to fly 500 metres overhead," he said. Mr Goldrick said even if they weren't natural allies in the long term, China's and Russia's interests currently were aligned around opposing "the world order that they see effectively as having been set up by the US". Mr Putin had calculated that China rather than the US was a preferable relationship to "restore Russia to where it thinks it ought to be", he said.” http://www.smh.com.au/federal-politics/political-news/australia-set-to-gather-intelligence-on-military-drills-between-china-and-russia-20160801-gqiecw.html

Former Goldman Star O'Neill May Quit UK Government Over China. William James, Reuters. “High-profile British Treasury Minister Jim O'Neill, a former Goldman Sachs chief economist, could quit his post over Prime Minister Theresa May's new approach to Chinese investment, the Financial Times reported, citing a friend of O'Neill. May intervened personally last week to delay the final decision on a partly-Chinese funded nuclear power project, a source said on Saturday, while a former colleague said May had previously expressed concern about the national security implications of the planned Chinese investment. O'Neill is a member of the unelected upper house of parliament and works in the finance ministry as Commercial Secretary, with responsibilities including infrastructure policy and promoting Britain as a source of foreign direct investment. Widely respected and influential in the global investment community, his appointment in 2015 was considered a major coup for the British government. He kept his role despite sweeping changes to the government in July following May's promotion to leader after David Cameron's resigned. "He’s considering why he has been asked to stay," said one friend according to the Financial Times. The friend said O'Neill was baffled about the government’s change of tack on China, and will quit unless May can explain why she wants him to stay, according to the FT report. The Treasury declined to comment on the report. In her previous role as interior minister, May had expressed concerns about the government's approach to Chinese investment, citing national security concerns, according to Britain's former business secretary Vince Cable. O'Neill had been heavily involved in former finance minister George Osborne's push for a "Golden Era" of relations between the two countries, largely based on courting Chinese investment in British infrastructure. Osborne left the government earlier this month along with Cameron in the wake of the country's vote to leave the European Union. He was replaced by former foreign minister Philip Hammond. China General Nuclear Power Corp (CGN) was set to invest around 6 billion pounds ($7.93 billion) for a 33 percent stake in the Hinkley Point nuclear project, paving the way for it to lead another project in Britain that would use Chinese nuclear technology. A decision is now due by the autumn, possibly as early as September.” http://www.reuters.com/article/us-britain-nuclear-oneill-idUSKCN10B0Z6

Laos: Struggling To Get Out Of China's Shadow. Helen Clark, Lowy Interpreter. “In the lead up to the event held in the Laos capital of Vientiane, many wondered if the South China Sea dispute would wreak the same havoc as it did at the Cambodia meeting four years ago, when a failure to agree meant hat, for the first time in 45 years, no joint communique was issued. This time around, a joint communique was agreed upon. The recent UN arbitration on the South China Sea case brought by the Philippines against China was not mentioned, as Cambodia opposedthe proposed wording. The statement did, however, cite the United Nations Convention on the Law of the Sea, and as such was a partial win for the Philippines and Vietnam. However Laos, rarely in the international spotlight, has interests that extend well beyond playing part time arbiter in a dispute it is not directly involved in. As Prashanth Parameswaran wrote on The Diplomat last week: The priorities that Lao officials outlined this year also reflect the country’s sense of what it would like to promote in the regional agenda... the focus on narrowing the development gap and a work plan for the Initiative for ASEAN Integration...  directly benefits Vientiane. On the rare occasions the international community considers Laos politics, the focus is generally on the pro-China and pro-US factionalism. This basic, single point of analysis has left some time long observers despairing. University of Queensland Emeritus Professor Martin Stuart-Fox has long decriedthe simplistic idea of US-China competition within Lao’s 41-year ruling Communist Party, noting that Laos has been balancing its trilateral big power relations (Thailand, China and Vietnam) for centuries, and often done quite well out of it. If anything, there is more a of a pro-Vietnam versus pro-China split in the Party. (The same speculation over factionalism afflict lower level analysis of Vietnam, though this is arguably for more concrete reasons given Vietnam has grown closer to the US since China's aggression in the South China Sea.) For the record, at a party congress earlier this year. Foreign Minister Thongloun Sisoulith was elected Laos Prime Minister. As Foreign Minister he was seen as something of a multilateralist, improving ties with neighbours Vietnam and China as well as the US, and the rest of Southeast Asia. As noted on the CogitAsia blog: 'While many commentators look for signs of pro-Vietnam or anti-China leanings in the new government, Thongloun has been regarded as a relatively neutral leader in the Politburo'. However the Party has more on its mind than geopolitical allegiances. One of the smallest and poorest of ASEAN members, the country's international 'coming out' began with the hosting of the Southeast Asian Games in 2009, followed by the chairmanship of the ASEAN-Europe Meeting (ASEM) in 2012. Laos would clearly like a bigger international profile, keen to be known as the nation that is 'land-linked' as opposed to 'land-locked'. Sticking points for the country are its hydro dams like the Xayaburi — Laos has been arguing with Vietnam for years over what that would do to Vietnam’s river systems — and human rights. The disappearance of NGO worker Sombath Somphonehas yet to be explained, and freedom of speech has not improved in recent years.  Laos wants to make good, or better, on its hopes of being 'land linked' and serve as a useful conduit and trade route between larger countries. More generally, it wants to increase development, and views ASEAN integration and groups like the ASEAN Economic Community (EAC) as useful, especially as most of its trade is within ASEAN. There have been meetings about this, of course, but issues between China and its neighbours tend to suck up all the airtime, leaving little time to consider how  smaller nations can grow their economies within a regional framework, or how a one party state much smaller than its communist neighbours manages economic transition.  China has been extremely useful as Laos pursued development but now Laos has an appetite for some cross-regional discussion of how to further that development, it seems China is getting in the way.” http://www.lowyinterpreter.org/post/2016/08/01/Laos-Struggling-to-get-out-of-Chinas-shadow.aspx#.V58rN5ycVVE.twitter

The U.S.-China Cyber Agreement: A Good First Step. Scott Harold, The Cipher Brief. “After years of the U.S. suffering losses valued in the billions of dollars due to economically-motivated cyber espionage from China, there are some signs that China has begun to reduce its intrusions into U.S. private sector firms’ computer networks. What led to this unexpected change in Chinese behavior? Is it because of the high-profile agreement signed by President Barack Obama and Chinese President Xi Jinping last September? How sustainable is that agreement? And what broader implications does it have for the overall U.S.-China relationship? The answers to these questions carry important consequences for U.S. national interests. It remains somewhat unclear whether China has indeed reduced its intrusions into U.S. private sector computer systems, as some U.S. cybersecurity firms that previously tracked Chinese cyber threat actors have claimed. The nature of hacking is such that it is virtually impossible to ever know for certain exactly what level of intrusion sets are occurring. If China did reduce its economically-motivated cyber espionage, there are a number of possible explanations for why it did so. Some observers have argued that China actually started cutting back several months before last fall’s summit agreement, perhaps taking steps to exert greater control over the community of military hackers. Other observers suspect that Chinese hackers may have simply redirected their efforts to other, more valuable or more vulnerable targets in other countries. Others believe China was spurred to curtail its theft of intellectual property by the U.S. indictments of five Chinese military officers in 2014. Such observers also point to the hurried, unscheduled visit to Washington in early September last year of Meng Jianzhu, a high-ranking Chinese Communist Party official in charge of political and legal affairs, just after the U.S. announcement that it was planning to push ahead with sanctions against Chinese actors for cyberespionage. In this view, Meng’s last minute visit suggests that the Chinese leadership agreed to reduce its hacking of U.S. firms out of a fear that Xi’s visit might be preceded by additional U.S. indictments of Chinese hackers. Finally, some analysts worry that Chinese hackers, who were notoriously sloppy in their operational security, may simply have improved their practices and are now better able to mask their behavior, meaning that hacking hasn’t actually gone down, it simply isn’t being detected as frequently as in the past. None of these explanations suggest that China changed its behavior because it concluded that private sector firms are illegitimate targets. China’s assertions about cyberspace norms focus on the right of states to censor access to online information. Moreover, China’s economy, the commanding heights of which are controlled by the state, differs dramatically from a market economy, where the private sector and the government are cleanly separated, making the U.S. argument that private sector actors are illegitimate targets an alien one to Chinese leaders. Many observers suspect that China’s apparent compliance with the cyber agreement represents little more than a shift in tactics that is probably temporary. Such analysts note that China did not lay down a costly marker, since it did not admit to having previously engaged in cyber espionage. Because it seems unlikely that China has suddenly changed its view of economically motivated cyber espionage wholesale, it is important for U.S. policymakers to keep focused on this issue.  The U.S. should make clear that indictments may once again be sought if Chinese hackers resume cyber espionage against U.S. firms. At the same time, the United States should seek to expand the value of the bilateral agreement by supporting the inclusion of U.S. allies and partners so as to guard against possible backsliding or simple retargeting by China. The 2015 cyber agreement should be seen as a potentially important first step, but by no means a final step, toward addressing the broader problem of Chinese espionage. At its heart, reducing cyber espionage against U.S. companies merely addresses a question of means, not ends. Even if China completely eliminates cyber espionage against U.S. companies, it will still continue targeting traditional U.S. national security actors through various means, including cyber espionage. Similarly, Chinese efforts to steal valuable intellectual property and business proprietary information from U.S. private sector enterprises through human agents can also be expected to continue. Additional U.S. attention and resources will be needed to address these challenges. A genuine reduction in Chinese economically-motivated cyber espionage could go some way toward easing tensions in the broader bilateral U.S.-China relationship. But absent changes in Chinese behavior toward U.S. friends and allies, a better attitude toward international law, and improvements in domestic human rights, the ultimate impact of a reduction in economic cyber espionage may simply not go far enough to restore the bilateral relationship to a healthy state.” https://www.thecipherbrief.com/article/tech/us-china-cyber-agreement-possibly-good-first-step-1092

Giving China A Ladder To Climb Down. William Choong, The Strategist. “The 12 July judgment by the Hague-based Arbitral Tribunal on the South China Sea constituted a near-total defeat for China. While it was widely expected that the Philippines would win, it wasn’t expected that China would lose by such a wide margin. Understandably, China has taken a hawkish and resolute stance against the Tribunal. Eager to show China’s resolve in defending its bastions in the South China Sea, China landed two civilian airliners on Mischief Reef on 13 July. It conducted two military exercises near Hainan Island – one just before the 12 July verdict and another the week after – closing off maritime areas and warning mariners that that area was prohibited. There’s now a distinct possibility that tensions will escalate in the South China Sea. Given that the Arbitral Tribunal had ruled that all the features in the Spratlys are either rocks or low-tide elevations, the U.S. now has the legal cover to conduct FONOPs closer to, or even inside, the 12nm zones around the maritime features. In June, French defence minister Jean-Yves le Drian said that France should urge European Union countries to conduct ‘regular and visible’ patrols in the South China Sea. Chinese anger at such overt challenges could well lead to a conflict not from deliberation, but from accidental escalation. Regardless of the verdict, China has a solid physical position in the South China Sea. In February, it was found that China had installed high-frequency radar on Cuarteron Reef, and possibly radars on Gaven, Hughes and Johnson South reefs. Such facilities would enable it to establish control over large swathes of the South China Sea within the nine-dash line. Three 3,000m airstrips in the Spratlys serve to defend China’s advanced submarines based farther north at Hainan Island. Deployed in the South China Sea, Jin-class submarines with JL-2 nuclear missiles can break into the Pacific Ocean to get within striking range of the continental United States. Given such a strategic position – compounded by Xi Jinping’s heady mix of nationalism and rejuvenation from a ‘century of humiliation’ – it would be irrational for Beijing to give up its assets in the Spratlys. The Arbitral Tribunal wasn’t able to rule on questions of sovereignty, and while it did rule that China’s historic rights claim to the nine-dash line was incompatible with UNCLOS, it didn’t conclude that the nine-dash line per se was invalid or illegal. That gives China some wiggle room to continue to press its claim. In the clearest, quasi-authoritative response to the judgment, Wang Junmin, deputy dean of the CPS Postgraduate Institute, notes that the Philippines had used the Chinese expression ‘historic rights’ to argue China hadn’t claimed ‘historic title’ to the South China Sea (the former may include sovereignty, but may equally include more limited rights, such as fishing or rights of access that fall ‘well short’ of claims of sovereignty; the latter is used specifically to refer to historic sovereignty). Writing in the PLA Daily on 18 July, Mr. Wang wrote that Chinese references to ‘historic rights’ doesn’t imply that China doesn’t claim ‘historic title.’ He added that China has ‘historic title’ and ‘historic fishing rights’ in different areas within the nine-dash line. By claiming that China has ‘historic title’ to internal waters in ‘archipelagos or island groups’ that are at a ‘relatively close distance’ and that can be viewed ‘integrated whole,’ China could well draw straight baselines around the features it occupies in the Spratlys and claim extended maritime zones outward. Such a hardened position goes directly against the Tribunal’s conclusions and would likely be challenged by the U.S. It’s time, however, for China and the U.S. to pull back from such a brink. The signs thus far are encouraging. The Chinese government didn’t yield to public calls for a boycott of Philippine goods (Xinhua called this ‘irrational patriotism’), and China has stressed that it would intensify talks for a binding Code of Conduct (COC) for the South China Sea. The U.S. has urged the resumption of bilateral talks between China and other claimants, and encouraged them not to act provocatively. Likewise, the Philippines has responded sensibly, with President Rodrigo Duterte saying he wouldn’t adopt a ‘flaunt or taunt’ position against Beijing. In the medium term, the best approach isn’t to pummel China with the 501-page judgment, but rather, to ensure that it has enough face to pursue tangible and functional outcomes. Those could include accelerating talks for the COC, an expansion of the Code of Unplanned Encounters at Sea (CUES) to include coast guard ships, and getting claimants – like the Philippines – to postpone negotiate directly with the Chinese. Speaking to his American counterpart recently, Admiral Wu Shengli, the chief of the PLA Navy stressed that China would never sacrifice its sovereignty and interests in South China Sea, would never stop construction there and never be caught off guard. Yet he signalled that both sides could cooperate by following CUES and Rules of Behaviour for the Safety of Air and Maritime Encounters. Working on tangible and functional outcomes – and not rubbing China’s nose in the ruling – might well be the best way forward.” http://www.aspistrategist.org.au/giving-china-ladder-climb/

New Report Details Why A War Between China And America Would Be Catastrophic. Dave Majumdar, The National Interest. “A war between the United States and China would cause severe losses on both sides, but – today at least – Beijing would bear the brunt of the casualties. However, as China’s anti-access/area denial (A2/AD) capabilities continue to improve – the balance of losses would shift more towards Beijing’s favor by 2025. Nonetheless, China would still suffer more losses than Washington even at that stage – according to a new report from the RAND Corporation. Victory for either side might prove to be elusive as the conflict could degenerate into inconclusive bloodletting. “As its military advantage declines, the United States will be less confident that a war with China will conform to its plans,” reads the new report by David C. Gompert, Astrid Cevallos and Cristina L. Garafola. “China’s improved military capabilities, particularly for anti-access and area denial (A2AD), mean that the United States cannot count on gaining operational control, destroying China’s defenses, and achieving decisive victory if a war occurred.” A war with China – now and in the future – would likely be fought at sea and in the air, but cyber and space capabilities would play a significant role, according to the report. But the RAND researchers expect that should a war breakout, it would remain a conventional fight. “Each side’s increasingly far-flung disposition of forces and growing ability to track and attack opposing forces could turn much of the Western Pacific into a ‘war zone,’ with grave economic consequences,” reads the report. “It is unlikely that nuclear weapons would be used: Even in an intensely violent conventional conflict, neither side would regard its losses as so serious, its prospects so dire, or the stakes so vital that it would run the risk of devastating nuclear retaliation by using nuclear weapons first.” Moreover, while the RAND study postulates that the United States would strike heavily at the Chinese mainland, the researchers don’t believe that Beijing would strike at the U.S. homeland except via cyber attacks. “We also assume that China would not attack the U.S. homeland, except via cyberspace, given its minimal capability to do so with conventional weapons,” the report states. “In contrast, U.S. nonnuclear attacks against military targets in China could be extensive.” A Sino-American war could develop in a number of ways – including short bloody war or a long and devastating war. Moreover, modern technologies incentivize either side to launch a preemptive attack first. “Sensors, weapon guidance, digital networking, and other information technologies used to target opposing forces have advanced to the point where both U.S. and Chinese military forces seriously threaten each other,” the report reads. “This creates the means as well as the incentive to strike enemy forces before they strike one’s own. In turn, this creates a bias toward sharp, reciprocal strikes from the outset of a war, yet with neither side able to gain control and both having ample capacity to keep fighting, even as military losses and economic costs mount.” In the case of a brief war fought today, American losses would be significant, but Chinese losses might be catastrophic. “If either U.S. or Chinese political leaders authorize their military commanders to carry out plans for sharp strikes on enemy forces, a severely violent war would erupt,” the report reads. “As of 2015, U.S. losses of surface naval and air forces, including disabled aircraft carriers and regional air bases, could be significant, but Chinese losses, including to homeland-based A2AD systems, would be much greater. Within days, it would be apparent to both sides that the early gap in losses favoring the United States would widen if fighting continued.” By 2025, however, China’s military capabilities are likely to have expanded to a point where it will not sustain as many losses. “By 2025, though, U.S. losses would increase because of enhanced Chinese A2AD. This, in turn, could limit Chinese losses, though these would still be greater than U.S. ones,” the report reads. “It could be unclear then whether continued fighting would result in victory for either side.” A longer war would be far more devastating – and could leave both military forces in shambles. “As of 2015, the longer a severe war dragged on, the worse the results and prospects would be for China,” the report states. “By 2025, however, inconclusive results in early fighting could motivate both sides to fight on despite heavy losses incurred and still expected. Although prospects for U.S. military victory then would be worse than they are today, this would not necessarily imply Chinese victory.” In any of the cases above – a war would cause serious losses and enormous economic damage. Indeed, it might deplete the military capabilities of both sides at an unprecedented rate – leaving both vulnerable to other threats. “The unprecedented ability of U.S. and Chinese forces to target and destroy each other – conventional counterforce – could greatly deplete military capabilities in a matter of months,” the report reads. “After that, the sides could replenish and improve their forces in an industrial-technological-demographic mobilization contest, the outcome of which depends on too many factors to speculate, except to say that costs would continue to climb.” The RAND study also makes a few recommendations to mitigate the potential for war.

•U.S. and Chinese political leaders alike should have military options other than immediate strikes to destroy opposing forces.

•U.S. leaders should have the means to confer with Chinese leaders and contain a conflict before it gets out of hand.

•The United States should guard against automaticity in implementing immediate attacks on Chinese A2AD and have plans and means to prevent hostilities from becoming severe. Establishing "fail safe" arrangements will guarantee definitive, informed political approval for military operations.

•The United States should reduce the effect of Chinese A2AD by investing in more-survivable force platforms (e.g., submarines) and in counter-A2AD (e.g., theater missiles).

•The United States should conduct contingency planning with key allies, especially Japan.

•The United States should ensure that the Chinese are specifically aware of the potential for catastrophic results even if a war is not lost militarily.

•The United States should improve its ability to sustain intense military operations.

•U.S. leaders should develop options to deny China access to war-critical commodities and technologies in the event of war.

•The United States should undertake measures to mitigate the interruption of critical products from China.

•Additionally, the U.S. Army should invest in land-based A2AD capabilities, encourage and enable East Asian partners to mount strong defense, improve interoperability with partners (especially Japan), and contribute to the expansion and deepening of Sino-U.S. military-to-military understanding and cooperation to reduce dangers of misperception and miscalculation. Ultimately, war is not in the interests of either the United States or the People’s Republic of China. Unfortunately, increases in ones’ own defensive capabilities often causes insecurity in another – part of the so-called Thucydides Trap. But as renowned Harvard scholar Graham Allison wrote – the Thucydides Trap is not unavoidable. “A risk associated with Thucydides’ Trap is that business as usual – not just an unexpected, extraordinary event – can trigger large-scale conflict. When a rising power is threatening to displace a ruling power, standard crises that would otherwise be contained, like the assassination of an archduke in 1914, can initiate a cascade of reactions that, in turn, produce outcomes none of the parties would otherwise have chosen,” Allison wrote for the Atlantic. “War, however, is not inevitable.” http://nationalinterest.org/blog/the-buzz/new-report-details-why-war-between-china-america-would-be-17210

Posted by Alex Gray | August 01, 2016

'Give Them A Bloody Nose': Xi Pressed For Stronger South China Sea Response. Ben Blanchard and Benjamin Kang Lim, Reuters. “China's leadership is resisting pressure from elements within the military for a more forceful response to an international court ruling against Beijing's claims in the South China Sea, sources said, wary of provoking a clash with the United States. China refused to participate in the case overseen by the Permanent Court of Arbitration in The Hague. It denounced the emphatic July 12 ruling in favor of the Philippines as a farce that had no legal basis and part of an anti-China plot cooked up in Washington. The ruling has been followed in China by a wave of nationalist sentiment, scattered protests and strongly worded editorials in state media. So far, Beijing has not shown any sign of wanting to take stronger action. Instead, it has called for a peaceful resolution through talks at the same time as promising to defend Chinese territory. But some elements within China's increasingly confident military are pushing for a stronger - potentially armed - response aimed at the United States and its regional allies, according to interviews with four sources with close military and leadership ties. "The People's Liberation Army is ready," one source with ties to the military told Reuters. "We should go in and give them a bloody nose like Deng Xiaoping did to Vietnam in 1979," the source said, referring to China's brief invasion of Vietnam to punish Hanoi for forcing Beijing's ally the Khmer Rouge from power in Cambodia. The sources requested anonymity because they were not authorized to speak to the media. President Xi Jinping has assiduously courted and thoroughly cemented his leadership over the PLA and faces no serious challenges to his command. While he is overseeing sweeping military reforms to improve the PLA's ability to win wars, he has said China needs a stable external environment as it deals with its own development issues, including a slowing economy. And few people expect any significant move ahead of Xi's hosting of a G20 summit in September. But the hardened response to The Hague ruling from some elements of the military increases the risk that any provocative or inadvertent incidents in the South China Sea could escalate into a more serious clash. Another source with ties to the leadership described the mood in the PLA as hawkish. "The United States will do what it has to do. We will do what we have to do," the source said. "The entire military side has been hardened. It was a huge loss of face," he said, declining further comment. Chinese Defence Ministry spokesman Yang Yujun, asked whether the PLA was pushing for a stronger response, repeated that the armed forces would resolutely defend China's territory and maritime rights, and peace and stability, while dealing with any threats or challenges. Retired military officers and army-linked academics have pushed home a strongly martial message. "The Chinese military will step up and fight hard and China will never submit to any country on matters of sovereignty," Liang Fang, a professor at the military-run National Defence University, wrote on his Weibo microblog about the ruling. It is not clear exactly what steps military hardliners are considering. Much attention has been focused around the potential establishment of an Air Defence Identification Zone (ADIZ) for the South China Sea, which would require international aircraft to identify themselves to Chinese authorities. Other options floated by those linked to the PLA include putting missiles on bombers patrolling the South China Sea capable of hitting targets in the Philippines or Vietnam. Yue Gang, a retired colonel, said China's announcement promising regular air patrols over the region showed it was seeking to deny the U.S. air superiority afforded by aircraft carriers. China should be confident enough to provoke an incident and drive the U.S. out, he added. "China is not intimidated by U.S. carriers and is brave enough to touch off an inadvertent confrontation," Yue wrote on his Weibo account. China's military build-up in the region looks set to quicken regardless of any action. "We must make preparations for a long-term fight and take this as a turning point in our South China Sea military strategy," Li Jinming of the South China Sea Institute at China's Xiamen University wrote in the Chinese academic journal Southeast Asian Studies. Despite the saber rattling, there have been no firm military moves that could cause an escalation of tensions. Diplomats and sources said the Chinese leadership was well aware of the dangers of a clash. "They're on the back foot. They're very worried by the international reaction," said one senior Beijing-based diplomat, citing conversations with Chinese officials. "They are genuine about wanting to get talks back on track. The leadership will have to think long and hard about where to go next." Within China's armed forces there is a recognition that China would come off worst in a face-off with the United States. "Our navy cannot take on the Americans. We do not have that level of technology yet. The only people who would suffer would be ordinary Chinese," said the source with ties to the military. Those voices appeared to have the upper hand for now, the source said, pointing to a realization that the 1979 border war with Vietnam did not go as well for China as the propaganda machine would like people to believe. Even setting up an ADIZ, like the one Beijing set up over the East China Sea in 2013 to anger from the United States, Japan and others, would be difficult to enforce given the distance from the mainland. China has repeatedly said it has the right to set up an ADIZ but that the decision depends on the level of threat it faces. A second source with leadership ties put it bluntly: "War is unlikely". "But we will continue to conduct military exercises," the source said. "(We) expect U.S. naval vessels to continue to come," and "miscalculation cannot be ruled out". Foreign Minister Wang Yi has stressed the importance of dialogue, saying it now was the time to return things to the "right track" and to "turn the page" on the ruling. The United States has responded positively to these overtures, sending U.S. National Security Adviser Susan Rice to China this week with a call for calm. Washington is also using quiet diplomacy to persuade other regional players not to move aggressively to capitalize on the ruling. China has been angered by U.S. freedom of navigation patrols in the South China Sea, but its forces have responded only by shadowing U.S. vessels and warning them, showing China's unwillingness to goad the U.S. military unnecessarily, according to Western and Asian diplomats. China is also wary of any incident overshadowing the G20 summit in Hangzhou in September, the highlight of this year's diplomatic calendar for Xi when he will be host to the leaders of most of the world’s economically most powerful countries, the sources said. The Beijing-based diplomat said it was more likely China would choose the period between the end of the G20 and the U.S. presidential election in November to make any move. "But that is a misjudgment if China thinks the United States will just sit back and do nothing," the diplomat said.” http://www.reuters.com/article/us-southchinasea-ruling-china-insight-idUSKCN10B10G

Chinese Graft-Busters Take Aim At Another PLA General. South China Morning Post. “A senior PLA officer who played a lead role in organising a massive military parade in Beijing last year was put under investigation for suspected corruption last week, according to two military sources. Major General Qu Rui, a deputy chief of the Combat Operations Department under the newly established Joint Staff Department, was taken away by military graft-busters during a meeting on Wednesday, sources said.  Qu was a key organiser of September’s parade in the capital to mark the 70th anniversary of the end of WW II. Rooting out PLA corruption is helping Xi Jinping to build his power base. He will face an internal corruption probe launched by the recently upgraded military disciplinary commission within the powerful CMC. If confirmed, Qu’s downfall would be the latest in a string of graft probes launched into the activities of senior officers in recent weeks ahead of the PLA’s anniversary on Monday. The South China Morning Post reported earlier this month that General Tian Xiusi, 66, a former PLA Air Force political commissar and an ally of disgraced former military chiefs Guo Boxiong and Xu Caihou, was put under investigation for alleged corruption. The report was later confirmed by Xinhua.Guo and Xu were snared in President Xi Jinping’s three-year-old anti-corruption campaign after it was extended to the military. Former top PLA general Guo Boxiong jailed for life over graft Guo, 74, the top general under former president Hu Jintao, was sentenced to life in prison for corruption by a military court last Monday. Xu, Hu’s No 2 general, died of cancer last year aged 72 and never stood trial for graft. Qu, a former deputy chief of the Combat Operation Department of the PLA’s General Staff Headquarters, was appointed to his present job in January following a massive organisational overhaul. He was a protégé of retired general Ge Zhenfeng, a former deputy chief of general staff and a key member of the “northeast army” led by Xu. It was not clear what prompted the investigation into Qu but sources said it was probably linked to his previous stint as head of a unit in charge of military equipment under the General Staff Headquarters No 5 department, which oversees information technology. Former top officer in China’s air force ‘under investigation by anti-corruption officials’: sources In addition to the anti-graft campaign, Xi has also spearheaded a major overhaul of the PLA and established 15 new units under the CMC, including the Joint Staff Department, in the last year. In a move widely seen as consolidating his control over the military, Xi also launched a major reshuffle of the military’s top brass and promoted dozens of officers to full general and major general over the past few years. Yi Xiaoguang, a deputy chief of staff of the Joint Staff Department, and Zhu Fuxi, the Western Theatre Command’s political commissar, were promoted to full general on Friday.” http://www.scmp.com/news/china/diplomacy-defence/article/1997337/chinese-graft-busters-take-aim-another-pla-general

China Activates Four Lighthouses In South China Sea. Aiswarya Lakshmi, Marine Link. “Four out of five lighthouses planned for use in the South China Sea have been activated to boost navigation and the fifth lighthouse will be completed and put into use soon. China started to build lighthouses in the South China Sea in May last year, with four now in use on Huayang, Chigua, Zhubi and Yongshu reefs. The most recent project went into operation on Yongshu Reef on June 25. "The five lighthouses are important public service facilities in the South China Sea. Construction and operation of the lighthouses reflects China's dedication to its responsibility of boosting navigational safety in the South China Sea, a critical maritime and trade corridor linking the Pacific and Indian oceans," Xu Ruqing, head of China's Maritime Safety Administration, said at a press conference of the China Maritime Forum in Ningbo, Zhejiang Province. Xu Ruqing introduced that all five lighthouses are 50 to 55 meters tall and are equipped with the Automatic Identification System and VHF (very high frequency) radio, allowing vessels to receive navigation information and warnings from the lighthouses. According to Xu Ruqing, the lighthouses will serve multiple purposes, including navigation support, maritime search and rescue, fishing, marine disaster prevention and mitigation and lower the risk of oil spills.” http://www.marinelink.com/news/lighthouses-activates413287.aspx

Putin In The Pacific: Why We Should Worry. Daniel Flitton, Melbourne Age. “The alarm should have sounded a couple of months ago when Chinese commentators began quoting Vladimir Putin, that "if a fight is inevitable, go and fight first.” But warning bells are ringing loudly now after China declared this week Russia will send warships into the disputed South China Sea to conduct joint navy exercises. The startling development will bring yet another great power into what has fast become a global flashpoint right in Australia's neighborhood. And you shouldn't be surprised that Australia is seen very much as a player in this growing dispute. Just have a read of a firecracker editorial published in China's state-run Global Times on Saturday, calling for "revenge" after the decision by Foreign Minister Julie Bishop last week to join Japan and the U.S. in calling for Beijing to respect international law. "If Australia steps into the South China Sea waters, it will be an ideal target for China to warn and strike," the paper thundered. "Australia is not even a 'paper tiger,' it's only a 'paper cat' at best." How much you take the Global Times as delivering a not-too-subtle official threat on behalf of the authorities in Beijing – and some in Canberra will interpret it that way – or just a shrill bluff really depends on how you judge China's intentions One thing is certain, as defence hardheads well know, is that if China really did think Australia was no more significant than a "paper cat,” they wouldn't feel the need to say so. Australia has resisted calls to follow the U.S. lead and dispatch its own navy ships inside the sensitive 12-mile zone around China's artificial islands, just to show Canberra will not recognise any claims to sovereignty. It was China's sweeping claim, known as the "nine dash line,” that was declared illegal last month by an international tribunal. But back to Russia, why Putin might feel the need to send his navy to this far distant waterway right now, and how much more complicated this dispute might soon become. As Marina Tsirbas from the National Security College in Canberra observes, Russia is looking for any excuse to give the U.S. a "poke in the eye.” Remember Putin made a dramatic intervention into the Syrian conflict last year by sending Russian fighter jets to bolster the failing regime of Bashar al Assad, much to the annoyance of the White House. This promised naval deployment of Russian ships to the South China Sea also comes as a surprise, although Moscow has always insisted it should be seen as an "intrinsic" Pacific power, with a longstanding navy port in Vladivostok. Russia has conducted navy drills with China elsewhere, and made a point of dispatching a small fleet of powerful warships off the coast of Australia when Putin's came to Brisbane in the "shirtfront" days after MH17 was shot down. "China and Russia increasingly find themselves backing one another up when one of them is in confrontation with the West," says Michael Wesley, a foreign affairs specialist with the Australian National University. Wesley doubts the two powers will forge an alliance – "they are not going to go to war for each other" – but may have moved beyond mere ties of convenience. Yet Russia is not the first country to hold navy drills with China. The Royal Australian Navy conducted live fire exercises with the Chinese navy a couple of years ago, drills that admittedly occurred in waters much further north, outside the South China Sea. How significant this latest Russian intervention turns out to be really depends on the warships sent, how long they stay, and what they do. A spokesman for Defence Minister Marise Payne said: "we expect that all parties will conduct themselves in accordance with international law." Russia's presence might be more for symbolism than practical support, but either way, the crowd on troubled waters is growing.” http://www.theage.com.au/world/experts-wary-about-chinas-new-coziness-with-russia-in-the-south-china-sea-20160730-gqh99x.html

After The South China Sea Ruling, Time For More FONOPs. Joseph Bosco, The Diplomat. “In its courageous and comprehensive decision on the South China Sea, the arbitration tribunal appointed by the Permanent Court of Arbitration has rendered an invaluable service to the region and the international community. It has established an international law overlay to China’s sweeping territorial and maritime claims and thereby provided important guidance for all six competing claimants. Hopefully, the decision will be a wake-up call for China’s leaders—a deus ex machina that opens a way out of the predicament they have created for themselves. China is at a decisive point in its history. It can continue on the path of defiance and disdain toward the international legal system and return China to the kind of angry isolation Richard Nixon described in 1967: a China “outside the family of nations, nurturing its fantasies, cherishing its hates, and threatening its neighbors.” Or Beijing can man up, swallow a little pride, and win accolades of international praise, respect, and appreciation by accepting the tribunal decision and working cooperatively within ASEAN and other regional institutions for the peaceful accommodation of every country’s interests. Foregoing China’s sweeping maritime claims would also eliminate the potentially confrontational aspects of America’s FONOPS in the South China Sea, highly constrained as they have been so far. Beijing’s claims are no longer even historically colorable after the tribunal’s sweeping findings and rulings. But whether China cooperates or not, the arbitration decision affords the United States a unique opportunity to correct its own earlier mistakes in ensuring navigational freedoms. For two years, China dredged sand from the sea bottom, piled it onto rocks and reefs, and built artificial islands to fill in the dashes in its nine-dash line claim to virtually the entire South China Sea. Contrary to Xi Jinping’s representations to President Barack Obama at their California summit last year, China continued to construct runways and military facilities on those newly-created land features. All the while, American officials joined others in protesting China’s expansionist actions while standing passively by. Last October, the United States finally moved to assert its right of freedom of navigation by dispatching the USS Lassen within twelve nautical miles of five features in the Spratly Islands claimed by China. In January, the Curtis Wilbur did the same off Triton Island in the Paracels, and in May the William Lawrence steamed within twelve nautical miles of Fiery Cross Reef in the Spratlys. All three ship transits were intended to enforce the claims by Secretaries Ash Carter and John Kerry and other officials that “the United States will fly, sail, and operate anywhere that international law allows”—but all three failed to meet the operating part of that standard. While technically freedom of navigation operations (FONOPS) within Washington’s very broad definition, they deliberately did not challenge China’s sovereignty claims, only the “requirement” of notice. All three limited FONOPS were merely exercises of innocent passage, a law of the sea concept that applies to transits within a country’s implicitly acknowledged territorial waters. By deactivating their radar systems and avoiding exercises or tactical maneuvering, the U.S. Navy ships did not act as if they were operating on the high seas as Washington claims it is doing. China protested anyway but must have welcomed the unintended territorial concessions. Now that the tribunal has demolished even the patina of China’s legal/historical claims to the international waters of the South China Sea, Washington should act as decisively and confidently as did the brave jurists on the tribunal. Beijing should accept regular, unconstrained FONOPS not as provocations but as the normal routine on the high seas as affirmed by the arbitral tribunal.” http://thediplomat.com/2016/07/after-the-south-china-sea-ruling-time-for-more-fonops/

Tsai To Apologise For Injustices To Taiwan’s Aboriginals But Threats To Way Of Life Abound. South China Morning Post. “For Tama Talum of Taiwan’s aboriginal Bunun mountain people, hunting is a way of life, integral to his tribal customs – but after his arrest for illegally killing a deer and goat on land near his village, he fears those traditions will die out. It is just one of many cases reflecting the wrangle between Taiwan’s authorities and its indigenous people, with critics arguing laws discriminate against aboriginal culture. Tsai Ing-wen – the first Taiwanese leader with aboriginal blood – will attempt to ease those tensions when she delivers the first apology to the island’s indigenous people on Monday for injustices over the centuries. “An apology isn’t going to solve all the problems, but symbolically it shows Tsai is willing to face this issue,” said Kolas Yotaka, a legislator of the ruling Democratic Progressive Party (DPP), who is from the largest Amis tribe. She added: “It gives us hope.” However, for Talum, the damage is done. The 57-year-old is a free man while he awaits the result of an appeal at the Supreme Court after an uproar in the aboriginal community over his 3½ sentence for possessing an illegal weapon and hunting protected species. Aboriginal hunters are legally only allowed to use home-made guns – which are said to be dangerous and have led to injuries – and to hunt on festival days, restrictions to which many tribespeople object. Talum’s arrest has stopped younger tribe members wanting to hunt, he said. “Some of them are scared after seeing me being dragged away. They don’t want to learn. I was an optimistic man but it’s hard to be upbeat,” he said. Their sense of injustice revolves around the loss of ancestral land rights, which came under threat when immigrants from the mainland arrived 400 years ago. Much of that land is now national park, leading to clashes over hunting and foraging in areas where permits are needed. “There are so many restrictions, telling us what we can’t do,” Talum said. “We aren’t stealing or robbing anyone, and it’s not that we are hunting everyday.” Talum moved to the city in search of work, but eventually returned to take care of his mother. Aboriginal unemployment is higher than the rest of the workforce and their wage is about 40 per cent less than the national average, according to the government’s Council of Indigenous Peoples. A lack of autonomy to manage and live off their land also exacerbates social issues such as alcohol abuse, according to Scott Simon, a professor at the University of Ottawa, who researches Taiwan indigenous rights. “The alcohol problem is a major public health issue that is not being adequately addressed. These issues are related,” he said. Despite the challenges, some young aboriginals are trying to reconnect with their roots. “What we want is simple: give us back what was originally ours,” said Kelun Katadrepan, who works for an indigenous television station. The 30-year-old from the Puyuma tribe has started a campaign group gathering young professionals to advocate aboriginal involvement in politics. In addition to restoring dispossessed land, Katadrepan wants an overhaul of the education system to prevent further loss of tribal languages five are seen as “severely endangered” by Unesco. His parents did not want to teach him their native language while growing up, believing he needed to master Putonghua to secure a better future. “We aren’t Chinese, but we are forced to learn Chinese since we are little. That is not our culture,” Katadrepan said. But there have been gradual efforts to change that. While teaching is usually in Chinese, some schools offer options to take native language classes. There are also indigenous community colleges where traditional customs and skills are taught. With the DPP now in power, legislator Yotaka hopes government regulations will now be brought in line with the aboriginal basic law, adopted in 2005 to protect indigenous rights. That would correct current contradictions, including the fact that hunting is illegal apart from during major tribal festivals – even though the basic law protects indigenous rights to kill wild animals for self-consumption. Talum says he has not risked hunting since his conviction, except for a sanctioned foray during a spring festival where young Bunun men demonstrate their hunting skills and pray for a good millet harvest. He still clings on to hope that his son, who was raised in the city and is now in his thirties, will eventually learn the old ways. “After a while, when the time comes, he will think of going to the mountains with his father,” he says. http://m.scmp.com/news/china/policies-politics/article/1996678/tsai-apologise-injustices-taiwans-aboriginals-threats

Chinese Tech Giant LeEco To Acquire Vizio For $2 Billion. Nyshka Chandran and Anita Balakrishnan, CNBC. “China's LeEco plans to acquire Vizio for $2 billion—a move that will create a global television powerhouse and help cement the tech giant's presence in the world's largest economy. Tuesday's deal will "lay a great foundation for LeEcco in the U.S. and global market," LeEco founder and CEO Jia Yueting told CNBC's "Power Lunch" on Tuesday, in an interview that was translated from Chinese.  Tuesday's news was the latest indicator of LeEco's forceful expansion into the U.S. Last month, LeEco poached a senior legal counsel from Google and purchased Yahoo's Silicon Valley property following its April unveiling of an 80,000-square-foot production factory in San Jose. LeEco is also due to launch its smartphones in the U.S. later this year, according to media reports.  Jia said he plans to fund international expansion through a combination of equity financing and cash flow from the firm's seven sub-ecosystems.  Previously known as LeTV, the company has gone from being primarily a video streaming service—it's well-known as the Netflix of China—to a diversified conglomerate with a product range that includes smartphones, televisions, mountain bikes and, most recently, electric vehicles.  Under the terms of the deal, Vizio's hardware and software businesses will be owned and operated as a wholly owned subsidiary of LeEco, while the Vizio's data business, Inscape, will spin out, the companies said in a statement. The deal is expected to close during the fourth quarter of 2016, the companies said.  Privately-held Vizio is one of North America's leading consumer electronics brands, known especially for its line of smart TVs. "I'm excited to see how LeEco's global reach and resources will elevate Vizio," William Wang, founder and CEO of Vizio, said in a statement.  Analyst reaction to the $2 billion price tag was mixed. Bob O'Donnell, founder and chief analyst of TECHnalysis Research, called the figure "high" and reflective of just how important U.S. expansion was for LeEcho. On the other hand, Bradley Gastwirth, CEO of equity research firm ABR Investment Strategy, believed the price was fair, noting that the deal also offered LeEcho access to Vizio's data business, Inscape. "Inscape will still be owned 51 percent by William Wang, with the remaining 49 percent by LeEcho," Gastwirth said. Jia, who in the past has criticized Apple for its lack of innovation, said on Tuesday that he believes Chinese and U.S. companies can become "very good friends." His comments come amid a wave of controversy regarding China Inc's expanding presence in the U.S. Chinese investment in the U.S. rose to a record high last year as companies embarked on an aggressive shopping spree amid a worrisome domestic backdrop of volatile stocks, a depreciating renminbi and a marked economic slowdown. "Like we always say, LeEco looks like an enemy to all, but actually we are the best ecosystem partner for everyone," Jia said.  He wishes to cooperate with U.S. tech rivals such as Amazon and Netflix, noting that "they can all become very good friends." "In the U.S. our model is an open content ecosystem, so we want to open our cloud platform, e-commerce platform, big data platform, software, and hardware to our partners, so there is good opportunity for us to cooperate..."  For U.S. consumers, this acquisition should bolster the visibility of LeEcho's brand name seeing the Chinese conglomerate remains unknown to many Americans, commented Gastwirth.” http://www.cnbc.com/2016/07/26/chinese-tech-giant-leeco-to-acquire-vizio.html

Thailand 'Full of Chinese Agents,' No Longer Safe For Chinese Refugees. RFA News, Qiao Long. “Chinese political refugees in Thailand, many of whom smuggled themselves across Southeast Asia to escape persecution by the authorities back home, say the country is no longer a safe haven for dissidents, as the Thai authorities seem increasingly willing to hand them back over to Beijing. Several Chinese asylum-seekers—some of whom were recognized by the United Nations as genuine refugees—have been deported for immigration violations, throwing the expatriate dissident community into a state of constant fear, some told RFA in recent interviews. "The Thai government began an operation to round up any foreign nationals who have overstayed their visas," Wu Yuhua, a rights activist who escaped to Thailand more than a year ago, told RFA. "This means that the Chinese refugees are now living in constant fear, every day," she said. "We fear that one day, it'll be us who gets taken in." Thailand is no longer the safe haven it once was for Chinese dissidents fleeing persecution, according to Wu and many others like her. "It's not so much being locked up in immigration detention. That's not so bad, but if we get repatriated, we will definitely wind up in jail," Wu said. Some rights activists never even make it as far as Thailand, she said, citing the case of Liu Jiaqing, who was arrested by police in Myanmar. "I heard recently he was sentenced to two years' imprisonment," Wu said. Those who do get to Thailand face the constant threat of detention, as well as official retaliation against loved ones back in China, she said. Chinese activists in Thailand now face being followed and watched on a regular basis by personnel hired by the Chinese government, refugees say. "The following, the surveillance, the monitoring: all of this makes it much more risky," Yu Yanhua, who fled persecution in his hometown of Xuzhou, in the eastern Chinese province of Jiangsu, told RFA. "I don't dare go back to where I am living; I'm too frightened," Yu said. "There is nowhere safe to hide.” Fellow asylum-seeker and former Henan rights activist Xing Jian said Thailand now seems to be full of Chinese agents. "People get suspicious if you ask after them, because China has sent a huge number of agents to Thailand, planting them among the refugees and messing with their relationships," he said. "The refugees here have very few dealings with one another now, even at the UNHCR," Xing said. "Even if we see them there, we won't go over and greet them." Zhang Wei, from the southwestern Chinese province of Guangxi, said he was followed by suspected Chinese agents when he helped organize an event commemorating the 1989 Tiananan massacre. "There were three suspicious-looking people there," he said. "They looked exactly like Chinese state security police, to judge from the way they were dressed." "Somebody even went to the home of [Thailand-based refugee] Li Xiaolong  and tried to visit him," he said. Thailand-based dissident Liu Xuehong said the Chinese agents are busy eroding any support for refugees, either among each other or from supporters in Thailand. "Their aim is to obstruct us, and to stop us from speaking out," Liu said. "Even the U.N. High Commission for Refugees (UNHCR) is concerned about our safety." Last November, Chinese asylum seekers Jiang Yefei and Dong Guangping, who had fled persecution in their home country, were handed back to Chinese authorities in a move that drew strong criticism from the U.N. at the time. They are now in pretrial detention in the southwestern city of Chongqing. "We call on the U.N. to speed up our applications for resettlement as refugees so that we can live life like normal human beings," Liu said. The fear of meeting a similar fate has left many Chinese asylum-seekers in serious financial difficulties, he said. "Some people are reduced to eating waste or leftover food, or rely on friends to live," Liu said. "There isn't much support in place, and the UNHCR is overwhelmed by too many international refugees." Earlier this month, Zhao Changfu, a prominent rights activist from the eastern Chinese province of Jiangsu, skipped bail for subversion and fled through mountains and jungle, using Google Maps as a guide. Liu said that he and Zhao were followed by an unidentified person when they went to the UNHCR to process Zhao's asylum application. "It was just one person, following us ... The security situation hasn't been quite right since Zhao Changfu arrived," he said.” http://www.rfa.org/english/news/china/agents-07292016113331.html

Will China Upstage The U.S. At The November APEC Summit? Evan Ellis, Latin America Goes Global. “When I visited Beijing, China from July 16-31 of this year, it was the high point of summer both in Washington D.C. and Beijing; focused more on the sweltering heat and impending vacations, I wasn’t ready to think about the fall and winter. But my Chinese colleagues were already focused on the November Asia-Pacific Economic Cooperation (APEC) leaders’ summit. APEC started in 1989 as a forum for Pacific Rim countries to promote free trade. The annual summit of member heads of states, which currently includes 21 countries, has become one of the most important high-level forums for countries on both the Asian and Latin American sides of the Pacific. Although the APEC leaders’ summit rotates among member countries, this year’s meeting in Lima, Peru will be the first time in eight years that the event has been held in Latin America. The past two gatherings in Latin America (2004 in Santiago, Chile, and 2008 also in Lima), highlighted the region’s growing commercial relationships with Asia and showcased major new trade initiatives between the People’s Republic of China (PRC) and the region. In my conversations with my colleagues from Chinese companies and academia, I realized how important this particular event will be for the PRC, the U.S. and the region—not just for the issues on the table for discussion but even for the symbolism and side discussions that will occur. On the PRC side, between President Xi Jinping and Prime Minister Li Keqiang, since March 2013 (when Xi assumed the presidency) Chinese state leaders have made at least one trip per year to Latin America—with each featuring multiple stops and important policy announcements. In May 2013, just two months after assuming the Chinese presidency, Xi demonstrated his interest in the region by visiting Costa Rica, Trinidad and Tobago, and Mexico, meeting with a total of 11 heads of state from the region before arriving in Sunnylands, California to meet with U.S. President Barack Obama. In July 2014, Xi traveled to Venezuela, Cuba, Argentina, and Brazil in a conjunction with that year’s annual BRICS summit in Fortaleza, Brazil. The tour through the region provided the Chinese leader the chance to showcase multiple new initiatives toward the region, including the PRC’s new “1+3+6” approach to building its relationship with the region, referring to one plan, three engines (trade, investment and finance), and six fields (energy and resources, construction of infrastructures, agriculture, manufacturing, scientific and technological innovations and information technologies), and highlighting $35 billion in new loan funds promised for the region. In May 2015, Prime Minister Li Keqiang visited Brazil Colombia, Peru and Chile, affirming $27 billion dollars in deals during his stop in Brazil alone. Although the Latin American countries that President Xi will visit this November en route to APEC have not yet been announced, the trip will likely be the centerpiece of PRC diplomacy toward Latin America this year. The combination of a U.S. administration focused on the November presidential elections, and a region in need may make this year’s APEC leaders’ summit in Lima a triumph for Chinese diplomacy toward Latin America. In 2004, President Hu Jintao’s trip to that year’s APEC summit in Santiago, Chile, put the PRC on the map for Latin America’s mainstream business and political leaders, with his talk of $100 billion in Chinese investment or trade with the region within the next 10 years. President Hu’s show-stealing presence at the 2004 APEC summit was due in part to the U.S.’s relatively weak showing. Then-President George Bush arrived at the event distracted by events in other parts of the world and brought to Santiago an agenda out of step with most Latin Americans’ interests: North Korea’s efforts to obtain a nuclear weapon, the strong U.S. dollar, and U.S. budget deficits. In 2004, like now, Latin America was looking for answers to its economic challenges. By the time of the Santiago summit, Latin America had suffered several years of falling foreign direct investment as Western capital increasingly flowed to the PRC and other Asian destinations. Latin American heads of state arrived at the meeting looking for new answers to the challenges of development. Similarly, this year, Latin American economies (particularly in South America), have been reeling from low global prices for commodity exports. This year alone, the region is expected to contract up to 1.3 percent, dragged down largely by the economic crises in Brazil and Venezuela. This year’s summit will occur on November 19-20, just 11 days after the U.S. elections. In the lead up to the Lima gathering, White House staffers and senior U.S. policymakers will likely be distracted by the election, leaving little time to focus on preparation. In addition, President Obama will arrive in Lima as a lame duck, scheduled to leave office January 20, 2017, two months after his appearance at APEC. His appearance will largely be a farewell and an attempt to define and consolidate his legacy, meaning there will likely be only a few—if any—new initiatives. The APEC leaders’ summit will also be the first major gathering of global leaders after the U.S. elections reveal the next president. As such, the conversations on the sidelines of the summit will be as important as the event itself. Given that both U.S. presidential candidates, Hillary Clinton and Donald Trump, have indicated opposition to the Trans-Pacific Partnership in its current form, the leaders gathered in Lima will likely be looking for signals whether the initiative, signed in Auckland in February 2016, will now wither away without the required approval by the U.S. Congress. If the conclusion is that it will die on the vine, the big question will be “where do we go from here?” In such a vacuum, China’s President Xi would likely push for his country’s own trade initiative, the Regional Comprehensive Economic Partnership (RCEP), as an alternative path to free trade. Yet because the RCEP does not currently include Latin America, moving down this path would likely be a major setback for trans-Pacific economic integration. By contrast to the TPP, the less stringent terms of RCEP, focusing principally on free trade rather than supporting issues such as intellectual property protection, would represent a loss to the U.S. and like-minded partners to define the emerging regime of the Pacific in a fashion congruent with Western interests. If Hillary Clinton wins the election, the assembled leaders in Lima will likely be looking at rumored members of her new cabinet for clues about likely continuity and change regarding U.S. economic and security policy toward Asia. Particular focus will be given to how hostile President Clinton’s policy might be toward the PRC, and how the U.S. level of attention toward Asia and security commitments to Asian states might evolve. If Donald Trump is elected, APEC will be the first high-level forum in which state leaders can evaluate the possible dramatic shifts in the Asia-Pacific’s economic and security environment. Trump’s declared intention to revisit both the TPP and U.S. membership in the North American Free Trade Agreement (NAFTA) could spawn wide-ranging discussions at the summit regarding how to re-work trans-Pacific trade integration without the United States. If it’s felt that U.S. focus on free trade and TPP will likely diminish in the next administration, the summit may also serve to re-energize interest in the Pacific Alliance as a non-US alternative. This year’s host, Peru is a founding member, as a Pacific-oriented, pro-market, free-trade-oriented organization to integrate pro-market Latin American economies independent of the United States. In the security realm, Trump’s announced intention to force U.S. allies to bear a greater share of regional security burdens and to support Japan’s development of nuclear weapons may prompt the countries of the region to rethink their response to the perceived threat of PRC expansionism in the South and East China Seas. Yet participants will also be wondering under what circumstances a Trump administration might unexpectedly intervene, in economic or other fashion, if the combative, thin-skinned president-elect feels offended. ven without a Donald Trump victory in the November, Asian security issues will be a backdrop of the summit, with China continuing to construct island military bases and otherwise assert its territorial claims in the South and East China Seas. My Chinese colleagues reassure me that the PRC government will likely attempt to calm tensions prior to the summit, so that it does not distract from other issues the PRC wishes to discuss. But, given the PRC’s recent actions, the other governments of the region are not likely to simply let the matter go. While it’s impossible to predict the specific topics that China will push on the agenda at the summit, it will probably use the occasion to highlight its most important Asian initiative, One Belt One Road (OBOR) along with supporting Asia Infrastructure Investment Bank (AIIB). By the time of the summit the AIIB’s first projects will have gotten off the ground. With respect to initiatives in Latin America, the PRC may take a new step forward with the multilateral loan funds it has set up through China Development Bank and China Import-Export Bank, which, to date, have not disbursed any funds. While it may not be in a position to announce new progress on Peru-Brazil inter-oceanic railroad, which remains stuck in the study phase, it’s also likely that China will showcase one or more headline-capturing new projects in the region. As with prior summits, President Xi will probably also use the gathering to conduct bilateral meetings with Latin American leaders that he could not visit en route to Lima. This will include Chile’s president Michelle Bachelet and Peru’s newly elected President Pedro Pablo Kuczynski. Given China’s lingering frustration over the Mexican government’s cancellation of the Mexico City to Queretaro high-speed railroad just before the 2014 APEC summit in Beijing (and, just for good measure, a second time months afterward), a meeting between President Xi and Mexican President Enrique Peña Nieto is not guaranteed. But a side meeting would indicate that the PRC is ready to smooth over past differences. It is possible, yet doubtful, that President Xi will include Ecuador and Bolivia as stops en route to Lima. While the level of Chinese business in each country and its good relations with their current regimes makes them logical candidates for a visit, China has not, to date, deemed either a “strategic partner” meriting such attention. A visit by President Xi to either country could indicate that they are being “elevated in importance” by the PRC among ALBA countries in the context of the implosion of Venezuela, as part of China’s evolving strategy toward the region. Beyond China, the summit will be an opportunity for Russian President Vladimir Putin to travel to the region. While traditional Russian allies in Latin America such as Nicaragua, Cuba and Venezuela will not be present in Lima, Putin’s presence, and any other Latin American stops he makes en route, will be Russia’s first public statement regarding the current state of its intentions toward Latin America in the wake of the U.S. elections. Finally, the APEC leaders’ summit in Lima will also showcase the new government of Pedro Pablo Kuczynski. As when Peru last hosted the 2008 summit, this year’s gathering will allow the host to highlight its role as a destination for Asian investment, its importance as a trading partner, and its potential role as a nexus for trade between Latin America and the rest of the region. It will also call attention to Kuczynski’s high caliber economic team, and the return of the political pendulum in Latin America back toward governments that favor free trade and a market-based approach to development. For the U.S., the November summit represents a complex challenge that should not be ignored. A generation from now, the Obama administration’s much-discussed “pivot to Asia” will be remembered for how he left it at APEC, as he transitioned out of office. Whoever wins the U.S. election in November, members of the incoming president’s policy team should accompany the official delegation to Lima, both to provide indications about U.S. intentions and to hear the thoughts and concerns of the leaders assembled at the summit. Although such coordination may be particularly improbable if Donald Trump wins the election, it should nonetheless be considered for the greater good of America’s standing among its international partners and for launching the incoming administration in the best possible fashion. Both the current administration and the incoming team must come to the APEC leaders’ summit prepared to talk about the path forward in a way that is relevant to the economic and security concerns of both Latin America and Asia. That includes the United States and the PRC and other powers such as Russia that will be at the table. Even if an incoming U.S. administration intends to revisit the trade and security commitments that bind the U.S. to the region, it must make clear that such policy changes do not change the enduring bonds of geography, commerce and family that connect the U.S. both to Latin America, and to its neighbors across the Pacific. Most of all, it must show that the U.S. presence in the Asia-Pacific strategic and economic environment are core to its national interests and vision for the future.” http://latinamericagoesglobal.org/2016/07/will-china-upstage-u-s-november-apec-summit/

Posted by Alex Gray | July 29, 2016

Russia To Join Chinese Drills In Sea Zone Under Dispute. Chris Buckley, The New York Times. “Russian naval forces plan to join Chinese forces for a joint exercise in the South China Sea, highlighting Moscow’s partnership with Beijing after a recent international legal ruling underlined rifts between China and Southeast Asian nations over rival claims across the sea. The joint exercise will be held in September, a spokesman for the Chinese Ministry of National Defense, Senior Col. Yang Yujun, said in Beijing on Thursday. But he gave no details about the size of the drill or precisely where it would take place in the vast stretch of sea from southern China nearly to the Philippines. “Following a joint understanding reached between China and Russia, the navies of the two countries will hold a joint military exercise in the relevant sea and air areas of the South China Sea in September under the name Joint-Sea 2016,” Colonel Yang said. The drill was not aimed at any other country, he said. But he also said that the experience gained would “enhance the capacities of the two navies to jointly respond to maritime security threats.” On July 12, the Permanent Court of Arbitration in The Hague decisively rejected Beijing’s expansive claims to sovereignty across the South China Sea, where China has been building artificial islands and consolidating its control of disputed areas. Beijing refused to take part in the case brought by the Philippines, and Chinese officials and state media have pilloried the decision and suggested the United States was somehow to blame. The Philippines has been especially worried that China will start building islands on the Scarborough Shoal, about 220 miles northwest of Manila. But several experts said that the joint naval exercise would probably serve more as a show of partnership at a tense time than as a substantive military shift in the area. “It is premature to draw a definitive judgment,” said Bonnie Glaser, the director of the China Power Project at the Center for Strategic and International Studies in Washington. “My inclination is to view this as one of a series of Chinese reactions to the ruling that can demonstrate the Chinese Communist Party’s resolve to defend Chinese sovereignty and thus fend off pressure from the public and the military.” “In my view, however, the China-Russia exercise is not necessarily a departure from what has so far been a pattern of relative restraint” in China’s reaction to the Permanent Court of Arbitration’s ruling, she said. Whether Russian participation in the joint exercise would add more than symbolic support to China’s position over the sea disputes remained unclear, said M. Taylor Fravel, a scholar at the Massachusetts Institute of Technology who studies China’s military forces and its multiple maritime disputes. “The key question will be where in the South China Sea the exercise occurs,” he said. The two countries might hold their exercise close to Guangdong Province in southern China, or Hainan, a Chinese island-province that extends into the sea. That would be a less contentious site. Or they might hold them near the disputed Spratly Islands, which would be more likely to alarm neighbors, Mr. Fravel said. China and Russia have a long history of friction and mutual suspicion over their own territorial disputes. But they have been trying to strengthen military and security cooperation, and joint Chinese-Russian naval exercises have become increasingly frequent since 2005. China’s president, Xi Jinping, has, like his predecessor, Hu Jintao, striven to build a close relationship with President Vladimir V. Putin of Russia. In June, Mr. Xi and Mr. Putin issued a joint statement on “strengthening global strategic stability” that stressed their shared views on many issues. “China and Russia should support each other on issues concerning core interests,” Mr. Xi said at the time. In public, Russian officials have said they support negotiated solutions to the disputes in the South China Sea, but they have not given a full-throated public endorsement to China’s rejection of the international court’s decision. This drill will not be the first time that China has displayed its partnership with Russia by holding sea exercises. China is locked in a longstanding dispute with Japan over claims to islands in the East China Sea. Last year, China and Russia held joint drills in the Sea of Japan, and a year before that in the East China Sea. But the exercises did not enter waters around the disputed islands.” http://www.nytimes.com/2016/07/29/world/asia/russia-china-south-china-sea-naval-exercise.html

America’s Philippines Blunder. Greg Rushford, The Wall Street Journal. “U.S. Secretary of State John Kerry on Wednesday discussed the “full range” of economic and security issues with Rodrigo Duterte, the Philippines’ newly elected president. The visit comes in the wake of The Hague’s July 12 ruling that Chinese actions in the South China Sea violate Philippine rights. Mr. Kerry’s diplomatic mission was to assure Mr. Duterte that Manila can count on Washington’s mutual-defense promises. But there are also Mr. Duterte’s doubts that the U.S. can support the Philippine trade and economy. When Mr. Duterte was sworn in to office on June 30, U.S. Trade Representative Michael Froman announced a new trade policy that upends important economic growth plans in the Philippines. It threatens to wipe out an estimated $100 million annual boost to Philippine exports of travel goods such as luxury handbags, wallets and backpacks. It also complicates Philippine investment aspirations to create some 75,000 travel-goods-related jobs in the next five years. At first glance, Mr. Froman’s announcement gives no hint of the economic controversy it has sparked. He says that President Obama wants to make “a powerful contribution to lifting people out of poverty and supporting growth in some of the poorest countries in the world, while also reducing costs to American consumers and businesses.” The policy benefits 43 least-developed beneficiary countries, such as Cambodia and Haiti, and 38 African nations. Pursuant to the U.S. Generalized System of Preferences (GSP) program, these countries will no longer have to pay stiff tariffs of up to 20% on handbags, wallets and other travel goods exported to the U.S. The U.S. decision to give preferential treatment to the industry’s small players, while blindsiding the most competitive producers, is perplexing. Cambodia, for instance, holds a modest 0.4% of the U.S. market, producing mostly backpacks. Africa’s total travel-goods exports to the U.S. amount to roughly one hundredth of one percent market share. As a result, the policy gives just two countries—China and Vietnam—a combined 90% share of the $5 billion U.S. travel-goods market. It is unlikely that preferential treatment will prompt least-developed countries to boost their exports. Even with 15 years of duty-free access to U.S. clothing markets under the African Growth and Opportunity Act, 40 African countries combined to export less than 1%, or $1 billion, of garments each year to the U.S. The Philippines alone exceeds Africa in clothing exports by more than $100 million. Diplomats from other countries and industry giants in the U.S., such as Coach, Columbia Sportswear and Kate Spade, have written to Mr. Froman asking for an explanation. On Wednesday 14 members of U.S. Congress, including 10 from the powerful Ways and Means Committee that has jurisdiction over trade, also issued a strong letter to the U.S. trade chief. But Mr. Froman has yet to offer any economic rationale for the decision, nor is there any evidence on the public record to support it. Developing countries with larger market shares of the travel-goods industry, such as India, Indonesia, Pakistan, the Philippines, Sri Lanka and Thailand, must now reconsider their plans to expand their investments. Major U.S. players such as Coach and Michael Kors, which looked to U.S. trade officials to provide financial incentives to shift production away from China, will now put those investment plans on hold. China is thus poised to keep its 85% share of the U.S. travel-goods market. Vietnam, as a communist country, is not eligible for the GSP preferences. But in the Trans-Pacific Partnership trade deal, the U.S. agreed to give the Vietnamese—who now hold a 5% market share—the same duty-free treatment withheld from GSP-eligible countries. Pakistan’s Prime Minister Nawaz Sharif thought he had received assurances directly from President Obama last year that U.S. trade officials understood the “importance” of increasing enhanced market access for Pakistan’s GSP-covered exports. Diplomats I have spoken to chafe at the unfairness. Viewed through the Philippine lens, the failure to connect economic cooperation with the security aspect of Obama’s pivot to Asia is glaring. Cambodia, apparently thanks to financial inducements from Beijing, has been the spoiler whenever the Philippines has sought solidarity from its partners in the Association of Southeast Asian Nations in standing up to China in the South China Sea. Asked repeatedly for his side of the story, Mr. Froman asserted through a spokesman that “travel goods are a product particularly well-suited to be produced in least-developed countries.” He declined to explain further. While the broader security relationship will survive, it is worth noting that in international economic diplomacy, like in personal relationships, unnecessary smaller slights erode trust. With the Chinese watching on the sidelines and eager to buy their way out of their South China Sea mess, this is not a wise time to rub the volatile new Philippine leader the wrong way.” http://www.wsj.com/articles/americas-philippines-blunder-1469724370

Crackdown on Hong Kong's Dissident Publications Continues. Cal Wong, The Diplomat. “In the continued persecution of those who criticize and make fun of the Chinese leadership, in particular Xi Jinping, China has continued to pursue and imprison Hong Kong journalists. Echoing the recent case of the five missing booksellers, another two Hong Kong journalists, who had business operations based out of Hong Kong, have been arrested in China’s Shenzhen, where they were residing at the time of arrest in May 2014. The pair were charged for running an illegal business, the very same charge imposed on the five abducted booksellers last year. Their Hong Kong-registered company, National Affairs Ltd, published two magazines largely based on rumors and gossip about those in the upper echelons of the Chinese government. It also frequently carried reports on the power struggles within the Communist Party of China, according to the Hong Kong Journalists Association (HKJA). Publisher Wang Jianming was sentenced to five years and three months in prison, while editor-in-chief Guo Zhongxiao was slapped with a sentence of two years and three months. Both pleaded guilty in the Shenzhen Nanshan District People’s Court last year. The two were prosecuted on the grounds that they sold banned material to Chinese nationals, despite the fact that only eight Chinese nationals were actual customers (and friends of the publisher) and that the business is registered and based in Hong Kong, a technically separate territory with its own laws. Wang’s lawyer argued that under “one country, two systems” there was nothing illegal in his client’s business. Nevertheless Guangdong’s print and broadcast regulator said the magazines were “illegal publications” that were not registered in mainland China, but were sold to Chinese readers. Under Chinese law, illegal business operations that lead to less than RMB 250,000 ($37,500) in proceeds would result in a jail term of less than five years. The defense argued that the illegal portion of the business (the mainland readers) accounted for only RMB 60,000 ($9,000) of the total revenues. However, in a rare occurrence even by Chinese standards, the judge chose to ignore these figures and instead ruled on the HKD 7 million ($902,500) in total revenues. The Independent Commentators Association and HKJA are worried that the mainland authorities are selectively suppressing targeted or sensitive publications on the “pretext of law” in order to intimidate and silence journalists who travel to the mainland and in turn, erode press freedom in Hong Kong. Hong Kong Journalists Association chairwoman Sham Yee-lan said the Hong Kong government had a responsibility to offer help to its citizens. The Hong Kong Immigration Department said that it had not received any request for help, according to the South China Morning Post. From October of last year, five booksellers, all of whom either worked at or owned Mighty Current Media, a Hong Kong publishing house and bookstore that specializes in tabloid publications on China’s political elite, went missing under mysterious circumstances. The men, of varying nationalities but all of ethnic Chinese descent, disappeared from mainland China, Thailand, and Hong Kong and turned up on Chinese television confessing and asking to be punished for a number of offenses that they had committed over the past 10 years.” http://thediplomat.com/2016/07/crackdown-on-hong-kongs-dissident-publications-continues/

Taiwan-U.S. Security Partnership Facing Chinese Test, Brookings Institution Says. William Lowther, Taipei Times. “The security partnership between Taiwan and the U.S. would be increasingly tested by the continuing modernization of China’s armed forces, the Brookings Institution said in a working paper. “What Taiwan does to ensure its security is also a critical variable,” said the paper, which was written by former American Institute in Taiwan chairman Richard Bush, who is director of the think tank’s Center for East Asia Policy Studies. It is part of a series on Washington’s commitments in the Asia-Pacific region released as the U.S. “election season heats up and campaign rhetoric questioning the value of U.S. alliances overseas has kicked off a furor of debate in foreign policy circles.” The U.S. Republican Party held its national convention last week, while the Democratic Party held its convention this week. “The ability of the People’s Liberation Army [PLA] to project power across the Taiwan Strait and in the East China Sea will only grow,” Bush wrote in the paper. “Despite the ambiguity of public American rhetoric, the capabilities that the PRC [People’s Republic of China] has acquired to complicate any U.S. intervention suggest that it assumes the U.S. will in fact act to defend Taiwan.” Even if the U.S. did come to Taiwan’s aid in the case of a Chinese attack, the “tyranny of distance” across the Pacific Ocean would require Taiwan to survive on its own for an estimated several weeks, he wrote. “That raises the question of whether Taiwan’s defense strategy would buy it enough time,” he wrote. China’s array of ballistic and cruise missiles has created the possibility that the PLA could immobilize Taiwan’s air force by repeated missile strikes on airfields, Bush said. “The Chinese military cannot yet conduct a successful amphibious campaign against Taiwan or execute a tight naval blockade of the island’s ports, but its capabilities are improving systematically and in the process are negating the ROC’s [Republic of China] long-standing defense strategy,” Bush said. “Washington policymakers should probably pull out the dual-deterrence playbook and consider the appropriate mix of warnings and reassurances to Beijing and Taipei in the knowledge that China’s military power will only grow in the years ahead,” he wrote. The paper came as another U.S. expert warned President Tsai Ing-wen that she might need to restrict her supporters who want to promote an “ideological agenda.” Former U.S. Department of State policy planning official Alan Romberg said in an analysis that the most hopeful interpretation of the present situation between Taiwan and China is that a process has begun that could eventually lead to a stable relationship. “For that process to succeed, Tsai will need to rein in enthusiasts in both the executive and legislative branches who may be inclined to see the January election results as giving Tsai and the DPP [Democratic Progressive Party] a mandate to press an ideological agenda,” Romberg said. “And Beijing will have to pull back from its most rigid requirements, allowing interpretation of Tsai’s words and actions to fill the gap,” he said. The analysis, published by California-based think tank the Hoover Institution, said that a general consensus seems to exist both in Taiwan and China that any process to stabilize relations – or decide that is not possible – would take about six months. “While the view in Taipei seems to be hopeful that all will be well by the end of that period, one senses a rather more downbeat expectation on the Mainland [China],” said Romberg, who is now director of the East Asia Program at Hoover’s Stimson Center. “Some people believe that if Tsai does not openly embrace some form of ‘one China’ not just in actions, but also in words, cross-strait relations will take a decided turn for the worse,” he said. “One hopes the more optimistic view prevails, but we will have to wait and see.” http://www.taipeitimes.com/News/taiwan/archives/2016/07/29/2003652018

The Paradox At The Heart Of The South China Sea Ruling. Feng Zhang, Foreign Policy. “On July 12, an arbitration tribunal at The Hague delivered what is widely regarded as a landmark ruling on the maritime territorial dispute between the Philippines and China. Among many breathtaking findings, the tribunal declared China’s so-called “nine-dash line” invalid. It also concluded that none of the Spratly Islands – not even Itu Aba (Taiping Island), the largest naturally formed feature – are capable of generating an Exclusive Economic Zone (EEZ) and continental shelf of their own. On their face, these decisions, which rejected every argument that China made, drastically reduce China’s maritime rights in the Spratly chain of the South China Sea; international observers have almost unanimously described the ruling as an overwhelming victory for Manila, a heavy defeat for Beijing, and a game changer for Asian maritime disputes. But so far, the award hasn’t changed the underlying dynamics of regional politics in the South China Sea, and ASEAN, a powerful southeast Asian body, refrained from commenting on the award following a meeting, a move widely seen as the result of arm-twisting from Beijing. In fact, it is becoming clear that the tribunal’s finding was so sweeping that it is paradoxically less likely to have any real-world impact. Perhaps the biggest paradox of the ruling is that many policy elites inside China now privately see it as a big gift to their government. That, at least, was the immediate post-ruling reaction from several leading scholars at prestigious think tanks in Beijing, who wished not to be named. For those who have questioned Beijing’s refusal to take part in the arbitration and who would have liked to see meaningful engagement instead, the outcome came as a personal disappointment and a blow to their cause. But for those who have opposed the arbitration process, there is more than a sigh of relief at the fact that the nature of the award makes it far easier for Beijing to delegitimize it, at least at home. Three camps – realists, hardliners, and moderates – are currently vying for influence over South China Sea policy within China’s policy-making apparatus. The award is likely to make the hardliners a winner in these internal debates. They have long maintained that the arbitration case is but an American conspiracy against China; now the outcome serves as vindication of those suspicions. Beijing will now have no qualms about upgrading administrative and physical control to further strengthen its positions in the South China Sea – in recent days, China’s military has already swiftly moved to begin regular patrol of the South China Sea, in addition to conducting a new round of military exercises. China’s top naval commander has affirmed Beijing’s determination to complete island construction, likely including military installations. The sweeping nature of the award has invited Chinese analysts and officials to try to tear it apart. Immediately after the ruling, one vice foreign minister criticized the fact that the judges were paid by the Philippines for their work. He said that the tribunal does not understand Asian culture or the South China Sea dispute, given that four of the judges come from Europe, and one from Ghana. More recently, a team of scholars from the Chinese Communist Party’s Central Party School concluded the tribunal had misunderstood China’s claims to the “nine-dash line.” On the diplomatic front, the tribunal decision presents more of an obstacle than an opportunity for Manila and Beijing to reach a compromise, at least in the short run. After the award, Chinese diplomats insisted it cannot be used as the basis for negotiation under any circumstances, deadlocking negotiation while China continues to build up its physical presence in the South China Sea. Yet in the months leading up to the award, Chinese diplomats heard calls from many countries for China to comply with the outcome of the arbitration. The pressure was mounting. The more limited the outcome, the easier other countries would have found it to call for Chinese compliance, and the more combative Chinese resistance would have appeared. That pressure has now abated; one senior Chinese diplomat privately described the award as “stupid.” Although China expected the ruling to favor the Philippines, this diplomat said, the findings still came as a surprise. Chinese officials hope that the broad nature of the award helps to convince other countries that the tribunal is biased. They will no doubt find solace in the fact that thus far, only the Philippines, the United States, Australia, New Zealand, Canada, Japan, and Vietnam have openly called for Chinese compliance. This list surprises no one, since the Philippines initiated the arbitration, the United States is presumed to have instigated it, Australia, New Zealand, Canada, and Japan are key U.S. allies, and the final country, Vietnam, is itself involved in territorial disputes with China while also emerging as a security partner for the United States. ASEAN’s joint communiqué, issued almost two weeks after the ruling, mentions neither China nor the arbitration, although it expresses serious concerns over recent developments including land reclamations. The European Union, along with many other countries, have used mild language merely to acknowledge the ruling, without calling for compliance. Another paradoxical effect of the award is its potential to effect Chinese attitudes toward international law. Beijing’s refusal to take part in the arbitration process has always confused Chinese scholars, particularly legal experts. (An article by an overseas Chinese scholar criticizing Beijing’s refusal to participate as damaging to China’s national interests aroused huge controversy at home.) The award, however, undermines advocates of a more proactive approach to international law by appearing to demonstrate the political nature of the arbitration process. The “anti-participation” camp is now arguing more forcefully that advocates of participation are naïve and utopian in placing hope in international law. Had the award been more attentive to Chinese interests, a future, more enlightened leadership in Beijing might have gradually and quietly complied with some of the rulings (whatever its public statements to the contrary), thus bringing China’s claims broadly in line with the United Nations Convention on the Law of the Sea. But this award doesn’t appear to give Chinese leaders such face-saving opportunities. One can argue that, over the long run, the award brings benefits to China. For example, the United States and Japan currently claim some of their features in the Pacific Ocean as “islands” entitled to EEZs. But under the award’s narrow definition of “islands,” the status of these features would be reduced from “island” to “rock,” and thus no longer entitled to exclusive economic rights. Unfortunately, to think in more creative and forward-looking terms will require a radical change of mindset among the Chinese leadership that is all but inconceivable for the foreseeable future. For a long time to come, China will be instead preoccupied with preventing and reversing losses to its interests in the South China Sea that it believes have accumulated over the past several decades as a result of Southeast Asian claimant states’ actions, rather than with making new economic or strategic gains in the high seas. Of course, the tribunal likely based its judgments on legal grounds, not prudential considerations about the award’s possible geopolitical implications. But from Beijing’s perspective, what at first glance looks like a home run for the Philippines actually represents the best outcome from a bad case. In this sense, the Philippines has won too much. The many paradoxes the award presents are not all bad for regional politics. Beijing has moved proactively to prevent large-scale demonstrations against the ruling, inviting some confidence in its basic policy rationality. The ruling also makes it less likely for Southeast Asian countries to initiate new arbitrations, since the award’s reasoning also applies to and favours their EEZ claims. In addition, the United States will have less incentive to conduct its Freedom of Navigation operations in such a public manner, since the ruling makes much of the South China Sea international waters as far as American naval vessels are concerned. Moving forward, American restraint will reduce the likelihood of maritime incidents with China and create conditions for more effective diplomacy. It will be needed, given the uncharted territory awaiting Asia’s troubled maritime order in a post-arbitration world.” http://foreignpolicy.com/2016/07/28/can-china-actually-be-benefiting-from-south-china-sea-ruling-paradox-hague-philippines/
Posted by Alex Gray | July 28, 2016

Who Supports China In The South China Sea And Why. Wang Wen and Chen Xiaochen, The Diplomat. “The South China Sea arbitration case has elicited almost unanimous public opposition in China. Besides this, it has been reported that 66 countries worldwide have endorsed China’s position on the South China Sea. Yet that figure also caused controversy, especially in the United States. According to our team’s research, we have found at least 70 countries supporting China’s position on various occasions. We find that the reason for the controversy over the figure comes down to different definitions on “China’s position.” But no matter how it is defined, the psychology behind these statements is a desire to avoid taking sides between China and the United States, showing the reality of a fundamental global consensus on peace and wide-spread anxiety toward the potential for conflict in the South China Sea. Thus, we should take every opportunity to go beyond the “zero-sum game” in order to maintain peace in the South China Sea, to seek Asia-Pacific economic cooperation, and to make the “cake” bigger using economic and financial means. There is no doubt that Chinese almost unanimously support their government’s official position on the South China Sea, shown by the firestorm of social media comments soon after the award. Moreover, China’s position is also welcomed and understood by other countries. According to the Chinese government and media, nearly 100 parties from more than 60 countries declared their support for China’s position on the South China Sea issue. China Daily counted 66 countries, as shown in the map below. The figure, however, encountered doubts from American media and think tanks. The Asia Maritime Transparency Initiative argued that the real number was only ten. We personally also received emails expressing similar doubts. Considering such a huge gap in the count, our research team at the international studies department of Chongyang Institute for Financial Studies, Renmin University of China (RDCY), sought to verify on our own by conducting an independent count. We explored the issue by extensively searching the internet, and then looked for original sources including media reports, official statements, diplomatic documents, and talking points. We also searched the Chinese foreign affairs database, Xinhua‘s news and multimedia database, and our news citation system with data from various sources such as Bloomberg and Reuters to verify. Strikingly, we identified 70 countries that have expressed their support for China’s position, even more than reported by Chinese media. In addition, the League of Arab States and Shanghai Cooperation Organization are also in line with China. (We have listed the countries and sourced all of the statements, with the date of issue, in the appendix below). It is said some others privately expressed support to China according to our global network, but we only counted the countries that went on record. It is also possible that our team may have miss some countries that are supporting China. One reason is quite obvious: some of these statements of support are not available in English. They are expressed and available in Chinese, French, Spanish, Arabic, Swahili, Khmer, or other languages. Therefore, some analysts in the English-speaking world may have merely failed to find them. More importantly, though, the discrepancy has something to do with the essence of “China’s position.” Simply put, we suppose most American media and think tanks have not yet understood what “China’s position” means. In our view, China’s position on the South China Sea issue can be interpreted as below: China does not participate in the arbitration, nor accept, recognize, or implement the award. China will adhere to peaceful negotiations and settlements of the South China Sea dispute. While disputes should be settled by the parties directly concerned in accordance with the Declaration on the Conduct of Parties in the South China Sea (DOC), China will work with ASEAN countries to maintain peace and stability in this region. The temporally-established (ad hoc) arbitral tribunal is neither a part of the Permanent Court of Arbitration (PCA) nor the International Court of Justice (ICJ). It does not have jurisdiction over the territorial disputes, which is the core of the arbitration. The arbitration itself is flawed in procedure. Thus, the award is not legally-binding, nor representing international law. To directly support any of those components is to support China’s position. On the contrary, those countries that openly endorse the arbitral tribunal as affiliated to PCA and assert China should recognize and implement the award oppose China’s position. In this regard, at least 70 countries, based on our research, endorse China’s position in various angles of the four components above, and they did so in various ways: unilaterally, bilaterally, or multilaterally. All of them welcome peaceful negotiations to settle the disputes. In addition, we should bear in mind that Philippines’ ex-parte arbitration violates its own commitment to peaceful dialogue and negotiation. Among these countries, some expressed their public and firm support for China’s stance of non-acceptance of the arbitration. Nonetheless, “non-acceptance” is only part of China’s position. American media and think tanks who use this alone for their counts misinterpreted the implication of China’s position. Generally speaking, most countries’ attitudes toward the South China Sea issue can fall into three categories. Counties in the first category, represented by Japan, oppose China’s position by supporting the Philippines’ stance while insisting China should recognize and implement the result of the arbitration, which is claimed to officially represent the PCA. This opinion is rare. China Daily mapped five in its report, but our team can only identify three: Japan, Australia, and the United States. Vietnam and the United Kingdom, though represented on the map, do not meet the definition of opposing China directly. In this circumstance, although Japan indeed raised the issue at the Asia-Europe Meeting (ASEM) in Ulaanbaatar, it was echoed by no country except the Philippines itself, according to Japanese media such as Japan Today, The Japan Times, and The Japan News. The second group includes countries that explicitly expressed their firm support to China on the arbitration, such as Pakistan, Cambodia, and some African countries. This group is bigger than the first one, but still limited. For example, in a public speech broadcast on TVK, Cambodia’s state-owned television network, on June 20, Prime Minister Hun Sen revealed diplomatic pressure over the South China Sea from “certain country outside the region” — widely believed to refer to Japan — and expressed his objection to the arbitration. In a press release found on the official website of the Ministry of Foreign Affairs of Pakistan on July 12, the Chinese neighbor reiterated its support for China on its statement of optional exception in light of Article 298 of the United Nations Convention on the Law of the Sea (UNCLOS). Among African countries, Kenya issued a statement on June 15, also on its MFA website, declaring its respect for China’s right of optional exception under UNCLOS Article 298. Gambia, another coastal country in West Africa, has stated its support of China’s position on the arbitration by clearly saying the arbitral tribunal has no jurisdiction over delimitation in the South China Sea through the Gambia Radio and Television Service (GRTS). Last, many countries, categorized as the third group, support China’s position in terms of resolving the disputes through consultations and negotiations while following the Declarations on the Conduct of Parties in South China Sea (DOC). Combining the second and the third groups, we have found 70 countries, with probably some still missing. Our global think tank network and foreign embassies in Beijing told us some other countries also hold similar attitudes, but have not openly expressed their position due to some “pressure.” We did not include them in our count. Therefore, our key finding is that the claim by Chinese officials that at least 66 countries support China’s position is verified and solid; in fact, we found five more countries. Although the second and third groups as outlined above may have different stresses on China’s position, they all welcome at least one of the four components. Considering China’s official position on the peace negotiations, these two types of opinions acknowledge the path of peace talks. Further, the fact that most countries do not show a hardline stance toward either China or the United States illustrates their anxiety about conflicts. This psychological factor is the fundamental issue behind the rally of support. In our opinion, the moderated stances of most countries can be explained by the global fundamental consensus over the South China Sea issue — a desire for peace. However, some people are worried about the possibility of an armed clash in the South China Sea and even the start of a “new Cold War” which may force countries to take sides between the United States and China. From this point of view, those who assert that only 10 countries support China not only too narrowly define “China’s position,” but also fail to fully recognize the nuance of other countries’ positions. Moreover, whether the count is 10 or 70, the real issues behind these statements are the global consensus on peace and worldwide anxieties or even fears of conflict — or worse, war. In recent years, conflicts and turbulence have risen across the world. Thus, there are great anxieties about social unrest and mass violence; there are also anxieties about the distrust between major powers, which may very likely result in a new Cold War or even hot wars if badly managed. East Asia has long been called “The Museum of Cold War,” where long-standing geopolitical and traditional security issues have not yet been settled and even have been heating up in recent years, especially after the “pivot to Asia” was introduced. Recently, the South China Sea has been the focal point of Sino-U.S. relations. However, when it comes to the South China Sea issue, some countries find themselves trapped into a dilemma: not only do they worry about the loss of economic support from China, but also they are worried about the loss of security support from the United States. Moreover, some may worry that the regional organization they belong to will be split by the South China Sea issue. Besides Cambodia mentioned above, Singapore and Thailand have also stated that they will not be involved in the disputes and called for peace. Further, ASEAN as a whole did not form a unanimous view after the arbitration, which shows even ASEAN countries try to avoid taking sides between the two giants. A great portion of China’s support comes from African and Middle Eastern states that call for diplomatic negotiations rather than unilateral actions. This is not surprising given their collective history as colonies and the deteriorating security environment in these regions. Extremism is on the rise while the South China Sea heats up. In one of our seminars in Washington D.C. recently, Professor Amitai Etzioni of George Washington University reminded us that the United States’ active response to terrorism and extremism in the Middle East and Africa will also guarantee its credibility among allies without taking on the risk of conflict with China; meanwhile, China has many common interests with the United States on anti-terrorism issues. Take a look at the tragedy in Nice, think about the death toll in Kabul, let alone the long-lasting bloody turbulence in the Middle East, then you will probably agree with our conclusion: it is time for China and the United States to work together to address our common threats — terrorism and extremism — instead of focusing on the current zero-sum game in the South China Sea. When former Chinese State Councilor Dai Bingguo famously said the arbitral award is nothing but “a piece of waste paper” in the U.S.-China Dialogue on the South China Sea held by our institute (RDCY) and the Carnegie Endowment for International Peace, we have almost forgotten his key point is that we need a cooling down. Indeed, no matter how the public reacts to the arbitration, the “fusing point” — July 12 – has already passed; all parties are evaluating the next step in the game and restarting the long-term setup for the region. As we mentioned above, peace, the real and fundamental global consensus, remains there. Whether parties want it or not, the disputes will be settled in peace while regional cooperation will continue. In fact, even in the Philippines there is an effort toward peace. Rodrigo Duterte, the new president, has shown a low-key, restrained, and cooperative attitude after the arbitration. It is reported that Fidel Ramos, a former Philippine president (and also the authors’ friend), will visit China as an envoy. All these efforts show that peace and stability remain the common interests of all parties of the South China Sea in the “post-arbitration” era. This also goes for the United States. As Jeffery Bader of the Brookings Institution wrote in his recent “framework for U.S. policy toward China,” despite the disputes over the South China Sea issue, China is still a vital stakeholder in global governance and shares a lot of common interests with the United States. In particular, China is going to hold the G20 summit in Hangzhou — a chance for China to lead the global economy recovery cooperatively with other G20 members, including the United States. So why can’t the two cooperate on the South China Sea? There have been good signs, in fact. Admiral John Richardson, the U.S. chief of naval operations (CNO) paid a successful visit to China on July 17-20, having a fruitful talk with his counterpart Adm. Wu Shengli. We hope this visit will serve as a new starting point for Sino-U.S. military exchanges after the arbitration. Furthermore, cooperative governance is plausible in the South China Sea. As the authors said at the U.S.-China Dialogue, the most devastating threat to the fishermen in and around the South China Sea is not from China, nor from the United States, but from typhoons. In this regard, all parties, including China and the United States, can cooperate on issues such as meteorological stations, data sharing, typhoon early warning systems, and joint research on climate change. When it comes to hard military issues, the mechanism for Sino-U.S. cooperation already exists. China has taken part in the RIMPAC exercises twice now; in fact, as we wrote this piece, one Chinese fleet was exercising together with U.S. Navy around Hawaii. It is time to freeze tensions as well as activating the existing military exchanges. We should also bring joint development and broader economic cooperation back to table. Recently, the Duterte government has expressed its will to cooperate with China in exploiting the resources of the South China Sea. The Philippines have some maritime area in the South China Sea that are not subject to sovereignty disputes, but does not have the technology and investment to benefit from them. Here China can do something for the Philippines. This prospect recalls the suggestion to shelve differences and seek joint development put forward by former Chinese leader Deng Xiaoping when meeting with a former Philippine leader. Finally, as we wrote in our previous article, the South China Sea issue will not stop China-ASEAN economic and financial cooperation. The 21st Century Maritime Silk Road initiative and Mekong-Lancang Mechanism initiated by China are shaping more diversified development projects, and a more flexible and open win-win situation where all ASEAN countries can obtain the investments that they urgently need, including in the sectors of manufacturing, infrastructure, and what we call the “financial infrastructure.” Moreover, the Asian Infrastructure Investment Bank (AIIB) is a financial institution with strong compatibility and feasibility. The Philippines joined the institution as a founding member; of course, Japan and the United States are welcome to join and benefit from AIIB as well. To conclude, to avoid a war and to maintain peace in the South China Sea and the Asia-Pacific is the real and fundamental global consensus behind the divergent views on “China’s position.” To make a difference, China, the United States, and other countries should bring joint development back and focus more on possible cooperation areas from anti-terrorism to economic and financial ties, eventually leading the global economy out of its sluggish and uneven recovery.” http://thediplomat.com/2016/07/who-supports-china-in-the-south-china-sea-and-why/

The South China Sea Ruling: Reinforcing China's Negative Image In Japan. Santosh Sharma Poudel, The Diplomat. “On July 12, 2016, an arbitral tribunal appointed by the Permanent Court of Arbitration under the United Nations Convention of the Sea (UNCLOS) issued a ruling that “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’” in the South China Sea, among other points. The ruling is legally binding. Yet China insisted from the start that the tribunal does not have jurisdiction over the issue. Beijing and Manila had agreed to settle their relevant disputes through negotiations; thus, China argued, Manila’s decision to unilaterally initiate arbitration was against its obligations. China would neither participate in the tribunal nor accept the ruling. Unsurprisingly, China declared that the tribunal’s award was “null and void.” However, the tribunal’s decision and Chinese reaction have implications beyond the South China Sea. While this arbitration was between the Republic of the Philippines and the People’s Republic of China, it has significant implications for Japan. Japan’s interest in the South China Sea is multi-dimensional. About $5.3 trillion in trade is conducted through South China Sea per annum, globally. Japan being a trading and resource dependent country, freedom of navigation along the sea lanes is extremely crucial for Japanese economy and security. However, another direct implication of the ruling is over the rule of international law, which is an important feature of Japanese foreign policy. Immediately after the ruling by the tribunal, Japanese Foreign Minister Fumio Kishida released a statement advocating “the importance of rule of law” and reminding that the ruling is “legally binding” and “hence the parties [read China] are required to comply.” Another important factor is the effect on Japan’s image of China as a result of Chinese (non)compliance. To start with, the lack of mutual trust between China and Japan is vast, but not new. Japanese have increasingly come to view China as “assertive” at best and a “bully” at worst, which has a contemptuous disregard for international rules and norms when those rules or norms do not favor PRC. This, to Japan, shows Chinese willingness to use the rules in their favor, and discredit them otherwise. This ruling and subsequent Chinese non-compliance provides fodder, if it was lacking earlier. China has signed and ratified UNCLOS. However, as the tribunal’s decision went against Chinese interests, China conveniently decided to discredit and reject the ruling. In fairness, China was consistent from the beginning that the tribunal’s decision will be “null and void.” This shows, at best, China cherry picking which part of international rules they have ratified will apply to them – and at worst gross disregard for international rules. This only solidifies the Japanese view that China “uses” international rules only when those rules serve Chinese interests. This has serious implication over the Senkaku (what China refers to as Diaoyu or Diaoyudao) Islands. According to analysts in Japan, Japan seems ready to battle the case in the International Court of Justice (ICJ) if China were to bring the issue there. Yet the Chinese reaction to the tribunal’s ruling in the South China Sea breeds no confidence that China would accept the ruling if it goes against China even if it were to bring the issue to ICJ, which itself is very unlikely. Thus, this effectively rules out any possible solution to the Senkaku issue vis-à-vis ICJ. As the ruling date neared, Beijing also raised objections over the selection of three of the five judges to the tribunal by then-president of the International Tribunal for the Law of the Sea (ITLOS), Shunji Yanai, who is of Japanese nationality. China suggested that Yanai’s role amounted to “bias.” Additionally, China argued that the four judges of European origin would not sufficiently understand the history of South China Sea. This can be understood as the reaction of a state which is seeking reasons to discredit a result it was determined to reject. Yet Beijing’s willingness to use any “Japan factor” in order to discredit the tribunal’s ruling shows that the trust deficit runs very deep. Some analysts have framed China’s non-compliance as a typical reaction of a “great power.” According to realists, great powers are not necessarily bound by international rules when their interest is at stake. If this is true, it is more alarming to the global community, including Japan, as to what kind of “great power” China will turn out to be. This is especially true for Japan, which is in China’s direct neighborhood and has some outstanding issues with Beijing, including the territorial dispute over the Senkakus (a dispute that Japan denies exists) and the “history” issue, among others. Already, China is being labelled as “assertive” or a “bully”; its non-compliance will only serve to reinforce that image. This has resulted in further strategic distrust between the two governments and a growing number of Japanese who view China unfavorably. According to an opinion poll by Genro in October 2015, nearly nine out of ten Japanese citizens view China unfavorably. Chinese non-compliance to international rules and norms is one of the major factors that contribute to this negative image. China’s response and actions in the days after the ruling will either mitigate or fuel these concerns. In the aftermath of the tribunal’s ruling, China has conducted military exercises closing off some parts of South China Sea. Additionally, the Southern Theater Command of the People’s Liberation Army (PLA), which looks after the South China Sea front, unveiled a series of new weapons for sea and air combat. Other reports that China is preparing to declare an Air Defense Identification Zone (ADIZ) over the South China Sea do not bring much confidence that China will look to mitigate the political and diplomatic cost incurred by the tribunal’s ruling. Instead, China seems ready to offset the cost by bolstering its force and presence in the region. On the day of the ruling, China deliberately “leaked” a photograph of China’s most advanced nuclear-powered submarine, an implicit warning. In the words of Beijing-based military commentator Song Zhongping, “no matter what the international arbitration ruling said, China will keep pushing ahead with its maritime ambitions in the South China Sea because it regards it as a ‘fortress’ ... and the only route for China to establish itself as real maritime power.” This will further give credence to the image of China as a “bully” or “assertive” nation. Chinese “non-acceptance, non-participation, non-recognition and non-compliance“ stance toward the tribunal and rejection of its ruling has only served to reinforce the existing negative image of China in Japan and beyond. It definitely will have only a negative effect on China’s soft power, including its aim to be known as responsible, law-abiding state. This is not to suggest that Japan’s image of China is a result of China activities in South China Sea alone. Sino-Japanese relations are too multi-faceted to be defined by a single issue. However, an instance like this provides a glimpse of how the two countries view one another. Also, the South China Sea ruling and Chinese response are not made in a vacuum. Japan feels the anxiety brought about by the rapid rise of China and the opaqueness of its rapidly modernizing military force. With Japan having a stake in the rule-based order in the region and facing a territorial dispute with China, Chinese activities in South China Sea are very keenly watched by Japan. Chinese activities in South China Sea serve as a potential precedent for Chinese activities in East China Sea.” http://thediplomat.com/2016/07/the-south-china-sea-ruling-reinforcing-chinas-negative-image-in-japan/

China Claims J-20 Fighter Will Be Combat Ready In 2019. George Allison, UK Defence Journal. “Two LRIP aircraft have already rolled off the line; the first began flight testing in January. The Chinese People’s Republic Army Air Force is believed to have received four J-20 jets, which have completed acceptance tests recently. It is understood that the first front-line units are supposed to activate and receive aircraft this month and are expected to be combat ready by 2019. In April 2009, a Wall Street Journal report indicated that, according to the Pentagon, information from the Lockheed Martin F-35 Lightning II had been compromised by unknown attackers that appeared to originate from China. There is some speculation that the compromise of the F-35 program may have helped in the development of the J-20. United States Secretary of Defense Robert Gates downplayed the significance of the aircraft by questioning how stealthy the J-20 may be, but stated the J-20 would “put some of our capabilities at risk, and we have to pay attention to them, we have to respond appropriately with our own programs.” The main weapon bay is capable of housing both short and long-range air-to-air missiles. Two smaller lateral weapon bays behind the air inlets are intended for short-range missiles.” https://ukdefencejournal.org.uk/china-claims-j-20-fighter-will-combat-ready-2019/?utm_source=TW&utm_medium=Twitter&utm_campaign=social

Fatal Crash Of Chinese J-15 Carrier Jet Puts Question Mark Over Troubled Programme. Choi Chi-yuk, South China Morning Post. “Mainland state media confirmed for the first time yesterday that a home-grown, carrier-based J-15 jet fighter crashed during training in April. The crash could deal a blow to the development of the fighter jet and cast a shadow over the PLA Navy’s blue sea strategy and aircraft carrier programme. J-15s are the core jet fighters for the mainland’s aircraft carrier, the Liaoning, and other more advanced domestic carriers reportedly under construction. China National Radio reported yesterday that a top-class PLA J-15 pilot died after he lost control of his plane during a simulated deck landing exercise at a unspecified inland base. “When Zhang Chao was flying a carrier-based jet fighter in a mock landing on an aircraft carrier on April 27, he encountered a breakdown with the fly-by-wire flight control system,” the report said. “At the critical moment, Zhang tried his best to save the aircraft. When the pushrods failed, he ejected and died as a result of an injury on landing.” Macau-based military expert Antony Wong Dong warned that the fatal accident might indicate that the J-15 was not of high enough standard for an aircraft carrier, which would be a major disappointment to the navy. “As was with case with accidents during trial flights of the Su-27s in the 1980s, the reason behind the crash of the J-15 could either be a failure in the flight control system or a problem with production quality,” Wong said. Canada-based Kanwa Defence Review reported in January that the programme for the development of the J-15 was well behind the demands of the navy, with the aircraft’s maker, Shenyang Aircraft Corporation, managing to deliver no more than 10 of the planes between 2012 and 2015. Some military observer suggested that the People’s Liberation Army might reconsider its commitment to the J-15, but Wong said he thought the reverse might be the case. “As there is no alternative in sight, I think the Chinese military will not abandon its plan but be forced to go on building J-15s,” Wong said. The state radio report said Zhang, a 29-year-old Hunan native, had just been promoted as a full battalion ranking lieutenant commander this month. The defence ministry said late last year that it was building its second aircraft carrier, the first to be made in China.It would adopt the same ski-jump take-off design that analysts said would suit J-15 jets. Analysts had expected the carrier to be ready for use by 2020.” http://www.scmp.com/news/china/diplomacy-defence/article/1995729/fatal-crash-chinese-j-15-carrier-jet-puts-question-mark

China Says To Hold Drills With Russia In South China Sea. Ben Blanchard, Reuters. “China and Russia will hold "routine" naval exercises in the South China Sea in September, China's Defence Ministry said on Thursday, adding that the drills were aimed at strengthening their cooperation and were not aimed at any other country. The exercises come at a time of heightened tension in the contested waters after an arbitration court in the Hague ruled this month that China did not have historic rights to the South China Sea and criticized its environmental destruction there. China rejected the ruling and refused to participate in the case. "This is a routine exercise between the two armed forces, aimed at strengthening the developing China-Russia strategic cooperative partnership," China's defense ministry spokesman Yang Yujun told a regular monthly news conference. "The exercise is not directed against third parties." China and Russia are veto-wielding members of the U.N. Security Council, and have held similar views on many major issues such as the crisis in Syria, putting them at odds with the United States and Western Europe. Last year, they held joint military drills in the Sea of Japan and the Mediterranean. China claims most of the South China Sea, through which more than $5 trillion of trade moves annually. Brunei, Malaysia, the Philippines, Taiwan and Vietnam have rival claims. China has repeatedly blamed the United States for stoking tension in the region through its military patrols, and of taking sides in the dispute. The United States has sought to assert its right to freedom of navigation in the South China Sea with its patrols and denies taking sides in the territorial disputes. Russia has been a strong backer of China's stance on the arbitration case, that was brought by the Philippines. Yang said China and Russia were comprehensive strategic partners and had already held many exercises this year. "These drills deepen mutual trust and expand cooperation, raise the ability to jointly deal with security threats, and benefit the maintenance of regional and global peace and stability," he said.” http://www.reuters.com/article/us-southchinasea-china-drills-idUSKCN1080O8

Japanese Sub Visits Ex-US Navy Base In Philippines, Despite China’s Warnings. Southfront.  “A Japanese submarine has visited a former US naval base located on the edge of China’s territorial claim. On July 24, Tokyo was warned by Beijing against meddling in the South China Sea conflict, where the Hague Tribunal had recently ruled against China’s nine-dash line territorial claims. “Japan is not a party to the South China Sea issue, and considering its shameful history, it has no rights whatsoever to accuse China on the matter,” the Xinhua news agency quoted the words of Chinese Foreign Ministry spokesperson Lu Kang. However, this did not prevent one of the newest and largest Japanese submarine to visit a former US naval base in Subic Bay, in the Philippines, being escorted by two Japanese destroyers. The incident took place one day before the annual Balikatan military exercise, in which the Philippines, the United States, Australia, and Japan are going to take part over the next 12 days. Tokyo states that the submarine’s arrival in the South China Sea is not aimed at any country. Beijing has not yet commented the incident. “We don’t have any message to any country,” the China Daily information website quoted the words of the Captain of Japan’s Maritime Defense Force, Hiraoki Yoshino. The US and its Pacific allies oppose China’s construction of artificial islands in the Spratly and Paracel archipelagos, and accuse the country of attempting to establish an air defense zone. China says that its islands will be used primarily for civilian purposes, and the country has every right to build within its own territory. Nevertheless, the US has pushed regional allies to play a more active role in countering China’s growth. Balikatan of the last year was similarly seen as a way to provoke Beijing.” https://southfront.org/japanese-sub-visits-ex-us-navy-base-in-philippines-despite-chinas-warnings/

U.S. Navy’s LCAC Docks In Australian Navy’s HMAS Canberra. Naval Technology. “The Royal Australian Navy’s (RAN) Canberra-class landing helicopter dock ship HMAS Canberra (L02) has successfully received the U.S. Navy’s landing craft, air cushion (LCAC) within its internal well dock for the first time. The operation was conducted as a part of the ongoing Exercise Rim of the Pacific (RIMPAC) exercise being held off the coast of Hawaii. The event was followed by successfully recovery-and-launch of four U.S. Marine Corps’s (USMC) amphibious assault vehicles (AAV). HMAS Canberra boat group commander lieutenant Sandy Jardine said that the recovery further marks the first step in conducting collaborative operations with U.S. amphibious assets in future. Jardine said: “The AAV will bring protected mobility across the water for our soldiers, while the LCAC gives us over the horizon reach at more than 40k.” The LCAC was guided into HMAS Canberra by RAN petty officer Bosun Michael Hammond. Jardine added: “For LCAC recovery, we needed to ensure the well dock stayed dry and at the correct angle. “We achieved that by adjusting the trim of the ship, and bringing the ship up to a higher speed. “Americans and Australians have always had a good working relationship, and to be able to experience this on board HMAS Canberra has been a very rewarding experience.” http://www.naval-technology.com/news/newsus-navys-lcac-docks-in-australian-navys-hmas-canberra-4960907
Posted by Alex Gray | July 26, 2016

China And Asean Reach Deal On Uninhabited South China Sea Islands. Catherine Wong, South China Morning Post. “China and Asean members agreed on Monday to avoid basing people on now-uninhabited islands and reefs in the disputed South China Sea, as the bloc made its first official joint statement on the waters since an international tribunal ruling this month. The Association of Southeast Asian Nations’ joint communique expressed serious concerns over land reclamation and “escalations of activities in the area”, but did not directly challenge China nor mention the ruling. China and Asean then released a separate joint statement on implementing the Declaration on the Conduct of Parties in the South China Sea. The statement said China and Asean agreed to refrain from “action of inhabiting on the presently uninhabited islands, reefs, shoals, cays, and other features and to handle their differences in a constructive manner”. It also underlined their pledge to respect freedom of navigation and to peacefully solve territorial disputes through negotiation in accordance with international laws, including the UN Convention on the Law of the Sea. The Asean statement came after days of deadlock among senior Asean diplomats at a series of meetings in Vientiane, during which China’s close ally Cambodia was blamed for opposing references to the South China Sea in the joint statement. An Asean diplomat said the statement was drafted with Asean’s common interest in mind, but “not the interest of certain countries”. In a meeting late yesterday with Asean foreign ministers, US Secretary of State John Kerry made no direct mention of the South China Sea tensions between China and its smaller neighbours. But he did praise Asean generally for speaking up for “a rules-based international system that protects the rights of all nations whether big or small”, the Associated Press reported. In a meeting with his Asean counterparts, Foreign Minister Wang Yi called for a new page to be turned after the ruling by the Permanent Court of Arbitration in The Hague. China, which refused to take part in the arbitration or implement the tribunal’s ruling, has insisted the disputes will not affect its relations with Asean. Wang said his meeting with Asean foreign ministers was mostly about cooperation. “Only one country mentioned the arbitration [on the South China Sea],” he said. China and Asean would continue to push for the implementation of the Declaration on the Conduct of Parties in the South China Sea. Discussions about a binding code of conduct would be finalised by the first half of next year, he said. Wang warned again against “interference from outside countries” and efforts to “divide relations between China and Asean”, a veiled reference to the United States and Japan. “This page has to be turned over … The hype has to cool down,” he said. A Chinese diplomat said Beijing had been pushing for cooperation with Asean to export excess production capacity to countries in the region. Jinan University Southeast Asian studies expert Zhang Ming¬liang said Asean struck a careful balance in its response to the South China Sea disputes. “Asean has been very cautious on the issue. It has to safeguard its interests while at the same time avoid angering China,” he said. Zhang said the bloc had learned to manage differences since the 2012 meetings in Cambodia, when Asean officials failed to issue a joint statement for the first time due to clashes over the South China Sea. He had doubts that China and Asean could agree on the code of conduct by the first half of 2017 due to the grave differences between China and Asean countries. “But the two sides can start their cooperation in less sensitive areas such as fisheries and joint maritime rescue efforts,” Zhang said.” http://www.scmp.com/news/china/diplomacy-defence/article/1994669/china-and-asean-reach-deal-uninhabited-south-china-sea

U.S. To Support Talks In South China Sea Dispute. Ben Otto, The Wall Street Journal. “The U.S. said it would support talks between China and the Philippines to resolve a territorial dispute in the South China Sea, as the two global powers tried to calm tensions heightened by a recent ruling over Beijing’s sweeping claims there. U.S. Secretary of State John Kerry on Tuesday said that he would encourage Philippine President Rodrigo Duterte to negotiate bilaterally with China when the two meet in Manila on Wednesday. “This could be a very important moment of shifting how this discussion is taking place,” Mr. Kerry said in the Laotian capital. He added that China’s foreign minister conveyed to him in a meeting the night before that China seeks to “move away from the public tensions and to turn the page.” No claimant in the South China Sea, Mr. Kerry said, “should take steps that wind up raising tensions.” The comments followed a gathering of the 10-member Association of Southeast Asian Nations and other nations with Asian interests which was dominated by divisions over China’s territorial claims and activities in the sea. In a case brought by the Philippines, an international arbitration tribunal ruled on July 12 against China’s claims to historic and economic rights over most of the sea, where four Southeast Asian nations—the Philippines, Vietnam, Malaysia and Brunei—assert claims that overlap with Beijing’s. Fears of militarization grew as China rejected that ruling and announced long-range bomber flights to distant islands and new naval drills. The U.S. said it would continue sailing and flying through the region. France suggested European navies should patrol the waters as well. This week’s developments suggest China and the U.S. are trying to ratchet down the tensions. Regional diplomats in Laos said China has dropped mention of its “nine-dash line” territorial demarcation of the South China Sea in recent statements. They said China has also called for action on a long-delayed “code of conduct” for the region. And that it agreed that nations shouldn’t inhabit “presently uninhabited” islands and reefs. With that, these people said, China could be signaling that would curb its practice of building up artificial islands in the disputed waters, complete with airstrips and other facilities. “Everyone is making room for things to calm down,” one senior Southeast Asian diplomat said. U.S. National Security Adviser Susan Rice, who is visiting China this week, urged officials in Beijing to use the recent arbitration tribunal ruling as an opportunity to initiate diplomatic efforts that can ease tensions in the South China Sea, a senior Obama administration official said. Still unclear is how talks would proceed between China and the Philippines. China last week said it would negotiate its claims with the Philippines without acknowledging the tribunal’s ruling. The Philippines rejected an offer to talk with Beijing on that basis. Mr. Kerry didn’t address the issue on Tuesday. “It’s very odd that China is asking the U.S. to support bilateral talks when Beijing has imposed an unacceptable precondition on Manila that it must disregard the [tribunal’s] ruling,” said Ian Storey, a Southeast Asia specialist at the ISEAS Yusof-Ishak Institute in Singapore. “There’s no way Washington would put pressure on the Philippines to hold talks with China on the basis of putting the ruling aside.” The U.S., Japan and Australia on Monday called on China and the Philippines to abide by the ruling, noting in a joint statement that the decision was “final and legally binding on both parties.” The statement added that “the ministers stressed that this is a crucial opportunity for the region to uphold the existing rules-based international order.” The three countries also urged all states to refrain from large-scale land reclamation, the construction of outposts and the use of those outposts for military purposes.  Asean hasn't issued a statement on the ruling, concluding its own meetings in Laos with a joint communiqué that called for respecting legal process, which diplomats said was an allusion to abiding by the July 12 ruling. Diplomats said Vietnam and the Philippines, a close U.S. ally, had pushed to include mention of the ruling in the 31-page communiqué but were blocked by Cambodia, a Chinese ally. The Philippines said that Asean had supported what they said was Foreign Affairs Secretary Perfecto R. Yasay Jr.’s proposal “to enshrine the ‘rule of law’ as a fundamental principle of Asean.” A note about respecting international legal processes, including those of the U.N. Convention on the Law of the Sea that guided the tribunal’s decision, appeared on the first page of the joint communiqué. The territorial dispute presents Mr. Duterte with a major foreign policy challenge. Mr. Duterte said during his presidential campaign that he favored talks with China but he has faced public pressure since the ruling to take a strong line. Mr. Duterte has repeatedly said that military force isn’t an option and used his maiden state of the nation address to strongly affirm the ruling “as an important contribution to the continuing efforts to pursue the peaceful resolution and management of our dispute” with China.” http://www.wsj.com/articles/beijing-asks-u-s-to-back-china-philippine-talks-1469511072

Chinese RIMPAC Delegation Snubs Japanese Sailors. Sam LaGrone, USNI News. “The Chinese naval delegation to the Rim of the Pacific exercises barred at least some Japanese sailors from touring their ships and only reluctantly invited members of the Japanese Maritime Self Defense Force to a reception aboard a People’s Liberation Army Navy warship, USNI News has learned. Several sources told USNI News that during more than a week of in-port receptions aboard participating countries’ warships, the Chinese delegation skipped the July 2 Japanese reception. Additionally, the PLAN initially did not invite the JMDSF attendees to their reception until U.S. leadership made public comments about inclusion. U.S. Pacific Fleet Commander Adm. Scott Swift and 3rd Fleet commander Vice Adm. Nora Tyson stressed that a multitude of countries working together was key to RIMPAC’s success and both stressed inclusivity in their July 5 opening day speeches. “While these specific allegations were not addressed to leadership, both Adm. Swift and Vice Adm. Tyson have repeatedly reminded all participants that inclusivity is critical to the mission of RIMPAC,” Cmdr. Ryan Perry with U.S. 3rd Fleet told USNI News last week. Several Japanese sailors attempting to tour Chinese ships during the subsequent RIMPAC open house day were turned away at the PLAN quarterdecks, two sources familiar with the snub told USNI News. U.S. Navy officials did not comment on the incidents further. A Navy official told USNI News there have been no problems with the Chinese during the at-sea portion of exercise on Monday. Last week, the commander of the Littoral Combat Ship USS Coronado (LCS-4) told USNI News operating with the Chinese has been positive. “The level of partnership I’ve seen so far has actually exceeded my expectations, and I feel it’s been a mutually productive exercise. We’ve gotten to learn a little bit about how they operate and develop some of those useful insights that I’m sure will pay dividends once we get over to 7th Fleet,” Cmdr. Scott Larson said on July 21. Attendees of RIMPAC 2014 – the first to which China was invited – told USNI News there were no issues with access to Chinese ships during the reception or the open house days. As part of the biennial RIMPAC exercise, service members from more than 20 countries meet and mingle on one another’s ships during receptions and cultural exchanges, which are hosted prior to the start of at-sea operations. Pictures published from this year’s event show U.S. Pacific Command commander Adm. Harry Harris pounding rice flour with a mallet on the Korean guided missile destroyer Sejong the Great (DDG-991), a mariachi band playing on a Mexican Navy amphibious ship during the California portion of the exercise, and a collection of specially-made RIMPAC sake boxes as a party favor on the Japanese helicopter destroyer JS Hyuga (DDH-181). Several formal naval officers who participated in the receptions at past RIMPACs told USNI News that tensions between regional rivals – like Korea and Japan – are put aside during the social portion of the exercise. What sources described as China’s snub to the Japanese at RIMPAC is reflective of the Beijing’s larger diplomatic playbook. “The Chinese use these very blunt instruments that can get under the skin of others to exhibit unhappiness or dissatisfaction as how they’re being treated,” Michael Fuchs, former U.S. deputy assistant secretary of state for East Asian and Pacific affairs, told USNI News on Monday. “Japan has been a favorite target of the Chinese and has been for some time, but are by no means alone.” In military-to-military relations, China has had a history of altering plans at short notice based on Beijing’s political mood, Naval War College professor James Holmes told USNI News on Monday. In the case of the U.S., China has canceled military-to-military relations for periods over arms sales to Taiwan and has revoked long-planned U.S. carrier port visits to Hong Kong with no notice. “We’ve made the mistake of showing how much we covet military-to-military engagement, so they see canceling mil-mil engagement as a cudgel to beat us around the head when we annoy them,” Holmes said. In May, the Stennis Carrier Strike Group was turned away from Hong Kong shortly after Secretary of Defense Ash Carter made a highly publicized visit to USS John C. Stennis(CVN-74) while it was in the South China Sea. In 2013, the Chinese sent the guided missile destroyer Qingdao to Australia’s International Fleet Review for less than a weekend while other participants stayed several more days, Holmes wrote in The Diplomat. While docked in Sydney, the crew stayed on the ship and no tours were allowed. Holmes said despite the alleged in-port reactions by the Chinese, Beijing values their inclusion in the exercise. “I will say I’m surprised they haven’t pulled out of [U.S. military-to-military] contacts entirely considering how events in the South China Sea have unfolded recently,” Holmes said. “Best I can tell, RIMPAC has gone off okay. They seem to place a lot of stock in that.” RIMPAC 2016 runs until Aug. 4 and includes, “27 nations, 45 ships, five submarines, more than 200 aircraft and 25,000 personnel,” according to the Navy.” https://news.usni.org/2016/07/25/rimpac_china_japan_snub

Retired Chinese General Sentenced To Life In Prison For Corruption. Josh Chin, The Wall Street Journal. “A retired Chinese general became the highest-ranking military official to be convicted as part of President Xi Jinping’s antigraft drive when a military court sentenced him to life in prison Monday for corruption. State media said 74-year-old Guo Boxiong, who was one of the top two officials in China’s military before his retirement three years ago, was stripped of his rank and had all of his personal assets confiscated, the official Xinhua News Agency said in a short report. Gen. Guo was expelled from the Communist Party a year ago over bribe allegations, a precursor to his conviction and sentencing. In a separate interview transcript published on the Ministry of Defense website, Xinhua quoted an unnamed court representative as saying Gen. Guo was found guilty of abusing his position to help others win promotion and accepting “an immense amount“ of bribes, either directly or through intermediaries. It didn’t elaborate. “Guo Boxiong made a full confession to the accusations of corruption against him, expressing his guilt and regret,” Xinhua quoted the court representative as saying. The trial was held behind closed doors as it involved state secrets, the news agency said. Gen. Guo served as vice chairman of the powerful Central Military Commission under former President Hu Jintao from 2002 to 2012. His case is just one of a series of high-profile prosecutions of senior military figures under the umbrella of Mr. Xi’s long-running antigraft campaign. His fellow vice chairman, Gen. Xu Caihou, was accused of corruption in 2014 but died of bladder cancer before he could face trial. Dozens of serving and retired generals have been detained or convicted on corruption charges under Mr. Xi, who has undertaken an ambitious program to remake the People’s Liberation Army into a modern force more capable of projecting power abroad. The military has been increasingly called upon to defend China’s claims in disputed areas of the East China Sea and South China Sea. A commentary posted on an official military website when Gen. Guo was expelled from the party a year ago compared him to Lin Biao, an army chief who was accused of plotting a coup against Mao Zedong before he died in a plane crash in 1971. Gen. Guo’s son, Guo Zhenggang, who is also a general, was placed under investigation for corruption in March 2015. It hasn’t been possible to reach either Guo for comment.” http://www.wsj.com/articles/retired-chinese-general-sentenced-to-life-in-prison-for-corruption-1469451107

Japan Defense Head, U.S. Pacific Command Chief Agree On S. China Sea. Kyodo News. “Japanese Defense Minister Gen Nakatani and Adm. Harry Harris, commander of the U.S. Pacific Command, affirmed Monday the importance of respecting a recent international tribunal ruling dismissing China's territorial claims in much of the South China Sea during talks in Tokyo. Harris' four-day visit to Japan from Sunday comes after an international court based in The Hague ruled on a case brought by the Philippines, finding "no legal basis" for China's claims to historic and economic rights over most of the waters. There appeared to be a slight difference in tone over the South China Sea ruling in the official account of their talks, a Japanese official said, though he declined to elaborate. But Harris agreed with Nakatani's assertion that it is important for the parties to conduct themselves according to international law, the official said. Nakatani and Harris also affirmed the importance of involving China in international affairs, the official said. Harris praised Japan's Maritime Self-Defense Force's participation in the ongoing Rim of the Pacific, or RIMPAC, exercise set to run through to Aug. 4, according to the official. The drill also includes the United States and China among a host of other maritime nations, according to the official. The official said that Nakatani and Harris also agreed to work together with South Korea in addressing North Korea's development of ballistic missiles, and affirmed their commitment to ongoing Japan-U.S. defense cooperation in the East China Sea. Tokyo has expressed concern over Chinese naval vessels' recent sailing into and around Japanese territorial waters in the East China Sea, including into a contiguous zone surrounding the Senkaku Islands. Beijing claims the uninhabited islets and calls them Diaoyu. Nakatani told Harris the revision in April last year of the Japan-U.S. defense cooperation guidelines and security legislation enacted by the Diet later last year have helped create "an effective framework for a stronger Japan-U.S. alliance." The legislation effectively expanded the role of Japan's Self-Defense Forces, allowing them to come to the aid of allies. "In response to recent (circumstances) including North Korea's missile launches and China's activities in the East and South China seas, I feel it is ever more important for Japan and the United States to respond thoroughly through our alliance," Nakatani told Harris as their meeting began. According to the official, Nakatani and Harris also agreed to go forward on the relocation of the U.S. Marine Corps Air Station Futenma in Okinawa, and the recently resumed construction of helipads in a U.S. training area elsewhere in the island prefecture. Both issues have attracted fierce local criticism. Nakatani acknowledged Harris' visit Sunday to areas in Kumamoto Prefecture, southwestern Japan, hit hard by April's deadly earthquakes, expressing thanks for U.S. airlift support in recovery efforts. "It's just another indication that friends help friends, and points also to the strength of the Japan-U.S. alliance," Harris said. Harris said he and Adm. Katsutoshi Kawano, chief of the Japanese Defense Ministry's Joint Staff, will tackle areas of important mutual interest in talks on Monday and Tuesday. Before sitting down to their talks, the officials discussed the hit smartphone game "Pokemon Go," released in over 30 countries including the United States and Japan, which presents the risk of users trespassing into restricted areas in search of virtual creatures to capture. Harris said he had heard the area around the Defense Ministry was a Pokemon hotspot, and Nakatani responded that the premises are set up so the creatures do not enter. The ministry is entirely free of "PokeStops," where users congregate to catch rare Pokemon and receive in-game items.” https://english.kyodonews.jp/news/2016/07/422894.html

The Coral Casualty Of China’s Marine Rampage. Andrew Browne, The Wall Street Journal. “– Protected by their country’s navy, Chinese fishing boats devastated mile upon mile of pristine coral in Philippine waters, using their propellers as blades to hack out giant clams buried in the reefs. Other threatened species that fell prey to Chinese poaching on an industrial scale, with official connivance: turtles, sharks, eels and oysters. And all of this, according to the unanimous ruling of an international tribunal in The Hague, was just the prelude to an even greater catastrophe – China’s dredging of seven massive islands in the Spratlys chain on top of the already traumatized reef systems that form a critical link in the fragile ecology of the South China Sea. The headline-grabbing part of the verdict, which stretches to nearly 500 pages, is its categorical striking down of China’s historic claims over almost the entire South China Sea within a “nine-dash” line. Yet the section that describes China’s obliteration of reefs is by far the most damning. It is a portrait of destructive power, unconstrained by international law, public opinion in the region, or seafaring tradition. The judges came up with a detailed description, backed by reams of scientific evidence, of how coercive Chinese policies now imperil the livelihoods of some of the region’s most vulnerable communities who live on the edge of hunger – those that make a living from the sea. Even though Obama administration officials harp constantly on the Chinese threat to navigation and overflight, that danger is theoretical, for now at least. China hasn’t yet interfered with commercial shipping or aviation. If it did, China itself would be the most notable casualty since it is the world’s largest trader. Ecological devastation, on the other hand, is all too real. Some 270 million people inhabit coastal areas of Southeast Asia; millions depend directly on the sea, many through fishing. China isn’t the only country that has made life precarious for these groups. Marine stocks in the South China Sea are severely depleted as a result of overfishing, practices like dynamite and cyanide fishing, as well as coastal pollution. Likewise, damage to reefs, where the cycle of marine life in the oceans begins, has been under way for years. Here comes China with the world’s largest fishing fleet, rapidly expanding navy and growing territorial ambition, exacerbating a crisis that condemns fishing villages in littoral states like the Philippines to poverty. According to one scientific report published in 2013, coral cover on atolls and archipelagoes in disputed areas of the South China Sea – six governments, including China and the Philippines, contest ownership – has declined from around 60% to 20% within the past 10 to 15 years. The situation off China’s coast is even more dire: Coral abundance has declined by at least 80% over the past 30 years on its fringing reefs, the report says. The tribunal verdict cites research by John McManus, a marine biologist at the University of Miami, who says the propeller harvesting of giant clams “exceeded anything I had previously seen in four decades of investigating coral reef degradation.” It quotes Sebastian C.A. Ferse, a coral-reef ecologist at the Leibniz Center for Tropical Marine Ecology in Bremen, Germany, as saying the artificial islands have destroyed complex reef systems formed over millennia and they won’t recover for decades, perhaps centuries. It is possible, he warns, that the demolition could have a “cascading effect” across the South China Sea, which covers 1.4 million square miles. China outright dismisses evidence that it is presiding over the environmental rape of a stretch of water that it increasingly treats like its own private lake. “China cares about protecting the ecological environment of relevant islands, reefs and waters more than any other country, organization or people in the world,” a Foreign Ministry spokesman said in May. China has rejected the tribunal’s verdict. The commander of the People’s Liberation Army Navy vowed that China would press ahead with building artificial islands in the Spratlys. Construction “is reasonable, justified and lawful,” Wu Shengli said, according to the official Xinhua News Agency. If ever there was an issue for Southeast Asian countries to tackle, as a regional group, this is it. Yet over the weekend, a statement that followed a meeting of foreign ministers of the Association of Southeast Asian Nations managed to avoid reference to the tribunal’s ruling altogether. China is a signatory to the United Nations Convention on the Law of the Sea – whose rules on the preservation of marine life it has blatantly flouted, according to the tribunal – but insists on negotiations with neighbors one by one to settle issues in the South China Sea. With a multiparty solution off the table, what’s ahead for the coral reefs? China can double down on its defiant island-building, or quietly comply with the ruling of The Hague. To gauge where one of the world’s most important marine areas is headed, don’t listen to the bluster of China’s admirals, focus instead on what its fishing boats and dredgers are doing.” http://www.wsj.com/articles/the-coral-casualty-of-chinas-marine-rampage-1469508763

Fantasy Island. Steve Mollman, Quartz. “On July 14, Taiwan’s ex-president Ma Ying-jeou held up a bottle of water during a press conference to prove a key point – that 400-meter-wide Itu Aba, the largest feature in the contested Spratly archipelago, is clearly not a rock. The water, sourced from the feature Taiwan calls Taiping Dao, is proof that it is actually an island, he said. The difference is worth billions of dollars to Taiwan, and could affect nations from Japan to France. Ma was responding to an international tribunal’s July 12 ruling that Itu Aba is legally a “rock,” based on the United Nations Convention on the Law of the Sea (UNCLOS). In terms of maritime rights, that means Itu Aba generates a paltry 12-nautical-mile territorial sea around it. The far more valuable designation of “island” produces an exclusive economic zone (EEZ) of 200 nautical miles. That would have given Taiwan and its industries coveted rights to fish, oil, natural gas, and other resources. The classification, made by the Permanent Court of Arbitration in The Hague, is certainly a blow to Taiwanese pride and its potential GDP. But Taiwan is not alone. Many “islands” dotting the globe generate EEZs, and many of those are smaller than Itu Aba. Nations with such EEZs – among them the U.S., Japan, and France – will now find they are more vulnerable to legal challenges. The July 12 ruling “adds great clarity to the law of the sea,” said Peter Dutton, a U.S. Naval War College professor, in an interview with the U.S. National Committee on U.S.-China Relations on July 13. “There’s now a lot more certainty about what islands get resource zones and what don’t. This is an issue that I think all states are now going to have to pay careful attention to. This is not just about China or even about other countries in the South China Sea.” The Spratly archipelago, about the size of Tunisia, is a scattered collection of islets, banks, reefs, and shoals. Each of the features is claimed by one nation or another, among them Vietnam, the Philippines, and most notably by China, which claims not just the Spratlys but most of the South China Sea, and has been frightening neighbors with its militarization in the area. With its small size and lack of aggression, Taiwan isn’t frightening anyone, although because of a shared history with China it makes an equally sweeping claim to the sea. But it did have high hopes for Itu Aba. It put significant effort into making the islet more island-like, adding gardens, livestock, and buildings. It also put in a runway, which looks inordinately large on the backdrop of the islet. In March, Taiwan arranged a group trip to the islet so that journalists and others could see for themselves just how island-like the place is. The visitors, once they emerged from a four-and-a-half-hour flight from Taipei aboard a military transport plane, learned that Taiwan had spent more than a $100 million upgrading the runway and port at Itu Aba. They also learned Itu Aba has fresh water (otherwise nearly nonexistent in the Spratlys), is naturally formed, and supports livestock. By contrast, China is reportedly considering the use of floating nuclear reactors for water desalination to support the artificial islands it has built in the sea atop reefs. Here’s one reason Taiwan cares so much about the classification. An EEZ surrounding Itu Aba would have overlapped with the EEZ generated by the west coast of the Philippines’ Palawan Island, near which is Reed Bank, believed to hold significant reserves of oil and natural gas. To resolve the overlap Taipei and Manila would have likely worked out a maritime boundary, and Taiwan (assuming its sovereignty over Itu Aba held) would have solidified rights to some of the hydrocarbon riches. After the ruling, it’s clear that under international law only the Philippines has sole extraction rights to those riches. What’s still unclear is whether Taiwan and China will respect the ruling. So far they have both strongly rejected it. In the past Chinese forces have prevented the Philippines from exploring for oil at Reed Bank, which falls within China’s “nine-dash line.” That line, drawn on a map in the 1940s, is used by China (and Taiwan) to justify its claims to nearly the entire sea. But the tribunal invalidated that line, which is welcome news for not only the Philippines, but also for Vietnam, Malaysia, and Indonesia, which have also encountered China’s aggression in their EEZs because of it. The tribunal did not rule on who has sovereignty over any of the contested features in the sea, as that was outside its jurisdiction. What it did rule on, under UNCLOS, is what’s legally an island versus a rock, among other maritime distinctions. The convention states that “rocks which cannot sustain human habitation or economic life of their own shall have no exclusive economic zone or continental shelf.” That passage, the tribunal noted, was there for a reason: [It] serves to disable tiny features from unfairly and inequitably generating enormous entitlements to maritime space that would serve not to benefit the local population, but to award a windfall to the (potentially distant) State to have maintained a claim to such a feature. The tribunal studied the history of UNCLOS to find further clarity, and also observed: The purpose of the exclusive economic zone that emerges from the history of the Convention... was to extend the jurisdiction of States over the waters adjacent to their coasts and to preserve the resources of those waters for the benefit of the population of the coastal State. If any nation is the “coastal State” in relation to Itu Aba, it’s the Philippines. The city of Puerto Princesa on its Palawan Island lies less than 490 km away, compared to the southern part of Taiwan at more than 1,500 km to the north. Designating Itu Aba a “rock” will have ramifications far beyond the South China Sea, partly because it sets a precedent. The five judges who issued the ruling “really shape the future of the law,” said Dutton. “These are five of the world’s most learned international law-of-the-sea scholars. They understand the law, they understand how it was developed.” Three of the judges who worked on the case are also judges on the International Tribunal for the Law of the Sea (ITLOS), an intergovernmental organization established by UNCLOS to settle disputes arising out of the interpretation and application of the UN convention. Another has served ITLOS as president and judge and currently participates as an ad hoc judge. One EEZ that’s more legally vulnerable after the ruling surrounds Okinotorishima, an uninhabited atoll claimed by Japan in the Philippine Sea. That EEZ includes rare metals in the seabed and possibly oil and gas. China, South Korea, and Taiwan have argued that Okinotorishima is at most a rock. Much of Okinotorishima’s dry “land” consists of three concrete structures. Japan would probably now lose a case challenging the EEZ. Among U.S. territories, the EEZs generated by Johnson Atoll (south of Hawaii), Jarvis Island (in the south Pacific), and Palmyra Atoll and Kingman Reef (in the northern Pacific) are now thrown into question. For France, ones around Clipperton Island (near Mexico), the Crozet Islands (between Africa and Antarctica), and parts of French Polynesia have less legal validity. There are more examples, but none of them matters much to Taiwan. On July 20 a group of Taiwanese lawmakers, and separately a group of patriotic fishermen, traveled to Itu Aba to reassert their nation’s sovereignty, protest the ruling, and, probably, blow off some steam. But it didn’t change the ruling. And as for that bottle Ma held up at the news conference? It soon emerged that the water in it was not really from Itu Aba – yet another claim struck down. Gulp.” http://qz.com/737219/this-tiny-islet-in-the-south-china-sea-is-now-officially-a-rock-and-the-implications-are-global/

Posted by Alex Gray | July 25, 2016

Imagery Shows Chinese HQ-9 Battery Being Removed From Woody Island. Sean O’Connor, Jane’s. “Satellite imagery captured on 10 July shows an HQ-9 strategic surface-to-air missile (SAM) battery on Woody Island in the process of being taken off the island on board a Chinese naval vessel. The Airbus Defence and Space image revealed that the battery had been removed from its deployment site along the northern coast of Woody Island in the Paracels, a move that coincided with the conclusion of military exercises in the area that took place prior to the Permanent Court of Arbitration's (PCA's) 12 July ruling on the South China Sea dispute. Imagery taken on 8 July shows most of the dispersed HQ-9 battery components concealed under camouflage netting. Three transporter-erector-launcher (TEL) vehicles and the battery's Type 305A target acquisition radar (TAR) remained uncovered. Imagery captured a day later shows HQ-9 battery components uncovered and garrisoned together near the radar position. On 10 July, subsequent imagery showed a column of vehicles, including probably HQ-9 TELs, parked on a road adjacent to the island's southern harbour. A Type 072A landing ship berthed in the harbour represented a possible transhipment option for the equipment. The HQ-9 battery, present on the island since at least February 2016, is likely to be sent back to China for maintenance. At present, Woody Island lacks garrison facilities sufficient to house the HQ-9 battery. Continued construction on the island may result in a garrison and a prepared SAM site appearing in the near future. China has controlled all of the Paracels, which are also claimed by Vietnam and Taiwan, since the mid-1970s and the end of the Vietnam War.” http://www.janes.com/article/62442/imagery-shows-chinese-hq-9-battery-being-removed-from-woody-island\

China Scores Diplomatic Victory, Avoids Criticism From ASEAN. Japan Times. “Southeast Asian nations overcame days of deadlock Monday when the Philippines dropped a request for their joint statement to mention a landmark legal ruling on the South China Sea, officials said, after objections from Cambodia. Beijing publicly thanked Cambodia for supporting its stance on maritime disputes, a position that threw the regional block’s meeting in the Laos capital of Vientiane into disarray. Competing claims with China in the vital shipping lane are among the most contentious issues for the Association of Southeast Asian Nations, with its 10 members pulled between their desire to assert their sovereignty while finding common ground and fostering political and commercial ties with Beijing. China claims most of the sea, but ASEAN members the Philippines, Vietnam, Malaysia and Brunei all have rival claims. In a ruling by the U.N.-backed Permanent Court of Arbitration announced July 12, the Philippines won an emphatic legal victory over China on the dispute. The Philippines and Vietnam both wanted the ruling — which denied China’s sweeping claims in the strategic waterway that channels more than $5 trillion in global trade each year — and a call to respect international maritime law to feature in the communique. Calling for bilateral discussions, Cambodia opposed the wording on the ruling, diplomats said. Manila agreed to drop the reference to the ruling in the communique, one ASEAN diplomat said Monday, in an effort to prevent the disagreement leading to the group failing to issue a statement. The communique referred instead to the need to find peaceful resolutions to disputes in the South China Sea in accordance with international law, including the United Nations Convention on the Law of the Sea, to which the court ruling referred. “We remain seriously concerned about recent and ongoing developments and took note of the concerns expressed by some ministers on the land reclamations and escalation of activities in the area, which have eroded trust and confidence, increased tensions and may undermine peace, security and stability in the region,” the ASEAN communique said. It was important to avoid militarization of the region, and for freedom of navigation to be maintained, ASEAN said. Beijing says the court ruling has no bearing on its rights in the sea, and described the case as a farce. Cambodia’s position was the right one and would safeguard unity of ASEAN and cooperation with China, Chinese Foreign Minister Wang Yi told Cambodian Foreign Minister Prak Sokhon, according to a statement posted on the Chinese Foreign Ministry’s website early Monday. “China greatly approves of Cambodia and other ASEAN countries taking charge of impartiality and safeguarding fairness,” Wang said. Such statements by the grouping have previously been issued, notably after an ASEAN-U.S. summit in California in February, and have led to criticism that ASEAN is becoming a toothless organization. “Certainly, Cambodia’s paralysis of ASEAN … hurts ASEAN’s unity, cohesion, relevance and reputation,” said Malcolm Cook, an analyst at the Institute of Southeast Asian Studies, a Singapore think tank. “It makes ASEAN peripheral, not central, on this issue.” “For Laos and Cambodia, they clearly see relations with China as more important than their membership in ASEAN and are willing to damage ASEAN to aid their relations with China,” he said. China frequently blames the United States for raising tensions in the region and has warned regional rival Japan to steer clear of the dispute. “We will not permit any outside force to seek to exploit and hype up the so-called South China Sea arbitration case and bring chaos to this region,” Wang said. The United States, allied with the Philippines and cultivating closer relations with Vietnam, has called on China to respect the court’s ruling. It has criticized China’s building of artificial islands and facilities in the sea and has sailed warships close to the disputed territory to assert freedom of navigation rights. On Sunday, Wang reiterated his government’s position that it will only accept bilateral negotiations with the Philippines. “Every country has the same position as China, that is that we should fully and effectively implement the regional Code of Conduct, and in that COC it clearly states the dispute should be resolved by peaceful, sit-down talks between the parties directly concerned,” he said. In recent days, China’s military has staged live-firing exercises in the area and said it would begin regular aerial patrols over the sea. It also has asserted that it will not be deterred from continuing construction of its man-made islands. U.S. Secretary of State John Kerry arrived in Laos’ capital Monday. He is expected to discuss maritime issues in a meeting with Wang, as well as in meetings with ASEAN members. Both are in town for the ASEAN regional forum and East Asia summits, which bring ASEAN diplomats together with the U.S., China, Japan, Russia and several other countries. Kerry will urge ASEAN nations to explore diplomatic ways to ease tension over Asia’s biggest potential military flash point, a senior U.S. official said ahead of his trip. Barack Obama is set to become the first U.S. president to visit Laos, attending an annual summit in September. Nobel laureate Aung San Suu Kyi is also in Laos, making her debut at ASEAN meetings as Myanmar’s foreign minister.” http://www.japantimes.co.jp/news/2016/07/25/asia-pacific/asean-makes-last-ditch-attempt-consensus-south-china-sea/#.V5YJ_Fe_1i9

China Bans Internet News Reporting As Media Crackdown Widens. Bloomberg News. “China’s top internet regulator ordered major online companies including Sina Corp. and Tencent Holdings Ltd. to stop original news reporting, the latest effort by the government to tighten its grip over the country’s web and information industries. The Cyberspace Administration of China imposed the ban on several major news portals, including Sohu.com Inc. and NetEase Inc., Chinese media reported in identically worded articles citing an unidentified official from the agency’s Beijing office. The companies have “seriously violated” internet regulations by carrying plenty of news content obtained through original reporting, causing “huge negative effects,” according to a reportthat appeared in The Paper on Sunday. The agency instructed the operators of mobile and online news services to dismantle “current-affairs news” operations on Friday, after earlier calling a halt to such activity at Tencent, according to people familiar with the situation. Like its peers, Asia’s largest internet company had developed a news operation and grown its team. Henceforth, they and other services can only carry reports provided by government-controlled print or online media, the people said, asking not to be identified because the issue is politically sensitive. The sweeping ban gives authorities near-absolute control over online news and political discourse, in keeping with a broader crackdown on information increasingly distributed over the web and mobile devices. President Xi Jinping has stressed that Chinese media must serve the interests of the ruling Communist Party. The party has long been sensitive to the potential for negative reporting to stir up unrest, the greatest threat to its decades-old hold on power. Regulations forbidding enterprise reporting have been in place for years without consistent enforcement, but the latest ordinance suggests “they really mean business,” said Willy Lam, an adjunct professor at the Chinese University of Hong Kong’s Center for China Studies. Xi is cementing his power base and silencing dissenters ahead of a twice-a-decade reshuffle at next year’s party congress. Lam said that he "is really tightening up his crusade to silence opponents in the media." The regulator will slap financial penalties on sites found in violation of the regulations, the Paper cited the official as saying. A representative of Sohu declined to comment on the report. Tencent, Sina and NetEase didn’t respond to messages and phone calls seeking comment. The cyberspace administration has yet to respond to a faxed request for comment. The government is now considering ways to exert a more direct form of influence over the country’s online media institutions. In recent months, Chinese authorities have held discussions with internet providers on a pilot project intended to pave the way for the government to start taking board seats and stakes of at least 1 percent in those companies. In return, they would get a license to provide news on a daily basis. China’s online giants serve content, games and news to hundreds of millions of people across the country -- Tencent’s QQ and WeChat alone host more than a billion users, combined. Online news services however have always operated in a regulatory gray area. They’re not authorized to provide original content and technically aren’t allowed to hire reporters or editors. Still, outlets have recently published investigative stories on official corruption cases, and covered sensitive social issues from demonstrations to human rights. For instance, NetEase ran a feature in April after the party announced an investigation into a senior Hebei provincial official, Zhang Yue. The story was later removed from the internet. “Current-affairs news” is a broad term in China and encompasses all news and commentary related to politics, economics, military, foreign affairs and social issues, according to the draft version of China’s online information law. The amended draft of the regulation is currently seeking public feedback on the CAC’s official website. The change in the guidelines on original reporting also comes weeks after China replaced its chief internet regulator. Xu Lin, a former Shanghai propaganda chief who worked briefly with Xi during his half-year stint as Shanghai party boss in 2007, succeeded Lu Wei in June as head of the cyberspace administration. The regulator has since tightened its grip on online news reports, such as by warning news or social network websites against publishing news without proper verification. In another sign that the government is exerting influence over information, the publishers of a private purchasing managers index suspended that popular gauge without explanation.” http://www.bloomberg.com/news/articles/2016-07-25/china-slaps-ban-on-internet-news-reporting-as-crackdown-tightens

Discord Between China’s Top Two Leaders Spills Into the Open. Lingling Wei and Jeremy Page, The Wall Street Journal. “Earlier this month, President Xi Jinping and Premier Li Keqiang both delivered forceful instructions on how to reform China’s state-owned sector. Their messages directly contradicted one another. On July 4, officials of the State Council, China’s cabinet, were read remarks by Mr. Xi calling for “stronger, better, bigger” state juggernauts, with a central role for the Communist Party in their management. Mr. Li’s prepared comments stressed the need to “slim down” state companies and to “follow market rules” in remaking them. Party insiders and China experts say the conflicting messaging and other recent episodes, including thinly veiled criticism of Mr. Li’s policies from the Xi camp, show how discord between the top two Chinese leaders is increasingly spilling into the open, a remarkable departure from the unified front China’s leaders traditionally seek to present. In the short term, the disunity is adding another layer of uncertainty over leaders’ promised restructuring of the Chinese economy, which has appeared stuck in recent months. Officials involved in overseeing the state sector have gathered in recent days to “study the spirit” of the conflicting July 4 instructions. Some remained confused. “There is a lack of clear direction from the top,” said an official at the State-owned Assets Supervision and Administration Commission who attended the study session. “Everybody is waiting to see what others might do,” he said. The result: “inaction.” Press officials at the commission didn’t respond to inquiries. In a statement to The Wall Street Journal on Friday, the State Council’s Information Office said “the speculative questions” raised by the Journal are “baseless.” It didn’t address the relationship between Messrs. Xi and Li but said China has adopted “consistent and steady” macroeconomic policies since late 2012 and has made “big progress” in economic and social development. It said China is determined to meet economic challenges under the leadership of the party and the State Council. The longer-term concern is any political impact of a split. Conflict within the leadership has been a feature of modern China’s most tumultuous periods, from the Cultural Revolution to the 1989 Tiananmen Square protests. The party’s legitimacy rests in large part on being able to project an image of uniform and levelheaded decision-making at the top. Mr. Xi, like China’s last two top leaders, is president, party chief and head of the military. The premier heads the cabinet and for most of the last four decades has managed the economy, with other duties divided among other senior party figures. Mr. Xi has reversed that collective leadership model and centralized decision-making within a number of small committees he heads, including over the economy. His supporters say the party leadership had become weak and corrupt in the previous administration and now needs a strong central figure to maintain public support while overhauling the economy. Detractors say Mr. Xi has taken on too much to govern effectively, while stripping authority away from Mr. Li and other more qualified economic stewards. Mr. Li has acquiesced to that treatment for the last two to three years, but in recent months, supporters say, he has been actively undermined.  Rumors now abound within the party about whether he will be replaced as premier in next year’s reshuffling of key party posts. Messrs. Xi and Li are the only two members of the seven-man Politburo Standing Committee—the top leadership body—not due to retire. The two men have very different backgrounds and public personas. Mr. Xi, 63 years old, whose father was a revolutionary hero, has close personal ties to other descendants of the party elite and has cast himself as a paternalistic, if aloof, authoritarian. The bookish and affable Mr. Li, 61, came to prominence as a star student of law and economics. He rose through the ranks of the Communist Youth League, becoming a favorite of the previous party chief, Hu Jintao. The first episode of the discord came in May, when the official People’s Daily published a lengthy front-page interview with an unidentified “authoritative person,” which criticized the heavy role of credit in driving first-quarter growth. Mr. Xi’s top economic advisers drafted the article under his instruction, according to people familiar with the matter, who said Mr. Xi was upset that China unleashed 4.6 trillion yuan ($697 billion) in bank credit from January through March, even exceeding stimulus in 2009 during the depth of the financial crisis. Mr. Xi was worried that his plan to pare debt and industrial overcapacity was “on the line,” one of the people said. While the article didn’t mention Mr. Li by name, the people said it was meant as a public rebuke of the premier’s stimulus policies. In addition, the article poured cold water on a debt-for-equity swap program publicly touted by Mr. Li in March, saying such a program shouldn’t be used to keep alive “zombie” firms—money-losing companies in industries with excessive capacity. People sympathizing with the premier say he was simply trying to meet the growth target set by the leadership, and to ensure sufficiently high growth for economic reforms to succeed. Mr. Xi has advocated overhauls while also insisting growth stays on target, and he has backpedaled on his 2012 pledge to embrace market forces. His decrees on the state sector in the past year, for example, have centered on strengthening the party’s control. “Li Keqiang has been placed in an impossible position,” wrote Barry Naughton, an expert on China’s economy at the University of California, San Diego, in a paper published this week. ”Economic policy has moved in a fundamental way into Xi Jinping’s shop, and out of Li Keqiang’s shop. Li cannot be happy with this, and it is hard to see how the Xi-Li relationship can be maintained under these conditions.” A big risk from the policy uncertainty, said Arthur Kroeber, co-founder of China-focused research firm GaveKal Dragonomics, is that needed changes, such as the closing of money-losing factories, stall. “It’s increasingly clear to me that China’s economic program is not very coherent,” he said. The report last week of second-quarter growth of 6.7%— the same pace as in the first quarter, despite multiple headwinds—was seen as a sign that leaders continue to use an old stimulus playbook of credit expansion and state spending rather than tackling inefficiencies. Some state-company executives are confused. “Can we be a big state employer and at the same time profitable?” asked a senior official at a state-backed shipping company in Shanghai. “It would be very hard to do in reality.” It isn’t clear to what extent the tension reflects deeper differences in outlook of the kind that caused previous leadership clashes. “Xi and Li may disagree over specific policies, but their differences are minor in the grand scheme of things and the result of political jockeying, not principle,” said Scott Kennedy, a deputy director at Center for Strategic & International Studies, a Washington think tank. China’s social-media users are cautious in discussing the divide, using coded references to a split between the southern and northern parts of the party and government’s Zhongnanhai leadership compound, where Messrs. Xi and Li work, respectively. In what people familiar with the matter depict as a subtle response by Mr. Li to criticism in the People’s Daily article, four words were added to a state-media news report about a May 9 conference call led by the premier. The words, which these people say weren’t part of the call, were xiang ren wei guo, an idiom loosely translated as “the premier endures for the nation.” They say Mr. Li personally vetted the media report before it went out. This month, Mr. Xi held a meeting with more than two dozen of the country’s top economists and analysts. Mr. Li wasn’t invited, according to people with knowledge of the matter. “It’s a meeting held by Xi Dada,” one of the people said, using a popular nickname for Mr. Xi. “It’s not necessary for Li to attend.” Two days later, Mr. Li held his own round-table discussion with a separate group of economists, according to state media reports. Despite growing challenges this year, he said, China’s economy has performed “steadily and within expectation.” http://www.wsj.com/articles/discord-between-chinas-top-two-leaders-spills-into-the-open-1469134110

China Says South Korea's THAAD Anti-Missile Decision Harms Foundation Of Trust. Jack Kim, Reuters. “Chinese Foreign Minister Wang Yi has criticized South Korea's move to deploy an advanced U.S. anti-missile defense system to counter threats from North Korea, saying it harmed the foundation of their mutual trust, news reports said on Monday. The announcement by South Korea and the United States this month that they would deploy a Terminal High Altitude Area Defence (THAAD) unit has already drawn protests from Beijing that it would destabilize regional security. The decision to deploy THAAD is the latest move to squeeze the increasingly isolated North Korea, but China worries the system's radar will be able to track its military capabilities. Russia also opposes the deployment. "The recent move by the South Korean side has harmed the foundation of mutual trust between the two countries," Wang was quoted by South Korea's Yonhap news agency and KBS television as telling South Korean Foreign Minister Yun Byung-se. Wang and Yun met late on Sunday on the sidelines of the 10-member Association of Southeast Asian Nations conference of foreign ministers in Vientiane. Yun told Wang that the move was aimed at protecting South Korea's security and that it would not damage China's security interests, Yonhap said. At a separate meeting in Beijing, Fan Changlong, one of the vice chairmen of the Central Military Commission that controls China's military, told U.S. National Security Adviser Susan Rice that the THAAD deployment would only worsen tensions on the Korean peninsula. "The United States must stop this kind of mistaken action," China's Defence Ministry paraphrased Fan as saying. South Korea and the United States have said THAAD would only be used in defense against North Korean ballistic missiles. North Korea has launched a series of missiles in recent months, the latest last week when it fired three ballistic missiles that it said was a simulated test of preemptive strikes against South Korean ports and airfields used by the U.S. military. The missiles flew 500-600 km (300-360 miles) into the sea off its east coast and could have hit anywhere in South Korea if the North intended, the South's military said. North Korea came under the latest round of United Nations Security Council sanctions in March after Pyongyang's fourth nuclear test in January and the launch of a long-range rocket the following month.” http://www.reuters.com/article/us-southkorea-thaad-china-defence-idUSKCN1050Y7?feedType=RSS&feedName=worldNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Reuters%2FworldNews+(Reuters+World+News)

South China Sea Air Strips’ Main Role Is ‘To Defend Hainan Nuclear Submarine Base.’ Minnie Chan, South China Morning Post. “China’s underwater military strategy in the South China Sea, which remained concealed for the past two decades, suddenly emerged after an international tribunal rejected most of Beijing’s territorial claims in the hotly contested waters. On July 12 – the same day the Permanent Court of Arbitration at The Hague announced that China’s claims over the resource-rich and strategically vital South China Sea region had no legal basis – a photograph of China’s most advanced nuclear-powered submarine was “leaked” and published on many mainland military websites. The photograph, revealing the expanded type 094A “Jin-class” submarine, led to speculation that the vessel might be capable of delivering China’s new generation, intercontinental-range ballistic missile, the JL-3, whose estimated range of 12,000km would enabling it to reach the United States from the South China Sea. “I believe the type 094A, which has been closely monitored by the U.S., was deliberately ‘leaked’ to warn the U.S.,” Macau-based military observer Antony Wong Dong told the South China Morning Post. On Monday Admiral Wu Shengli, of the People’s Liberation Army Navy, told visiting U.S. Chief of Naval Operations Admiral John Richardson in Beijing that China would not compromise its sovereignty and would press ahead with construction of facilities in the South China Sea. Wu also warned that “the Chinese navy is fully prepared to cope with military provocation.” As Beijing’s state media repeatedly attacked the ruling of the tribunal – which Beijing has refused to recognise – President Xi Jinping said that China’s “territorial sovereignty and marine rights” in the seas would not be affected. The South China Sea is one of the world’s busiest trade routes, through which more than U.S. $5 trillion of maritime trade passes each year between the Indian Ocean and the western Pacific Ocean. However, Beijing has another – arguably more important – reason for prizing the 3.5 million square km area of waterway. It regards the waterway as crucial for providing its expanded submarine fleet, stationed the Yulin naval base in Hainan, with unrestricted access to the waters of Pacific Ocean. The East China Sea has only a few, narrow underwater channels, which means its submarines can easily be monitored. But the South China Sea features underground submarine facilities with a tunnel access, shielding Chinese submarines that enter the South China Sea from the prying eyes of U.S. reconnaissance satellites. “No matter what the international arbitration rulings said, China will keep pushing ahead with its maritime ambitions in the South China Sea because it regards it as a ‘fortress’ that will enable its military expansion,” Beijing-based military commentator Song Zhongping told the Sunday Post. “The South China Sea provides the only route for China to establish itself as a real maritime power. The area has several underwater channels and straits, which will allow China’s submarine fleet to break through the United States’ first and second island-chain blockades, which have been attempting to keep China’s maritime forces contained in the Asian continent. “That’s why Beijing carefully chose [to centre] its naval and submarine headquarters in Hainan province many years ago.” China declared a U-shaped nine-dash line, which includes 80 per cent of the area of the South China Sea, in 1953, with James Shoal, located about 80km off the coast Malaysia’s Sarawak state, at the bottom. Before 2000, Beijing built Asia’s biggest nuclear-powered submarines base in Yulin, Hainan’s southernmost port. In June, the British-based IHS Jane’s Defence Weekly reported that state-owned China State Shipbuilding had proposed constructing a sonar surveillance system, nicknamed the “underwater great wall” project, featuring a network of ship and submarine surface sensors that could significantly erode the undersea warfare advantage of U.S. submarines to help Beijing control the South China Sea. Ashley Townshend, a research fellow at the United States Studies Centre at the University of Sydney, said China’s underwater network and facilities on Woody Island and other artificial islands were aimed at enhancing Chinese navy’s control of the South China Sea. “If China can use its military installations in the South China Sea to defend its submarines from air, sea, underwater, and outer space threats – a very big if – it may succeed in turning [the waterway] into a bastion for its nuclear-armed submarines,” he said. Even mainland naval experts have acknowledged that the airstrips and other defence facilities on the artificial islands in the Spratly Islands are part of efforts to expand Yulin naval base’s power over the South China Sea , which includes the 2,000m-deep Bashi Channel. However, the waterway also serves as an important thoroughfare for U.S. naval vessels from the Pacific Ocean to the Indian Ocean region, said Alexander Neill, a Shangri-La Dialogue senior fellow for Asia-Pacific security at the International Institute for Strategic Studies Asia. “U.S. aircraft carriers regularly transit the South China Sea on their way to operations in the Middle East,” he said. “So to challenge freedom of navigation of U.S. aircraft carriers and submarines that protect them interferes with some key national security concerns for the U.S. as well as active operations. “Chinese submarine deployments in the Spratly Islands would defeat the purpose of stealth, and expose them to further detection by the U.S.. Given that China is placing some of its strategic nuclear deterrent on submarines, this is a risky proposition ... Submarine deployments in the Spratlys could also be used as part of China’s ‘self-defence’ requirement in response to U.S. naval freedom of navigation operations.” Last October, the Pentagon sent the destroyer USS Lassen to within 12 nautical miles of Subi Reef, one of Chinese artificial islands in the Spratlys, on a so-called “freedom of navigation” operation. Washington and Beijing accused each other of escalating tensions and militarising the disputed waters, which are claimed wholly or in part by mainland China, Vietnam, the Philippines, Malaysia, Brunei and Taiwan. “China’s long-term goal is to build a real ‘blue’ water navy with global reach,” Song said. “It is starting to expand its influence further from the region. He said the submarine base, and other construction projects in the Spratly Islands, were parts of its bigger overall strategy to fully control security in the region “through traditional and non-traditional military means.” U.S. defence officials said China had deployed two ­J-11 fighter jets and bolstered its advanced surface-to-air missile system on Woody Island, known as Yongxing in Chinese, while four of eight shipped based HQ-9 short range missile launchers deployed to the area were ­operational. Woody Island is the largest island in the Paracel chain of islands in the South China Sea and is the adminstrative centre of Sansha provincial-level city created in 2012 and includes much of the South China Sea claimed by China. Beijing installed a runway on the island in the early 1990s, which lies about 330km southeast of the Yulin submarine base. The U.S. Navy operated 75 nuclear-powered submarines in 2014, including 15 of the more modern Virginia or Seawolf-class designs, according to the World Nuclear Association. However, it deploys only four Los Angeles-class submarines in the Asia-Pacific region, which are stationed at the U.S. naval base on Guam. The PLA Navy now has about 70 submarines, 16 of them are nuclear-powered, which were based mostly in Yulin, according to the Pentagon’s annual report to Congress. “The South China Sea is the fortress protecting China’s access to the India Ocean route, which is also Beijing’s oil lifeline, with Woody Island serving as the bridgehead of Xi’s ‘One Belt, One Road’ development initiative,” Wong said. “That’s why so many advanced weapons have been deployed there.” http://www.scmp.com/news/china/diplomacy-defence/article/1993754/south-china-sea-air-strips-main-role-defend-hainan

US Shipments Of Vehicles Delayed. Luo Tien-pin and William Hetherington, Taipei Times. “Deliveries of US amphibious assault vehicles have been delayed, with the US military supplier citing technical difficulties. In a bid to improve the nation’s amphibious assault capabilities, 36 AAV-7A1s were purchased from the US, with the first shipment to arrive in the second half of this year and the remainder to be received by the end of 2019. Sources said that even though payment for the first shipment has been sent, the vehicles are to be delayed until 2020. One source said the military has been in contact with the US in an attempt to resolve the situation, expressing concern that LVTP-5 amphibious vehicles in service have exceeded their useful life and that continued use would compromise Taiwan’s amphibious assault capabilities, but the US has remained resolute in its position. The US cited technical difficulties for the delay, saying that it is waiting on other orders. Military officials said they had settled the issue with the US in 2013, adding that the delay might be because of a political issue. “The AAV-7A1 plays a pivotal role in modern amphibious warfare. Whether in defense of the perimeter of the Pratas Islands [Dongsha Islands, 東沙群島] or Itu Aba Island [Taiping Island, 太平島], in a mission to safeguard Taiwan’s southern coast or the outlying islands of Kinmen and Matsu, or even in conducting rescue missions following major natural disasters, the AAV-7A1 plays a crucial role,” the source said. “Delaying shipment of the 36 vehicles will be a major blow to the military’s ability to maintain combat readiness,” the source said. Navy Command Headquarters yesterday said that “because the US has to conform to a production schedule that allows it to complete several orders simultaneously, shipments will be postponed.” The navy said that the shipment would be accomplished in two installments, with 24 units arriving in 2020 and the remainder in 2021, adding that it would make amendments to its investment network because of the delay. The navy has used the LVTP-5 in amphibious landing exercises, but as the vehicles are beyond their service lifespan, finding replacement parts has become increasingly difficult. In 2006, the navy commissioned the US to produce 54 AAV-7A1s to replace its outdated fleet. A military official said that although it has already procured 54 AAV-7A1s, that is far from its target, which is to procure 36 more. The navy plans to use four of the AAV-7A1s as command vehicles, while two are to be assigned for use in disaster relief operations. The official said the 36 vehicles cost NT$5.3 billion (US$165.26 million), with the purchase contract signed by both sides on May 12 and funds transferred on June 24. “It was completely unexpected that the US would suddenly announce a three-and-a-half-year delay. The sudden, unexpected nature of the decision was a great shock to the military — we are unable to accept this turn of events,” the official said.” http://www.taipeitimes.com/News/front/archives/2016/07/23/2003651598

India Expels 3 Chinese Journos For Un-Journalistic Activities. Sutirtho Patranobis, Hindustan Times. “India has expelled three journalists of the Chinese official news agency, Xinhua, by refusing to renew their visas to work in the country, a move that could worsen the already strained relations between the two countries. The three journalists have been ordered to leave India by July 31. Journalists Wu Qiang and Lu Tang head Xinhua’s bureau in New Delhi and Mumbai respectively. The third, She Yonggang, is a reporter based in Mumbai. Lu Tang has an India connect as she studied in universities at New Delhi and Gujarat. She graduated in International Relations from New Delhi’s Jawahar Lal Nehru University. No official reason was given for the Indian government’s decision, but sources said the three had come under the “adverse attention of security agencies” for allegedly indulging in activities beyond their journalistic brief. The sources, however, said the action did not imply that Xinhua journalists are not welcome in India. “The agency can replace them with others. There is nothing here to construe that Xinhua has to wind up its news operations in India,” a source said. HT reached out to Xinhua in Beijing but an official said nobody could be immediately contacted for a comment. Commenting on the expulsion, Mohan Guruswamy, chairman of the Centre for Policy Alternatives, said that not extending visas of journalists is a needless aggravation. He posted his comments on Facebook. “Lu Tang, whom many of you FB users might recognise and who has done so much to provide China’s opinion makers with a better understanding of India is among the three Chinese journalists not to get their work visas extended,” he wrote on the Chinese correspondent’s Facebook wall. “We can now expect some tit for tat for no rhyme or reason. If Indian scribes are turned out of China we too will lose our eyes and ears in that country. Not extending visas of journalists is a needless aggravation. I am sure the [Ministry of External Affairs] would be clueless about this as this is now under the exclusive purview of the largely clueless Ministry of Home Affairs.” Ranjit Kalha, a former secretary in the MEA said that the move seems to have been “done without thinking through [the] outcome,” reported Thewire.in. The decision comes at a time when relations between New Delhi and Beijing have been under strain following China’s refusal last month to back India’s bid for membership of the Nuclear Suppliers Group. Beijing has been wary of New Delhi’s growing bonhomie with Washington. Non-renewal of visas is a common practice followed by governments to expel foreign journalists whose writing is seen as critical of official policy. In December, China expelled a French journalist for writing a piece questioning the government’s handling of the situation in the restive Xinjiang Uyghur Autonomous Region (XUAR), describing the reporting as fabricated. The mode of expulsion was similar: The journalist’s visa wasn’t renewed. Wu has been working in India for seven years while the other two were posted in Mumbai last year. Xinhua works directly under the jurisdiction of the State Council, or the Chinese Cabinet, headed by Premier Li Keqiang. The two countries have a history of delaying granting of journalist visas, but this is possibly the first time that an extension or renewal of visas has been denied. The journalists’ visas had expired earlier this year but they were asked to wait. However, their passports were returned to them without the visa, effectively ensuring that they could not move out of the cities of residence. On July 14, all three were informed that they had to leave India by July 31 as their visas will not be renewed. Analysts said the possibility of China carrying out tit-for-tat expulsions of Indian-journalists could not be ruled out. Five Indian journalists work out of Beijing at present. Additionally, a number of Indians work for China’s English state media like China Central Television, China Daily and China Radio International. Two more New Delhi-based Indian journalists are currently on a fellowship to China at the invitation of the communist government.” http://www.hindustantimes.com/india-news/india-expels-three-chinese-state-media-journalists-amid-strained-bilateral-ties/story-zinnHMN9wr8BluNvRJFnPI.html

Gov. Deloso Claims Chinese Military Presence In Zambales. Franco G. Regala, Manila Bulletin. “As tension over the West Philippine Sea (South China Sea) continues following The Hague ruling, Gov. Amor Deloso of Zambales cautioned yesterday that there allegedly is Chinese military presence in his province. Deloso told the Manila Bulleting that the Chinese military has allegedly occupied a mountain area in Sta. Cruz municipality, where their missile is supposedly stationed. He said this 500-hectare area was allegedly sold to the Chinese by former Gov. Hermogenes Ebdane, Jr. “Pinagbili nila (Gov. Ebdane) sa Chinese and tatlong bundok at nakabuo sila ng 500 na hectare of island at dyan ngayon na-station ang missile ng China kaya binabantayan ng American warship yan lalo na’t naging pabor sa atin ang ruling ng arbitration court (They sold it to the Chinese – three mountains that compose a 500 hectare island area where they have stationed their missile; that’s why an American warship has been keeping an eye on it since the ruling favorable to the Philippines by the arbitration court),” Deloso said. Previous reports say that three Chinese conglomerates namely, Jiangxi Rare Earth & Metals Tungsten Group, Wei-Wei Group, and Nihao Mineral Resources Inc. also operate in the same municipality, and have put up five “minahang bayan (small-scale mines)” through Filipino dummies. The governor noted that Beijing has already established itself not only in Panatag/Scarborough Shoal (formerly Bajo de Masinloc) but also in the mountains and the mainland. The disputed island is 85 kilometers from Sta. Cruz municipality but only 65 km more or less from Masinloc. He added: “Pumosisyon ang China sa (Bajo de) Masinloc kasi unang unang may oil sa ilalim. Malaki ang source ng oil diyan. (The Chinese occupied Scarborough Shoal because there’s oil underneath. There’s a big source of oil there),” he said.” http://www.mb.com.ph/gov-deloso-claims-chinese-military-presence-in-zambales/

As Mugabe Fights For His Political Future, Why Is China So Silent? Simon Allison, ISS. “As Zimbabwe teeters on the brink of economic and political crisis, there’s one voice that has been conspicuously silent: China. Despite the mutual professions of admiration and everlasting friendship, it seems that President Robert Mugabe has been abandoned by his Chinese counterpart in his hour of need. It wasn’t meant to be this way. At last year’s China-Africa forum in South Africa, Mugabe described Xi Jinping in glowing terms: ‘Here is a man representing a country once called poor, a country which was never our coloniser. He is doing to us what we expected those who colonised us yesterday to do… We will say he is a God-sent person.’ Mugabe has good cause to be grateful to Xi, and to China, which has been a staunch ally over the years. Infamously, in 2004, ignoring the spate of political violence and human rights abuses in Zimbabwe at the time, China’s Deputy Commerce Minister Fu Ziying observed: ‘It’s apparent that his Excellency has been very good.’ This quote is rather typical of the kind of whole-hearted support that China has offered the Zimbabwean president over the years. Not only has China turned a blind eye to Zimbabwe’s assorted governance issues, but it has also been an important economic partner. As well as being the biggest importer of tobacco, Zimbabwe’s largest cash crop, recently China forgave some US$40 million in debt. Even more significantly, last year the Asian superpower promised to plough some US$4 billion into the stagnant Zimbabwean economy through a series of ‘megadeals’ in energy and infrastructure. But maybe these ties were never as impressive as they looked on paper. Take the debt forgiveness: while a nice gesture, it is meaningless in comparison to the US$1.8 billion that Zimbabwe owes the IMF in arrears (against total international debts topping US$9 billion). And while those megadeals may sound impressive, they have so far failed to get off the ground, for the most part – even though Zimbabwe’s stuttering economy could use an injection of cash right about now. Zimbabwe is facing a potentially crippling liquidity crisis, with banks restricting cash withdrawals and government imposing ever-tighter restrictions on foreign exchange. The country’s economic woes are driving increased political instability. #ThisFlag, a citizen-led campaign for government reform, is gaining unprecedented traction, while calls for Mugabe to resign or be removed from office are getting louder and louder, especially in urban communities. Sources within his ruling party, the Zimbabwean African National Union-Patriotic Front (ZANU-PF) suggest that the 92-year-old leader has also lost support of key players within the party. What Mugabe needs right now, more than anything, is a bit of help from his friends – preferably in the form of a timely cash injection. But none has been forthcoming from China. This comes as no surprise to long-time China-Africa observers. ‘One should make a distinction between rhetorical and financial support in the China-Africa relationship. Just because China rolls out the red carpet and reiterates a friendship between the countries doesn’t necessarily mean they are willing to lend support in other ways,’ explained Cobus van Staden, a lecturer at the University of the Witwatersrand and co-host of the influential China in Africa podcast. This is especially true when it may not be in China’s financial interest to do so, according to Ross Antony, Interim Director of Stellenbosch University’s Centre for Chinese Studies. ‘China seems to be getting donor fatigue when it comes to Zimbabwe. Although Xi Jinping had a state visit last year… investing in Zimbabwe has become an increasingly risky enterprise for Chinese firms. ‘Although originally exempt from Zimbabwe's indigenisation laws, Chinese diamond mining firms, for instance, have come under increasing pressure to relinquish a 51% stake to local actors. Additionally, Mugabe's continued hold on power, and the political uncertainty it is causing, has implications for Chinese investors banking on long-term stability of their interests,’ said Antony. Antony also emphasises that China’s support for Zimbabwe should not be confused with support for Mugabe himself. ‘From a financial point of view, it may make sense to simply hold back and let internal political changes take their course,’ he said. And this appears to be exactly what China is doing. China has more than just money at stake in Zimbabwe, however. ‘China’s extensive investments in Zimbabwe’s crisis-ridden economy and rhetorical support for Mugabe’s isolated regime are crucial to its broader strategy for expanded influence in Africa. If China can engineer a marked improvement in political and economic conditions in Zimbabwe, it will be able to profit economically from a country that Western powers have very limited leverage over and set a precedent for other sub-Saharan African countries to pivot towards China,’ explained Samuel Rabani in The Diplomat. In this context, China’s current lack of support for Mugabe might suggest that he is now viewed as actively detrimental to China’s interests in Zimbabwe. China’s controversial policy of ‘non-intervention’ in the internal affairs of African states has made them a favourite ally for autocrats and dictators across the continent (although, increasingly, this policy is coming under pressure, most notably in South Sudan where China contributes peacekeeping troops and is mediating tensions). But as Mugabe is finding out, non-intervention is a double-edged sword: just as China won’t intervene against him, it won’t intervene for him either. This should serve as a warning too for other African leaders who have grown accustomed to taking Chinese support for granted.” https://www.issafrica.org/iss-today/think-again-as-mugabe-fights-for-his-political-future-why-is-china-so-silent

Posted by Alex Gray | July 21, 2016

What’s Next For Manila Following South China Sea Ruling? Armando J. Heredia, USNI News. “The long-awaited tribunal ruling on China’s territory grab of the Western Philippine Sea finally emerged on July 12. As expected it was a mostly clean sweep for the Philippines government – judging that the claims under the PRC’s Nine-Dash Line vision were invalid, and its current activities of island reclaiming and resource grabbing were both illegal and harmful to the environment. However, the hard part has just begun. For the two years that the case slowly made its way through the court, China repeatedly stated that the court had no jurisdiction, and in no way would Beijing recognize the Permanent Court of Arbitration’s decision. So where does that leave Manila now? It’s been a storm of uncertainty for the embattled Philippines. The tribunal’s decision came right on the heels of Rodrigo Duterte’s presidential inauguration. The new leader is arguably a wild card for the how the United States and other claimants will handle the regional disputes. Duterte is a study in contrasts compared with his predecessor, Benigno Aquino III. The Aquino administration was marked in large part by a return to closer ties with the U.S., as the Philippines reeled under the pressure of China’s intrusive expansion in the region’s maritime space. Aquino recognized the weak state of the Philippine military, and chose to accelerate the modernization process while taking the fight to China. Simultaneously his administration opened the way for American forces to return to the Philippines through the Enhanced Defense Cooperation Agreement (EDCA). As the hard-charging, tough-talking mayor of Davao City, Duterte rode to power on a plurality vote. Known for his brusque, no-nonsense – at times crude – personality, Rodrigo Duterte views the United States with a certain level of hostility. He has at times considered the Philippines as simply a pawn between great powers, in a game that he would rather see the nation exit cleanly and quickly. While he has carved a reputation as an effective small-government leader, Duterte has little experience in dealing with foreign policy at a national level. His choice of Perfecto Yasay as foreign affairs secretary, a noted businessman with no foreign service qualifications and a controversial former chairman of the Philippines Securities and Exchange Commission, has already resulted in policy statement bungles that may have weakened the Philippines’ position following the tribunal’s decision. While it’s unclear who solicited whom, Duterte was briefed on the complexity of the decision by three prominent members of the Philippines legal team that presented the case – including Supreme Court Judge Antonio Carpio, arguably the foremost knowledgeable expert on the case. It is unknown what, if any, recommendations emerged from either of those sessions. But the muted response from Malacanang Palace immediately following the tribunal decision is likely a reflection of several factors. First, the Philippines remain weak in terms of kinetic responses to China’s incursions. While the Aquino administration consistently refused to “rock the boat” and make provocative moves that it felt might negatively influence the PCA’s decision process, both presidents are held hostage by the poor material and qualitative state of the Philippines military. Despite a modernization effort that outspent several previous administrations put together, the acquisitions made under Aquino barely put a dent in the so-called “death spiral” effect of the Philippines armed forces that started just after the evacuation of U.S. forces in the wake of Mount Pinatubo’s eruption. Any confrontational action by the Philippines would have to leverage the country’s poorly equipped Coast Guard to mitigate clashes leading to general war with China. The branch lacks sufficient hulls to establish presence operations, and the boost of Japanese-made patrol boats comes too little, too late to make a difference. The loss of Scarborough Shoal, which indirectly led to the filing in the court, is once again a flashpoint. Located in what the PCA has determined to be the Philippines’ exclusive economic zone (EEZ), the Chinese Maritime Agency continues to deny Filipino fishermen access to the grounds. Judging by the recommendations of local government units for those affected to find other means of living, it’s clear that a there is little appetite or capability to impose a kinetic solution. While Foreign Secretary Yasay’s latest negotiations reflect a more assertive approach that leverages the PCA decision, Duterte is quite simply in a bind. China is one of the Philippines’ largest trading partners, and the prolonged conflict over territorial sovereignty has affected economic ties – everything from bananas and mangos to tourism. The newly installed president has even openly mulled the idea to trade concessions on the Spratlys in return for a Chinese-made transportation system. Only a strong Cabinet and trusted subject-matter counsel can guide Duterte at this point through these unfamiliar waters. Duterte’s campaign promises to resolve a perceived national drug problem and bring peace to a war-torn insurgent-laden Southern Philippines is also competing with foreign policy objectives for resources. The controversy around extra-judicial killings and rampant corruption aside, the armed forces of the Philippines will have to use its meager resources to supplement, and in many cases, perform basic law enforcement actions that the even more destitute Philippine National Police cannot execute. By populating his Cabinet with prominent leftist and insurgency-aligned political figures, Duterte is calculating that he can co-opt most of the remaining rebel movements in the troubled southern end of the nation. However, he has also directed incoming Secretary of National Defense Delfin Lorenzana to realign the armed forces modernization back to counterinsurgency operations as needed in order to strike what is hoped would be a fatal blow to hard-line terror groups such as Abu Sayaaf. Given the challenges that already plague the military’s upgrade efforts, this immensely sets back a credible external defense and further limits kinetic options to enforce the PCA ruling. While on the campaign trail, Duterte indicated he would consider letting the enhanced defense cooperation agreement (EDCA) with the United States stay in place, acknowledging that the U.S. presence mitigated the Philippine’s weak defense status. Given that cold marriage of convenience however, it’s entirely possible that a diplomatic solution with China over the Spratlys might require the Philippines to severely curtail or even sever the burgeoning U.S. military presence. After all, EDCA was established via executive order, and could easily be reversed using the same power. Such a move would be a blow to the U.S. pivot to Asia, as well as a reputational win for China. If America’s most erstwhile figurehead ally in the maritime dispute could turn to Beijing, it would seriously undermine the confidence of other regional claimants in putting stock with Washington. Despite the cheers heard around the globe following the court decision, no other nations have really stepped forward to change the equation with regard to accessing the Spratlys or mitigating the Chinese presence. For all intents and purposes, the Philippines continues to stand alone despite its legal victory. The courses of actions are scant if any, and freedom to maneuver severely curtailed.” https://news.usni.org/2016/07/20/manila_south_china_sea

South China Sea: Beijing Calls KFC, Apple Protests 'Irrational.' Shen Lu and Ben Westcott, CNN. “Nationalist sentiment has swept China in the wake of last week's international tribunal ruling over the South China Sea, with protests targeting KFC, Apple and Filipino fruit. But the Chinese government has had enough, telling protestors through the the state-run People's Daily newspaper Wednesday that they are being "irrational and disruptive." On July 12, the Permanent Court of Arbitration in the Hague ruled overwhelmingly in favor of the Philippines, saying there was no legal basis for China's claim to a large part of the South China Sea. China strongly rejected the decision. In the week after the ruling, videos and pictures of nationalists boycotting U.S. food chains -- the ultimate U.S. symbol in their eyes -- have been posted on social media in several Chinese cities. Chinese news portal Sohu.com reported that residents from an estimated 11 Chinese cities launched a boycott movement against KFC on Monday. In Changsha in Hunan province, residents held up a banner outside a KFC restaurant that reads: "Get out of China, KFC and McDonald's." On Tuesday, police in central China's Henan province detained three people outside a KFC outlet over organizing a disruptive boycott. Meanwhile, a campaign of smashing iPhones has taken off on social media, in protest against U.S. tech giant Apple. Since the South China Sea ruling was handed down, a musical video compiling Chinese citizens rapping "South Sea arbitration, who cares?" has gained nearly 4.9 million views on social media platform Weibo, China's equivalent of Twitter. At one point the video, which was backed by the Chinese Communist Party Youth League, shows two young women in camouflage clothing repeat the lyrics while showing off daggers. Anti-Philippines sentiment can even be felt on China's largest online shopping web site Taobao, with sellers offering locally grown dried mango instead of fruit grown in the Philippines. "We only sell domestic dried mangoes! .... Safeguard the South China Sea," one seller wrote. In recent days the government has begun to indicate protests should cease, similar to when when mass rallies across China following a similar territorial dispute with Japan in 2012 were strongly discouraged by the Chinese government. State media has begun to criticize the protests as "irrational," saying they could harm China's reputation. "Any action that promotes national development can rightfully be called patriotic. But so-called patriotism that willfully sacrifices public order will only bring damage to the nation and society," a People's Daily editorial said Wednesday. "Pragmatic and effective patriotism only counts If we can all rationalize our actions, converting patriotic concept into action, contributing to the national development by fulfilling our own duties," state news agency Xinhua commented. Analysts say the ruling has sparked an outburst of nationalism among Chinese. "It will further escalate nationalist sentiment in a big nation like China, which is might is right," Wang Jiangyu, law professor with the National University of Singapore, said. "In fact, it has immediately forced many of China's moderates to become hawks." But not all Chinese social media users are in favor of this type of behavior. "I am Chinese; I think the boycotters are idiots and I am boycotting them," Weibo user @Age_AVR commented. Calls to Yum! China, the company that owns KFC, and Apple, went unanswered.” http://www.cnn.com/2016/07/20/asia/china-nationalism-south-china-sea-ruling/

China Eyes Eight Cruise Ships To Serve South China Sea. Ben Blanchard, Reuters. “Up to eight Chinese ships will offer cruises to the South China Sea over the next five years, a state-run newspaper said on Thursday, as Beijing continues to promote tourism to the disputed waters. Sanya International Cruise Development Co Ltd, a joint venture by COSCO Shipping, China National Travel Service (HK) Group Corp and China Communications Construction Co Ltd, will buy between five and eight ships, the official China Daily reported. It will also build four cruise liner docks in Sanya, a Chinese resort city on the southern island province of Hainan, the paper added. Liu Junli, chairman of Sanya International Cruise, said the company is already operating the "Dream of the South China Sea" cruise ship and plans to add another two cruise ships by next summer, the report said. The ships will travel to the Crescent group of islands, part of the Paracels, and is also "considering a cruise around the South China Sea at the appropriate time,” it added. Hotels, villas and shops will all be built on the Crescent group, the paper said. It is not clear if foreigners will be allowed on these cruises or if they will be allowed to visit China's holdings in the South China Sea. China claims 90 percent of the potentially energy-rich South China Sea. Brunei, Malaysia, the Philippines, Vietnam and Taiwan lay claim to parts of the sea, through which passes about $5 trillion of trade a year Countries competing to cement their rival claims have encouraged a growing civilian presence on disputed islands in the South China Sea. The first cruises from China to the Paracel islands were launched by Hainan Strait Shipping Co in 2013. Beijing has also said it wants to build Maldives-style resorts around the South China Sea. China has refused to recognize a ruling by an arbitration court in The Hague that invalidated its vast territorial claims in the South China Sea and did not take part in the proceedings brought by the Philippines.” http://www.reuters.com/article/us-southchinasea-ruling-shipping-idUSKCN10107I

Japan's Defense Paper To Show Wariness Over China's Muscle Flexing. Kyodo World Service. “Japan will express its wariness over China's muscle-flexing in the South China Sea in this year's defense white paper, warning Beijing's militarization of the disputed waters is making its territorial claims a fait accompli, according to an outline of the paper obtained by Kyodo News on Wednesday. The white paper, which the Cabinet is expected to approve early next month, will say China's activities in the South China Sea could be called high-handed, unilateral action to change the status quo, the outline indicates. The South China Sea remains a source of friction with neighboring countries as China claims sovereignty over most of the sea, a vital shipping lane and believed to have rich fishing grounds and possibly large oil or natural gas deposits. Vietnam, the Philippines, Malaysia, Brunei and Taiwan have overlapping claims. The outline also says that China's activities are intensifying near the Japan-controlled Senkaku Islands in the East China Sea. China also claims those uninhabited islands, which it calls Diaoyu. It notes that a Chinese navy ship last month sailed in a contiguous zone just outside the territorial waters around the Senkaku Islands. And it says the number of times that Japan has scrambled its Air Self-Defense Force fighter jets against Chinese aircraft approaching its airspace is rising sharply. As for North Korea, the white paper will criticize Pyongyang's repeated provocative actions, including its test in January of a nuclear explosive device. North Korea has conducted four nuclear tests in defiance of U.N. Security Council resolutions. Referring to Pyongyang's launch in February of a long-range rocket that utilized banned ballistic missile technology, the white paper will assert that North Korea has obtained the technology to bring mid- and long-range ballistic missiles to the stage of practical use, and is keen to pursue more advanced missile development, the outline indicates. The outline restates, as last year's paper did, that there is a possibility that North Korea may have succeeded in miniaturizing nuclear weapons for warheads. Regarding terrorism, in the wake of the terrorist attack on a restaurant in the Bangladesh capital of Dhaka earlier this month, in which 20 people including seven Japanese were killed, the outline says the threat of terrorism is spreading globally, and Japan must face this as its own challenge. The white paper is also expected to devote a new chapter to the country's new security legislation, which came into effect in March. It enables Japan to exercise the right to collective self-defense, or coming to the aid of friendly nations under attack even if Japan itself is not attacked.” http://english.kyodonews.jp/news/2016/07/422173.html

Turnbull Must Walk Tightrope Between US Ally And China. Editorial Board, The West Australian. “One of the many balancing acts Malcolm Turnbull will need to negotiate in this prime ministerial term is the nation’s relationships with the United States and China. While he walks the domestic tightropes of a slim majority government and an unpredictable Senate, Mr Turnbull must also keep a focus on ensuring Australia does not get caught in the crossfire between two of the nation’s most important friends. Tensions have continued to rise over the South China Sea, where the US has been conducting so-called “freedom of navigation” exercises around the artificial islands created on reefs in the Spratly Islands, which China has claimed as its territory. This month, China rejected an international court ruling in favour of the Philippines that said it had no legal basis to claims of sovereignty over large parts of the South China Sea. Australia has urged all parties to act with restraint and abide by the court’s ruling. Labor’s defence shadow minister Stephen Conroy again showed his lack of diplomatic sensibilities, reacting to the international court’s decision with unnecessary aggression. He accused our largest trading partner of “bullying” and called for Australian forces to both sail into and fly over the 12-mile limit around the islands. Mr Turnbull rightly repudiated the errant Opposition spokesman, saying that while everyone else in the region was calling for calm consideration, only Senator Conroy appeared to be calling for an escalation of tensions. Yesterday, the Prime Minster again struck the right tone by encouraging all sides to reach a peaceful solution during a meeting with visiting US Vice-President Joe Biden. Mr Biden reaffirmed the US presence in the Pacific region in a muscle-flexing message that appeared to be aimed at Beijing. “The United States is going nowhere,” he said. “The United States is here in the Pacific to stay. “We are a Pacific nation. We are a Pacific power and we will do our part to maintain peace and stability in the region.” Mr Turnbull cited the many important aspects of our close alliance with the US, including the fight against terrorism and the Trans Pacific Partnership trade deal that will hopefully be ratified soon. He told Mr Biden that Australia has no stronger alliance than the one we have with the US. That may be so, but even the best of friends should be able to agree to disagree.” https://au.news.yahoo.com/thewest/a/32101233/turnbull-must-walk-tightrope-with-us-over-south-china-sea/#page1

The US-ROK Alliance Needs A Boost On Regional Challenges. Randall G. Schriver and Samuel J. Mun, The Diplomat. “Since the signing of the U.S.-Republic of Korea (ROK) Mutual Defense Treaty on October 1, 1953, the U.S.-ROK alliance has been the bedrock of maintaining peace and stability on the Korean peninsula for over 60 years. The alliance has since gone “global,” focusing on issues such as non-proliferation, counterterrorism, and peacekeeping. The U.S.-ROK alliance is as robust and dynamic as ever, but in its transformation, it appears to have skipped a stage: a U.S.-ROK alliance focusing on regional challenges beyond the peninsula. As tensions rise in the South China Sea over maritime claims, the need for the U.S. and South Korea to look regionally is more crucial than ever. Both countries have an enormous stake in international law, free flow of trade, freedom of navigation, and the peaceful resolution of territorial disputes. In light of these facts, why hasn’t the alliance taken concrete steps toward coordinating its approach toward regional issues as it has toward North Korea and other global challenges? There are three reasons. First is the opportunity cost of diverting attention and resources from defending against North Korea. As North Korea’s nuclear and missile tests have shown over the past six months, the North Korean threat is persistent and growing. North Korea also continues to develop and deploy cyber and other asymmetrical capabilities that pose significant threats to the U.S. and South Korea. The alliance must therefore dedicate a large share of its attention and resources toward a contingency on the Korean peninsula. Second, fraught ties between Japan and South Korea have hindered the U.S.-ROK alliance from bringing Japan into the fold when it comes to addressing regional issues. But the United States cannot affect security in Asia, including the Korean peninsula, without the U.S.-Japan alliance and the U.S. deployed forces in Japan. Japan’s central role in this matter may make some in South Korea uncomfortable, but a regionally focused U.S.-ROK alliance requires coordination with Japan. On a positive note, the Japan-ROK relationship is on the mend after the resolution of the “comfort women” dispute. Additionally, the U.S.-Japan-ROK missile defense exercise this summer was an encouraging sign that the U.S.-ROK alliance is capable of having a regional agenda and incorporating other like-minded countries in the region. The third reason is perhaps the most awkward, which is the divergence of U.S. and ROK views of China. Understandably, antagonizing China or pushing back against China’s destabilizing behavior touches a sensitive nerve among the South Korean public. From the South Korean perspective, realities of geography, bilateral trade, and China’s leverage in influencing North Korea are central to South Korea’s calculus. But China’s leverage over North Korea should not cloud our judgment when it comes to assessing China’s intentions with regard to the Korean peninsula and the region at large. It should not be forgotten that 70 years ago, China sent “volunteer” forces across the Yalu in 1950 to support North Korea, preventing unification of the Korean Peninsula and an end to the Korean War. Fast forward to the 21st century and China continues to prop up its North Korean ally. President Park Geun-hye’s efforts to shore up Seoul-Beijing ties in her administration were rewarded with disappointing results from Beijing, which chose not to stand shoulder-to-shoulder with Seoul after Pyongyang’s nuclear test in January. Similarly, in 2010, North Korea’s sinking of a South Korean naval vessel and artillery shelling of a South Korean island brought about no meaningful change in Chinese policy toward its North Korean ally. There is no doubt that Kim Jong-un is unpopular in Beijing, but none of this should reassure the U.S. and ROK that China will pursue a drastic change toward North Korea in favor of U.S. or ROK interests. In fact, it’s unlikely that China plans to accommodate U.S.-ROK interests in the region at all. Xi Jinping shed light on these ambitions when he gave a speech at the Conference on Interaction and Confidence Building Measures in Asia (CICA) summit in 2014, calling for the establishment of a “new regional security cooperation architecture” and declaring that “A military alliance which is targeted at a third party is not conducive to common regional security.” An achievement of this “Asia for Asians” vision would be devastating to the U.S.-ROK alliance and the broader security network that maintained peace and stability on the Korean peninsula and in the region for the past 70 years. In this light, how consequential can the U.S.-ROK alliance really be if the two governments can’t be on the same page when it comes to China? This is not to say that South Korea shouldn’t pursue a dynamic economic relationship with China. And this is not to say that South Korea’s alliance with the United States should preclude efforts by Seoul to strengthen political and diplomatic relations with Beijing.  But, this does mean that the U.S.-ROK alliance requires a serious assessment of China’s strategic ambitions in the region. There are at least three steps that Seoul and Washington should take in order for the alliance to remain consequential going forward. First, the U.S.-ROK alliance should conduct a joint net assessment of China. What are their capabilities and intentions? What do their military modernization programs mean for the region and the U.S.-ROK alliance? Second, the alliance should develop a regional strategy. Both countries have an enormous stake in freedom of navigation, the peaceful resolution of disputes, democracy, and international norms. And third, the U.S.-ROK alliance should develop infrastructure to respond to regional events, not just peninsular events. In light of China’s rejection of the Permanent Court on Arbitration’s ruling on July 12, the U.S. and South Korea should coordinate freedom of navigation (FON) operations in the South China Sea. By any objective measure, the U.S.-ROK alliance is rightly judged as a shining success. We stand ready to “fight tonight” on the Peninsula and would surely prevail despite Pyongyang’s continuing investments in offensive capabilities. And our alliance can claim success on global issues such as cooperation in fighting terror, proliferation and mutual contributions to international peacekeeping. These virtues notwithstanding, we should also note the danger to the health of our alliance going forward should there be a divergence of views on the most consequential challenge facing the Asia-Pacific region for as far as the eye can see—namely, how to approach a more powerful and more assertive China that seeks to revise the political and security architecture in the region.  Our countries should not sit idly by as the regional security environment deteriorates. Taking these steps will add the necessary dynamism and flexibility for the alliance to tackle the most pressing challenges of the 21st century.” http://thediplomat.com/2016/07/the-us-rok-alliance-needs-a-boost-on-regional-challenges/

 

Posted by Alex Gray | July 20, 2016

Is It Time For The U.S. To Take a Position On Scarborough Shoal? Rear Adm. Michael McDevitt, USNI News. “Starting in early 2016, Scarborough Shoal suddenly became an issue of serious concern for U.S. officials.According to articles in the press reports information was obtained that strongly suggested that China was about to start turning Scarborough into another artificial island, similar to what they had done in the Spratlys. Apparently, one of the factors that suggested Beijing was about to act was a posting found on a Chinese website that included satellite photographs based on a construction bid proposal that would turn Scarborough into an island base similar to what China has constructed on seven Spratlys Islands. A modern Scarborough airfield with radar and other modern information, surveillance and reconnaissance (ISR) facilities so close to Philippine bases where U.S. has been granted rotational access by the Philippine government possess obvious strategic issues. As shown in the graphic below from the office of U.S. Sen. Dan Sullivan (R-Alaska), turning Scarborough into a base with air search radars would allow China to have full-time radar coverage over most of Luzon. Whether this is China’s intent is not known, but Washington reacted as though they thought it was. Whatever information the Department of Defense has it was deemed credible enough to trigger a “full-court” press aimed at dissuading Beijing from taking those steps. Given that Scarborough is ideally located to “control” the northeast exit of the South China Sea and is only 150 nautical miles west of Subic Bay, if it was turned into a PLA base with a jet capable airfield it would enable among other things a credible Chinese South China Sea Air Defense Identification Zone. The U.S. response included beginning the rotational deployment of a small task force of US Air Force tactical aircraft to the Philippines, the presence operations of the USS John Stennis Carrier Strike Group in the South China Sea for much of March, April and May of 2016, along with a many high-level public statements, the most dramatic of which came from the Secretary of Defense in testimony before the Senate Armed Services committee. Carter was quoted as saying that Scarborough is “a piece of disputed territory that, like other disputes in that region, has the potential to lead to military conflict…That’s particularly concerning to us, given its proximity to the Philippines.” According to New York Times reports, President Obama also mentioned Scarborough Shoal to President Xi Jinping during their meeting on March 31st on the margins of the Nuclear Security Summit: The stakes are so high that Mr. Obama warned the Chinese leader, Xi Jinping, during their recent meeting in Washington not to move on the Scarborough Shoal or invoke an air defense zone, said an American official who was briefed on the details of the encounter and spoke anonymously because of the diplomatic sensitivities. In essence, the flurry of activity regarding Scarborough in March, April and May of 2016 was meant to send a clear signal to China that the United States sees Scarborough as being different from the Paracels and Spratlys. Although official U.S. policy of taking no position on the merits of disputed sovereignty claims to features in the South China Sea includes Scarborough Shoal, recent US action suggests that it does in fact have a different unofficial view. Since Scarborough is not in either the Spratly or Paracel chains and is not also claimed by any littoral state other than China and Taiwan, and for almost 50 years was treated as though it was under US jurisdiction, changing the US position on sovereignty over Scarborough would not be a stretch. It is the author’s view that the evidence supports Philippine sovereignty over the Shoal. To this point: When comparing the Chinese and Philippine cases, evidence of effective occupation is not overwhelming in either case – but, of the two, the Philippines’ case is stronger. Most mariners charted this feature only in order to remain well clear of it since it was a hazard to navigation. Similarly, the presence of itinerant fishermen from either China or the Philippines is legally insufficient to establish a legal presence. But, past activities by the U.S. Navy and Philippine authorities to survey the Shoal so that it could be safe for shipping, constitute some positive occupation, along with its contemporaneous appearance on Philippine charts. Past actions by the Philippine armed forces to exercise law enforcement jurisdiction in the 1960s, both to eject smugglers and to monitor future movement, show intent to exercise jurisdiction over the atoll. The past uses of the shoal by the U.S. Navy for military activities and its legal assessment that the atoll was part of the Philippines also support the case that the Republic of the Philippines was exercising sovereignty over the atoll. Even though the Philippines today asserts that its current claims are independent of the territory that was ceded by Spain to the United States, the key point is that the U.S. government considered it to be part of the Philippines, and any “occupying” activities which it undertook can be vicariously attributed to the Philippines because the United States was the legal proxy for the Philippine people until full independence in 1946. In short, it would not be legally difficult for the U.S. government to persuade itself that the Government of the Philippines does have a superior claim to sovereignty over Scarborough Shoal. The obvious political and security implication of such a judgment would be the US-Philippine Mutual Defense Treaty could be interpreted to cover Scarborough Shoal; an act that hopefully would deter Chinese island building. It is probably not the best time to actually do this while Beijing is still reeling from the Hague arbitral panel findings, and before we learn if Philippine President Duterte is trying to reach a deal with Beijing over access to Scarborough. But, this is a card that Washington should keep close at hand while waiting to see how things play out. Unless the almost three months of recent US naval and air posturing around Scarborough was simply a bluff, it suggests that Washington has already decided that Scarborough is important enough to the security of the Philippines (and to the United States position in the Philippines) to accept the risks associated with doing something that will really irritate Beijing.” https://news.usni.org/2016/07/19/take-position-scarborough-shoal?utm_source=USNI+News&utm_campaign=0ccf8b508d-USNI_NEWS_DAILY&utm_medium=email&utm_term=0_0dd4a1450b-0ccf8b508d-230983325&mc_cid=0ccf8b508d&mc_eid=a269089d86

The Wisdom Of The Hague’s South China Sea Decision. Jerome Cohen, The Wall Street Journal. “The July 12 arbitration award in the Philippines case against China under the United Nations Convention on the Law of the Sea (Unclos) isn’t only significant for East Asia and maritime law. It will also have implications for public international law and the peaceful settlement of international disputes generally. Until now, arbitration hasn’t enjoyed much prominence in international relations. Cannon fire, even from water cannons, makes headlines. The tragic, albeit accidental, death of a single foreign fisherman produces more television coverage. Even important arbitration awards, such as the 2014 Unclos tribunal’s decision to award 80% of the disputed area in the Bay of Bengal to Bangladesh rather than India, barely receive international media coverage at all. This helps China to argue that arbitration, like international court adjudication, is inconsistent with Asian values and not an accepted mode of peacefully settling disputes. China’s argument is refuted by the U.N. Charter and many treaties ratified by Asian countries, including China, requiring compulsory arbitration or adjudication. Moreover, as Singapore’s Ambassador Tommy Koh, who played an important role in the 1982 adoption of Unclos, has emphasized, a surprising number of Asian countries have chosen third-party decisions to resolve disputes. Diplomats tend to play down international legal decisions. When in October 2012 I urged East Asian states to use arbitration or adjudication to help settle their territorial and maritime disputes, some diplomats dismissed the idea as unrealistic. I was therefore excited when, a month later, Japan’s departing Foreign Minister Koichiro Gemba challenged China to sue Japan before the International Court of Justice to determine sovereignty over the Senkaku Islands. Yet the Abe government has only hinted at following Mr. Gemba’s initiative. It took the stunning Philippine arbitration case against China brought in 2013 to illustrate the value that international legal institutions can have for weak countries with no other defense against overwhelming power. The skillfully crafted Philippine legal briefs won my admiration. Although rejected not only by China but also Taiwan, the tribunal’s elaborately researched and scrupulously reasoned responses proved just as impressive. They were even more so given the difficulties imposed by China’s nonparticipation and the tribunal’s mistaken refusal to permit Taiwan’s participation, out of exaggerated deference to Beijing’s “one China” policy. Learned books will soon analyze the complex jurisdictional and substantive issues discussed. Here one can only mention the decision that has drawn the most immediate fire from both Chinas: the determination that the Spratly islands aren’t entitled to the 200-nautical-mile exclusive economic zone and continental shelf. Unclos Article 121 grants an EEZ to all islands except “rocks which cannot sustain human habitation or economic life of their own.” The words of this confusing but crucial exception aren’t self-defining. They were a compromise among Unclos drafters who, unable to agree upon a more precise formulation, left these vague terms to be given concrete meaning case by case. Despite Taiwan’s formal exclusion from the proceedings, the Chinese (Taiwan) Society of International Law managed to submit a strong “friend of the court” brief. It tried to demonstrate that Itu Aba (Taiping Dao), the largest of the Spratlys and the only one occupied by Taiwan, is a fully entitled island that doesn’t fall within Article 121’s exception. But the tribunal decided that islands that lack a history of supporting settled human communities without substantial outside aid shouldn’t enjoy the enormous special rights to maritime and seabed resources that EEZ/continental-shelf status confers. To do otherwise, the tribunal declared, would violate the underlying purpose of Article 121 “to prevent States from claiming for themselves potentially immense maritime space . . . to the detriment of other coastal States and/or the common heritage of mankind.” The tribunal conducted an extraordinarily exhaustive and frank examination of the language and drafting history of Unclos and previous law-of-the-sea negotiations. It also considered the limited extent to which practice and earlier decisions had shed light on the issue, relevant Asian historical developments, the region’s geography and geology, and the practical consequences of narrowly or broadly defining the exception. Although initially sympathetic to Taiwan’s brief, I found the tribunal’s bold, lengthy and informative application of Article 121 more persuasive and a much-needed authoritative addition to the law of the sea. It embodies the admonition of the Vienna Convention on the Law of Treaties that international agreements must be interpreted in light of their major purposes. The tribunal erred in not allowing Taiwan adequate opportunity to state its case, but its decision on the merits was surely wise.” http://www.wsj.com/articles/the-wisdom-of-the-hagues-south-china-sea-decision-1468943819

Things Heat Up Near South China Sea: Two U.S. Aircraft Carriers, B-52s And EA-18G Growler Detachment. David Cenciotti, The Aviationist. “Some interesting photographs have been arriving from the troubled waters of Indo-Asia-Pacific region. The most recent ones, released on Jun. 18, show the USS John C. Stennis (CVN 74) and USS Ronald Reagan (CVN 76) carrier strike groups (CSG 3 and CSG 5) crusing close each other during dual carrier flight operations in the Philippine Sea. Such operations included air combat training, long-range strike training, air defense drills as well as sea surveillance. The CSG 3, that started operations in the Western Pacific on Feb. 4, consists of the aircraft carrier USS John C. Stennis (CVN 74), guided-missile cruiser USS Mobile Bay (CG 53) and guided-missile destroyers of Destroyer Squadron (DESRON) 21, USS Stockdale (DDG 106), USS Chung-Hoon (DDG 93) and USS William P. Lawrence (DDG 110), and the aircraft of Carrier Air Wing (CVW) 9. CSG 5, begun its summer patrol of the Indo-Asia Pacific, on Jun. 4, and consists of the aircraft carrier USS Ronald Reagan (CVN 76), guided-missile cruisers USS Shiloh (CG 67) and USS Chancellorsville (CG 62) and guided-missile destroyers from Destroyer Squadron (DESRON) 15, USS Curtis Wilbur (DDG 54), USS McCampbell (DDG 85), USS Benfold (DDG 65); the aircraft of Carrier Air Wing (CVW) 5, is forward-deployed to Yokosuka, Japan and routinely, patrols the Western Pacific. According to the U.S. Navy, the CSGs (Carrier Strike Groups) began coordinated operations in international waters to demonstrate “the United States unique capability to operate multiple carrier strike groups in close proximity.” U.S. Navy aircraft carriers regularly conduct dual carrier strike group operations in the Western Pacific and sometimes also in the South China Sea, East China Sea and Philippine Sea: this occurs when carriers deployed to the 7th Fleet area of operations from the U.S. West Coast are joined with the forward deployed carrier strike group from Japan. When it happens a force of 12,000 sailors, 140 aircraft, six combatants and two carriers operates in the same sea: an impressive “show of force.” Previously, in Sept. 2012, USS George Washington (CVN 73) and USS Carl Vinson (CVN 70) strike groups conducted combined operation in the South China Sea and East China Sea. In 2001, USS Constellation (CV 64) and Carl Vinson operated together in the South China Sea. A few days before the two carriers started combined operations, a joint service bombing exercise at the targeting island Farallon de Medinilla, an uninhabited small island in the Northern Mariana Islands in the Pacific Ocean located 45 nautical miles north of Saipan, saw two U.S. Air Force B-52 Stratofortress bombers launched from Andersen Air Force Base, Guam, fly over USS Spruance (DDG 111) in a maritime attack training sortie. Along with the two carrier strike groups and the B-52 providing extended deterrence, Washington has also deployed to the Philippines the first temporary detachment of Navy EA-18G Growlers. The electronic attack aircraft have arrived at Clark Air Base, on Jun. 15. Even though they are officially there to train with the local FA-50, the detachment, made of 4 aircraft and 120 personnel with the Electronic Attack Squadron (VAQ) 138, “will support routine operations that enhance regional maritime domain awareness and assure access to the air and maritime domains in accordance with international law.” Therefore, the strategical deployment brought not far from the disputed waters in the South China Sea some cutting-edge aircraft capable to perform electronic escort missions on both U.S. ships and spyplanes that are frequently shadowed by Chinese spyplanes or intelligence gathering ships. Furthermore, the Growlers could jam, if needed, the Chinese radars on the Spratly, Paracel, Pratas and the rest of the islands, including those that have been artificially created, decreasing Beijing ability to establish an ADIZ (Air Defense Identification Zone) similar to that in the East China Sea and to support its warplanes in the area. The presence of (some more…) EA-18Gs could theoretically limit the operations of the Chinese Air Force (PLAAF) and Navy (PLANAF) that, according to “Flashpoint China: Chinese air power and regional security” published by Harpia Publishing and written by Andreas Rupprecht, one of the most authoritative sources on Chinese Air Power, “are able to ensure virtually continuos, round-the-clock aerial coverage and combat air patrols over the area during a crisis or a conflict.” In particular, the PLANAF is pretty active in the area with a regiment each of H-6 bombers and JH-7 fighter-bombers and no fewer than three regiments of J-11 interceptors covering the South China Sea . “The availability of long-range J-11s and aerial refueling assets implies that much of the SCS [South China Sea] is now de-facto Chinese airspace,” says Rupprecht. It’s not a coincidence that a recent close encounter in the area involved few weeks ago two Chinese J-11 tactical aircraft that carried out an “unsafe” intercept of a U.S. EP-3E reconnaissance aircraft on a routine mission in international airspace over the South China Sea.” https://theaviationist.com/2016/06/19/things-heat-up-near-south-china-sea-two-u-s-aircraft-carriers-b-52s-and-ea-18g-growler-detachment/

China And US Conduct Joint Submarine Rescue Drill. Franz Stefan-Gady, The Diplomat. “The People’s Liberation Army Navy (PLAN) and U.S. Navy conducted a joint submarine rescue drill on July 13 as part of the 2016 Rim of the Pacific (RIMPAC) naval exercise, held biennially in June and July of even numbered years in waters around the Hawaiian Islands and southern California. The practical exercise involved the Dalao (Type 926)-class submarine rescue ship Changdao of the PLAN’s South Sea Fleet and U.S. Navy submariners who, aboard the Changdao, participated in launching a LR7 deep submergence rescue vehicle. According to a U.S. Pacific Command press release, Chinese and U.S. sailors successfully launched the rescue vehicle and conducted a successful mating with a faux-NATO rescue seat. Deep submergence rescue vehicles are designed to rescue personnel from disabled submarines. They do so by attaching themselves to the hull of the submarine and land on a so-called rescue seat—the submarine’s escape/rescue trunk, through which crew members of the disabled boat can be evacuated. Participants of the drill noted that it confirmed that the PLAN and U.S. Navy can jointly conduct a rescue exercise in the event of an accident. “This exercise was an important part of China’s participation in the RIMPAC-2016 multinational maritime exercise,” China Military Online states. “It was a completely successful exercise on both sides,” said Bill Orr, technical advisor for the International Submarine Escape and Rescue Liaison Office. “The rescue vehicle mating exercise was a culmination of a very detailed and well-planned bilateral and multilateral submarine rescue vignette within the RIMPAC training evolution.” “I was very impressed with how engaged the Chinese officers were towards enabling a cooperative rescue effort, if needed,” added Orr. “Having everyone ready to jump into action and demonstrating the readiness displayed today is very satisfying. Of course, you hope you never have to use these kinds of skills in a non-training scenario, but I feel very comfortable knowing we can succeed if and when it’s needed.” According to a U.S. Navy diver, who served as a liaison during the drill: “It’s been great collaborating with both the Chinese and the other nations who were on hand for the training symposiums and briefings we did surrounding this exercise. We’ve found that most countries’ submarine rescue assets are very similar, which makes it that much easier should we ever need to come together to perform a submarine rescue.” For the 2016 iteration of RIMPAC, the PLAN dispatched a guided-missile destroyer, a guided-missile frigate, a hospital ship, and a replenishment vessel, along with the submarine rescue ship Changdao. The world’s largest international maritime exercise will conclude on August 4.” http://thediplomat.com/2016/07/china-and-us-conduct-joint-submarine-rescue-drill/?utm_source=Sailthru&utm_medium=email&utm_campaign=Defense%20EBB%2007-20-16&utm_term=Editorial%20-%20Early%20Bird%20Brief

 

More J-20 Stealth Fighters Built In China. Mike Yeo and Chris Pocock, AIN Online. “China’s Chengdu Aircraft Company (CAC) has built more Low Rate Initial Production (LRIP) J-20 stealthy jet fighters, with another new aircraft featured in flight on Chinese websites over the past week. This is the second known J-20 LRIP aircraft, after the first example serialed 2101 was shown in late December 2015. They follow two prototypes and six known development aircraft that featured a successive series of refinements. The latest aircraft is painted in shades of gray and carries toned down national insignia, but unlike all previous J-20s has no identifying serial numbers. Reports from China suggest that this latest aircraft may in fact be the fourth LRIP aircraft, but verifiable evidence of this has yet to surface. Most information about the J-20 has emerged from unofficial Chinese websites, and the type has never been shown in public. The appearance of LRIP aircraft suggests that the type is nearing introduction into service with the People’s Liberation Army Air Force. A number of J-20s have been seen on satellite imagery at the China Flight Test Establishment base at Xi’an-Yanliang. The latest report to Congress on Chinese defense developments by the U.S. Department of Defense suggests that the J-20 could become operational in 2018. The J-20 appears to be designed for long-range interception with an emphasis on frontal-aspect low-observability. It has an infrared search and track sensor and possibly also an electro-optical distributed aperture system (EODAS), the latter a Chinese-designed system similar to that on the Lockheed-Martin F-35 Lightning II stealth fighter. The weapons are carried internally, with a central bay expected to contain four beyond visual range air-to-air missiles (BVRAAMs). There is also provision for two short-range AAMs in two separate weapons bays on each side of the fuselage. The main question that is left for the design is the powerplant, with all J-20s built so far being powered by two Russian Saturn AL-31 engines. China hopes eventually to install 180-kN (40,000-pound-thrust)-rated WS-15 turbofans. But China’s jet engine development program has been stymied by manufacturing and reliability issues. Even the less ambitious WS-10 turbofan is yet to fully enter service with the single-engine Chengdu J-10 fighter, although it has been flying on the twin-engine Shenyang J-11 Flanker since 2010. Meanwhile, Chinese websites have also shown what appears to be a second J-31 stealth fighter leaving the Shenyang Aircraft Corporation factory by road, covered in tarpaulins. The prototype J-31 was similarly recorded, before its first flight in October 2012. This type is being marketed for export as the FC-31. At the Dubai Airshow last November, a Chinese official told reporters that the FC-31 would be powered by Chinese engines. The prototype was powered by two Russian RD-93s.” http://www.ainonline.com/aviation-news/defense/2016-07-19/more-j-20-stealth-fighters-built-china

Sorry For Having Insulted China? Here’s Your Chance To Apologize. Didi Kirsten Tatlow, The New York Times. “Chinese leaders have often accused those who disagree with them of “hurting the feelings of 1.3 billion Chinese.” Getting into the spirit, Taiwanese and Hong Kongers are responding enthusiastically to a satirical Facebook page calling on them to say “sorry” to China. Sorry for anything, and everything. The reasons for contrition so far have included living under a blue sky (China’s skies are chronically polluted); eating clean food (food safety is a major challenge in China); and locking the door when using the toilet (not always done on the mainland). “I’m sorry, I don’t write simplified characters,” wrote Ziyou, referring to the writing style of mainland China, but not Hong Kong or Taiwan, in apologizing for being different from Beijing. The commenter’s name is itself a clever pun. It means “character travel,” but is a homophone for “freedom.” The Facebook page comes as actors and other celebrities across Asia and the United States find themselves the target of rising Chinese nationalism, their careers vulnerable to the scrutiny of thousands of “patriots” ready to sniff out perceived disloyalty to the Communist Party. They may be accused of being “poisonous,” “traitors” or “anti-China elements,” often for gestures or statements that are considered normal in their places of birth. Some have been pressured to issue videotaped or written apologies. On Facebook, the person identified as a founder of the #FirstAnnualApologiseToChinaContest described himself as a farmer and philosophy student in Taiwan named Wang Yikai, according to the mainland transliteration for the characters in his name. Mr. Wang did not respond to a request for comment, and the preferred rendering of his name could not be confirmed. “If you have any thing want to apologize to China, Welcome to attend the first annual ‘Apologise to China’ contest,” the page reads in English. The contest began Saturday and expires July 30 and the winner will be crowned ‘The first king of apologize to China!’” the page said. In one video on the page that is proving a popular contender for the title, several men prance around a room in what look like rubber wet suits, slapping themselves on the face and bottom, apologizing. Most of the video is in Cantonese, the language spoken in Hong Kong and southern China, but one set of apologies is sung in Japanese. Japan is another target for Chinese online patriotic ire because of a territorial dispute over the islands known as the Diaoyu in China and the Senkaku in Japan. Here are some of the lyrics:

“My fault, my fault, my fault, my fault.

Don’t, don’t, don’t be angry,

I pity you, glass-hearted baby.

I’m sorry, sorry, sorry, sorry.

You aren’t wrong. It’s all my fault.

I am sorry, I am sorry.

I pity you, patriotic baby.”

Recently, the trolling reached saturation point for Kiko Mizuhara, 25, a Japanese-American model and actress who, separately and in earnest, apologized to those who said she had expressed anti-China sentiments. She stood accused of “liking” an image by the artist Ai Weiwei of a lifted middle finger on Tiananmen Square, among other things. Online, some sprang to Ms. Mizuhara’s defense: “China really is a damnable pile of mentally ill people and crazy dogs,” wrote Chuang Viki underneath the video broadcast on YouTube, which is blocked by Chinese censors. Another recent high-profile target who has been obliged to issue an apology is the Taiwanese actor Leon Dai. Tens of thousands of Weibo posts have accused him of supporting independence for Taiwan and Falun Gong, a spiritual group that is banned on the Chinese mainland. “You are not good enough to be Chinese,” wrote one person, in a typical comment. “You Taiwan independence separatist won’t have a good death.” Last week, Zhao Wei, a mainland Chinese actress and director also known as Vicki Zhao, said she was dropping Mr. Dai from her movie “No Other Love” over the uproar. In January, the Taiwan pop singer Chou Tzu-yu, a member of a South Korean band, apologized after being excoriated by Chinese commenters online for holding a Taiwanese flag during presidential elections on the island. For many Asian artists, the Chinese market has become a core part of their sales, exposing them to threats of boycott. “Apologized yet today?” a person wrote on the Facebook page, summing up the mood. Online wrath for those who cross China surged after a ruling last week by an international tribunal rejecting the country’s claims to most of the South China Sea. On its official Weibo site, the Communist Youth League praised the waxing patriotic fervor. “The Leon Dai scandal and the South China Sea tribunal ruling have flooded China’s social media,” it wrote. “The young people rushing onto center stage are changing the rules of the game of social media.” “They have built a path of national territorial integrity and sovereignty that are core interests of the country, and that constitute a red line that cannot be crossed,” it added. “And that’s the own choice of a new generation.” Over the weekend, a popular Beijing-based Taiwan journalist, Gong Ling, committed suicide, leaving a note saying, “There is nothing in China that is not political.” Ms. Gong had reportedly had depression, but she said she had also been the target of criticism by mainland Chinese who applied “trumped-up labels” to attack her pro-Taiwan politics. But even that was an occasion for nationalistic criticism online, with some on the mainland Chinese site Zhihu saying that Ms. Gong lacked resilience, and that the tragedy reflected that China was becoming powerful and Taiwan weaker.” http://www.nytimes.com/2016/07/20/world/asia/china-apologise-contest.html

China’s Failure In The South China Sea. Orville Schell, The China File. “The recent Permanent Court of Arbitration in the Hague’s long-awaited ruling on conflicting Chinese and Filipino claims in the South China Sea has delivered a stunning rebuke to Beijing. By insinuating international law into what essentially had been a standoff, many hoped that the Court’s decision would provide an off-ramp for the disputants. But, far from accepting the Hague’s ruling as Indian Prime Minister Modi graciously had in 2014 after losing in a different UNCLOS arbitration with Bangladesh over the Bay of Bengal, Beijing rejected the court’s judgment out of hand and began lashing back defiantly against the Permanent Court of Arbitration, calling it a “puppet tribunal” and its decision a “farce directed by Washington” with no legal standing. By reiterating its policy of “no acceptance, no participation, no recognition, and no implementation,” China has painted itself into a difficult corner and diminished the chances of resolving the myriad maritime disputes—involving Vietnam, Brunei, Malaysia, Taiwan and now even Indonesia as well as the Philippines—in a peaceful manner. What is more, by continuing to press its claims with such belligerence, Beijing also throws up a huge obstruction in the way of better U.S.-China relations. After all, the only force that stands between the weaker South East Asian countries and China is the U.S. Pacific Fleet. What makes the Hague ruling so sensitive for China right now is not just the humiliating rebuke it gives to Beijing and President Xi Jinping, but the fact that it comes as one more in a string of already embarrassing, if largely unnoticed, other reverses that China has recently suffered in its relations with Asian countries. Together they form a striking tableau of foreign policy ineptitude, examples of China’s misreading the real balance of power and politics in the region and then acting either to propitiate nationalistic sentiment at home or to defend what Xi may imagine is part of a larger restoration of China to a position of greatness in Asia and the world. However, if looked at from a somewhat different perspective, it is difficult to see how these serial setbacks have done anything but harm to China’s global standing, diminish its security, and undermine the long term interests of the Chinese people. Whereas only six or seven years ago China’s relations with almost all neighboring countries in Asia, particularly those in South East Asia, were quite good, now, as a result of these maritime disputes and other missteps, China cannot boast a single true ally, even obedient client state, in the region today. A list of the recent reverses China has suffered includes: The Philippines: Manila, a U.S. treaty ally, has not only just won a milestone international law case against Beijing, but also, because of China’s expansionism into Philippine claimed waters, U.S. forces, expelled from the Republic in the 1990s, have now been invited back into the country, reconsolidating the Philippine-U.S. alliance. Vietnam: Because of an increasingly conflicted relationship with China over island claims in the South China Sea, Communist Party-ruled Vietnam has not only given rise to anti-Chinese riots, begun hosting a growing number of visits by the U.S. President, Secretary of State, and other officials; agreed to join the Trans Pacific Partnership; but also even begun discussing turning over old Vietnam War era naval bases to the U.S. Navy. Japan: Although during the 1970s most WWII grievances were resolved so that a period of real Sino-Japanese amity ensued in the 1980s, in the past two decades Beijing has revived its dispute over the Senkaku/Diaoyu Islands with Tokyo, another U.S. treaty ally. By harping again on the inadequacy of Tokyo’s apologies for wartime abuses, Beijing has increasingly strained relations between the world’s second and third largest economies and excited conservative anti-Chinese forces within Japan, recently helping Prime Minister Shinzo Abe win a sweeping electoral victory. South Korea: It was not so many months ago that South Korea, also a U.S. treaty ally, found its President, Park Geun-hye, sitting on Tiananmen Gate making nice with Chinese President Xi and Russian President Vladimir Putin in hopes of cementing better trade relations with China and winning President Xi’s support for more Chinese pressure on North Korea, or the DPRK. However, upon returning home, not only were there few signs of Chinese reciprocity, but when President Park called President Xi and did not get a response for a month, and when the DPRK began testing hydrogen weapons and long range missiles as China stood by, President Park not only turned to the United Nations for a stricter regimen of sanctions, but began pivoting back toward the U.S., even requesting, and getting (over strenuous Chinese objections), Washington’s agreement to provide the ROK with a THAAD missile defense system. Myanmar: Once ruled by a military junta that made it a reliable authoritarian client state, in the last three years Myanmar not only has become an increasingly democratic country, but also has become more independent, more suspicious of China’s big power intentions and drifted closer to the U.S. orbit. Taiwan: Once in an accomodationist mode of interaction under former President Ma Ying-jeou, the Taiwan presidency and legislature, captured in January by Tsai Ying-wen and the Democratic Progressive Party (DPP)—a party long committed to independence—now puts this already insubordinate island into a heightened state of tension with China. Indonesia: Long friendly to China, Indonesia’s recent disputes over fishing grounds within its Exclusive Economic Zone have introduced new animosities and conflict into its bi-lateral relations with Beijing. Even though these reverses have largely been self-inflicted by China, if the past is any guide to the future, Beijing leaders once again will blame “hostile foreign forces,” just as the New China News Agency started to do when it called the recent international court ruling “a bundle of fairy rope the West has tossed out at a strategic moment in a vain attempt to terminate China’s development.” Also militating against a Chinese course correction is the ever widening abyss between Xi Jinping’s florid rhetoric about the birth of a new New China that is wealthy, powerful, and invincible, and the actual reality of the world now arrayed around him. After extolling Mao Zedong and his socialist revolution in his recent speech commemorating the 95th Anniversary of the Party, President Xi launched into a peroration on his ambitions to “realize the China dream of bringing about a great rejuvenation of the Chinese nation.” However, he also pointedly reminded neighboring countries that, “Although China does not covet other countries’ rights and interests and is not jealous about other countries’ development, it definitely will not give up its own legitimate rights and interests… The Chinese people do not provoke matters, but are not afraid to confront provocations. No country should expect that we will trade away our own core interests. No country should expect that we will eat the bitter fruits of undermining our country’s sovereignty, security, and development interests. ”In such a grandiose notion of national revival, for a proud and thin-skinned leader like Xi there is no tolerance for the indignity of appearing weak. And so, while a Hague ruling may on the surface seem only to be about rocks, atolls, and shoals in the South China Sea, for Xi it is about dignity and face. And in his playbook of grand pretension, yielding to an international court in The Hague, in a case brought by the weakling Philippines, or anyone else for that matter, is unthinkable. As the phrase now found on billboards around China puts it, “When it comes to Chinese territory, not one inch will we yield.” Xi is jousting in the international lists of greatness, and for him manifestations of vacillation or compromise, much less surrender, are intolerable signs of weakness. So, precisely because China has quietly endured a series of self-induced, although unwelcome, setbacks around its peripheries, Xi is all the more allergic to being tarred again with the big brush of failure, especially on such a grand and public stage as the South China Sea has now become. Thus, it will be more than a little surprising if Xi and China now somehow do the sensible thing by reversing rudders, prudently seeking compromise, and getting on with their far more important and already perilous task of economic reform and building better relations with their Pacific neighbors.” http://www.chinafile.com/viewpoint/chinas-failure-south-china-sea

 

Posted by Alex Gray | July 19, 2016

China Begins Air Patrols Over Disputed Area Of The South China Sea. Michael Forsythia, New York Times. “China said Monday that it had begun what would become regular military air patrols over disputed islands and shoals of the South China Sea, highlighting its claim to the vast area a week after an international tribunal said Beijing’s assertion of sovereignty over the waters had no legal basis. China’s air force flew a “combat air patrol” over the South China Sea “recently,” Xinhua, the official news agency, reported, citing Shen Jinke, an air force spokesman. The patrol consisted of bombers, fighters, “scouts” and tankers and would become “regular practice,” Mr. Shen said, according to Xinhua. The announcement of the air patrols, plus a separate statement that China would conduct military exercises in the South China Sea off the coast of Hainan Island, came as Adm. John M. Richardson, the chief of United States naval operations, was in Beijing to discuss the South China Sea and other issues that arose after the tribunal rebuked China’s claims over the waters on July 12. The landmark decision rejected China’s assertion that it enjoys historical rights over a huge area of the South China Sea encompassed by a “nine-dash line.” China had argued that the court had no jurisdiction in the matter. China’s announcement of military exercises and patrols as a response to the ruling had been expected by analysts. But Beijing also moved to contain any public anger over the tribunal’s decision. The angry mobs of people demonstrating outside of embassies in the Chinese capital, a regular feature in the past when China wanted to vent its grievances, never materialized. On Monday, Admiral Richardson’s Chinese counterpart, Adm. Wu Shengli, said China would continue construction in the South China Sea. In the past two years, China has reclaimed thousands of acres on seven features in the Spratly Islands, an area where Vietnam, the Philippines and Taiwan also have claims, building ports, large airstrips and radar installations. “We will never stop our construction on the Nansha Islands halfway,” Xinhua, in a separate report, quoted Admiral Wu as saying, using the Chinese name for the Spratly chain. “The Nansha Islands are China’s inherent territory, and our necessary construction on the islands is reasonable, justified and lawful.” Significantly, the Xinhua report on the air patrols said the flights encompassed the Scarborough Shoal, a fishing ground far to the north of the Spratlys off the coast of Luzon Island in the Philippines. China seized control of the shoal in 2012, using coast guard vessels to bar Filipino fishermen. The tribunal ruled that China had violated what it said were the “traditional fishing rights” of Filipino fishermen in the area. The Xinhua article did not say when the air patrol took place and did not provide any details, other than saying that the bombers were H-6K aircraft, a modification of a decades-old Soviet design that carries cruise missiles. China has not reclaimed land on Scarborough Shoal, a move that would probably inflame tensions with the Philippines as well as with the United States. And while Admiral Wu reminded Admiral Richardson about China’s position on the South China Sea, his remarks, coming only days after one of the most stinging rebukes to Beijing’s foreign policy in years, were moderated with calls for more cooperation between the world’s two biggest navies.” http://www.nytimes.com/2016/07/19/world/asia/china-sea-air-patrols.html?_r=0

China To Continue Construction On Disputed Islands. Chun Han Wong, The Wall Street Journal. “China’s navy chief told his U.S. counterpart that Beijing would continue construction work on disputed South China Sea islands regardless of foreign opposition, state media said, underscoring Chinese defiance toward an unfavorable international-arbitration ruling. Adm. Wu Shengli’s comments on Monday came days after a July 12 arbitration tribunal at The Hague rejected Beijing’s historic and economic claims over much of the South China Sea, handing a legal victory to the Philippines, which had brought the case. The ruling also excoriated China’s efforts to build artificial islands in the Spratlys chain, known as Nansha in Chinese. “We will never stop our construction on the Nansha Islands halfway...no matter what country or person applies pressure,” Adm. Wu told U.S. Chief of Naval Operations Adm. John Richardson during a meeting in Beijing, the official Xinhua News Agency said. Adm. Wu defended the construction—spanning land reclamation and the building of lighthouses and airstrips—as “justified and lawful,” and warned that efforts to coerce China “will only have the opposite effect,” Xinhua said. Monday’s meeting was part of Adm. Richardson’s first visit to China as U.S. Navy chief. “The overall tone of the meeting was positive, but the discussions were certainly candid and frank,” U.S. Navy Cdr. Chris Servello said. “Admiral Richardson conveyed the importance of adhering to international laws and norms and reiterated that U.S. forces will sail, fly and operate where [the] laws allow.”  China has boycotted the arbitration and said it would ignore the ruling, but some observers say the verdict could prompt Beijing to start reclaiming land and building facilities on Scarborough Shoal, a South China Sea outcrop also claimed by the Philippines. Monday’s meeting coincided with a Chinese air force statement saying that it recently flew long-range bomber aircraft near Scarborough Shoal, an uninhabited clump of rocks, sandbars and coral reefs near valuable fishing grounds, also known as Huangyan Island in Chinese.  The People’s Liberation Army Air Force didn’t specify when the “air combat patrol” took place, or whether it was before or after the tribunal’s ruling. The patrol featured the H-6K bomber—a Chinese variant of a Russian-designed jet—as well as fighter, reconnaissance and tanker aircraft, the air force said Monday on its verified Weibo microblog. Such patrols over the South China Sea will become “regular” practice, and are part of the PLAAF’s efforts to carry out more realistic combat training, air force spokesman Sr. Col. Shen Jinke said in the Weibo statement. The statement didn’t say how many aircraft were involved in the patrol, nor did it reveal how close they came to Scarborough Shoal, control of which China seized from the Philippines in 2012. It wasn’t clear whether the patrol was linked to PLA exercises in the South China Sea that ended on July 11. China’s Defense Ministry didn’t immediately respond to a request for further comment on the patrol. It wasn’t clear if Adm. Wu and Adm. Richardson discussed the patrol in their meeting, which also broached bilateral naval cooperation. The PLA Navy is participating in U.S.-led joint naval drills held in waters near Hawaii, which end in early August. Washington has publicly warned China against reclaiming land around Scarborough Shoal, located 120 nautical miles from the Philippines and some 250 nautical miles northeast of the artificial islands Beijing has built in the disputed Spratlys archipelago over the past two years. In April, the U.S. flew three different air patrols near the shoal as a signal of its concerns about possible Chinese plans for the area.” http://www.wsj.com/articles/china-flies-military-aircraft-near-scarborough-shoal-1468852659

Philippines Rejects China Talks Not Based On Sea Feud Ruling. Jim Gomez, Associated Press. “The Philippines' top diplomat said Tuesday he had rejected a Chinese offer to hold talks "outside of and in disregard" of an international tribunal's ruling last week that debunked Beijing's claim to ownership of virtually the entire South China Sea. Foreign Secretary Perfecto Yasay Jr. said he told his Chinese counterpart, Wang Yi, that China's condition "was not consistent with our constitution and our national interest," adding Wang warned that if the Philippines insists on China's compliance to the decision, "we might be headed for a confrontation." During talks on the sidelines of last weekend's Asia-Europe meeting in Mongolia, Yasay said Wang insisted that the Philippines should not even "make any comments" on the landmark decision by the Permanent Court of Arbitration in The Hague. Wang "asked us also to open ourselves for bilateral negotiations but outside of and in disregard of the arbitral ruling, so this is something that I told him was not consistent with our constitution and our national interest," Yasay told the ABS-CBN network. "They said that if you will insist on the ruling and discussing it along those lines, then we might be headed for a confrontation," he said. Despite the seeming impasse, Yasay said he was still hopeful both countries can find a way to resolve the long-seething dispute, suggesting China's publicly issued positions may still change. Yasay said he asked that Filipinos be allowed to fish in the Scarborough Shoal, where Chinese coast guard ships have blocked and turned away fishing boats since effectively seizing the disputed fishing area after a tense standoff with Philippine government ships in 2012. Wang responded by saying China was open to discussing that possibility with the Philippines "but not in the context of the arbitral tribunal ruling," Yasay said. Two days after the tribunal issued its ruling, Chinese coast guard ships again blocked Filipino fishermen from approaching the shoal in scenes documented by an ABS-CBN news crew. The Philippines decided to take its dispute with China to international arbitration in 2013 after China took control of Scarborough Shoal and reneged on a U.S. State Department-brokered deal for both countries to withdraw their ships from the area to ease a dangerous faceoff, according to former President Benigno Aquino III, who brought the case against Beijing. With the Philippines' anemic military dwarfed by China's forces, Aquino bolstered relations with the United States and other allies to deter China's increasingly assertive actions in the disputed waters and modernize its air force and naval fleets, further straining ties with Beijing. Rodrigo Duterte, who took over as president last month, has been seen as more conciliatory toward China and critical of U.S. security policies, saying during an election campaign that he would be willing to "shut up" on the disputes if China would finance railway projects in his impoverished country. When the tribunal issued its decision, Duterte's government purposely avoided any high-profile celebration to avoid antagonizing China, which refused to take part in the process and declared the tribunal's ruling "null and void." The ruling, which was welcomed by the U.S. and other countries, invalidated China's sprawling territorial claims under the United Nations Convention on the Law of the Seas, regarded as the constitution governing the use of the world's oceans. It said that China violated the 1982 maritime treaty by building up artificial islands in the South China Sea that destroyed coral reefs and by disrupting Philippine fishing and oil exploration. Yasay took an assertive tone Tuesday. "Let me say that the arbitral tribunal had really debunked in no unmistakable terms the position of China in so far as the nine-dash line is concerned," Yasay said, referring to Beijing's expansive sea claims demarcated by dashes on its maps.” http://bigstory.ap.org/article/768455b2892f4bf78b1906c785073033/philippines-top-diplomat-says-he-rejected-beijing-offer

China To Close Part Of South China Sea For Military Exercise. Christopher Bodeen, Associated Press. “China is closing off a part of the South China Sea for military exercises this week, the government said Monday, days after an international tribunal ruled against Beijing's claim to ownership of virtually the entire strategic waterway. Hainan's maritime administration said an area southeast of the island province would be closed from Monday to Thursday, but gave no details about the nature of the exercises. The navy and Defense Ministry had no immediate comment. Six governments claim territory in the South China Sea, although the area where the Chinese naval exercises are being held is not considered a particular hotspot. China's navy and coast guard operate extensively throughout the South China Sea and regularly stage live firing exercises in the area. The announcement of the drills came in the middle of a three-day visit to China by the U.S. Navy's top admiral, Chief of Naval Operations Adm. John Richardson, to discuss the South China Sea dispute and ways to boost interactions between the two militaries. Although the tribunal's ruling was likely to be raised in Richardson's discussions, the head of the Chinese navy, Adm. Wu Shengli, did not mention it directly in opening remarks before reporters at a meeting Monday between the two men at navy headquarters in Beijing. State broadcaster CCTV later reported that Wu reiterated China's determination to defend all of its territorial claims in the South China Sea and would not permit its interests to be infringed on, a standard position for Chinese officials. China rejected last Tuesday's ruling by the Hague-based Permanent Court of Arbitration in a case initiated by the Philippines, and refused to take part in the arbitration. It asserts that islands in the South China Sea are "China's inherent territory," and says it could declare an air defense identification zone over the waters if it felt threatened. In the days following the ruling, Beijing landed two civilian aircraft on new airstrips on disputed Mischief and Subi reefs and dispatched its coast guard to block Philippine fishing boats from a contested shoal. In a further development, Chinese air force spokesman Shen Jinke was quoted by state media as saying that air force fighters and bombers had recently conducted patrols over the South China Sea and would make that "a regular practice" in future. The tribunal ruled that China violated international maritime law by building up artificial islands in the South China Sea that destroyed coral reefs, and by disrupting fishing and oil exploration. China's island development has inflamed regional tensions, with many fearing that Beijing will use the construction of new islands complete with airfields and military facilities to extend its military reach and perhaps try to restrict navigation. Several times in the past year, U.S. warships have deliberately sailed close to one of those islands to exercise freedom of navigation and challenge the claims. In response, China has deployed fighter jets and ships to track and warn off the American ships, and accused the U.S. of threatening its national security.” http://bigstory.ap.org/article/8e3c3e91ba5447188bca02a5e822ab2a/china-announces-south-china-sea-military-exercises

China Vs. Vietnam: Next Up At The International Court On The South China Sea. Anders Corr, Forbes. “Now that the Hague’s Permanent Court of Arbitration voted resoundingly in Philippines’ favor on the South China Sea, it is Vietnam’s turn to bring an arbitration case. China has interfered massively in Vietnam’s economic development — not only against its fishing, but against its offshore oil and gas exploration and extraction. China justifies its interference in Vietnam’s exclusive economic zone (EEZ) based on China’s recently-claimed 9-dash line — the same 1930s line that the Court invalidated yesterday in the Philippine legal victory. In 2012, China cut the cables of seismic equipment used by Vietnam to explore its own EEZ for oil and gas. Starting in 2014, China repeatedly explored for oil within Vietnam’s 200 nautical mile EEZ, with its high-tech $1 billion HS 981 drilling rig. Subsidized Chinese steel-hulled boats regularly sink wooden Vietnamese fishing boats in disputed areas of the South China Sea, most recently last weekend. In what the Vietnamese describe as a “merciless and pitiless” incident, Chinese boats tried to prevent rescuers from retrieving fishermen thrown overboard. With the Court’s ruling yesterday, nothing stops Vietnam from bringing a similar arbitration case against China — and getting an almost certain win. Vietnam has done a great job of patching up its differences with countries more reasonable than China. Vietnam even submitted a joint submission with Malaysia on their shared continental shelf — a model of cooperation and reason. Vietnam still claims all of the Spratlys and Paracel Islands, but one senses none of the stridency and intensity regarding these claims that was exhibited by China on their 9-dash line claim. My prediction is that Vietnamese leaders simply want — and will soon petition — the Court to ascertain the limits of their EEZ, based on 200 nautical miles from the coastline, plus additional continental shelf. Once this is settled, Vietnam will be theoretically free to fully utilize its EEZ. Enforcement of Vietnam’s claim is another matter. China’s reaction to the Philippine’s successful case over the coming months will help Vietnam know what to expect after a new ruling in its favor. But there is now every reason for Vietnam to bring an arbitration case. As President Rodrigo Duterte of the Philippines discovered, there is no reason to bargain with China prior to a PCA ruling, as the PCA ruling strengthened the bargaining position of the Philippines. China knew this, which is why China was so desperate for bilateral negotiations prior to yesterday’s ruling. Vietnam’s bargaining position with China will be similarly strengthened by bringing a case and receiving a ruling from the Hague tribunal. Let’s hope Vietnam now takes action.” http://www.forbes.com/sites/anderscorr/2016/07/13/china-vs-vietnam-next-up-at-the-international-court-on-the-south-china-sea/#1a11d20e2887

The Curious Case Of Okinotori: Reef, Rock, Or Island? June Teufel Dreyer, CSIS PacNet. “The July 12 ruling of the Permanent Court of Arbitration (PCA) in The Hague in favor of the Philippines’ case against China’s claim to sovereignty over large portions of the South China Sea created ripple effects that went far beyond the area involved. In denying that many of the entities claimed by the People’s Republic of China (PRC) were islands, which would entitle them to exclusive economic zones (EEZs) of 200 nautical miles from their base lines, but rocks, which are entitled to only a 12-mile exclusion zone, the tribunal also undermined the Japanese government’s claim that Okinotori is an island. These distinctions are not trivial. If Okinotori were recognized as an island, Japan would be entitled to an additional 116,474 sq. nautical miles, or about 400,000 sq. km, of EEZ. This is larger than the total land area of the rest of Japan. The Japanese government, which had previously transferred coast guard vessels to the Philippines to assist Manila in patrolling areas claimed by China, immediately affirmed the PCA’s decision, but also reiterated Japan’s claim to Okinotori’s status as an island, Okinotorishima. Foreign Minister Kishida Fumio noted that the court’s verdict applied only to the issues between China and the Philippines, adding that Okinotori had been regarded as an island since 1931 – presumably because the Japanese government’s declaration of sovereignty over it as a shima, island, in that year was uncontested – and, further, that the court had not set the standards for what constitutes a rock. Earlier, Kuribayashi Tadao, a highly regarded Japanese expert on the law of the sea, had argued that there was no legal definition of a rock, and since rocks are not coral reefs, a country can claim an EEZ based on its possession of the latter. Chief Cabinet Secretary Suga Yoshihide essentially repeated Kishida’s points the following day. Located about midway between Guam and Taiwan, the entity, whose name translates “Distant Bird,” is 1,050 miles from Tokyo, making it Japan’s southernmost possession. Part of the Ogasawara (Bonin) island chain, Okinotori is so small that that it is not even marked on most maps. The first mention of its existence was recorded in the log of the British ship Iphigenia in 1789, under the name Douglass Reef. It is noteworthy that the British record refers to the outcropping as a reef, which is defined as a ridge of rock, sand, or coral, the top of which lies close to the surface of the sea. By contrast, an island is a naturally formed area of land surrounded by water that stays above water at high tide, and which can sustain human habitation. According to Article 121 (3) of the United Nations Convention on the Law of the Sea (UNCLOS), entities that are above water at high tide but cannot sustain human habitation or economic life of their own are not considered islands but rocks, and are not entitled to an EEZ. The British did not claim Douglass Reef, and the next known visits were from a Japanese ship, the Manshu, in 1921 and 1925. After ascertaining that no other claimants to the area existed, the Japanese government in 1931 declared sovereignty over what it called Okinotorishima, placing it under the jurisdiction of Tokyo municipality, along with the rest of the Ogasawaras. The impetus for the annexation is believed to have come from the imperial navy, since the area, in the midst of the Philippine Sea, is strategically located and surrounded by deep water. Plans for a hydroplane base, a lighthouse, and a meteorological observation site were interrupted by the outbreak of World War II. After the war, the US occupied the Ogasawaras, including Okinotori, returning them in 1968 to little notice and no recorded objections. In 1983, Japan became a signatory to UNCLOS and, based on its possession of Okinotorishima, claimed the aforementioned 154,000 sq. mile EEZ.   Whatever its condition in 1789 and the 1920s – during the latter, the navy referred to it as five entities above sea level – erosion had by the 1970s reduced Okinotori to two, typically described as the size of king-sized beds. In the 1980s, perhaps in response to Chinese hydrographic mapping activities in the area, the Japanese government began to literally shore up its claims. Okinotori’s remaining natural features were surrounded with 82-foot thick concrete floors and steel breakwaters to stave off further erosion. Slits were cut in the concrete casing to comply with the UNCLOS stipulation that an island must be surrounded by water, and the smaller outcropping was covered by a titanium net to shield it from debris thrown up by waves. The site was seeded with calciferous micro-organisms. In 1988, Japan’s Marine Science and Technology Center installed a marine investigation facility, and regularly repairs it after typhoons. The total expenditure exceeded $600 million. The Chinese government expressed its displeasure. In April 2004, at a meeting of mid-level diplomats from both sides after the Japanese government objected to China’s hydrographic exploration activities in the area, Beijing declared for the first time that it considered Okinotori a rock, not an island, and therefore not entitled to an EEZ. The Japanese government did not respond, incentivizing the Nippon Foundation a private organization that has sponsored nationalistic causes as well as charitable and other activities, to take action. An investigative delegation landed on the rock/reef/island the following February, later proposing projects designed to create the conditions for self-sustaining economic activity and, eventually, human habitation. Under international law, while the EEZ waters beyond the 12-mile territorial sea are regarded as international, the state possessing the EEZ has the right to exploit, conserve, and manage its natural resources, whether living or nonliving, of the seabed and the waters lying immediately above it with regard to other activities for the economic exploitation and exploration of the zone, such as the production of energy from the water, currents, and winds. The state also has jurisdiction over the establishment and use of artificial islands, installation and structures, marine scientific research, and the protection and preservation of the marine environment.  With the world’s fishery stocks rapidly depleting due to rising demand from growing populations and overfishing, who has jurisdiction has been an increasingly contentious issue. Fishing rights became an issue between Taiwan and Japan in April 2016, when Japanese authorities seized and fined a Taiwanese fishing boat within the former’s claimed EEZ. Taiwan, whose fishing associations constitute a strong lobby group, also objects to the existence of an EEZ in the area. An EEZ extending from Okinotori has strategic significance as well. The area is potentially rich in oil, other energy resources, and rare metals, and lies along the route US warships would likely take from bases in Guam to defend Japan and/or Taiwan in a confrontation with China. apan and Taiwan’s newly inaugurated government, more Japan-friendly than its predecessor, have already established a negotiating framework that is likely to resolve their dispute. It concerns fishing rights alone, and already in 2013 the two sides reached agreement on similarly contested fishing waters elsewhere. Since China’s interests are broader, encompassing other resources as well as security issues, it will doubtless continue to object.  Since Okinotori cannot, at least at present, sustain either significant economic activity or human habitation, Tokyo’s case would appear to be weak. The only other comparable case involved the United Kingdom’s claim to the eroded remains of an extinct volcano aptly named Rockall, whose EEZ, if recognized, would establish a claim to the rich fishing grounds of the area. After the ratification of UNCLOS, London agreed to four-way talks with Dublin, Reykjavik, and Copenhagen, in essence backing away from its claim. Still, one must ask what country would want to submit Japan’s claim to Okinotori as an island to the International Tribunal on the Law of the Sea (ITLOS). Taiwan, barred from entering the United Nations due to the PRC’s opposition, has no standing, and little incentive, to bring such a case. China, having already announced that does not believe ITLOS has jurisdiction over such matters, would have difficulty justifying what would seem a complete turn-around in its position. And thus far no other state has expressed interest in doing so.   Hence, weak or not, Japan’s stance seems likely to remain legally untested. Chinese fishermen are likely to fish in these troubled waters, as elsewhere, and Beijing will continue to defend their right to do so, reserving the right to defend it by force if need be. In other words, the significance of the court’s decision notwithstanding, little will change in the waters surrounding Okinotori(shima).” https://www.csis.org/analysis/pacnet-59-curious-case-okinotori-reef-rock-or-island

Shaping China’s Response To The South China Sea Ruling. Bonnie Glaser, The National Interest. “China’s national pride as well as its ambitions to exert control over the South China Sea were dealt a heavy blow by the July 12 decision of the Permanent Court of Arbitration in The Hague in the case filed by the Philippines. As expected, Beijing firmly rejected the ruling, declaring the award null and void with no legally binding force. In a string of official statements, including a new White Paper, China reiterated its positions and warned that it would decisively respond to any provocations against Chinese interests in the South China Sea. In a sharp rebuke to Foreign Minister Julie Bishop’s call for China to abide by the verdict and her assertion that Australia would continue freedom of navigation exercises, China’s foreign ministry spokesman cautioned Australia against treating international law as a 'game' and threatened that unwelcome actions by Canberra could result in a setback in bilateral relations. Beijing’s policy response to the ruling is not yet clear, however. After venting its anger and shoring up the legitimacy of the Communist Party by pledging to the Chinese people that the CCP will protect and defend the country’s sovereignty and territorial integrity, Xi Jinping will likely review his country’s approach to the South China Sea disputes. The result will be either a decision to double down on its assertive and coercive actions, or to revise its South China Sea strategy in favor of a more accommodating approach. If Xi opts to double down and forge ahead with Chinese efforts to control the sea and air space in the South China Sea, tensions will increase along with the attendant risk of military conflict. China could land fighter jets on its three new airstrips in the Spratlys and further militarize the artificial islands it has built by dredging sand from the bottom of the ocean. In contravention of the ruling and the UN Convention on the Law of the Sea (UNCLOS), China could draw straight baselines around the Spratlys as an island grouping and declare internal waters, territorial sea, exclusive economic zone and continental shelf. An Air Defense Identification Zone could be established mirroring vast China’s nine-dash line claim. In what would be an especially provocative move, Beijing could proceed with an apparent plan to dredge and build another military outpost on Scarborough Shoal, only 123 miles from the Philippine island of Luzon. In addition, the Chinese could continue their unlawful behavior of interfering (through use of Coast Guard vessels, imposition of fishing regulations, etc) with foreign fishing boats and exploitation of energy in portions of the South China Sea where China claims 'historic rights.' Alternatively, Xi Jinping could decide to gradually adjust China’s policy, comply with parts of the ruling, and seek accommodation with the neighborhood. For example, China could negotiate an agreement with the Philippines that allows fishermen from both countries to fish within the territorial waters of Scarborough Shoal. This would be a true win-win: Beijing could highlight the agreement as vindicating its long-standing preference for bilateral diplomacy and Philippine fishermen could return to securing their livelihood in the waters from which they have been excluded for more than four years. China could signal that it will not prevent Manila from exploiting oil and gas fields at Reed Bank. Beijing could stop declaring annual no-fishing zones in the Paracels and refrain from harassing Vietnamese fishermen. Future activities on Chinese-built islands in the Spratlys could be strictly limited to provision of public goods, the absolute minimum necessary for self-defense. China could refrain from dredging new islands. Cooperation between China and ASEAN could advance with an agreement on applying the protocols and procedures under the Code of Unplanned Encounters at Sea (CUES) to regional coast guards and the conclusion of a legally binding Code of Conduct. An escalatory response by China is more likely if Beijing feels cornered by the US and its allies. For this reason, it is essential that the Philippines be humble in victory and that other countries resist the temptation to shame and isolate China. It is unnecessary (and incorrect) to humiliate Xi Jinping by declaring that China’s nine-dash line is invalid. The ruling has left open the possibility that the nine-dash line can endure as a representation of China’s claim to sovereignty over land features and maritime entitlements permitted under UNCLOS. Washington and Canberra should strongly support dialogue between Beijing and Manila to work out their differences. We should also encourage other countries to exercise self-restraint and ensure that their law enforcement vessels and fishing boats abide strictly by UNCLOS to deny China any pretext for future violations. Freedom of navigation operations (FONOPS) in the South China Sea should continue, but their timing and conduct should be carefully considered. Moreover, such missions should be carried out quietly, without fanfare. If the details of a US FONOP are leaked to the media, the Pentagon should simply state that the operation was a routine enforcement of freedom of navigation and overflight, and was not intended to challenge Chinese sovereignty. If Chinese rhetoric and actions over time indicate that Beijing is not making 'excessive claims' to maritime jurisdiction that are inconsistent with 'high seas freedoms' under UNCLOS, such FONOPS may no longer be necessary. The next US administration should make it a priority to seek Senate ratification of UNCLOS. Centering US policy toward the South China Sea on a rules-based order has proved correct. The contradiction, if not hypocrisy, of the US insistence that China abide by the Convention while the US refuses to accede to it is evident, and undermines US moral authority. If the principles and practices embodied in UNCLOS are critical to American interests, then the US should ratify the Treaty. Now that the ruling has been issued, the South China Sea disputes will enter a new phase that contains both challenges and opportunities. Fortunately, the upcoming ASEAN Regional Forum meetings and the G20 Summit in September, which Xi Jinping is hosting and wants to be a resounding success, provides a respite. The US, Australia, and other like-minded countries should actively seek to use the next few months to help facilitate a shift in Chinese policy toward the South China Sea that is based on accommodation with its neighbors and conformity with international law.” http://nationalinterest.org/blog/the-buzz/shaping-chinas-response-the-south-china-sea-ruling-17019?page=show

 

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