China Caucus Blog

Posted by The Congressional China Caucus | July 27, 2015

Forbes: White House Has No China Strategy; Here’s Mine. “What’s the strategy for coping with what everyone on Capitol Hill and inside the Obama administration agrees is an increasingly assertive China? The White House can’t answer, Rep. Randy Forbes says, “because they don’t have it.” So, it’s fair to ask: what is Forbes’s strategy, then? The House seapower chairman’s outline for a “winning strategy” boils down to five principles, he told me in an interview: (1) have a clear objective: a peaceful and prosperous Pacific where China follows the rule of law and the US works closely with its partners; (2) speak truth to Chinese power: Be willing to offend Beijing with frank statements, especially on issues like human rights and Taiwan; (3) punish Chinese provocations, for example by un-inviting them from international wargames like RIMPAC if they continue building artificial “islands;” (4) strengthen our military presence in the Pacific, especially (but not only) naval forces; (5) communicate our strategy — to the American people so they buy in, to our allies so they’re reassured, and to the Chinese so they’re deterred. “One of the cornerstones of any strategy is the ability to articulate that strategy,” Forbes told me. “The administration will tell you have they have a strategy, but ask them in any hearing, ask them in any place, to put it on the record… They will not tell you, because they don’t have it.” “We’ve been trying to encourage them to have an East Asia strategy review,” Forbes added. “We haven’t had one since the ’90s… They’ve refused to do one since they’ve been in office.” Forbes isn’t alone in his frustration with the administration. Sen. John McCain and Sen. Jack Reed, the chairman and ranking Democrat of the Senate Armed Services Committee, wrote the Pentagon in May protesting the Chinese invitation to participate in the world’s largest naval exercise, RIMPAC. McCain, Reed, and two other Senators — Bob Corker, and Bob Mendez, the top Republican and top Democrat on the Foreign Relations committee — sent Obama a letter in March calling for a strategy on Chinese provocations in the East and South China Seas. “Without a comprehensive strategy…long-standing interests of the United States, as well as our allies and partners, stand at considerable risk,” they wrote. At a Center for Strategic and International Studies conference on Wednesday, Forbes outlined three crucial questions on which he’d never gotten a satisfactory answer: “When it comes to China, what is our strategy?.. Are we winning or losing?… What are the metrics that we use to measure that?” “We should have as the cornerstone of our strategy that we want to have a winning strategy, [not] do this just to get this participation trophy,” Forbes told me. That said, “winning doesn’t mean the Chinese come out worse and we come out better,” the congressman clarified. “It just means we have to have a definition of what winning is.”

The PLA General Staff Department Third Department Second Bureau: An Organizational Overview of Unit 61398
“In May 2014, the United States Department of Justice (DOJ) announced indictments against five Chinese People’s Liberation Army (PLA) officers on charges of cyber espionage directed against U.S. firms. According to the indictments, the five officers were assigned to the Third Office of the PLA General Staff Department (GSD) Technical Reconnaissance Department (alternatively known as the Third Department) Second Bureau. According to the U.S. Attorney General, “this is a case alleging economic espionage by members of the Chinese military and represents the first-ever charges against a state actor for this type of hacking.” While assigned personnel may well engage in cyber espionage, a survey of Second Bureau infrastructure indicates a much broader communications intelligence mission. Who is the Second Bureau, what is its mission, how is it organized, and where does the bureau fit within the broader Chinese Communist Party state and military bureaucracy? This overview updates and expands upon Project 2049 reports published in November 2011 and October 2012 on Chinese cyber operations. Signals intelligence (SIGINT), or technical reconnaissance in PLA lexicon, advances the interests of the Chinese Communist Party (CCP) and the People’s Republic of China (PRC). The PLA’s SIGINT community consists of at least 28 technical reconnaissance bureaus (TRBs). The GSD Third Department, often referred to as 3PLA, is roughly analogous to the U.S. National Security Agency. It has direct authority over 12 operational bureaus, three research institutes, and a computing center. Eight of the 12 operational bureau headquarters are clustered in Beijing. Two others are based in Shanghai, one in Qingdao, and one in Wuhan. Ten additional TRBs provide direct support to the PLA’s seven military regions (MRs), while another six support the PLA Navy (PLAN), Air Force (PLAAF), and Second Artillery Force (PLASAF). Grade, rather than rank, is the main indicator of relative authority and responsibility throughout the PLA. Third Department bureau leaders – the director and political commissar – have a grade equivalent to a ground force division leader with a primary rank of senior colonel (SCOL) and a secondary rank of major general (MG). A bureau director is also identified as the unit commander.4 The Second Bureau (Unit 61398) is one of the largest among the 12 operational bureaus that comprise the GSD Third Department. The Second Bureau and the GSD Third Department Fourth Bureau both have origins in the mountains west of the Shanxi provincial city of Xinzhou. Technical reconnaissance work stations under Second Bureau control were distributed throughout China. By 1986, the Second Bureau headquarters and most subordinate elements relocated to Shanghai. At the same time, the GSD Third Department Fourth Bureau headquarters moved to the city of Qingdao in Shandong province. The Second Bureau Party Committee implements policies established by the central leadership in Beijing and Shanghai City Party Committee. The political commissar serves as the bureau’s Party Committee secretary. The Second Bureau director has a formal position within the Shanghai City government and most likely is deputy secretary of the Second Bureau Party Committee.”

China’s Island Building is Clearly Military, U.S. Pacific Chief Says.
“The top U.S. military officer in the Pacific sternly warned China on Friday to immediately cease its “aggressive coercive island building” in the South China Sea, which he argued was intended clearly for China’s military use as forward operating bases in combat against their regional neighbors. “I believe those facilities are clearly military in nature,” Harris said at the Aspen Security Forum, an annual gathering in Colorado of dozens of top U.S. national security leaders, convened by the Aspen Institute. In his notably undiplomatic remarks, Harris called on China to show meaningful diplomacy to resolve the territorial disputes. But the four-star admiral also appeared resigned to seeing further construction and eventual deployment of military aircraft and ships. “They are building ports that are deep enough to host warships and they’re building a 10,000-foot runway at Fiery Cross Reef,” Harris said, referring to one of China’s construction activities in the Spratly Islands that Japan has protested. “A 10,000-foot runaway is large enough to take a B-52, almost large enough for the Space Shuttle, and 3,000 feet longer than you need to take off a 747. So, there’s no small airplane that requires a runway of that length. They’re building rebutted aircraft hangers at some of the facilities there that are clearly designed, in my view, to host tactical fighter aircraft.” Harris also said he is concerned the islands could be used as a chain of Chinese listening posts. “Certainly, those islands, which are well out in the South China Sea, extends a surveillance network that could be in place with radars, electronic warfare capabilities and the like.” If that happens, he said, American warships could strike them in combat. “I think those islands, given the capabilities we have, are clearly and easily targets in any combat scenario with China. But they’re also easily seen as forward operating posts. Any increase of capability like that in that area is cause for concern,” Harris said. The U.S. has not yet seen China place any anti-ship missiles or supporting gear on the islands, he added. The U.S. commander dismissed Beijing’s repeated claims that the island expansions were rightful and peaceful, and said China has shown no credible diplomatic effort to resolve its territorial disputes with neighboring countries.  “Most countries choose to pursue diplomatic means to address their disputes.  China, on the other hand, is changing the status quo in the region through aggressive coercive island building without meaningful diplomatic efforts toward dispute resolution or arbitration,” Harris said, reading opening remarks at his appearance in Aspen. “China is changing facts on the ground…essentially, creating false sovereignty…by building man-made islands on top of coral reefs, rocks, and shoals,” Harris said. “These activities are harming the environment and will not strengthen any country’s legal claims to disputed areas in the South China Sea. We call on China to use the mechanisms of international dispute resolution in good faith, and to abide by those decisions as so many of its regional neighbors have already done. China has in the past accused the U.S. of ‘pursuing international hegemony’ and adopting a ‘Cold War mentality’ toward China. Nothing could be further from the truth. It is China’s actions that are inducing its South China Sea neighbors to build stronger relationships with each other and the U.S., driven not by a sudden U.S. effort to increase stability and security within the region, but by China’s conspicuous failure to do the same.”

FBI Probes ‘Hundreds’ of China Spy Cases.
The FBI has seen a surge in cases of economic espionage in the past year, and the bureau says that China is largely to blame. China’s intelligence services are “as aggressive now as they’ve ever been,” said Assistant Director Randall Coleman, who runs the bureau’s counterintelligence division. He and other senior FBI officials described the threat China poses to U.S. companies during a rare, on-the-record briefing with reporters Thursday. It was an event meant to underscore the pervasive nature of intellectual-property and trade-secrets theft and to alert businesses to protect themselves. “The predominant threat we face right now is from China,” Coleman said. The FBI has linked the theft of a broad range of technologies—from seeds to software—to the Chinese government, he said. The number of cases investigated by the division, which is responsible for stopping and catching spies, has shot up 53 percent in the past year, Coleman said. The precise number of total cases is classified, but Coleman said it’s “in the hundreds.” The FBI’s willingness to call out China for spying on U.S. companies stood in contrast to the White House’s reluctance to blame China for the massive hack against the Office of Personnel Management. As The Daily Beast reported this week, Obama administration officials have privately concluded that hackers working with the Chinese government stole personal information on more than 22 million current and former government employees, in what experts have called one of the biggest intelligence disasters in recent memory. Coleman declined to discuss the OPM hack, which he described as an ongoing investigation. But the spying for which the FBI is blasting China is also distinct, U.S. officials have said, from traditional espionage that aims to steal government secrets. When Chinese hackers or human spies make off with companies’ pricing data, secret formulas, or software code, they’re giving it to Chinese companies to give them an unfair advantage in the global marketplace, officials argue. The Obama administration has tried to draw a line between that economic espionage and the global surveillance against terrorists or spying on foreign governments that the United States routinely conducts. To bolster its case, the FBI released the results of a government survey of 165 companies—which it didn’t name—half of which reported said that their proprietary information had already been targeted by foreign spies. And in 95 percent of those cases, the companies suspected China was to blame, said William Evanina, a top U.S. counterintelligence official.”

Asia-Pacific Countries Buy Surveillance Planes to Outfox Rivals
. “Military commanders in Asia are putting surveillance planes at the top of their wish lists, ahead of warships and fighter jets, as they strive to protect their territorial waters from rival claimants. Several countries are hoping better intelligence will keep a lid on the region’s worsening maritime disputes by deterring provocative actions in remote stretches of ocean that Asian countries claim but aren’t able to monitor effectively. Nowhere has Asia’s weak ISR capabilities—military shorthand for intelligence, surveillance and reconnaissance—been more ruthlessly exposed than in the South China Sea, where China has been building at least seven artificial islands to boost its territorial claims. The islets were half-built before Beijing’s rivals even realized what was happening. Regional governments believe that investing in better ISR will help them avoid more nasty surprises. The thinking has opened up alucrative niche for aerospace companies, such as Boeing Co. and Sikorsky Aircraft Co. of the U.S., hoping to capitalize on Asian demand for a new generation of patrol planes. Bumping through choppy sea air in a U.S. Navy P-3C Orion maritime surveillance aircraft east of the Philippine island of Palawan in June, it was easy to understand why surveillance is the region’s latest military buzzword. The plane’s radar system swept a 200-mile radius of ocean with enough precision to spot a person in the water, while high-resolution cameras scanned the surface. The plane’s sensors can detect faint noises or metallic objects. A vessel somewhere below flashed onto the P-3’s consoles with perfect clarity. It was 6 miles away, the radar operator said. While defense spending in Asia has been surging, new monitoring capabilities have generally been neglected. But no longer: Malaysia, the Philippines, Singapore and Vietnam are among those prioritizing up-to-date surveillance systems.  “Investing in maritime ISR is a no-brainer for these countries,” said Euan Graham, director of the international security program at the Lowy Institute, a Sydney-based think tank. Piracy and smuggling, and a recent influx of seaborne refugees, are among the challenges demanding investment in surveillance technology, even without the territorial standoffs, Mr. Graham said. “Southeast Asian countries need to have some visibility about what is happening in their own backyard,” he said. The P-3—a venerable workhorse that has served the U.S. Navy for five decades—can scour several thousand square kilometers in one flight, and in all weathers. “This is the plane they send into hurricanes,” said Lt. Cdr. Patrick Ronan, commanding the P-3. In contrast, satellites take too long to retask and are useless in cloudy conditions, he said, while lumbering ships can’t search huge swaths of ocean. Drones have great potential, he said, but for now can only complement the work of human crews. Circling at 6,000 feet on a stormy summer morning, the plane steered U.S. and Philippine warships toward their search objectives as part of annual drills in the Sulu Sea. The ships were lonely specks in a featureless gray expanse: it was hard to imagine them ever finding anything without the P-3 to guide them.”

They’re Just Not That Into Us.
“A swelling chorus of Washington voices wants to change America’s long-standing strategy toward China. “I was so gullible,” Pentagon adviser Michael Pillsbury, who has helped shape policy under every president since Nixon, lamented in a recent book. “We believed that American aid to a fragile China whose leaders thought like us would help China become a democratic and peaceful power,” but “every one of the assumptions behind that belief was wrong—dangerously so.” Veteran diplomats Robert Blackwill and Ashley Tellis likewise concluded, in an April report for the Council on Foreign Relations,that Beijing’s goal is to become East Asia’s hegemon, so Washington should stop basing policy on the false hope that China is evolving into a “responsible stakeholder” in the American-led liberal international order. Thomas J. Christensen disagrees. A Princeton professor who served in the State Department from 2006 to 2008, he argues that “The China Challenge,” as he titles his book, isn’t chiefly to limit the risks of a rising China. It is to persuade Beijing to “pull its weight” in matters of cooperative “global governance.” U.S. strategy should thus “focus on the considerable common interests we have with China on everything from finance to trade, to nonproliferation, to stability in various regions of the world, to global environmental protection.” Beijing, in other words, is better viewed as a potential partner than a potential adversary. Mr. Christensen hasn’t written a brief for Beijing. He backs “a very strong U.S. military presence in East Asia” and doesn’t endorse withdrawal from the Korean Peninsula or cessation of support for Taiwan. As he tells it, he simply wants to extend the “pragmatism” that has governed U.S. policy toward China since the two countries cooperated against the Soviet Union in the 1970s and 1980s. Though Mr. Christensen presents his case in a scholarly and accessible fashion, contradictions and omissions ultimately make it unconvincing. U.S.-China relations appear more perilous than the author wants to admit, and his book—inadvertently—helps prove the point. Start with his claim that China wouldn’t have to “transform itself radically at home” and abandon authoritarianism in order to accommodate itself to the liberal global order. “Chinese patriots have every reason to reject a demand that they become ‘Western,’ ” he writes, emphasizing China’s postcolonial nationalism, “but no reason to reject high standards of compliance with universal norms of free market economics, intellectual property rights protection, and nuclear nonproliferation, as well as basic standards of universal human rights.”

China’s Global Ambitions, With Loans and Strings Attached.
“Where the Andean foothills dip into the Amazon jungle, nearly 1,000 Chinese engineers and workers have been pouring concrete for a dam and a 15-mile underground tunnel. The $2.2 billion project will feed river water to eight giant Chinese turbines designed to produce enough electricity to light more than a third of Ecuador.Near the port of Manta on the Pacific Ocean, Chinese banks are in talks to lend $7 billion for the construction of an oil refinery, which could make Ecuador a global player in gasoline, diesel and other petroleum products. Across the country in villages and towns, Chinese money is going to build roads, highways, bridges, hospitals, even a network of surveillance cameras stretching to the Galápagos Islands. State-owned Chinese banks have already put nearly $11 billion into the country, and the Ecuadorean government is asking for more. Ecuador, with just 16 million people, has little presence on the global stage. But China’s rapidly expanding footprint here speaks volumes about the changing world order, as Beijing surges forward and Washington gradually loses ground. It represents a new phase in China’s evolution. As the country’s wealth has swelled and its needs have evolved, President Xi Jinping and the rest of the leadership have pushed to extend China’s reach on a global scale. China’s currency, the renminbi, is expected to be anointed soon as a global reserve currency, putting it in an elite category with the dollar, the euro, the pound and the yen. China’s state-owned development bank has surpassed the World Bank in international lending. And its effort to create an internationally funded institution to finance transportation and other infrastructure has drawn the support of 57 countries, including several of the United States’ closest allies, despite opposition from the Obama administration. Even the current stock market slump is unlikely to shake the country’s resolve. China has nearly $4 trillion in foreign currency reserves, which it is determined to invest overseas to earn a profit and exert its influence. China’s growing economic power coincides with an increasingly assertive foreign policy. It is building aircraft carriers, nuclear submarines and stealth jets. In a contested sea, China is turning reefs and atolls near the southern Philippines into artificial islands, with at least one airstrip able to handle the largest military planes. The United States has challenged the move, conducting surveillance flights in the area and discussing plans to send warships. China represents “a civilization and history that awakens admiration to those who know it,” President Rafael Correa of Ecuador proclaimed on Twitter, as his jet landed in Beijing for a meeting with officials in January. China’s leaders portray the overseas investments as symbiotic. “The current industrial cooperation between China and Latin America arrives at the right moment,” Prime Minister Li Keqiang said in a visit to Chile in late May. “China has equipment manufacturing capacity and integrated technology with competitive prices, while Latin America has the demand for infrastructure expansion and industrial upgrading.” But the show of financial strength also makes China — and the world — more vulnerable.”

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

Posted by The Congressional China Caucus | July 24, 2015

Achieving Strategic Rebalance in the Asia Pacific: Dr. Patrick M. Cronin’s Congressional Testimony. “Chairman McKeon, Ranking Member Smith, and other distinguished members of the Committee, I sincerely appreciate this opportunity to testify on the trenchant matter of rebalancing to the Asia-Pacific region. I say trenchant because I believe it is in the vital interest of the United States to use the past few years as a springboard for widening and deepening our strategic engagement in the most important region of the 21st century. If we move intelligently and doggedly to leverage our considerable power to mold the rising and dynamic Indo-Pacific, then we can preserve and adapt an inclusive, rules-based international community that is fundamental to the preservation of freedom, peace and prosperity. But if we falter in our purpose and vigilance and divert from our long-term strategic interests, then fissures and flashpoints that seem manageable today may one day overwhelm our capacity to deal with them. Achieving strategic balance in the Asia-Pacific requires a clear understanding of U.S. interests, regional and global trends, and a realistic plan for linking our finite means to our ambitious objectives. If we are to succeed, we will have to adapt our armed forces to balance existing capacity while investing in future capability in what is largely a maritime and air (and cyber and outer space) domain. Equally, we will have to rebalance our finances through tough trade-offs at home and greater economic competitiveness and expanded international trade. And even as we maintain a defense second to none and a globalleading free market, we will have to rely more on allies and partners to shoulder more shared responsibility for the maintenance of regional and global order. Every government searches for strategic balance. After all, strategy involves aligning policy objectives with available means. When the environment in which one is crafting a strategy is in constant flux, there is a persistent need for recalibration. As the United States prepares to hand responsibility for Afghanistan’s security to Afghans next year, officials in Washington, D.C. continue to search for a new strategic balance, one that responsibly weighs short-term against long-term risk, and one that assesses the proper weight to place on military power as opposed to diplomacy, development, and other levers of power. The search for strategic balance and coherence is hardly new. The Obama administration entered office in 2009 determined to address a heavy “inheritance” of two protracted ground wars, a global counterterrorism campaign, Iranian and North Korean nuclear proliferation, and mounting debt and deepening economic recession.”

America’s Security Role in the South China Sea: Dr. Andrew Erickson’s Congressional Testimony. “
Chairman Salmon, Ranking Member Sherman, and distinguished members of the subcommittee, thank you for this opportunity to address this vital, timely topic. Allow me to share my assessment of the current situation in the South China Sea, followed by my recommendations concerning how the U.S. government should understand the situation and how it may best work to address it. A major Chinese narrative regarding the South China Sea is one of unreciprocated restraint. But Chinese leaders have clearly had an ambitious long-term vision of some sort, backed by years of efforts, themselves based on longstanding claims encapsulated in an ambiguous “nine-dash line” enclosing virtually all of the South China Sea. Beijing’s stance regarding South China Sea sovereignty issues is categorical and steadfast. In a position paper rejecting outright the Philippines’ recent initiation of international arbitration regarding their bilateral dispute, China’s Ministry of Foreign Affairs states, “China has indisputable sovereignty over the South China Sea Islands (the Dongsha [Pratas] Islands, Xisha [Paracel] Islands, the Zhongsha Islands [whose main features include Macclesfield Bank and Scarborough Shoal] and the Nansha [Spratly] Islands) and the adjacent waters.” Despite all its rhetoric, actions, developmental efforts, and apparent preparations, however, China has repeatedly declined to disclose the precise basis for, the precise nature of, or even the precise geographical parameters of, its South China Sea claims. As the U.S. Office of Naval Intelligence documents, China “has never published the coordinates of” the nine-dash line that it draws around virtually the entire South China Sea—perilously close to the coasts of its neighbors, all of whom it has disputes with. It has not “declared what rights it purports to enjoy in this area.” Beijing has still has not specified whether or not it considers the South China Sea to constitute a “core interest.” Given China’s statements and actions to date, however, there is reason for concern that it is determined to maintain expansive claims based on unyielding invocation of the “nine-dash line.” China’s military and paramilitary forces have a half-century-plus history of capturing islands and other features, many in South China Sea. It appears that Beijing long harbored ambitions to seize significant numbers of South China Sea islands, and indeed took several occupied by Vietnam in 1974 and 1988 even though severely limited in sea and air power at that time. Such operations have not received sufficient analytical attention. In some respects, they may have been more complex that previously appreciated outside China. For example, maritime militia forces appear to have been employed in the 1974 Paracels Conflict, the 2009 Impeccable Incident, the 2012 Scarborough Shoal Standoff, and the 2014 Haiyang Shiyou 981 Oil Rig Standoff.”

America’s Security Role in the South China Sea: Dr. Mira Rapp-Cooper’s Congressional Testimony.
“Chairman Salmon, Ranking Member Sherman, distinguished members of the Subcommittee, I am honored to have this opportunity to discuss regional states’ responses to China’s recent activities in the South China Sea. My testimony today will focus primarily on responses by countries that have sovereignty claims and occupy territory in the South China Sea, including the Philippines, Vietnam, Malaysia, and Taiwan. I will also address noteworthy responses by Japan, Australia, India, and regional institutions. Regional states share many of the United States’ interests in the South China Sea, including freedom of navigation and overflight, the peaceful resolution of disputes, and upholding international law. Claimant state actions are also motivated by their national sovereignty claims, which, as a neutral party, the United States does not necessarily share. I will argue that there are, however, ample opportunities for the United States to advance its interests in the South China Sea in tandem with those of other regional actors. To that end, I will conclude my testimony today by offering some suggestions on how the United States can use multilateral mechanisms to enhance security in this vital waterway. Land reclamation and construction in the South China Sea did not begin with China’s building efforts in 2014. South China Sea claimants began to set up outposts in the Spratly Islands in the 1950s, and several have undertaken land reclamation and construction efforts since that time. Malaysia occupies five Spratly features and reclaimed land and constructed facilities on Swallow Reef in 1983. The Philippines occupies eight features and has constructed facilities. Taiwan occupies one feature. It has reclaimed a small amount of land and is currently in the midst of airstrip and port renovations. Vietnam, which occupies as many as 29 features, has reclaimed land and built military and civilian facilities. Vietnam, Philippines, Malaysia and Taiwan all have airstrips of their own on Spratly outposts, and all four have stationed troops on these islands. When these other claimants activities are compared to China’s in size, scope, and speed, however, their building activity pales in comparison. To paraphrase Secretary of Defense Carter, China has gone farther and faster in its construction activities. The breakneck pace and widespread use of land reclamation and construction, rather than the mere fact of the building itself is what raises serious concerns about China’s intentions in the Spratlys for other South China Sea claimants. It is also worth noting that China is the only country to have completely transformed features that were formerly under water into artificial islands; other countries have used the technique to add some additional acreage onto features that were already above water. By way of comparison, Taiwan has reclaimed approximately five acres of new land over two years at one location. Malaysia reclaimed approximately 60 acres over 30 years at one location. Vietnam reclaimed 50-60 acres over five years at one location. China, however, has reclaimed at least 2,000 acres over one year at seven different locations.”

The Sino-Iranian Tango.
“The recent nuclear agreement between Iran and the P5+1 countries (China, France, Germany, Russia, the United Kingdom, and the United States) will have major implications for security in the Middle East. But the impact of the deal will be much wider. Just how wide was demonstrated by Russian Foreign Minister Sergei Lavrov, who, even before the official press conference announcing that the agreement had been concluded, declared that the deal obviated any need for NATO missile defenses in Europe, which have long been a point of contention between the United States and Russia. The deal will also likely lead to billions of dollars of investment by India in Iran's southern port of Chabahar, long-awaited progress on a gas pipeline from Iran to Pakistan, and perhaps even the provision of Iranian gas to a Europe eager to reduce its energy dependence on Russia. The biggest impact of all, however, may be on China. Iran and China have long-standing ties that are free of the historical baggage that complicates Tehran's relations with Russia, the United Kingdom, and the United States. Modern Sino-Iranian relations predate U.S. President Richard Nixon's opening to China, and China has been an indispensable security partner to Iran, including by supplying it with arms and, as Orde Kittrie noted in another article for Foreign Affairs, by providing it with key nuclear components. Thanks to the two countries' historically close relations and their mutual suspicion of the United States, many well-regarded China scholars expected China to play a spoiler role in the talks. But by all accounts, Chinese involvement was constructive. Beijing's approach may have been motivated by a desire to shape a diplomatic outcome to head off either of two undesirable outcomes: a U.S.-Iranian war that could endanger China's oil imports from the Persian Gulf or a U.S.-Iranian rapprochement that could leave that waterway ringed by American partners. Like Iran, China also likely sought the reversal of American sanctions, which in recent years threatened not only Chinese nuclear and arms exporters but more strategically important institutions such as Chinese banks and oil giants. Throughout the nuclear negotiations, China was careful to maintain close ties with Iran from within the P5+1, shielding the country from the effects of sanctions resolutions even as it voted in favor of them at the United Nations. Chinese-Iranian trade increased from about $3 billion in 2001 to over $50 billion in 2014 (the precise number is difficult to determine), and Chinese oil imports from Iran rose in 2014 and 2015 to their highest levels ever, after temporarily declining in 2012-13. Sino-Iranian security ties also continued to expand during the period of negotiations, and they went well beyond nuclear and arms exports. Chinese fighter jets reportedly refueled in Iran in 2010, and Chinese warships paid a visit to the Iranian port of Bandar Abbas in 2014 -- both firsts. Additionally, China at least indirectly supported Iran's regional agenda by vetoing multiple UN Security Council resolutions on Syria.”

Small Reefs, Big Problems.
“Every ten or so days, and rarely at weekends, the Chinese coastguard arrives at eight in the morning, in time for the Japanese foreign ministry to deliver a formal complaint to its Chinese counterpart by lunchtime. It is something of a ritual these days. Chinese vessels breach the 12-mile territorial limit of Japan’s Senkaku islands, which China claims and calls the Diaoyu islands. Japanese coastguard cutters shadow them warily until the Chinese decide that national honour has been satisfied and sail away. Call this little dance an improvement: in 2012, with anti-Japan fervour at its height, aggressive incursions into Senkaku waters highlighted the risk that China might even provoke a war with its neighbour over the uninhabited rocks. That the dance is carried out by coastguard vessels, white-painted and minimally armed, also allows both sides to disengage more easily. Yet gunmetal-grey warships lurk nearby. One reason China has backed off in recent months is the solid presence of the Japanese navy just over the horizon. And were the two countries ever to come to blows over the Senkakus, America has made it clear it would come to Japan’s aid. (It claims no view over the territorial dispute, which did not stop it using the Senkakus for bombing practice during its post-war occupation of Japan.) Facing pushback in the East China Sea, China has turned to softer targets: the islands, reefs and atolls of the South China Sea. These have long been the subject of territorial disputes among littoral states, especially involving the Philippines and Vietnam. But China has increased the tensions sharply in the past year. First, without consultation it towed an oil rig into Vietnam’s claimed Exclusive Economic Zone (EEZ). More troubling is confirmation of China’s massive landfill work on disputed reefs and islands a very long way from China’s shores. In contrast with Japan, China’s neighbours to the south are poorer and weaker, and they lack cast-iron American security guarantees. A vacuum has existed in the South China Sea since American forces withdrew from the Philippines in 1992. China’s neighbours are unnerved by its rapid increase in defence spending, in particular its pursuit of a blue-water navy. They note a Chinese president, Xi Jinping, who is not shy about flexing Chinese muscle. He likes to talk of China’s “peaceful rise” and of a “new type of great-power relationship”—one that appears to leave little space for small countries. In both Beijing and Washington, strategists have long liked to grapple with whether America and China are destined to fall into a “Thucydides trap”. In the original, the Spartans’ fear of the growing might of Athens made war inevitable. The modern parallel states that an existing power (America) is bound to clash with a rising one (China). In Japan the point is made differently: at sea modern China is behaving with the paranoid aggression of imperial Japan on land before the second world war. “They are making the same mistakes that we did,” says a Japanese official.”

China as an Autopilot Nation.
“Why did China’s government pump up stock prices and then react sharply when they started to fall? Why is it surfacing territorial disputes across the East and South China Seas? The issues are more related than they may seem, as both help illustrate how Chinese leaders grapple with making decisions and assuage domestic constituencies. In both areas, the Chinese government functions to a significant degree on autopilot, with decisions made largely through bureaucratic momentum. Flaws in the government structure allow small groups of officials to make important decisions. The top leaders may find it difficult to repudiate the resulting policies, even when they run counter to the overall strategy. Leaders in China don’t receive as broad a range of views as their counterparts in the U.S. and other advanced economies do. Rarely are they exposed to unsolicited critical views from think tanks, academia or the press. Open discussion of sensitive topics such as territorial claims or economic management is prohibited. Foreigners are one of the few permissible targets for critical commentary, so it should be no surprise that Chinese policy makers frequently blame foreign parties for problems. Meanwhile, policy makers gravitate to maximalist points of view. The stock market will rise indefinitely; build-out in the South China Sea will continue for the foreseeable future; nothing but sunny days ahead. Once a leader in China’s system adopts a maximalist position, nobody can question this approach without appearing weak or disloyal. Specialists and midlevel officials have few incentives to raise concerns or contrary ideas. China’s Confucian tradition supports a hierarchical worldview in which respect for elders is imbued from childhood, and its Leninist political structure means there can be no tolerance for dissent. Bad news does not flow up. China also suffers from time-horizon bias. There is little appetite for incurring short-term costs even if they might lead to long-term benefits. If a bull market can lead to increased economic confidence and a wealthier populace, so be it. If expansion and construction in the South China Sea allows for easier power projection, so be it. Arguably China could strengthen its security by resolving territorial disputes, or could have a better stock market if it hadn’t injected so much liquidity recently. But such moves would likely require compromises. The Chinese system offers little capacity for climb-downs or restraint. Decision making is siloed. In the U.S., before problems reach the president or even the cabinet, the National Security Council staff directs a series of working groups and coordinating bodies down to midlevel officials, requiring every department and agency to understand the others’ views on the subject at hand. A range of interagency exchanges means that before civilian or military officials reach senior rank, they are familiar with the broad scope of U.S. government decision making. In China, by contrast, the Central Military Commission makes military decisions as a stand-alone entity. Only at the highest level of the Communist Party, the Central Committee, is there a mechanism for interagency coordination. So if a Chinese ship harasses a U.S. ship in international waters, it is likely doing so without the approval or knowledge of, say, the foreign ministry. The Chinese ship captain might burnish his credentials as an aggressive officer while the foreign ministry pays the price for the deterioration in relations with Washington. Beijing knows it has limited political capital and an ambitious agenda. This includes keeping growth on track, reforming the economy, reining-in state-owned enterprises, helping banks deleverage, encouraging consumer spending and fighting corruption. And that’s just on the domestic side. Leaders seek to avoid the sort of internal friction entailed by course corrections. Easier to keep things on autopilot until problems come to a boil and the need for action is more generally accepted. These factors suggest that China will increasingly assert itself overseas not primarily because of expansionist or hostile aims, but because its system rewards and perpetuates such behavior. The lack of internal discipline and cost-benefit analysis can hurt the international community and—here’s the surprise—China, as well.”

China Says Has Every Right to Drill in East China Sea.
China said on Friday it had every right to drill in the East China Sea close to waters disputed with Japan, adding that it did not recognize a "unilateral" Japanese median line setting out a boundary between the two in the waters. Japan this week called on China to halt construction of oil-and-gas exploration platforms in the East China Sea close to waters claimed by both nations, concerned that Chinese drills could tap reservoirs that extend into Japanese territory. Patrol ships and aircraft from both countries have been shadowing each other in the area over the past couple of years, raising fears of a confrontation and clash. In an escalation of the latest dispute, Japan released aerial photographs of China's construction in the area, accusing it of unilateral development and a halfhearted attitude toward a 2008 agreement to jointly develop resources there. China resumed exploration in the East China Sea two years ago, Japan said. In 2012, Japan's government angered China by buying a disputed island chain there from private owners. Before then, China had curtailed activities under an agreement with Japan to jointly develop undersea resources in disputed areas. The platforms are being erected on the Chinese side of a median line delineating the exclusive economic zones of the two countries, according to a Japanese ministry official said. China's Foreign Ministry said its drilling activities in waters which are not disputed and under Chinese administration are "completely appropriate and legal". "China and Japan have not yet delineated maritime boundaries in the East China Sea, andChina does not recognize the Japanese side's unilateral marking out of a so-called 'median line'," the ministry said in a statement. China's position is that it had a 200 nautical mile exclusive economic zone, and its continental shelf in the East China Sea extends to the Okinawa Trough, it added. Japan was the one distorting the consensus reached in 2008, and Japan should "create good conditions and atmosphere" for resuming talks, which China sees as a good way of managing the dispute, the ministry said. Japan worries that the platforms will tap into gas fields that overlap the median line and could also be used as radar stations or bases for drones or other aircraft to monitor air and sea activity near the disputed chain of islets, known as the Senkaku in Japan and Diaoyu in China.”

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

Posted by The Congressional China Caucus | July 23, 2015

The New Silk Road: Xi Jinping’s Grand Strategy for Eurasia. “Xi Jinping’s ambitious vision is to improve connectivity from China to Europe, which is now considered part of China’s Greater Neighborhood Policy (GNP). China plans to spearhead investment in transport corridors including new air, rail and road infrastructure projects. Xi announced his Silk Road initiative in Astana, Kazakhstan on September 7, 2013 while on tour of Central Asia. He characterized it as an ‘‘economic belt’’ emphasizing the wealth of investment funds China could bring to the struggling region. In Astana, Xi Jinping introduced new vocabulary, notably the idea of an ‘‘economic belt’’ in order to differentiate his vision from that of Hillary Clinton’s ‘‘New Silk Road.’’ Hillary Clinton first referred publicly to her vision of a ‘‘New Silk Road’’ in a speech in Chennai, India on July 20, 2011.3Clinton’s approach was to help to integrate Afghanistan into a north–south trade corridor as a means of improving the Afghan economy. Chinese policymakers felt historic ownership of the Silk Road. Historically there was no single silk road but many, some more dangerous than others. Not only was silk traded, but also spices, silver, and other goods. The term ‘‘Silk Road(s)’’ is of recent vintage and was only introduced in the mid-1800s by German explorer Ferdinand von Richthofen who organized expeditions to China between 1868 and 1872.4 Chinese officials were flummoxed to find that Hillary Clinton used the term Silk Road to describe a U.S. policy. According to one Chinese diplomat, ‘‘When [the] U.S. initiated this we were devastated. We had long sleepless nights. And after two years, President Xi proposed [a] strategic vision of our new concept of Silk Road.’’ Clinton’s concept was repurposed, repackaged, and shifted from a north–south axis designed to improve Afghanistan’s economy, to an east–northwest axis, which gave the impression that all silk roads lead to Beijing. Clinton’s Silk Road initiative is not dead, but, compared to China’s deep-pocketed promises, appears to be on life-support. In October 2014, while in Indonesia, Xi Jinping announced the will to build a ‘‘Maritime Silk Road of the 21st century.’’ This maritime component of his Silk Road concept is expected to stretch across Southeast Asia, the Indian Ocean, Persian Gulf and the Mediterranean. Connectivity would include, for example, investment in port infrastructure in Sri Lanka and modernization of facilities. Although ‘‘road’’ is an awkward term to describe a maritime corridor, this word refers to the ‘‘silk road’’ and emphasizes China’s attempt to claim historical legitimacy in the region. Since then, the overland ‘‘economic belt’’ and the ‘‘maritime silk road’’ are referred to as ‘‘One Belt and One Road’’ (yi dai yi lu) and ‘‘Belt and Road’’ in official documents. The Government Work Report to the National People’s Congress of March 2014 and successive documents stressed the importance of the ‘‘Belt and Road’’ as a priority of China’s external action.8 At the March 2015 National People’s Congress, Foreign Minister Wang Yi indicated that the ‘‘Belt and Road’’ would be the focus of Chinese diplomacy in 2015 and that it would lead to the ‘‘rejuvenation of the Eurasian continent.’’

Tough Times Ahead if the DPP Returns to Power?
“Taiwan’s presidential election is six months away, but it seems increasingly likely that the DPP’s Tsai Ing-wen will win. In a July 7 TVBS public opinion poll, Tsai leads the KMT’s Hung Hsiu-chu 54.2 percent to 24.6 percent. Among those closely watching the possible return of the DPP to power is China, which worries that if elected, Tsai will deny that the two sides of the Strait belong to one China and pursue de jure independence. This fear derives from Tsai’s history as the creator of the “two states theory” in the Lee Teng-hui era as well as her unwillingness to accept the existence of “one China” even as she pledges to maintain the status quo across the Taiwan Strait. Beijing could react harshly if Tsai is elected president of Taiwan, including by taking punitive economic measures, suspending communication and cooperation mechanisms, stealing away some of Taiwan’s diplomatic allies, or even using military coercion or force. Xi Jinping’s reaction to a Tsai Ing-wen victory should not be underestimated. When it comes to sovereignty issues, the Chinese leader has shown little willingness to compromise. Since becoming General Secretary of the Chinese Communist Party (CCP) in 2012, Xi has sent tough signals to Taiwan, and these warnings have intensified in the run up to the presidential elections. As he deepens the anti-corruption campaign and maneuvers to put supporters on the Standing Committee of the Politburo at the 19th CCP Congress in 2017, Xi must protect his flank. Appearing soft toward Taiwan could create a vulnerability for his opponents to exploit. Early in his presidency, Xi met with Taiwan President Ma Ying-jeou’s official representative, former Vice President of Taiwan Vincent Siew, on the sidelines of the 2013 APEC summit in Bali, Indonesia. According to China’s official Xinhua news agency, Xi told Siew that “the issue of political disagreements that exist between the two sides must reach a final resolution, step by step, and these issues cannot be passed on from generation to generation.” He insisted that Beijing was “willing to have equal consultations with Taiwan on cross-Strait issues within the framework of one-China,” and would “make reasonable and fair arrangements for this.” Xi’s expression of impatience with the status quo echoed former Chinese President Jiang Zemin’s July 2004 statement that the “solution of the Taiwan question cannot be delayed indefinitely.” Still, unlike Jiang, there is no evidence that Xi has set a deadline for reunification.  Xi’s pressure tactics did not work. President Ma, who proposed a cross-Strait peace accord as recently as December 2011, said that there was no consensus in Taiwan on holding political talks with the Mainland and instead pushed for expanding cooperation on more practical issues. Progress in cross-Strait relations stalled unexpectedly in early 2014, when the Cross-Strait Services Trade Agreement (CSSTA) failed to pass Taiwan’s Legislative Yuan due to massive protests later dubbed the “Sunflower Movement.”

Overcoming Japan’s Security Skeptics at Home.
 On the cusp of passing laws that will increase Japan’s military role abroad, Japan’s Prime Minister Shinzo Abe is suffering a surprising reversal of fortune. As his popularity has dropped at home, his relationships with other East Asian leaders have suddenly improved. All this because Mr. Abe refuses to budge from his conviction that a more activist Japan is good for itself and the world. Last week, Mr. Abe’s coalition pushed two controversial security bills through the Lower House of the Diet. The legislation puts meat on the bones of Mr. Abe’s reinterpretation of Japan’s Constitution to allow for collective self-defense. If the bills pass the Upper House, or are passed for a second time in the Lower House, the Japan Self-Defense Forces will be allowed under certain conditions to come to the aid of third-party nations under attack. The scenario most frequently used by the government in arguing for the bills is the need to protect the forces of allies with which Japan might be engaged in security operations. Thus American ships that come under attack from North Korean missiles could be protected by the antimissile capabilities of the Maritime Self-Defense Forces. Many of the limitations on Japan’s ability to use force abroad, however, will remain in place, as the security legislation is far from a blank check for military operations abroad. Despite the limited nature of the bills, Mr. Abe’s popularity has soured at home. For more than two years he was an unstoppable politician, winning elections and confounding both domestic and foreign predictions of his political demise. The Japanese people, fed up with decades of ineffective governance, gave Mr. Abe resounding victories to try and jump-start the economy. Now, however, there is massive public backlash against Mr. Abe. His approval rating has fallen to 39%, and a majority now doesn’t support his government. More than 20,000 protestors jammed the streets of Tokyo to protest the passage of the security bill. Tokyo hasn’t seen protests of this size since the 1960s. Yet while he struggles at home, Mr. Abe is suddenly persona gratawith his two most important neighbors, China’s Xi Jinping and South Korea’s Park Geun-hye, who have tried to freeze him out during the past two years. The expectation of a summit between Messrs. Abe and Xi was strengthened by recent reports that Japan’s top security advisor met his Chinese counterpart to lay the foundations for a high-level meeting, possibly as early as September. Similarly, having just passed the 50th anniversary of the normalization of relations, South Korea and Japan are sending signals that Mrs. Park and Mr. Abe may meet this autumn as well. The shift in Mr. Abe’s diplomatic standing seems to be due to his persistence in expanding Japan’s relations throughout Asia, including with India and several Southeast Asian nations, as well as his triumphant visit to the U.S. Leaders in both Beijing and Seoul appear to be realizing that Mr. Abe is not going away and that they have failed to isolate him. Mr. Abe’s strange reversal of fortune thus has a common thread: his bulldogged determination to modernize Japan’s security policies. Despite growing domestic opposition, an equally large portion of the populace is worried about threats to Japan’s security. North Korea continues to build its nuclear and missile programs, and a rising China raises long-term fears.”

India, Japan, U.S. plan Naval Exercises in Tightening of Ties in Indian Ocean.
“Japan is set to take part in joint naval exercises with India and the United States in the Indian Ocean in October, military and diplomatic sources said, a drill that so riled China eight years ago that Delhi has not since hosted such a multilateral wargame. The Indian Ocean has emerged as a new arena of competition between China making inroads and India trying to recover its position as the dominant maritime power in the region. New Delhi's decision to expand the "Malabar" exercises that it conducts with the United States each year to include Japan suggests a tightening of military relations between three major maritime powers in Asia, analysts said. Military officials from India, the U.S. and Japan are meeting at a U.S. navy base in Yokosuka, near Tokyo, on Wednesday and Thursday to plan the exercises, a navy and a diplomatic source in New Delhi said. A Japanese government official in Tokyo confirmed the meeting and said representatives from the three navies were discussing Tokyo's participation in the wargames. He declined to be identified. The officials will decide the type of warships and planes the navies will deploy for the exercises in the Bay of Bengal in the northeastern Indian Ocean, said one of the sources familiar with the initial planning. "They are discussing platforms, logistics and interoperability between the three naval forces," said the source. India and the United States have fielded aircraft carriers and nuclear submarines in previous bilateral exercises. An Indian defense ministry official declined any comment on Malabar 2015, saying announcements will only be made closer to the event. A spokesman for Japan's Maritime Self Defense Force said no decision had yet been taken on Japan's participation. Jeff Smith, a South Asia specialist at the American Foreign Policy Council, said Japan was keen to take part in the exercises this year at a time when it is expanding the role of its military against a more assertive China. Indian Prime Minister Narendra Modi's inclusion of Japan after some hesitation was part of a trending pattern of forging close ties with the U.S. and its allies. "I'd view aircraft carrier participation in this year's drill as yet another signal from the Modi government that it was shedding the (previous) government's anxiety about a more overt balancing posture toward China and a more robust strategic embrace of the U.S. andJapan," Smith said. India last hosted a multilateral exercise in 2007 when it invited Japan, Australia and Singapore to join its drills with the U.S. navy in the Bay of Bengal, prompting disquiet in Beijing where some saw it as a U.S.-inspired security grouping in the making along the lines of NATO in Europe. At the time, Beijing activated diplomatic channels seeking an explanation from the participating nations, said Gurpreet Khurana, Indian navy captain and executive director of the government-funded Maritime Foundation of India.”

Beijing is Building World’s Largest Sea Plane for Use in South China Sea.
“After months of speculation China finally announced that it is has started to assemble the Jiaolong (Water Dragon) AG600 – the world’s largest amphibious aircraft, according to the International Business Times. The first airframe is currently being constructed at a facility in Zhuhai in Guangdong province. Final assembly should be completed  by the end of 2015 with a first flight tentatively scheduled for mid-2016. Government sources report that an order for 17 planes has already been placed domestically. As I reported before (See: “Will This Plane Let China Control the South China Sea?”), the AG600 is capable of landing and taking off on water (and land) and could make it easier for Beijing to press its claims in the South China Sea. Back in April, a defense analyst observed: Amphibious planes like the AG600 would be perfect for resupplying the new artificial islands that the Chinese are building in the SCS [South China Sea]. At the same time, these islands would be excellent bases of operations for the AG600 to engage in maritime patrols of claimed territories. However, an official in the Chinese aviation industry stressed that the plane is also intended for export abroad. “Since the first day of its development, the AG-600 has been designed for the global market. We are confident in its market prospects because the aircraft’s overall specifications, such as the maximum take-off weight and flight range, are better than other amphibious planes in the world,” said Qu Jingwen, general manager of the China Aviation Industry General Aircraft Company. The aircraft is powered by four turboprop WJ-6 engines and has a range of 5,500 kilometers. It has a maximum take-off weight of 60 tons and can carry up to 50 people. A few potential foreign customers have allegedly already sent purchasing inquiries. “Some countries with many islands, such as Malaysia and New Zealand, have expressed interest in the AG-600, and we are in contact with them,” Qu noted. However, one analyst is not so sure about the plane’s export potential. “Since the program can hardly be justified by the civilian demand, the likely explanation is that the program has a significant military importance,” Sam Bateman, an adviser with the Maritime Security Program at the S. Rajaratnam School of International Studies in Singapore emphasized. Yet, the chief designer of the plane, Huang Lingcai, insists that the plane can first and foremost play a key role in maritime rescue operations: There’s always a golden rescue time for survivors in the open sea. The time limit is usually controlled in seven to 12 hours, but the speed of the rescue boat is too slow. The cruise speed of this seaplane is 480kms per hour. If other conditions allow, the seaplane can land directly on the water surface, and then send out lifeboats. In this way we could conduct a successful rescue. This statement should still be taken with a grain of salt. It is highly unlikely that such a plane could be deployed in the open oceans for rescue operations due to high waves and strong currents. It will much more likely be used as a military or civilian transport aircraft in shallower waters. In that sense, it is ideally suited for deployment around the contested Spratly Islands in the South China Sea.”

South China Sea Row: Beijing Flexes Muscle in Military Exercises.
“China has launched a major military and naval drill in the South China Sea — a day after Japan warned Beijing to back down from territorial claims in the region. Chinese navy chiefs said the 10-day exercise, which started yesterday, would involve hundreds of military officials in waters just off the eastern Hainan Islands. Other military vessels were warned to avoid the area. The drill was expected to heighten tensions with Tokyo, which said this week in a defence white paper that Beijing should stop acting “without compromise” to meet its “unilateral demands” in the South China Sea dispute. Chinese military academics played down worries that the drill signalled Beijing would toughen its stance on the contested Spratly Islands. The Defence Ministry told the China Daily newspaper that “peace and stability in the Asia-Pacific ­region is in all parties’ interests”. Major General Zhu Chenghu, a professor at National Defence University of the People’s Liberation Army, ruled out a connection between the exercise and disputes in the South China Sea. “For people with military knowledge, they’d certainly know that a military drill of this scale will take at least three to four months of preparation, or maybe even longer,’’ he told Chinese state media. “Dozens of projects will be done during the training to test the navy’s tactics and weapons. “Of course, no country will conduct military training without any purpose ... but this time there is no evidence to subjectively link an ­ordinary drill to a third party.” The Chinese Defence Ministry said President Xi Jinping’s administration was offended at the Japanese white paper, which sets military plans for the year ahead. The report criticised China’s “opaqueness” over its military budget, saying China, particularly over maritime issues, “continues to act in an assertive manner, ­including coercive attempts at changing the status quo”. China’s Defence Ministry said it would not back down in efforts to “safeguard” the South China Sea and warned Japan against interfering in regional issues in which it was not involved. “According to international and domestic laws, China’s related activities in the jurisdiction of the East China Sea are beyond ­reproach,” it said. “Japan is not a party to the South China Sea issue, it should not sow discord, provoke conflicts and undermine peace and stability in the South China Sea. “Chinese army has unwavering determination to safeguard national sovereignty and maritime rights and interests, and China will continue to carry out legitimate activities in relative sea and airspace.” People’s Daily said Japan’s criticism of China was orchestrated to strengthen military and diplo­matic ties with the US. “If this attitude does not change, the defence white paper will only become a chronology of China’s military development and cannot stop China’s military development, “the newspaper said.”

Chinese PLA Simulates ‘Attack’ on Taiwan’s Presidential Office.
“His back to us, the People’s Liberation Army (PLA) soldier is seen running towards a building that bears a striking resemblance to the Japanese-built Presidential Office in Taipei. Following a collage of tanks and artillery firing rounds of ammunition, the scene switches back to infantry, which is seen approaching and eventually entering what is, presumably, the same building. According to reports in Chinese media, those scenes, featured in a three-minute video clip aired on state-run CCTV on July 5, come from Series C of this year’s live-fire Stride 2015 Zhurihe (跨越-2015·朱日和C) military exercises, which commenced at the Zhurihe Training Base in Inner Mongolia last month. Unnamed military experts cited in the reports inform us that the five-story structure, which is ostensibly computer generated, is of about the same height as the Presidential Office in Taipei, which has led to speculation that the object of this years Zhurihe’s exercise is to develop the skills necessary to resolve the “Taiwan issue” by force. The PLA Daily reported on July 21 that the exercises aimed to practice “winning a battle to gain control of major urban stronghold.” Citing PLA brigade head Ding Chao (丁超), the PLA Daily reported that the C exercise simulated urban combat sites copied from real city environments. Although the reports have understandably sparked some concern in Taiwan, the release of the footage should be taken in its proper context. Above all, given the sensitivity of the matter, and since it was aired on the CCTV 4, it is almost certain that the decision to air the segment, and to do so now, required the approval of senior officials in the Chinese Communist Party (CCP). Although not everything that appears on CCTV or Xinhua is necessarily controlled and approved by CCP officials, something as controversial as a simulated assault on the seat of government in Taipei certainly falls in the category of material that does necessitate a green light from above. Therefore, we should pay close attention to the propaganda value of the segment, which aired at a time when Beijing’s favorite counterpart in Taipei, the Chinese Nationalist Party (KMT), looks likely to be defeated in the January 16, 2016, presidential and legislative elections. As it has done before in the past, Beijing is sending a signal to voters in Taiwan to make the “right” choice (vote for its favored candidate, Hung Hsiu-chu of the KMT) and warning of the consequences should they fail to comply (by voting for the opposition Democratic Progressive Party’s Tsai Ing-wen). Only this time, rather than bracket Taiwan with live missiles as it did in 1995-96—which backfired and forced the Taiwanese to rally ’round the flag—Beijing is using simulated combat in an environment that is intimately known to the Taiwanese: downtown Taipei, which is much less abstract than bodies of water off Kaohsiung and Keelung. Look, the video says, we have become so powerful that we can take the battle to the street level. Consequently, rather than treat the video as portraying a serious drill in which PLA soldiers are practicing urban warfare in a Taiwan context, it should instead be regarded as an exercise in political warfare, something that the CCP is rather adept at. We should always keep in mind that China would much prefer to defeat Taiwan without having to resort to force, especially if this risks a U.S. intervention. The political warfare component of its strategy is therefore at least as important as is the PLA’s ability to fight.”

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

Posted by The Congressional China Caucus | July 22, 2015

Forbes: China Winning 'Rhetorical Battle' With US. The US has failed to articulate clearly a national strategy for dealing with China, something that has let the communist nation take an edge in the “rhetorical battle,” Rep. Randy Forbes, R-Va., warned an audience Tuesday. Forbes, who chairs the House Armed Services Committee's seapower and projection forces subcommittee, told an audience gathered at the Center for International and Strategic Studies that the government has spent too much time “tiptoeing around” the China issue rather than laying out how to deal with the rival nation. While Forbes praised the focus on the Pacific put forth by the Obama administration, he said it has not been backed up by a cohesive strategy or metrics that are able to define progress on the core issue — whether US interests are winning out in the region, or if Chinese interests are. “I’m not talking about military victories, I’m not talking about a zero-sum game. I’m talking about simply a definition of what ‘win’ is. And I don’t see that [from the US],” Forbes said. In comparison, Forbes said, China has a clear strategy of “controlled friction,” where they push against their neighbors and slowly expand their power — a situation highlighted by the expansion of reclaimed territory in the South China Sea. “No matter what anybody says, our friends in China feel they have strategy — and they do — and they feel they have a winning strategy, or at least their goal is to win,” he noted. He also pointed to the constant interchange of the much ballyhooed “pivot to the Pacific,” which was quickly renamed a “rebalance” to the region — with Pentagon and administration officials vacillating between the two in the last several years — as an example of how the US seems unable to articulate its goals. Part of the challenge identified by the congressman is a hesitancy on the part of the US to speak openly about China as a competitor. “It’s almost taboo to talk about competition with China. It’s like if we pretend there is no competition, there won’t be any competition,” Forbes told the audience. “Competition is OK. It doesn’t mean we are enemies. It just means we have a competition.” One thing that would help the issue, Forbes said, is the passage of the Trans-Pacific Partnership (TPP) bill put forth by the Obama administration. Experts have said the TPP represents a political tool for forging relations in the region that can help counter China, something Forbes hinted at in his commentary. “The United States has an incredible ability to build coalition that many other countries don’t have, and I have not yet seen China being able to put together that kind of coalition building,” Forbes said. He added that efforts to build allies' capacity in the region will get a boost if funding to train and equip regional partners comes through the conferencing process for the National Defense Authorization Act — which, he predicted, it likely will. Though Forbes did not specify which money he was referring to, it was likely a reference to a pot of $425 million included in the Senate version of the NDAA, available to help develop partner maritime security in Indonesia, Malaysia, the Philippines, Thailand and Vietnam.”

‘The China Challenge,’ by Thomas J. Christensen.
“China has major incentives to avoid unnecessary conflict,” Thomas J. Christensen writes. But the United States has no experience “tackling the least appreciated challenge: persuading a uniquely large developing country with enormous domestic challenges and a historical chip on its national shoulder to cooperate actively with the international community.” Christensen, a professor of politics at Princeton, served from 2006 to 2008 in the Bush administration as the deputy assistant secretary of state for East Asian and Pacific affairs. While he didn’t make policy, he was often present as a “backbencher” when China was being debated. (I would say he had a box seat.) He knows Chinese, and is well connected to Chinese academics, although seemingly not to more ordinary Chinese, whose opinions he does not report. I don’t always agree with what he writes, but he is unarguably qualified to make the judgments he does. And when he contends, with the clarity that distinguishes his narrative, that China “is by far the most influential developing country in world history,” and emphasizes that it “is being asked to do more at present than any developing country has in the past,” I take him seriously. He deals here with the crises and collisions that bedevil China-United States relations. He notes the big ideas that invariably add to the bedevilments. Many Chinese, whether sincerely or not, refer to imperialism and colonialism as factors that can never be forgotten, which the Communist Party overheats with waves of nationalism. The United States has numerous allies. Beijing has exactly one, North Korea, and some of Christensen’s high-ranking or well-informed interlocutors confide that this ally is a vexatious one. The grand problems also include climate change; nuclear proliferation, especially from Pyongyang and possibly Iran; the nature of Taiwan’s sovereignty; ­applying sanctions or not to third countries (Beijing usually vetoes these in the United Nations); Myanmar; who has what rights in the South China Sea. And add human rights in China and internationally — issues Christensen barely ­mentions. There are also the sudden thunderclaps, impossible to foresee but with immense consequences, like the accidental American bombing of the Chinese Embassy in Belgrade in 1999 during the Kosovo war, and the crash, in 2001, of a Chinese fighter jet into an American Navy intelligence plane in international air space. In that incident, the Chinese pilot died; the American aircraft landed in China, and the crew was briefly detained. Each of these events Beijing labeled an act of American ­aggression. Any of these issues, whether long-term or sudden, would be a first-class diplomatic headache. Christensen was present for some, and has discussed others with Chinese experts. Some of those he talked to characterized most American positions as moves to humiliate China, or even to attempt regime change. Christensen seems to be unusually evenhanded. On climate change he states that China and the United States together produce 40 percent of the world’s greenhouse gasses. China is the greater culprit now, but he suggests that the first world created this problem and that China has made some efforts to limit its polluting. He notes as well that many third-world countries cannot see how they can advance without burning fossil fuel.”

To Defeat China in Battle, America Should Study World War II.
“Military organizations are often accused of fighting the last war. In the case of the U.S. Air Force, the war in question is Desert Storm, the last unambiguous U.S. victory and a major milestone in the development of American air power. The Gulf War was a major success, demonstrating effective applications of stealth, precision and electronic warfare. But the war was fought with overwhelming logistical, numerical and technological superiority against an adversary that was geographically isolated, poorly trained, badly equipped and ineptly led. It is unlikely that the United States will operate from such a position of advantage again. Pentagon planners should give up on the fantasy of a short, decisive war against the People’s Republic of China — any “short, decisive war” involving the PRC is likely to end in a PRC victory. In a potential conflict with China, it is the U.S. that is geographically and numerically disadvantaged. Further, China has organized military developments for the past two decades around one key principle — that the U.S. would not be allowed to repeat Desert Storm. The U.S. Department of Defense summarizes the Chinese approach under an “anti-access, area denial,” a.k.a A2AD label, but is overly focused on finding technological means to operate in the A2AD environment in order to attempt a repeat of the Gulf War’s air campaign. China is perhaps the least likely country to succumb to such a strategy, which is really an attempt to match strength against strength in an epic, mano-a-mano battle where China holds advantages in distance and mass that we are unlikely to ever overcome conventionally. If the Air Force is going to do its part in deterring the PRC, the Pentagon must contribute to a viable offset strategy that relies as much on geography as technology. This is not to say that the United States cannot effectively fight the PRC, only that it cannot do so with a replay of techniques that proved successful more than two decades ago over Iraq. The war the United States should base its strategy upon is another conflict in which it fought an island nation that had successfully executed an “A2AD” strategy by physically occupying much of the Asian landmass from Manchuria to Burma — to Wake Island and the Solomons. An analysis of the flow of goods and materials into and out of China reveals that with 98 percent of all freight moving by sea, China is practically, if not geographically, an island nation. As such, it is vulnerable to interdiction of trade routes and energy supplies to a far greater degree than a land power, and this is a national vulnerability that air power is well-positioned to exploit — if applied properly.”

Japan-China East China Sea Dispute: Defense Paper Takes Aim At Chinese Gas Project. “
Japan’s Defense Ministry rolled out its defense white paper Tuesday, outlining various threats to the country and the Asia Pacific region. The paper gave particular attention to China, citing the Asian military giant’s maritime ambitions as one of the biggest concerns. “Coupled with a lack of transparency in terms of military and security affairs, China’s military development is of concern to the regional international community, including our country,” Defense Minister Gen. Nakatani said in news conference, according to the Japan Times. “Our country needs to observe it closely.” Though Japan took issue with several areas China was operating in, including the South China Sea, the most urgent concern was with an offshore gas platform that China has been constructing in the disputed waters of the East China Sea since June 2013. Plans of gas drilling in the East China Sea were initially mutually agreed upon by both parties in 2008. However, because the two sides have not been able to agree on a maritime boundary between their two exclusive economic zones, Japan expressed wishes to postpone the gas field project until a mutually agreed upon demarcation was met. Under Japan’s proposed demarcations, China’s gas platform was still theoretically on the Chinese side, the Japan Times reported. Still, Japan worried that the close proximity to Japan’s exclusive economic zone, about 16 miles west from the median line, meant China’s gas project could be siphoning gas from Japan-claimed seabeds. “Our country has repeatedly lodged protests with China’s unilateral development and urged it to stop the construction work,” the defense paper said. The paper also specifically noted concern over military activity in the East China Sea. “Activities by Chinese naval and air force aircraft, which apparently gather information about our country, have been observed frequently,” the paper said, adding that a Japanese “self-defense” fighter jet made a record 464 flights last year in response to Chinese aircrafts that neared Japanese airspace.”

Chinese Navy Starts Drills in S. China Sea. “
China said Wednesday its navy has begun 10 days of military exercises in the South China Sea, a move that comes amid concerns over Beijing's large-scale land reclamation projects in the region and its heavy-handed approach to territorial disputes. Ships are "prohibited from entering" the "designated maritime areas where the military drills are being held," the country's Maritime Safety Administration said in a statement published on its website. China claims most of the South China Sea, believed to be rich in oil and natural gas deposits, despite overlapping claims with Vietnam, the Philippines, Brunei, Malaysia and Taiwan. In staking its claims, it has engaged in the construction of artificial islands, combined with aggressive maritime patrols intended to keep other claimants out. The exclusion zone is off the southeastern coast of China's island-province of Hainan and includes some of the Paracel Islands, which are claimed by China and Vietnam. The exercises are meant to "test the navy's tactics and weapons," state-run Xinhua News Agency said in an article quoting Chinese Maj. Gen. Zhu Chenghu, a professor at the National Defense University of the People's Liberation Army. The drills come as the international community has stepped up its criticism of China's activities in the South China Sea. On Tuesday, Japan released a defense white paper calling China's approach to the region "high-handed." Over the weekend, the new commander of the U.S. Pacific Fleet, Adm. Scott Swift, joined a surveillance flight over the region, underscoring the importance Washington places on the issue. The decision to hold the drills is unrelated to recent actions by other countries, Xinhua quoted Zhu as saying. "A military drill of this scale will take at least three to four months of preparation," he said, adding that "there is no evidence to subjectively link an ordinary drill to a third party." Last year, China sent an oil-drilling platform into waters off the Paracels, setting off months of discord with Vietnam, in which Chinese and Vietnamese ships sparred at sea and anti-Chinese sentiment in Vietnam boiled over into deadly riots. Although Sino-Vietnamese relations had since improved, China returned a drilling platform to the area last month. Farther south, in the area of the Spratly Islands, China has reclaimed at least 2,000 acres and is believed to be working on runway, port and other infrastructure. The United States says China's large-scale reclamation work poses a threat to regional peace and stability. China says it is aimed at safeguarding its territorial sovereignty and maritime rights and interests, as well as better performing its international responsibilities in maritime search and rescue, disaster prevention and mitigation, environmental protection and navigation safety. The Chinese drills follow exercises in the South China Sea last month involving the Philippines, the United States and Japan.”

Philippines Hikes Defense Budget 25%.
The Philippines is planning a 25 percent hike in its defense budget next year, mainly to bolster its claims in the disputed South China Sea, officials said Tuesday. The proposed 2016 national budget, which President Benigno Aquino is to present to parliament for approval on Monday, would reserve a record 25 billion pesos (US $552 million) for defense spending. Funds would be used to acquire navy frigates and patrol aircraft, budget and defense officials told AFP. "We need to protect what is clearly within our territorial jurisdiction," Budget Secretary Florencio Abad said, when asked if the increase was due to the Philippines' maritime row with China. "Certainly, we need to at least be able to effectively monitor the developments in the area, particularly those in disputed zones," he added. Under the 3 trillion peso budget bill, defense spending would be up from a 20 billion peso military budget last year and five times bigger than in 2013, the officials said. The proposed 2016 defense budget is part of a five-year, 75 billion peso military modernization program approved by Aquino in 2013, Abad said. The amount would still be dwarfed by China, which claims most of the South China Sea, including areas close to the shores of its Asian neighbors. Beijing budgeted US $142.9 billion for its military this year. One of the region's most poorly equipped, the Philippine military relies on half-century-old ships and aircraft keeping watch over the South China Sea, where tensions have flared recently. The Philippines is catching up on military modernization after spending was held back to just 5 billion pesos in 2013 as the government shifted resources to recovery from Super Typhoon Haiyan, which struck the country that year leaving 7,350 people dead or missing. The Philippine military's mission to protect the country's territory is complicated by long-running communist and Muslim insurgencies that force it to devote troops and equipment for internal security. While China has gone on an island-building frenzy to reinforce its claims on South China Sea reefs and waters, the Philippines has set repairs on a crumbling World War II ship that serves as its lonely outpost there. The BRP Sierra Madre, emblematic of the Philippine military, was deliberately grounded on Second Thomas Shoal in 1995 in a desperate move to check China's advance in the Spratly islands. The South China Sea chain is also disputed in whole or in part by Brunei, Malaysia, Taiwan and Vietnam. "This budget will allow us more latitude in acquiring new assets for the Armed Forces of the Philippines," Defense Department spokesman Arsenio Andolong said. "We are pushing hard on modernization and we will need all the help we can get.... This includes the purchase of frigates and patrol aircraft." Two of 12 fighter jets that the Philippines had bought from South Korea are expected to be delivered as early as November, he said.”

Analysts See Cambodia Bolstering Military Ties With China.
Cambodia is strengthening its military ties with China, and analysts say it is likely to continue doing so for the forseeable future. Cambodian Defense Minister Tea Banh made a five-day trip to China last week, meeting with high-ranking military officials and receiving pledges of assistance from the Chinese military In a recent interview, he told the VOA Khmer service that the visit was successful in bringing military cooperation between the countries even closer. That relationship is closer than Cambodia’s military ties with the U.S., he said Analysts say Phnom Penh is likely to look more and more to Beijing for support because of growing tensions with its old patron, Vietnam, over border issues Cambodia and China have traditionally enjoyed close relations, and they became noticeably closer after 2012 when Cambodia, as host of an Association of Southeast Asian Nations summit, sided with China over the contentious South China Sea issue. The following year, Beijing provided Phnom Penh with a $195 million loan, which bought 12 Chinese Z-9 military helicopters. In May of this year, China pledged military trucks, spare parts, equipment and unspecified chemicals. Cambodian Prime Minister Hun Sen has often touted the relationship. During the inauguration of a Chinese-funded road in Kampong Som province last month, he told a group of farmers that Cambodian-Chinese relations were at an all-time high, and that the two were moving toward a “comprehensive” partnership. China’s development fund for Cambodia for 2015 amounted to $140 million, up from $100 million the year before, he said. Tea Banh defended the bilateral relationship, saying Chinese aid came with no strings attached and that China had never interfered in Cambodian affairs. He declined to disclose how much aid Cambodia would receive from his latest trip. Yet analysts warn that China is getting more out of the deal than Cambodia. Chheang Vannarith, a visiting professor at the University of Leeds in England, said China needs Cambodia as a partner in Southeast Asia, where competition is rising. “The region is full of complicated competition” between China and Japan and China and the U.S., he said. “China takes Cambodia in Indochina and the Mekong region to strengthen its sphere of influence in the Asia-Pacific.” In the end, he said, Cambodia is playing a riskier game than China. “Once we rely on China so much, we will lose what is called self-determination in foreign policy,” he said. Paul Chambers, a professor at Thailand's Chiang Mai University, called China “a growing superpower” that uses Cambodia for influence within ASEAN in what he characterized as a “growing cold war” between Beijing and Washington. “I believe that Hun Sen has shown himself in the past and present to be a very good balancer among allies,” he said. “Hun Sen will increasingly welcome Chinese defense sector assistance to Cambodia.” Hugh White, a professor of strategic studies at Australian National University in Canberra, told VOA Khmer that the growing military cooperation between Cambodia and China would counter U.S. influence in the region while bolstering Cambodia’s military capabilities.”

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

Posted by The Congressional China Caucus | July 21, 2015

America-China: Heading for South China Sea Clash? “In an ill-advised abundance of caution, the Obama administration may be establishing a dangerous precedent and setting the stage for an unnecessary confrontation with China in the South China Sea.The issue is China’s artificial island-building and militarization, and its entirely unfounded maritime sovereignty claims based on those manmade “land features.” China’s actions are directly contrary to the United Nations Law of the Sea Convention, which it has signed but whose provisions it flouts. (Conversely, the U.S. has not ratified UNCLOS, but honors its standards as consonant with customary international law.) China’s excessive maritime claims are precisely the kind of unilateral actions the U.S. Navy’s Freedom of Navigation (FON) program was designed to counter. Periodically, the Navy sends ships through international waters unlawfully claimed by one coastal nation or another in order to preclude any misunderstanding regarding universal navigational rights or any semblance of acquiescence in the offending nation’s claims. The principle applies as well to the right of overflight in international airspace where China and others have tried to exclude U.S. aircraft from conducting normal reconnaissance missions that are clearly outside the country’s 12-mile territorial limits. U.S. aircraft routinely conduct such flights despite those objections. Similarly, when Beijing unilaterally declared an air defense identification zone (ADIZ) in the South China Sea, Washington immediately asserted its overflight rights by dispatching (unarmed) B-52s through the space. (Unfortunately, it diluted its message by simultaneously advising U.S. civilian flights to comply with China’s notification demands.) The South China Sea has been a different story. Despite numerous statements by U.S. officials that China’s island reclamation program and related territorial claims violate UNCLOS and customary international law, no U.S ships have entered the contested waters. The administration, and even experts who criticize it for lacking a strategy to counter Chinese expansionism, worry that U.S. action will be seen by China, and perhaps others, as provocative. But continued inaction – for example, while long-term diplomatic negotiations pursue shared use of regional resources – can produce unintended adverse consequences. Experience with America’s intermittent presence in the Taiwan Strait is instructive. In the postwar period, long before there was a FON program, Washington saw little strategic value in the status of Taiwan and the U.S. Navy was largely absent from the area. When Secretary of State Dean Acheson seemed to write off Taiwan and South Korea as periperal US strategic interests, the Korean War erupted.”

Japan Annual Defense Paper Shows Heightened Worry over China.
“Japan emphasized China as a threat in escalating regional tensions in this year’s annual defense report as Prime Minister Shinzo Abe’s government tries to convince the public of the need to pass legislation to give Japan’s military a greater role. The report, approved Tuesday by the Cabinet, was delayed for more than a week as Abe’s ruling party panel demanded mention of additional examples of China’s “one-sided” maritime activities, such as undersea gas and oil development in the East China Sea. Abe’s ruling coalition has been pushing to pass highly contentious legislation allowing Japan’s Self-Defense Force to fight for foreign militaries even when it is not under attack, while expanding its role in international peacekeeping. Many Japanese are wary of expanding the military because of bitter memories of Japan’s World War II defeat. Opposition lawmakers have said Abe’s party might be exaggerating the threats to drum up support for unpopular legislation that many experts have also called unconstitutional. The 429-page white paper underscored that Japan’s security risk had worsened overall and cited continuing missile and nuclear threats from North Korea and terrorist threats from the Islamic State group as examples. China by far topped Japan’s list of security concerns, taking up one-third of a chapter on global security trends covering eight countries and regions. “China, particularly over conflicting maritime issues, continues to act in an assertive manner, including coercive attempts to change the status quo, and is poised to fulfill its unilateral demands high-handedly without compromise,” the report said. “Japan is strongly concerned about China’s actions, which we need to keep watching closely.” The report also raised concerns over China’s recent reclamation work in the South China Sea, saying it had escalated regional tensions. The Defense Ministry report also added a new section that also refers to maritime activities elsewhere. China has been building artificial islands in the vast, resource-rich area, alarming neighboring nations. Japan has increased defense cooperation with the Philippines and has conducted joint exercises in the area. Defense Minister Gen Nakatani has suggested that Japan could send reconnaissance aircraft to the region if the legislation is approved, though he denied any specific plans.”

Strategy Games, War, and Asia’s New Map.
“I noticed a slight change in focus before leaving the Pentagon last year. When the Obama administration introduced new initiatives as part of its policy of “rebalancing to Asia,” it increasingly involved the South China Sea, the Philippines, Vietnam, and Myanmar. India was becoming a larger strategic priority. And people began a discursive shift from Asia as a “Pacific theater” to Asia as a “maritime theater.” Since leaving government, I’ve seen the change become more acute, accentuated by ritualism and entrenched positions in Northeast Asia. China and Japan are in a kind of stalemate in the East China Sea, while China and Taiwan are, for now, both vested in preserving the status quo across the Taiwan Strait. Relations between North and South Korea remain frozen in time, and, 50 years after normalization, Japan-South Korea relations show no signs of sustainable improvement. Northeast Asia is a garden that needs continuous tending. It remains crucial to the global economy and U.S. interests, and a conflict there could be civilization-ending. But policymakers on all sides have been largely boxed in by the strategic choices of their predecessors. The lines of competition are clear and heavily militarized, and the stakes unmistakably high. In other parts of Asia, the potential benefits of access and influence are also great, but the dynamics of competition are less direct and more opaque. There is a rigidity to Northeast Asian geopolitics, while the rest of the region is more like the geopolitical Wild West. Asia’s strategic center of gravity, it seems, is shifting toward the Indian Ocean and the South China Sea. The shift matters, among other reasons, because it affects where and how strategic competition among nations plays out. Not too long ago, Robert Kaplan predicted that Asia’s future would increasingly converge on the Indian Ocean and the surrounding territories, as it had hundreds of years ago. He’s not wrong. South Asia and Southeast Asia are becoming more important for everyone due to crucial sea lines of communication for trade, global energy flows, and as a basis for power projection. The U.S. Navy and Air Force now routinely refer to Asia not as the “Asia-Pacific,” but as the inappropriately wordy “Indo-Asia-Pacific” (which thankfully has not fully caught on inside the Pentagon). Friends from the defense community in Australia have been nudging the United States toward the moniker “Indo-Pacific” region for years. Through various cooperative military exercises with local militaries, Japan is extending its naval reach for the first time in the 21st century to the South China Sea and Indian Ocean. And after millennia of geographic separation, China and India are contesting one another’s spheres of influence. India not only looks east, but is increasingly acting in that direction, while China is shifting its strategic initiatives south and west, competing with India for local access, presence, and resources. Different competitive logics are at work in different parts of the region. Every call for taking greater risks to confront China in the South China Sea or to deliberately introduce friction to force a choice on China shows a failure to understand that the incentives for certain types of behavior vary by location.”

Archaeology and the South China Sea.
“Recently, Vietnamese and Western media resumed reporting on China’s HD-981 oil rig, after it was redeployed to disputed waters, dredging up memories of the intense anti-Chinese protests in Vietnam and the diplomatic standoff that occurred last year when the rig was moved to waters between Vietnam and China for the first time. The HD-981 oil rig gives China a mobile, economic platform from which to project its sovereignty in disputed waters, but what about a cultural-historical platform? Well, “they have a ship for that,” too, and its recent deployment in the Paracel Island chain went relatively unnoticed. The vessel in question is China’s first domestically designed and developed archaeological ship, and its deployment reflects China’s ability to rapidly introduce dedicated ships for virtually every function it desires. In 2014, China officially launched its first archaeological vessel, the 950-ton, 56 meter-long Kaogu-01. Originally commissioned by the State Administration of Cultural Heritage (SACH) in 2012, primary construction on Kaogu-01 was completed by Chongqing Dongfeng Shipbuilding Corporation on January 24, 2014 at a total end cost of around 80 million yuan ($12.9 million). According to the Chongqing Youth Daily, the deployment of this ship marks the end of Chinese maritime archaeologists conducting their research from rented fishing vessels. The ship’s high price tag is reflected in its facilities and tools, which are sufficiently plentiful and advanced for the local news in Qingdao to describe Kaogu-01 as “armed to the teeth.” The ship boasts an A-frame crane capable of hoisting up to 3 tons, a folding arm crane that can extend up to 6 meters past the edge of the ship, a dive workroom, a decompression chamber, an “air-lock chamber for excavated cultural relics,” and two food storage rooms. Some reports even claim that it boasts a submersible to facilitate underwater searches. While it remains unclear which submersible, if any, Kaogu-01 might be equipped with, China’s deep-water submersible technology is quite advanced. In 2010, China became only the fifth country, after Russia, France, Japan, and the United States, to have a manned submersible capable of descending past the 1,000 meter mark. In 2012, China’s Jiaolong-01 7,000 meter manned submersible underwent its second round of tests, descending to a depth of 6,000 meters over 10 hours. China has also used submersible to execute underwater archaeological tasks in the past, using the Osprey-01 four-man submersible to explore underwater ruins in Fuxian Lake, Yuxi City, Yunnan Province in 2001. Kaogu-01 is powered by an electric motor capable of reaching speeds up to 12 knots. In addition, the ship can carry supplies sufficient for up to 30 days’ continuous operation. To increase stability and thereby minimize strain on the crew, the ship’s center of gravity has been lowered.”

China: Closing the Gap in Anti-Submarine Warfare.
  “China needs to defend itself from hostile submarines. Its goals of gaining regional power while protecting the mainland require a maritime strategy in the Western Pacific, especially in the areas Chinese military planners call the two island chains. The first island chain encircles the Yellow Sea, East China Sea and South China Sea. The second stretches from Japan to Indonesia. Beijing thus needs to develop robust anti-submarine warfare capabilities to keep submarines out of the first island chain, where many mainland and naval targets would be in range of attack. The People's Liberation Army Navy, however, does not have the means to counter U.S. submarines — the critical threat — or even those of nearby powers, including Japan and South Korea. Consequently, Beijing is devoting considerable resources to enhance the navy's anti-submarine warfare capabilities and correct one of its greatest military weaknesses. China's navy will improve, but it is still many years of effort and investment away from achieving the level of capability Beijing requires. At the moment, the People's Liberation Army Navy does not have the equipment, training and institutional knowledge necessary to effectively counter most submarine threats. Until recently, for example, the military relied on Type 037 submarine chasers, armed only with hull sonar and anti-submarine warfare rockets, mortars and depth charges. These are only adequate in certain cases against shallow diving submarines or in littoral water. They are largely ineffective against fast and deep diving nuclear submarines. With effort and investment, Beijing has begun to adopt more advanced patrol craft, such as the Type 056A corvettes in 2014. China's nuclear submarines, however, still lag behind, not quiet effective enough to hunt submarines, and certainly not able to challenge more advanced U.S. nuclear submarines Although Beijing began developing anti-submarine torpedoes in the 1980s, the navy did not have dedicated anti-submarine warships to carry them. The military also had inadequate numbers of anti-submarine helicopters — mostly lightweight Z-9Cs and somewhat more capable Ka-28 types. Until recently, the shortage of helicopters forced the navy to rotate them between ships. Instead of state-of-the-art equipment, China continued to rely on outmoded means such as naval mines to hinder submarine operations. Beijing even planned to string these mines across chokepoints and deploy them close to enemy harbors to hinder unfriendly surface and submarine vessels alike, though the tactic never needed to be implemented. At the beginning of the 21st century, Chinese anti-submarine capabilities began to improve. The navy's multi-role surface vessels were equipped with variable depth sonar, anti-submarine torpedoes and greater numbers of helicopters. But it was not until the rollout of the Type 052C destroyer in 2005 that any Chinese vessel was equipped with a towed sonar array. China also continued to lack dedicated anti-submarine patrol aircraft, with only a few aging Harbin SH-5s in service. Now China's anti-submarine warfare requirements are growing as the People's Liberation Army Navy steps up operations in the South and East China Seas. Beijing's dearth of vessels, patrol aircraft, helicopters and equipment means that anti-submarine warfare coverage is not always available.”

Chinese State Media to Pacific Fleet: We Won’t Be Pushed Around in South China Sea. 
"The temperature in the South China Sea’s testy waters may just have risen a degree or two. On July 18, the website of the U.S. Pacific Fleetposted an image (above) showing Scott Swift, the fleet’s new commander,onboard a U.S. P-8A Poseidon spy plane for a seven-hour-long flight over the South China Sea. Chinese official statements on Swift’s flight have thus far been moderate; the country’s Ministry of Defense has responded with relatively anodyne and boilerplate language, expressing “hope that the Americans fulfill their promise not to take sides in the South China Sea question, and do more that advantages peace and stability in the region, rather than the opposite.” In a signal China is treating the flight as a military and not diplomatic matter, the Ministry of Foreign Affairs has stayed mum. But Chinese state media has sent a signal of its own that’s considerably less restrained. On July 20, the website of People’s Daily, which almost exclusively runs content given prior sanction within the government, ran an interview with Zhang Junshe, a frequent commenter on military affairs in Chinese state media who works at the China Naval Research Institute. The article’s colloquial title says that other countries won’t be able to take advantage of China in the event of a conflict. In the piece, Zhang tells the Daily that while the U.S. has been patrolling the South China Sea with spy planes for “several decades,” it was unusual to see public reports of the same. In words that echo the Defense Ministry’s statement and aren’t directly attributed to Zhang, the article characterizes Swift’s actions as “completely contrary” to U.S. assurances that it’s not choosing sides in China’s South China Sea-related territorial disputes with its neighbors, including the Philippines and Vietnam. The article asserts that “the true American motivation is spreading the ‘China threat theory’ to create an excuse to raise the temperature in the South China Sea and to pivot to Asia.” The presence of American spy planes near China has been a highly sensitive subject within China for some time. An April 2001 U.S. spy plane crash landing on the Chinese island of Hainan marked a recent low point for U.S.-China relations and required a high-level detente. More recently, China has exchanged fierce rhetoric with its neighbors in the South China Sea, and views stated U.S. policy of a rebalance to Asia as part of an effort to contain Chinese influence in its own backyard. Like many in China, Zhang blames the United States for upsetting a “previously tranquil” South China Sea. “The controversy over islands and reefs in the South China Sea isn’t as tense as the United States says it is, [but] the U.S. is encouraging trouble from border countries in order to maintain its hegemony in the Asia-Pacific,” Zhang is quotes as saying."

Why Can’t We Be Friends? Assessing the Operational Value of Engaging PLA Leadership.
“U.S. military flag officer/general officer (FOGO) engagement with counterparts from the People’s Liberation Army (PLA) is valuable for strengthening both military-to-military and diplomatic relations. Such engagement is not valuable, however, because it builds trust-based relations or yields significant operational value. For the purpose of this study, operational value is defined as limited crisis resolution, greater interoperability, and increased safety of operations over a three- to four-year time frame. Out of eleven retired three- and four-star FOGOs with active duty experience engaging with the PLA who were interviewed for this study, none had established trust with their active duty counterparts or generated operational value as a result of engagement. Instead, this study finds that FOGO personal relations have minimal operational value due to numerous individual barriers that prevent the building of trust between counterparts and institutional barriers that prevent the translation of FOGO relationships into operational value. U.S. expectations of large operational returns on significant resources invested in FOGO engagement with PLA counterparts may prove ill-founded if these expectations are not grounded in an understanding of the individual and institutional barriers that exist to prevent those relationships from yielding tangible operational value. If the U.S. were to adopt a misplaced faith in the value of personal relationships with PLA counterparts as a primary means to de-escalate future crises, U.S. policymakers would be placed at a disadvantage for quickly or effectively resolving future crises with China.”

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

Posted by The Congressional China Caucus | July 20, 2015

Tokyo to Challenge China on Fiery Cross Reef. “In what may turn out to be the first step in a dangerous game of chicken, Japan's upcoming annual defense white paper will accuse China of belligerency in its dealings with neighbors as it becomes clear that China is laying the foundations of a military base on Fiery Cross Reef, one of seven artificial islands China has created in the disputed Spratly Islands. In the outline of the white paper, to be released in late July, on top of the usual statements citing North Korea's nuclear and missile development as issues of concern, the paper will directly call China's reclamation work on the Spratlys, "high handed."  In the last 18 months, China has added about 800 hectares to seven reefs in the area, including an airstrip on Fiery Cross Reef, along with the makings of a military radar base. All of this is seen as a significant escalation in a dispute over the islands, part of a huge swath of territory in the South China Sea (SCS) over which China claims undisputed sovereignty. While the Fiery Cross Reef development has been condemned by the US, Japan's accusation raises the ante and more directly challenges perceived Chinese expansionism, supporting the Philippines, Malaysia and Vietnam in their dispute over China's claims on the islands. Japan's assertiveness is relatively new and bold, and comes just as the Japanese Diet this month is passing legislation that will enable the country to engage in collective self-defense (CSD) for the first time in its postwar history. The statement also builds on an assertion made in last year's defense white paper that accused China of attempting to change the status quo in the region through force. Japan's latest assertion led to predictably robust responses from Beijing, with Foreign Ministry spokeswoman Hua Chunying accusing Japan of trying to "smear China to create tensions in the region." "The Chinese construction on the reefs has nothing to do with Japan's security situation. Japan is neither a claimer state or a nearby country in the South China Sea area. It's deliberate show of unnecessary worrying shows that Japan wants to be involved in the SCS affair," said Zhuang Jianzhong, vice director of the Center for National Strategy Studies at Shanghai Jiao Tong University. "China's reconstruction on the reefs has its historic and current need for various purposes and Japan has no right to criticize others while Japan deploys warships and increases patrolling radius over SCS areas to show its ambitious aim. History will show that China will be non-aggressive and no threat to other Asian countries while it will remain firm in defending its sovereignty and legitimate right," he said.”

Philippine Military Upgrade Stalls. “
A push by the Philippines to overhaul its obsolete military has ground to a halt just as the U.S. ally is striving to deter China in the disputed waters between them. A string of programs collectively valued at $1 billion stalled early last year, according to military officials and executives involved in Philippine defense deals. The delay underscores how the government’s efforts to transform the country’s derelict navy and air force have become mired in red tape, funding problems and corruption allegations. The delays leave long-held plans to build a “minimum credible deterrent”—comprising small but capable air and naval fleets—at least a decade from completion, said Jose Antonio Custodio, a Manila-based defense consultant. Even with a basic deterrent in place today, Manila would likely still lack the means to check Beijing’s assertiveness. “We’re still at square one,” said Mr. Custodio. “With China building all these new bases [in the South China Sea], I’d say it’s already too late.” Securing secondhand equipment from allies like Japan and the U.S. may now be the Philippines’s only chance of quickly upgrading its forces, sources familiar with the country’s procurement process said, with presidential elections due in May next year making it unlikely that any big contracts will be signed before then. President Benigno Aquino III has promised to rejuvenate the military, degraded by decades of underinvestment. A pledge to spend $1.7 billion on new equipment initially bore fruit, as the administration signed a flurry of defense contracts valued at $834 million in late 2013 and early 2014, including deals for 12 Korean fighter jets, three Airbus transport planes, and a new fleet of combat helicopters from Canada and the U.K. “The record will show that the Aquino administration has stepped up the pace of [military modernization] considerably, surpassing the procurement program undertaken by three previous administrations combined,” presidential spokesman Herminio Coloma said. However, Mr. Coloma also confirmed that Mr. Aquino has still not signed a law earmarking a further $2 billion for defense procurement that was passed by congress in February 2013. Mr. Coloma didn’t explain the delay. Government finances have been stretched thin after spending billions on reconstruction after Supertyphoon Haiyan in 2013, a fact Mr. Custodio, the defense consultant, cited for the spending delay. Spending has also slowed after a recent scandal in which prosecutors charged three senators with corruption for their alleged involvement in the use of dummy NGOs to steal around $220 million in public money. All three senators deny the charges. Already strict government procurement rules have been further tightened since then, putting the brakes on a range of spending programs.”

China, Russia Planning 20-Ship Naval Exercise in the Sea of Japan in August. “
China and Russia will conduct their largest joint Pacific exercise in August near Japan, Russian Navy planners announced on Friday. Announced last year, Joint Sea Exercise 2015 will occur in both the Sea of Japan and off the cost of Russian region of Primorsky — about 250 miles away from Japan. “These maneuvers will for the first time involve a joint amphibious assault drill in Russia’s Primorsky territory with the participation of carrier-based aircraft,” Russian Pacific Fleet spokesman Roman Martov said, reported the Russian TASS wire service. “Representatives of the headquarters of the Russian Pacific Fleet and the Navy of the People’s Liberation Army of China have carried out major work for the planning of the Chinese warships’ visit to Vladivostok port, the cultural program, sports competitions and all the tactical events of the sea, land and air parts of the maneuvers.” Since 2011, Russia and China have conducted regular joint exercises. Last year was the largest series of exercises, the Russian Navy and the PLAN drilled with 14 surface ships, two submarines, aviation assets and special operation forces (SOF), according to Chinese media. The Pacific drills follow the first ever joint Chinese-Russian exercise in the Mediterranean sea earlier this year. The much smaller exercise featured three Chinese People’s Liberation Army Navy (PLAN) and six Russian. In November, said Defense Minister Sergei Shoigu said the combined military-to-military between China and Russia partnership was growing. “We believe that the main goal of pooling our effort is to shape a collective regional security system,” Shoigu said. “We also expressed concern over U.S. attempts to strengthen its military and political clout in the [Asia-Pacific Region].”

US Pacific Fleet Chief Joins Surveillance of South China Sea.
In a move likely to irk China, the new U.S. commander of the Pacific Fleet joined a seven-hour surveillance flight over the disputed South China Sea over the weekend on board one of America's newest spy planes. Adm. Scott Swift joined the surveillance mission on board a P-8A Poseidon plane on Saturday to witness the aircraft's full range of capabilities, the U.S. Pacific Fleet said Sunday. Territorial disputes involving China, the Philippines and several others have flared on and off for years, creating fears that the South China Sea could spark Asia's next major armed conflict. Beijing has asked the United States to stay out of what it says is a purely Asian dispute, but Washington has said that ensuring freedom of navigation in the disputed waters and the peaceful resolution of the conflicts are in the U.S. national interest. The Chinese Embassy in Manila had no immediate reaction to the Pacific Fleet commander taking part in the surveillance flight. The Navy has acquired and plans to purchase more of the versatile P-8A Poseidon aircraft to replace its aging P-3 Orion fleet. The plane can be used for a range of undertakings, including anti-submarine warfare, and surveillance and reconnaissance missions. A picture posted by the Pacific Fleet in its website shows Swift intently looking on as U.S. officers demonstrate the P-8A's capabilities. In another, Swift, wearing headphones with a microphone, looks out the window at the blue sky over the South China Sea. U.S. Navy Capt. Charlie Brown, a Pacific Fleet public affairs officer who flew with Swift on board the P-8A, said by telephone that the admiral "was pleased with the capabilities of the Poseidon." Brown did not provide other details on the flight, like whether the plane flew over disputed areas where China has undertaken massive island-building that Washington has asked Beijing to stop. In May, a U.S. Navy P-8A was shooed away by radio callers, who identified themselves as being from the Chinese navy, when the surveillance aircraft flew over a disputed area where China has been undertaking island-building works. A CNN reporter who was on board the plane, which had taken off from the Philippines, reported the incident. Swift took part in the surveillance mission on Saturday after a visit to Manila, where he met top Philippine military officials. He flew to South Korea over the weekend and will visit Japan before returning to Hawaii, where the U.S. Pacific Fleet is headquartered. He assumed command of the fleet, among the world's largest, in May. Philippine Defense Secretary Voltaire Gazmin welcomed Swift's move, saying it showed America's commitment to come to the aid of allies locked in territorial disputes with China.”

Sri Lanka and China Wrap Up Silk Route 2015 Military Exercise.
“China and Sri Lanka concluded their second-ever joint military exercise last week. Exercise Silk Route 2015, likely named so for its concordance with China’s Maritime Silk Road initiative, in which Sri Lanka is a partner, incorporated a 43-member Chinese People’s Liberation Army contingent and soldiers from the Sri Lankan army. According to a statement released by the Sri Lankan Ministry of Defense, the Sri Lankan Army’s Commando Regiment and Special Forces participated in the exercises, which ran from June 22 to July 13, 2015. The exercise demonstrates the continuing deepening of security ties between Beijing and Colombo, despite the election of a new government in Sri Lanka in January which appeared to be less receptive to Chinese influence on the island that the previous government, which was led by Mahinda Rajapaksa. The Ministry’s statement noted a focus on primarily tactical exercises, including on “weapon handling, VVIP protection study, live firing, lane firing, sniper firing, body protection drills, backup vehicle movement and training, body protection formation, ambush drills, reconnaissance techniques, skill firing, special mission planning, combat tracking techniques, situation training exercise, jungle warfare and basic battle skills, vehicle ambush drills, aircraft and building option training, etc. China’s growing relationship with Sri Lanka has caused concern in New Delhi, which perceives any Chinese military activity in the Indian Ocean Region (IOR) as a prelude to encirclement. When Maithripala Sirisena came to power in a surprise election victory over Rajapaksa, it appeared that Sri Lanka may reevaluate its relationship with China. Sirisena’s campaign manifesto contained some particularly damning passages toward China, including one where he criticized the previous government’s handling of contracts that were awarded to Chinese firms: “The land that the White Man took over by means of military strength is now being obtained by foreigners by paying ransom to a handful of persons,” his manifesto noted In his first six months in office, however, Sirisena has remained cordial with Beijing, despite freezing some development projects and reviewing contracts awarded by the previous government. In fact, as Silk Route 2015 came to a close, reports emerged that Sri Lanka was actively looking to substitute Chinese funding and investment with other sources. This development would mesh with another statement Sirisena had made on foreign policy in his election manifesto. He noted a desire to have balanced and well-diversified foreign relations: “Equal relations will be established with India, China, Pakistan and Japan — the principal countries of Asia while improving friendly relations with emerging Asian nations such as Thailand, Indonesia, and Korea without distinction.”

Japan Military Chief Says South China Sea Surveillance Possible.
Japan's top military commander, Admiral Katsutoshi Kawano, said on Thursday he expected China to become increasingly assertive in the South China Sea and it was possible Japan would conduct patrols and surveillance activities there in the future. Speaking in Washington, Kawano said there had been "talk" of Japan conducting such patrols in the South China Sea, including anti-submarine activities. "But our position on this is that we consider this as a potential future issue to be considered depending on how things pan out,” he told the Center for Strategic and International Studies think tank. Kawano earlier met with his U.S. counterpart, General Martin Dempsey, chairman of the Joint Chiefs of Staff, and discussed implementation of updated bilateral defense guidelines agreed this year, a joint statement said. Tensions have been rising in the South China Sea, home to important international shipping lanes, due to overlapping territorial claims and rapid building of artificial islands by China that has been criticized by Tokyo and Washington. China claims most of the South China Sea and has territorial rivalries there with several Southeast Asian states. It also has competing claims with Japan in the East China Sea, further to the north. Kawano said he expected China to become more assertive and seek to expand its reach. “My sense is that this trend will continue into the future where China will go beyond the island chain in the Pacific,” he said in translated remarks. “So if anything, I would believe that the situation will worsen.” China has ramped up defense spending in recent years and is aiming to develop a navy capable of defending its growing interests as the world's second-largest economy. Its pursuit of sovereignty claims has rattled neighbors, although it says it has no hostile intent. Kawano said the number of aircraft Japan scrambled in response to territorial incursions last year was in line with Cold-War levels and one reason was Chinese activity. Kawano’s comments come after Prime Minister Shinzo Abe pushed legislation through parliament's lower house on Thursday that could see Japanese troops sent to fight abroad for the first time since World War Two. Abe's moves have been met with protests, but Kawano said he was confident the JapanSelf Defense Forces (JSDF), as the military is known, would win over public opinion.”

China's Xi Tells Army to Learn from Uncorrupt Past. “
China's military must learn from the glorious, uncorrupt example of its revolutionary forebears and thoroughly banish the deep-rooted, pernicious influence of the army's worst corruption scandal in decades, President Xi Jinping has told officers. Xi, who heads the military, has made weeding out corruption in the armed forces a top goal. Several senior officers have been felled, including one of China's most senior former military officers, Xu Caihou. Xu died of cancer in March. Meeting soldiers in the northeastern city of Changchun, Xi said there can be no ambiguity when it comes to fighting graft. "The damage caused by Xu Caihou's discipline and law-breaching activities is all-encompassing and deep-rooted," Xi said, according to a Defence Ministry statement late on Sunday. Xu, who had been a vice chairman of the powerful Central Military Commission which Xi leads, died before he could be brought to trial. The government said in October Xu had confessed to taking "massive" bribes in exchange for help in promotions. "Thoroughly clear away the influence of the Xu Caihou case in thinking, politics, organization and work style. Return to, hold on to, and carry on the glorious traditions and excellent working style of the old Red Army," Xi said, using an informal term for Communist forces who won the Chinese civil war in 1949. His remarks were carried in all major state-run newspapers on Monday. The Global Times, an influential tabloid published by the Communist Party's official People's Daily, said it was the first time Xi had mentioned Xu in public since the Xu's death. Retired and serving officers have warned that the graft problem in the army is so serious it could affect the military's ability to wage war. China intensified its crackdown on corruption in the military in the late 1990s, banning the People's Liberation Army from engaging in business. But the military has been involved in commercial dealings in recent years due to a lack of checks and balances, military analysts have said.”

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

Posted by The Congressional China Caucus | July 17, 2015

Taiwan Needs a Strong Ally. “China’s much-touted motto of “peaceful rise” has been exposed as a hollow slogan. Over the past year, Beijing has constructed 2,000 acres of artificial “islands” in the South China Sea, disregarding territorial claims by its neighbors and positioning artillery installations and airfields on these features. China now threatens to declare an exclusive air defense identification zone in the South China Sea, much as it did in the East China Sea in 2013. It regularly harasses its neighbors’ fishing vessels and violates their territorial waters and airspace. Other nations in the region, from long-standing allies like Australia and Japan to former-foe Vietnam, are clamoring for a strong U.S. response and tighter military ties with America. Yet even as the impetus grows for strengthened defense relationships in East Asia, the U.S. is forcing one of its closest regional partners to endure a range of humiliations and difficulties, all for fear of antagonizing China. Thirty-six years after U.S. Congress passed the Taiwan Relations Act, which requires the U.S. to sell Taiwan the weapons it needs to ensure its survival, U.S. leaders insist on a series of petty and counterproductive policies toward Taiwan that do nothing to enhance American interests or regional security. Today no U.S. military officer over the rank of colonel (or Navy captain) can visit Taiwan, a country that America is required by law to supply with advanced weaponry. Taiwan’s president and other senior government officials are prohibited from even traveling to Washington for meetings with their American counterparts.Tales abound of Taiwanese officers arriving for training at U.S. facilities in khaki pants and polo shirts, much to the surprise of their U.S. colleagues—who understandably wonder why representatives of a trusted military partner are restricted from wearing their nation’s uniform. Even midshipmen at Taiwan’s naval academy are forbidden from making port calls in Hawaii or Guam on their postgraduation training cruise. These indignities inflicted on a friendly nation are petty, but they reveal a larger truth about U.S. relations with China. American policy makers have consistently responded with meek acquiescence to Beijing’s hypersensitivity about matters ranging from Taiwan to Tibet, religious freedom and the persecution of ethnic minorities. But rather than eliciting appreciation from China, the U.S. has only emboldened Beijing and undermined our allies’ confidence that the U.S. is willing to uphold regional stability and international norms. U.S. policy toward Taiwan should reflect U.S. strategic interests, Taiwan’s decades of security cooperation with the U.S., and Taiwan’s march toward multiparty democracy—not inordinate fears of offending Chinese leaders. The U.S. should not only drop demeaning restrictions on bilateral relations but further integrate Taiwan’s military into the U.S. regional security architecture. To start with, the U.S. should invite Taiwan to participate in critical joint military exercises such as the Air Force’s Red Flag, which is open to numerous U.S. allies with capabilities similar to Taiwan’s. Taipei has been consistently denied participation. Participation in prestigious U.S. exercises would enhance Taiwan’s self-defense and signal America’s enduring commitment to our regional partners.”

Xi Jinping's Great Game: Are China and Taiwan Headed Towards Trouble?
“Taiwan’s presidential election is still six months away, but it seems increasingly likely that the Democratic Progressive Party (DPP)’s Tsai Ing-wen is going to win. In the latest TVBS public opinion poll on July 7, Tsai leads the Kuomintang (KMT)’s Hung Hsiu-chu 42 percent to 30 percent. Among those closely watching the possible return of the DPP to power is the People’s Republic of China, which worries that if elected, Tsai will deny that the two sides of the Strait belong to one China and pursue de jure independence. This fear derives from Tsai’s past history as the creator of the “two states theory” in the Lee Teng-hui era as well as her current unwillingness to accept the existence of “one China” even as she pledges to maintain the status quo across the Taiwan Strait. Beijing could react harshly if Tsai is elected on January 16 as the next president of Taiwan, including by taking punitive economic measures, suspending communication and cooperation mechanisms, stealing away some of Taiwan’s diplomatic allies, or even using military coercion or force. Xi Jinping’s reaction to a Tsai Ing-wen victory should not be underestimated. When it comes to sovereignty issues, the Chinese leader has shown little willingness to compromise. Since becoming General Secretary of the Chinese Communist Party (CCP) in 2012, Xi has been sending tough signals to Taiwan, and these warnings have only intensified in the run up to the presidential elections on the island. As he continues to deepen the anti-corruption campaign and maneuvers to put his own supporters on the Standing Committee of the Politburo at the 19th CCP Congress in 2017, Xi is likely to prioritize protecting his flank. Appearing soft toward Taiwan could create a vulnerability for his opponents to exploit at a sensitive time. Early in his presidency, Xi met with Taiwan President Ma Ying-jeou’s official representative, former Vice President of Taiwan Vincent Siew, on the sidelines of the 2013 APEC summit in Bali, Indonesia. According to China’s official Xinhua news agency, Xi told Siew that “the issue of political disagreements that exist between the two sides must reach a final resolution, step by step, and these issues cannot be passed on from generation to generation.” Moreover, he insisted that Beijing was “willing to have equal consultations with Taiwan on cross-Strait issues within the framework of one-China,” and would “make reasonable and fair arrangements for this.”

Nuclear Cooperation with China.
The Iran nuclear agreement has all but overshadowed another nuclear deal pending in the Congress – a renewal of peaceful nuclear energy trade with China. The United States first signed a nuclear cooperation agreement with China in 1985 but the agreement was controversial because of China’s proliferation behavior. It was not until 1998 that the necessary waivers for export licenses were issued. Since then, Westinghouse has sold four AP-1000 reactors to China and dozens more are planned. The economic benefits of cooperation seem to be clear, but there are still significant export control concerns. Unless Congress passes a resolution of disapproval, or conditions this agreement like the last one, the new peaceful nuclear cooperation agreement could enter into force as early as the end of July. Q1: Why sign a new 123 agreement with China now? A1: The existing agreement will expire at the end of 2015. Contracts underway now to build U.S. designed nuclear power reactors in China require a framework agreement in place for significant nuclear exports. Of all countries across the globe, China has plans to build the most nuclear power reactors, and after the accident at Fukushima, settled on the AP-1000 for its inland sites. These sales are likely to dwarf the number of AP-1000s that may be built in the United States. China has also entered into an agreement with Westinghouse to develop a Chinese version of the AP-1000 called the CAP-1400, which will be available for export. Although much of China’s nuclear industry will be busy building nuclear power reactors at home (there are 24 under construction now, with plans to double that number in the next 15 years), China now sells power reactors to Pakistan and is discussing other sales with Argentina and Romania. Q2: What are the most important features of the agreement? A2: Although China is a nuclear weapon state, the nonproliferation requirements in the agreement are virtually the same as those the United States signs with non-nuclear weapon states. The requirements under Section 123 of the Atomic Energy Act help ensure that material, equipment, and technology is safe, secure and not diverted to military uses. A few provisions stand out: the agreement grants China advance consent to reprocess U.S. origin spent fuel and does not contain an ironclad provision that the material will be under International Atomic Energy Agency (IAEA) safeguards.”

Time for A Stronger U.S.-Australia Alliance? “
Having just read the joint CSIS-ANU 'audit' of the U.S. alliance, published this week, a few of us here in Australia wondered whether the Australian public would support the sort of intensified alliance proposed by the report's authors. It has been said that the finer points of foreign policy don't decide elections here in Australia. So, does it even matter what the great unwashed thinks about the alliance? As one commentator has pointed out, “the last mainstream Australian politician to openly criticize United States policy was Mark Latham, and look what happened to him at the ballot box.” The unpopularity of Australia's participation with its alliance partner in the Iraq war must have contributed to some degree to the Howard government loss in 2007. So, perhaps one shouldn't blithely dismiss the relevance of public opinion on foreign policy generally, and the U.S. alliance in particular. The report, The ANZUS Alliance in an Ascending Asia, has three main policy recommendations for the alliance: 1. It should refocus on the Asia Pacific. 2. It should serve as a 'central hub for Asian regional order and architecture'. 3. It should play a leading role in enhancing maritime security in the region. The sorts of practical measures proposed include working more closely together with partners such as India and Indonesia in 'minilateral' security processes, along the lines of the increased cooperation between Australia, Japan and the U.S. in the past few years (this week, Japan is for the first time participating in the Talisman Sabre exercise with Australian and US military forces). In the maritime arena, the report recommends Australia and New Zealand provide “badly needed strategic operating locations” to compensate for the limited U.S. presence in the South Pacific. Other recommendations include sharing Australia's technological expertise and capability (radars, remote sensing), and more combined maritime operations to ensure open sea lines of communication. None of this should pose much of a problem from the perspective of Australian public opinion. The report's authors note the strong support for the alliance recorded in Lowy Institute Polls (now with 11 years of data on support for the alliance — check it out on our upgraded interactive tool) and from other polls, including those by ANU. Even more persuasive evidence (not picked up in the report) is Australian support for basing U.S. forces here in Australia, regardless of China's condemnation of the 2011 announcement that U.S. Marines would have a permanent presence in Darwin. In 2011, before the Darwin announcement, a majority (55%) of Australians were in favor of “Australia allowing the United States to base U.S. military forces here in Australia.” Asked again in 2013, support was even stronger, with 61% of us in favor. It is the first recommendation in the report – the 'refocus' on the Asia Pacific, which may cause problems for the punters, inoffensive as it sounds. Australians are confident that the U.S. will continue to guarantee Australia's security well into the future, with two-thirds (66%) of the adult population in our 2013 Poll saying it's likely “Australia will still be able to rely on the alliance in 20 years' time.”

Strengthening U.S. Alliances in Northeast Asia.
“Chairman Salmon, Ranking Member Sherman, Members of the Subcommittee, thank you for this opportunity to offer my views about how to strengthen U.S. alliance relationships with Japan and the Republic of Korea (ROK). U.S. government officials refer frequently to these alliances as “cornerstones” or “lynchpins” for America’s foreign and security policies in the Asia-Pacific, and these metaphors would become tiresome if they were not so apt for describing the value the alliances deliver to U.S. national interests. Indeed, as this Subcommittee well understands, these two countries are among our most important partners in trade and rule making, collaborate closely with us within leading multilateral institutions, host significant forward deployed U.S. forces and train with us at an elite level, and are frequently the first to support U.S.-led efforts to ameliorate international crises (to which they bring valuable technology, finance, and human capital assets). As often as we tend to talk about these bilateral relationships in the same breath, however, it is important to recognize the differences between them (in terms of their structure, their historical and political background, and the trend lines for how they are evolving). In some ways, the two alliances are developing in converging directions and might come to resemble one another more closely, for example in terms of how we seek to govern international trade relations, coordinate development aid in the region, or contribute to regional stability and security. The depth of our shared interests and values helps drive this trend and creates opportunities for more productive trilateral cooperation in the future. But in other ways— in part due to cultural differences, the scars of history, and the competitive nature of free market capitalism— the United States should expect divergent policy approaches by its allies toward such issues as the North Korean nuclear and missile challenge or China’s economic and military rise. In these cases, Washington can strive to bridge policy gaps where possible, but it should also respect the limits of trilateral cooperation and prioritize long-term harmony over short term gains. Most importantly, the United States should never forget that its future prosperity is inextricably linked to Asia’s peaceful adjustment to its growing wealth and power, and America has the means to positively affect this outcome, if utilized wisely. Close collaboration with key U.S. allies in the region is a critical enabler for whatever strategy Washington adopts, particularly if stronger links between our allies can be encouraged. Overall, the U.S.-Japan and U.S.-ROK alliances are in good shape today, thanks in part to consistent bipartisan support from the U.S. government over the years and careful attention paid most recently by both the Bush and Obama administrations. Polls show broad support on each side of these two alliances, and political change (back and forth) in all three countries over the last two decades has not disrupted their relationships. In fact, the alliances are arguably as strong as they have ever been.”

Japan Military Chief says South China Sea Surveillance Possible.
“Japan's top military commander, Admiral Katsutoshi Kawano, said on Thursday he expected China to become increasingly assertive in the South China Sea and it was possible Japan would conduct patrols and surveillance activities there in the future. Speaking in Washington, Kawano said there had been "talk" of Japan conducting such patrols in the South China Sea, including anti-submarine activities. "But our position on this is that we consider this as a potential future issue to be considered depending on how things pan out,” he told the Center for Strategic and International Studies think tank. Kawano earlier met with his U.S. counterpart, General Martin Dempsey, chairman of the Joint Chiefs of Staff, and discussed implementation of updated bilateral defense guidelines agreed this year, a joint statement said. Tensions have been rising in the South China Sea, home to important international shipping lanes, due to overlapping territorial claims and rapid building of artificial islands byChina that has been criticized by Tokyo and Washington. China claims most of the South China Sea and has territorial rivalries there with several Southeast Asian states. It also has competing claims with Japan in the East China Sea, further to the north. Kawano said he expected China to become more assertive and seek to expand its reach. “My sense is that this trend will continue into the future where China will go beyond the island chain in the Pacific,” he said in translated remarks. “So if anything, I would believe that the situation will worsen.” China has ramped up defense spending in recent years and is aiming to develop a navy capable of defending its growing interests as the world's second-largest economy. Its pursuit of sovereignty claims has rattled neighbors, although it says it has no hostile intent. Kawano said the number of aircraft Japan scrambled in response to territorial incursions last year was in line with Cold-War levels and one reason was Chinese activity. Kawano’s comments come after Prime Minister Shinzo Abe pushed legislation through parliament's lower house on Thursday that could see Japanese troops sent to fight abroad for the first time since World War Two. Abe's moves have been met with protests, but Kawano said he was confident the Japan Self Defense Forces (JSDF), as the military is known, would win over public opinion.”

A New Indonesia Military Base Near the South China Sea?
“On July 10, media reports surfaced that the Indonesian government had announced a plan to construct a new military base to guard border areas near the South China Sea. While the plan is still in its early stages, it is important to keep in mind a few things about what it does and does not mean to avoid misunderstanding what Indonesia may be trying to accomplish. As it stands now, the plan is better read as part of Indonesian President Joko “Jokowi” Widodo’s increasing focus on safeguarding the country’s sovereignty as part of the country’s foreign policy rather than a new departure or hardening of Indonesia’s South China Sea position per se. While defending Indonesia’s borders is hardly a new goal, the Jokowi administration has made it one of its top foreign policy priorities. Indeed, in Indonesian Foreign Minister Retno Marsudi’s first annual policy statement in Jakarta in January, she indicated that protecting Indonesia’s sovereignty would be accomplished by responding firmly to any intrusions into Indonesian territory and by settling maritime borders. The Jokowi administration’s ‘sink the vessels’ policy within the global maritime fulcrum concept is yet another manifestation of this. Given this background, it is not surprising that Indonesia would announce a plan to build more military posts in border areas to safeguard its territorial integrity. The focus on sovereignty and territorial integrity does include the South China Sea disputes, since, as I have written previously, China’s nine-dash line overlaps with Jakarta’s exclusive economic zone generated from the resource-rich Natuna Islands chain. But it is not limited only to the South China Sea issue. Indeed, if one examines the Indonesian media reports closely beyond the headlines, the plan as described by the head of Indonesia’s National Development Planning Board (Bappenas), Andrinof Chaniago, is to protect Indonesia’s territory in border areas more generally. Within this plan, the Natuna Islands is also only one of several potential base locations still under construction, along with Sambas, West Kalimantan; Tarakan, North Kalimantan; and the Riau Islands. These are not minor details. It gets to a point often missed: that China and the South China Sea are not the only sovereignty issues Indonesia needs to think about.”

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

Posted by The Congressional China Caucus | July 16, 2015

Naval Buildups in the South China Sea. "After decades of operating legacy Soviet platforms, Vietnam’s navy is acquiring advanced new frigates from Russia and the Netherlands, capable new Russian diesel-electric submarines, and a host of modern anti-ship cruise missiles. The Philippines has nearly doubled its fleet of surface combat vessels in the last five years and is working to acquire two advanced new frigates. Malaysia was among the first in the region to add advanced submarines to their fleet and is indigenously building six new advanced French-designed frigates. Meanwhile, Indonesia is building two new Dutch-designed frigates and acquiring two improved South Korean submarines as part of an ambitious 20-year modernization and expansion program. It is hardly a new observation that naval capabilities in Southeast Asia are surging. Harder to assess, though, is who has the advantage in a peer competition, or sufficient ability to prohibitively raise conflict costs to a more powerful aggressor. Focusing on what the region’s navies are acquiring is not that informative. It glazes over questioning the region’s strategic first principles – namely, assumptions about a country’s goals and what they think they need to achieve those goals – and whether (or to what degree) investments in naval capabilities are relevant to the ongoing disputes that appear to motivate them. Meaningfully assessing naval capability requires more than adding up fleet tonnage or ship numbers, and even more than tabulating a collection of ship “spec sheets.” It depends strongly on the scope of analysis and an understanding of technical, logistical, human, and operational limitations in the context of the intended missions – and, most crucially, the expected adversary’s capability. Capability should not be considered a generic measure (e.g., the ability to conduct anti-surface ship operations). Rather, it must be considered in relation to an expected opponent (e.g., the ability to conduct anti-surface operations against whose surface ships). As the starting point for evaluating capability, private analyses often lack understanding of the requirements new systems are notionally fulfilling. Observers should be wary of assertions that a new weapon system will “increase the capacity to conduct [insert mission type]” or “present a more credible defense against [insert threat or adversary].” Such statements may be true, strictly speaking, but they may lack meaning in the context of the required mission scope and adversary capability. To help understand the nature of requirements, we can begin by considering capacity, which at all levels of analysis is an expression of capability on its own.”

Abe Pushes Security Bills Through Japan’s Lower House. 
"Prime Minister Shinzo Abe made a significant stride toward his goal of expanding the role of Japan’s military Thursday, as the main chamber of parliament passed a package of national security bills despite scant public support and doubts about its constitutionality. The passage of the bills enables Mr. Abe to make good on a promise he made to U.S. lawmakers to approve “by this summer” legislation that allows Japan to take on more responsibility under their bilateral security agreement. Citing heightened tensions in East Asia, the U.S. and Japan upgraded the guidelines to their security treaty during Mr. Abe’s visit to Washington in April. Mr. Abe’s ruling coalition, with a solid majority in parliament, pushed the bills through, brushing aside noisy protests from opposition lawmakers on the floor of parliament and large, daily demonstrations by Japanese citizens outside the building. “The security environment surrounding Japan continues to get tougher,” Mr. Abe told reporters after the vote. “These are absolutely necessary bills in order to protect the lives of Japanese people and prevent wars.” The bills will now be sent to the upper house of parliament, where opposition lawmakers plan to continue fighting them. But even if the legislation fails to gain approval there, Thursday’s passage means it will automatically be sent back in 60 days to the more powerful lower house, which would have the final vote. The most contentious aspect of the legislation would allow Japanese troops to come to the rescue of allies under attack even if Japan itself hasn’t been attacked. That involves reinterpreting Japan’s pacifist constitution, which limits the military’s role to self-defense. Members of opposition political parties, including the Democratic Party of Japan, the former ruling party, and the resurgent Japanese Communist Party, left the chamber before the vote. Calling the legislation a “war bill,” Communist Party chief Kazuo Shii criticized today’s passage “a historic act of recklessness.” Polls have shown a majority of the public view the defense bills with skepticism, if not outright opposition, underscoring their attachment to the nation’s pacifist constitution, which was written by U.S. occupation forces and has kept Japan out of war for seven decades. A poll released Tuesday by the Asahi Shimbun daily found that 56% of respondents opposed the bills, compared with 26% supporting them. Mr. Abe’s forceful push for the bills has weighed on the approval ratings for his cabinet as well. The Asahi survey found 42% expressing disapproval, compared with 39% voicing approval. Some legal scholars, including one expert who testified on behalf of Mr. Abe’s party at parliament last month, have said the legislation, with its tolerance for the use of “collective self-defense,” violates the constitution, which renounces “the threat or use of force as means of settling international dispute.”

Japan Blazes Trail For US Army: Coastal Defense Vs. China.
"How can we deter — or, in the last resort, defeat — a more assertive China? Air and naval forces may not be enough. While the US Army is ambivalent, the Japanese army may have some lessons for their ground force counterparts in America. “They’re not standing around waiting for us to do something,” Andrew Krepinevich, head of the Center for Strategic and Budgetary Assessments, told me after his latest trip to Asia. “Japan wanted to do its part in defending the northern sector of the ‘First Island Chain'” — a long arc running from the Japanese home islands down through Taiwan and the Philippines into Indonesia. “They are building a series of facilities along the Ryukyu island chain to discourage Chinese acts of aggression and coercion,” he said. “It was very impressive.” In particular, the effort by the Japan Ground Self-Defense Force aligns with a concept Krepinevich laid out in  in a February Foreign Affairs article on “archipelagic defense.” “Rather than risk sending warships within range of PLA defenses,” Krepinevich wrote, “the United States and its allies could rely on ground forces, based along the first island chain and armed with mobile launchers and anti-ship cruise missiles,” as well as anti-aircraft missiles and missile defenses. In Krepinevich’s concept, Navy ships and long-range Air Force bombers would form a mobile reserve behind the land defenses, reinforcing threatened points and stopping Chinese breakthroughs. The fleet itself, however, would stay on the far side of island chain from China. In the Western Pacific, Krepinevich told me, “one of the big advantages we have is — unlike many of our other recent military operations, where we’re projecting power — in this case we’re merely trying to defend our allies. It’s the Chinese who have to come out.” In short, we don’t have to take the war to the enemy or destroy them: We just have to keep them from successfully taking the war to and destroying us. By contrast, advancing US ships and aircraft into easy missile range of the Chinese homeland would be a very expensive way to lose. That message isn’t easy for the US military to hear. We’ve not had to play defense since the Cold War. Once the Soviet war machine collapsed, the US focused on power projection: aircraft carriers, strike fighters, rapidly deployable ground forces and the like. Going into other people’s airspace, waters, and territory to destroy targets is what we do. The Army in particular, under intense pressure to reinvent itself for the post-Afghanistan era, would rather tout its agile expeditionary forces than its ability to dig in and hold islands.”

Philippines to Station Warplanes, Frigates at Former U.S. Base Facing Disputed Sea. 
"The Philippines will station new fighter jets and two frigates at the former U.S. naval facility in Subic Bay from early next year, officials said, the first time the massive installation has functioned as a military base in 23 years. Using Subic Bay would allow the Philippine air force and navy to respond more effectively to Chinese moves in the disputed South China Sea, security experts said. Subic Bay's deep-water harbor lies on the western side of the main Philippine island of Luzon, opposite the South China Sea. "The value of Subic as a military base was proven by the Americans. Chinese defense planners know that," said Rommel Banlaoi, a Philippine security expert. Once one of the biggest U.S. naval facilities in the world, Subic Bay was shut in 1992 after the Philippine Senate terminated a bases agreement with Washington at the end of the Cold War. Manila converted the facility, which was never home to the Philippine military, into an economic zone. Defense Undersecretary Pio Lorenzo Batino told Reuters the Philippine military signed an agreement in May with the zone's operator, the Subic Bay Metropolitan Authority, to use parts of the installation under a renewable 15-year lease. U.S. warships have called regularly at Subic Bay since 2000, but only to dock during exercises with the Philippine military or to use its commercial facilities for repairs and resupply. Officials said once Subic Bay was a military base again, the U.S. Navy could have much greater access to it under a year-old agreement that gives U.S. troops broad use of local military facilities, although that deal is on ice after it was challenged in the Philippine Supreme Court. Using Subic would be the latest Philippine military move to combat China's maritime ambitions. Besides beefing up security cooperation with the United States, Japan and Vietnam, the military plans to spend $20 billion over the next 13 years to modernize its armed forces, among the weakest in Southeast Asia. China, which claims nearly all of the South China Sea, said it was aware of reports of the arms buildup. "We hope that the Philippines does more to benefit regional peace and stability," the defense ministry said in a statement faxed to Reuters. Two FA-50 light attack fighters made by Korea Aerospace Industries, the first among a dozen ordered last year, would be based at the former Cubi Naval Station in Subic Bay from early 2016, two Philippine generals told Reuters. The two planes arrive in December. The full squadron of FA-50s would be based at Subic, as well as the 5th Fighter Wing, which would relocate from a rundown base in northern Luzon, said the generals, who declined to be identified. Two naval frigates would be stationed at Subic Bay's Alava Port. The generals cited proximity to the South China Sea and the ease in making the base operational as reasons for the move. "There are existing facilities in Subic Bay. We need only to refurbish them," one officer said. Since Subic Bay hasn't functioned as a military base for more than two decades, it was not among eight locations the Philippine armed forces has said the U.S. military could use under the stalled 2014 defense deal.”

Interview: Robert Kaplan. 
"Robert D. Kaplan is a senior fellow at the Center for a New American Security and a contributing editor at The Atlantic. He is also the former chief geopolitical analyst at Stratfor and was a member of the Pentagon’s Defense Policy Board. He is the author of many books, including Asia’s Cauldron: The South China Sea and the End of a Stable Pacific and the forthcoming In Europe’s Shadow. Following a speech on Asia at the Polish parliament on July 9, he spoke with Rafał Tomański. A shortened version of that interview follows. Q: Do you think that the age of the Asia is coming? A: I don’t believe that’s that simple. Asia can go through a big shock. If the Chinese economy was to implode – which I don’t believe, but it might happen – Asia would suddenly matter less. Such an implosion of the Chinese economy would affect Asian countries much more than it affects Europe and the United States. You have to remember that power is relative. One can be declining as a power but still have a lot of influence. It’s not going to be really an Asian century. Asian languages may also become more prevalent not as a main ones but as a secondary languages. Q: Excluding the implosion of Chinese economy, what do you think could surprise Beijing most? They seem to expect everything. A: And they seem to have a plan for everything. Everything is very planned out and calculated. One thing I didn’t mentioned in the lecture was that Chinese aggression is much more elegant and sophisticated than the Russian aggression. What do the Russians do? The guys in black ski masks and assault rifles – militia thugs. What do the Chinese do? They’re sending an oil rig into Vietnamese waters. Than they get a lot of criticism and they pull it back. They don’t use their navy; they send their coast guard to make territorial claims. It’s all very elegant. Designed to be a page three story, not a page one story. Very insidious. In a long run, the ability of the United States to contain China may actually be more challenging than to contain Russia because the Russian aggression is just so convertible. The Chinese are very organized and deliberate in everything they do. What can surprise them? We mentioned the economy. I think that the stock market [surprised] the leadership. I think real dramatic insurgency and unrest in the West with the Uighur Muslims could really surprise them. I think also Vietnamese or Japanese aggression can be surprising too. I don’t think the Chinese are expecting them to react, that they assume that no country in the region is going to start a conflict. They think that the only way the conflict can be started is to have it by accident. Q: So approaching the aggressor might be more surprising than a retreat? A: Right. That’s the opportunity, the moment of surprise. Another element and not even a surprise is the moment the North Korean regime collapses. When Kim Jong-un is assassinated by somebody in his inner circle or something. That would be like a wreck; like implosion and chaos. That’s not a surprise but a Chinese nightmare for years already.”

China's Fifth Generation Air Power Development. 
"Throughout its history, the People’s Liberation Army Air Force (PLAAF) of the People’s Republic of China (PRC) has lagged behind the aerial programs of other world powers such as the United States. Now, the PRC has set its sights on producing indigenously designed “fifth generation” fighter jets comparable to the US F-22 Raptor and F-35 Lightning II. Many US officials and pilots suspect that the Chinese have been using hacked US technology to aid their indigenous development programs. The PRC is also leveraging additive manufacturing technology (better known as 3D-printing) in order to increase speed and efficiency in manufacturing aircrafts and compete with the US. The J-20 Black Eagle could be fully operational by 2018, and a second model, the J-31 Gyrfalcon, by 2020. If true, China’s new generation of fighters could have a substantial impact on its ability to either defend what it considers to be sovereign airspace, or to mount an aerial offensive in a wartime scenario, particularly against Taiwan (ROC). Between 1990 and 1992 the PRC purchased 24 Su-27 Flankers from Russiaand slightly modified the design to become the J-11 Flanker B+.  In response, the US sold 150 F-16 Fighting Falcons to Taiwan. The acquisition of fourth generation Su-27s allowed China’s Air Force to enter modernity, and they have become progressively more capable ever since. In 2010, half of the PLAAF fleet still consisted of jets modeled after 1950s and 1960s Soviet MiG-19 Farmers and MiG-21 Fishbeds, but China’s ability to project air power has increased significantly within the past 5 years. Recently, the PRC and Russia completed a deal to transfer 24 Russian Su-35 Super Flankers, a potent “generation 4++” fighter, to the Chinese, in addition to China’s scheduled integration of fifth generation technology. Currently the PLAAF relies on the J-11 as its primary fighter. However, this model is largely unproven. This aircraft is perhaps most recognized as the fighter variant involved in an August 2014 incident in which a single J-11 intercepted a USN P-8A Poseidon surveillance aircraft 135 miles east of Hainan Island. Twice the J-11 came within 50 yards of the US aircraft. The aggressive maneuvering by the Chinese pilot was an example of the PLAAF making it clear that US surveillance is not appreciated within the airspace over its exclusive economic zone (EEZ). Since 2008 the PRC has worked to design and manufacture fifth generation concepts, both for its own use and to sell on a global scale. Two companies in China have worked on designs: the Chengdu Aircraft Industry Group (J-20) and the Shenyang Aircraft Corporation (J-31). Both are subsidiaries of the state-owned Aviation Industry Corporation of China (AVIC). It is likely that the J-20 and J-31 will complement one another when integrated into the PLAAF’s arsenal. The J-20 is closer to becoming operational, with an inaugural test flight in 2011; it is expected to reach initial operating capability (IOC) by 2018. Because both jets are still in prototype stage, their exact capabilities are not certain. However, it is speculated that the J-20 will provide a long-range strike system capable of reaching anywhere in the Western Pacific region, and incorporate a stealth design; the first of its kind in the PRC. In a conflict, the J-20 would likely be deployed in air-to-air combat with the mission of limiting the enemy’s radar coverage and strike range. The J-31 could be a potent complement to the J-20, similar to the planned US partnership of the F-22 and F-35.”

Thailand Puts $1 Billion Chinese Submarines Purchase on Hold.
 "Thailand has put on hold the purchase of submarines from China, the Thai defence minister said on Wednesday, raising questions about its commitment to acquiring its first such vessels. Defence Minister Prawit Wongsuwan said this month the navy had approved a 36 billion baht ($1.06 billion) plan to buy three submarines from China. Thailand, a staunch U.S. ally for decades, has stepped up engagement with China as China increases its influence in the region with loans and aid for infrastructure, and as a 2014 coup in Thailand strained Thai-U.S. relations. Prawit, known to be a strong backer of the plan to get submarines, told reporters the acquisition was on hold while the navy re-considered the role of the vessels and their cost. "We will wait for now and not introduce it to the cabinet for approval," Prawit told reporters. "For now, the navy must inform itself and educate itself on whether the submarines are worth it and how much they will add to the Thai navy." Thailand has been considering getting submarines since the 1990s with both Germany andSouth Korea seen as possible suppliers, though deals have never been concluded. In November, Thailand's navy chief said he had revived plans to procure submarines. Officials say Thailand's quest for submarines makes sense strategically and could help ensure freedom of navigation in the Gulf of Thailand if territorial disputes in the energy-rich South China Sea blow up. Vietnam has taken possession of three Russian-built Kilo-attack submarines and has three more on order. Singapore, which has four second-hand submarines, has ordered two from Germany's ThyssenKrupp Marine Systems. Indonesia has ordered three from South Korea's Daewoo Shipbuilding. China this year surpassed Germany, France and Britain to become the world's third-largest arms exporter, according to the Stockholm International Peace Research Institute think-tank. China was the first major power to acknowledge Thailand's ruling junta following a May 2014 military coup."

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

Posted by The Congressional China Caucus | July 15, 2015

Oil-Thirsty China a Winner in Iran Deal. “The Iran nuclear deal is likely to provide big benefits to one of its brokers—China—giving Beijing greater room to ramp up Iranian oil imports as part of a global buying binge. For years, the U.S. threatened to punish countries that didn’t reduce crude imports from Iran, forcing China’s government and oil companies to walk a tightrope between rising Chinese energy demand and displeasing Washington. While Beijing publicly opposed the U.S. moves, China also cut its Iranian oil imports in 2012 and 2013, boosting U.S. efforts to isolate Iran’s economy. China and Iran had already begun ramping up their oil trade ahead of Tuesday’s deal between Tehran, Washington and five other governments, including Beijing. China on average bought more barrels a day from Iran in the first five months this year than before U.S. efforts to isolate Tehran intensified. Over time new Chinese investment in energy and infrastructure there could follow growing oil trade, which jumped nearly 30% last year compared with a year earlier. Iran’s expected growth as an energy exporter is also likely to intensify competition to win market share in China, said Michal Meidan, director at China Matters, a consultancy. A flood of new Iranian crude onto global markets could eat away at Saudi Arabia’s position as China’s top foreign crude supplier and compete with Russia, whose share of Chinese imports has grown this year. “Iran is clearly going to try to export more” to China, said Ms. Meidan. “There is a very clear and direct challenge to the Saudis.” How quickly China ramps up imports from Iran partly depends on when financial and other sanctions against Iran are removed. Under the deal’s terms, Iran must complete a number of specific steps related to its nuclear program including disabling two-thirds of its centrifuge machines used to enrich uranium and slashing its stockpile of enriched uranium. The deal has to be approved by Congress and could still be scuttled by Iranian supreme leader Ayatollah Ali Khamenei, who continued to spout anti-American rhetoric as negotiations came to a close. Global oil prices fell Tuesday on the prospect of new Iranian barrels flooding global markets. For China, the deal also promises strategic benefits. Beijing sees Iran as a potentially stable partner in the Middle East, allowing China to exert greater sway in the region even as it works with U.S. regional partners like Saudi Arabia.”

From Remote Outpost, India Looks to Check China's Indian Ocean Thrust.  
"One by one, the four Indian warships cruised into a sleepy harbor in the country's remote Andaman and Nicobar islands, fresh from visiting Southeast Asian capitals and conducting exercises in the disputed South China Sea. The arrival of the warships at Port Blair earlier this month symbolizes how an island chain better known for its beaches and diving is quietly becoming a key plank in New Delhi's strategy to counter China's growing naval presence in the Indian Ocean. In interviews in New Delhi and Port Blair, the archipelago's administrative hub, Indian defense officials outlined plans to transform a modest military base into a strategic listening post with strengthened air force, navy and army capabilities. While some of the officials noted that earlier expansion plans had largely faltered, they said there was fresh energy under Prime Minister Narendra Modi, who wants to reassert New Delhi's traditional dominance of the Indian Ocean. All agreed the chain's location was its biggest asset in watching China's navy. Scattered between the Bay of Bengal and the Andaman Sea, the Andaman and Nicobar islands are closer to Myanmar and Indonesia than the Indian mainland. More importantly, its southern isles lie near the top of the Malacca Straits, a gateway to the Indian Ocean and through which China gets three-quarters of its oil. "The world's busiest shipping lanes are just to the south," Lieutenant Governor A. K. Singh, a former military commander who runs the Andamans, told Reuters from his hill-top office in Port Blair, a one-time British penal colony. "For too long we have had a fortress mentality about the islands, that they had to be defended. The time has come for us to start looking at these very strategically placed islands as a springboard for India." India has long had an uneasy relationship with China - a dispute over their Himalayan border led to war in 1962. More recently New Delhi has worried about Chinese submarines venturing into the Indian Ocean. China's Foreign Ministry rejected the notion that Chinese naval forays were behind any rise in Indian deployments. The Chinese Defense Ministry said Beijing cooperated with militaries around the region, including India's. "This is an added positive factor for regional peace and stability," the Defense Ministry said in a statement. Nevertheless, India is building longer airstrips at the top and bottom of the Andaman and Nicobar chain, partly for long-range surveillance planes, defense officials said.”

Japan Weighs Closer Operations with U.S. Navy.
"One the United States' strongest and most advanced allies in Asia is stepping up its role in regional security, and for sailors it could mean a lot more exercises and exchange programs, experts say. Troubled by the rise of a more assertive China, Japan has signaled a sea change in a long-standing armed forces policy of strictly self-defense dating back to the end of World War II. Japan's top admiral said in June that his forces were open to the idea of going on patrols in the South China Sea with the U.S., something the U.S. has been pushing Japan to do for some time. Adm. Katsutoshi Kawano, chief of the Joint Staff of the Japanese Maritime Self-Defense Force, said the recent actions by China — including aggressive moves like creating an air identification zone in the East China Sea and building artificial islands in the South China Sea — have been worrisome and that Japan is reassessing how it approaches its fraught relationship with its larger neighbor. "In the case of China, as we can see with the South China Sea problem, they are rapidly expanding their naval presence and their defense spending is still growing," Kawano told The Wall Street Journal. "Also because there is a lack of transparency, we are very concerned about China's actions." In addition to the potential patrols, the Japanese have been in discussions with the Philippines for a visiting forces agreement, similar to the one brokered between the U.S. and the Philippines last year, which would allow Japan to use some Philippine military facilities. This is a remarkable change, that comes after decades of hard feelings toward Japan stemming from their brutal occupation of the island nation during World War II. Japan's emerging commitment to regional security beyond its territorial waters could mean more opportunities for sailors to work with the Japanese Maritime Self-Defense Force, said retired Adm. James Stavridis, who served as NATO Supreme Allied Commander Europe. "Japan is like us in that it is, at its core, a maritime power," Stavridis said. "I think sailors can expect an upgraded set of exercises, technology exchanges, sailor exchanges, and an even more welcoming sense for U.S. forces in Japan. Overall I think it's very positive." Many Japanese feel threatened by China, and those concerns have been reflected in the politics of Prime Minister Shinzo Abe, said Stavridis, who now serves as dean of the Fletcher School of Law and Diplomacy at Tufts University. "Shinzo Abe has been much more assertive and forward leaning than his predecessors going all the way back to the World War II," he said."

China Commissions First MLP-Like Logistics Ship, Headed For South Sea Fleet. 
"China commissioned its first semi-submersible logistics ship for the People’s Liberation Army – Navy (PLAN) in a July 10 ceremony at the PLAN’s Zhanjiang Naval Base in Guangdong Province. Chinese state television reported that the ship, named the Donghaidao (868), has been assigned to the PLAN’s South Sea Fleet. The ship is similar in layout to the U.S. Military Sealift Command Mobile Landing Platform (MLP), although the Donghaidao is significantly smaller. The Chinese media listed the ship as measuring 576 feet long with a beam of 106 feet, compared to a 785-foot length and 164-foot beam for the MLP. PLAN’s version of the ship has a fully loaded displacement of 20,000 tons, compared to 78,000 tons for the American ship. The PLAN ship sports a pair of cranes immediately ahead and aft of the cut-down submersible hull section. Reports of the ship being built at Wenchong Shipyard in Guangzhou first surfaced in May, with a photo posted online showing the ship was already at an advanced state of construction. Open source satellite imagery also shows the ship being built at the yard’s drydock as far back as October 2014. The Chinese TV report stated that the new ship will be used to transport heavy equipment and small craft, with a particular emphasis on the ability of the ship to rescue small craft in distress. However, the accompanying video demonstrated a PLAN Zubr-class large air-cushioned landing craft operating off the ship. China is known to operate at least four of the hovercraft, with two having been acquired from Ukraine and the other two built locally in China. The assignment of the Donghaidao with the South Sea Fleet and its ability to operate the Zubr-class will significantly boost the PLAN’s amphibious capability in the South China Sea, significantly extending the 300-mile range of the Zubrs. Most of the PLAN’s amphibious forces, including the three modern Type 071 Yuzhao-class Landing Platform Docks currently in service, are presently assigned to the South Sea Fleet. These amphibious forces have been very active supporting China’s controversial reclamation and construction work on disputed reefs in the South China Sea. There have been numerous sightings of Type 072-class Landing Ship Tanks near the reefs in question, with their shallow drafts and ability to carry cargo proving useful in the shallow waters of the reefs."

How China Views the South China Sea Arbitration Case.
"On December 7, 2014, China’s Foreign Ministry was authorized to release the “Position Paper of the Government of the People’s Republic of China on the Matter of Jurisdiction in the South China Sea Arbitration Initiated by the Republic of the Philippines.” Various explanations have been offered for this by media outlets both in China and abroad, and the issue is of renewed importance today. The Permanent Court of Arbitration in The Hague finished hearing the Philippines’ oral arguments this week, but as China refuses to participate in the arbitration, the December position paper remains the clearest outline of China’s stance on the case. What are the highlights and features of the document? What was the effect of publicly releasing this document? And what will China’s next step be? As everyone who is following the South China Sea issue knows, the Philippines submitted a “memorial” of ten volumes and nearly 4,000 pages to the International Tribunal on the Law of the Sea. Within that memorial, the first volume was the most important – 270 pages including the Philippines’ legal analysis and relevant evidence relating to this case, explaining in detail why the arbitral tribunal has the jurisdiction to accept the Philippines’ request for arbitration. Volumes two through ten were appendixes, including archival data, evidence, and maps supporting the Philippines’ position. According to the tribunal’s process, China had to present its counter-memorial by December 15, 2014. But on March 31, 2014, a spokesperson for China’s Foreign Ministry clearly expressed that China does not accept and will not participate in the arbitration. The act of releasing the position paper on the eve of the December deadline was effective in two ways: it both expounded on why the tribunal does not have jurisdiction over this case and reiterated China’s position of not participating in the case. So does this mean there has been a chance in China’s South China Sea policy, from the earlier, softer stance of “dual-track approach” to the clear position expressed in the position paper? If not, how to explain the relationship between these two? In August 2014, Chinese Foreign Minister Wang Yi put forth the “dual track approach,” sending the message that China agreed to handle the South China Sea disputes under a multilateral framework. ASEAN as a whole could play a suitable role in the disputes, but China opposed interference from countries outside the region, especially mediation that favors one side over the other. From this we can see that, in light of the internationalization of the South China Sea disputes, China was no longer opposing any type of internationalization, but instead favoring limited (or relatively controllable) regionalization of the issue in order to prevent unlimited (and uncontrollable) globalization."

8 Developments in US-Vietnam Relations Show Emerging Partnership. 
"Various analysts and commentators have erred in their analysis of the recent visit to Washington by the secretary-general of the Vietnam Communist Party (VCP), Nguyen Phu Trong, by placing too much emphasis on the lack of a break through in defense relations. Trong’s visit was not a tipping point in Vietnam’s relations with the United States and China. Nor were arms sales and U.S. access to Cam Ranh Bay the major items on the agenda. In 2013, when Vietnam and the United States raised their bilateral relations to a comprehensive partnership, they used this formulation because both sides independently concluded that a strategic partnership was premature. Reportedly, former Secretary of State Hillary Clinton proposed a strategic partnership with Vietnam in mid-2010. Prior to her visit, the Defense Department released its Quadrennial Defense Review (QDR) that mentioned developing “new strategic relations” with Vietnam. The 2014 QDR identified Vietnam as a “key partner.” The same situation arose in Australia’s relations with Vietnam. In 2009 the then Prime Minister Kevin Rudd rejected Vietnam’s request to raise bilateral relations to a “strategic partnership” reportedly because he refused to sign an agreement that was largely symbolic. In addition, Rudd felt that defense relations with Vietnam had not developed sufficient intimacy to be called a “strategic partnership.” In the end, after much angst, Vietnam agreed to characterize bilateral relations with Australia as a comprehensive partnership. The parallel does not end here. This year, when Prime Minister Nguyen Tan Dung visited Australia he met with Prime Minister Tony Abbott. They reached an agreement to enhance their comprehensive partnership in coming years but fell short from declaring a formal strategic partnership. After Secretary-General Trong’s meeting with President Obama, the two leaders issued a Joint Vision Statement that emphasized intensifying their comprehensive partnership. No strategic partnership was announced. During the course of Trong’s five-day visit (July 6-10), he met with President Barack Obama, Vice President Joe Biden, National Security Advisor Susan Rice, Secretary of State John Kerry, Secretary of the Treasury Jack Lew, U.S. Trade Representative Michael Froman, Senators John McCain and Patrick Leahy, American religious leaders, Vietnamese-American community representatives, American entrepreneurs, the head of the Communist Party of the United States, former President Bill Clinton, United Nations Secretary General Ban Ki-moon, and a group of Harvard University professors."

How the U.S. Should Respond to the Latest Chinese Hack.
"Having written about the hacking of the Office of Personnel Management (OPM) for the print magazine last week, I polled friends over the weekend about the impact of OPM director Katherine Archuleta’s resignation on Friday. The most positive response was that whoever replaced Archuleta would likely follow her precedent in declaring snow days early and often the first winter on the job. But while it may address the problem of insufficient vacation days, the resignation is not likely to solve the most serious issues created by Chinese hackers’ theft of personnel files, including security-clearance disclosure forms, for more than 20 million people. In light of Chinese perceptions of what is at stake, the United States urgently needs to establish deterrence in the cyber realm and also to build up its defenses. Regrettably, there is little evidence that either the deterrence or the defense priority is being addressed. As my article mentioned, the most common response to the OPM news has been to worry about identity theft or the exposure of U.S. spies operating clandestinely overseas. Intelligence experts have pointed out that those holding clearances are also more at risk of being subjected to blackmail now that the hackers can read about private aspects of their lives that they disclosed in the process of being vetted. These are valid concerns. But they are typically American, rather than Chinese, ways of thinking about the situation. Director of National Intelligence James Clapper has been quoted to the effect that, given the chance, he would have done what the Chinese did — as if this were just another round in the perennial game of spy vs. spy. But this obscures the uniqueness of the Chinese military’s perspective on future wars and the way the OPM hacks, together with scores of other recent intelligence feats, fit into this perspective. For Chinese strategists, stealing the secrets of the American national-security establishment is a coup not just in the espionage competition but also in the global contest for power and influence. This is because the Chinese see the data as valuable both in economic terms and in terms of identifying targets for attacks designed to knock the United States out of the contest. On the economic side, the United States will have difficulty quantifying the damage done by the OPM strikes. It is fair to say that whatever China invested in those hackers has paid off in spades — as the information garnered from OPM’s databases would otherwise have taken untold man-years of intelligence work to collect."

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

Posted by The Congressional China Caucus | July 14, 2015

A Strategy for South China Sea. “The US-China relationship is entering a new phase. Beijing has become more confident, global and assertive. In a relationship that has unique cooperative and competitive elements, none will stress that relationship more than those concerning the South China Sea. The combination of competing national claims, nationalism, advances in seabed extraction technology and recent interpretations of exclusive economic zones under the UN Law of the Sea all make for a combustible environment. Operating below the level of military aggression, China's strategy for the region is clear. It seeks to make enforceable the strongest possible claim to actual civil control of the South China Sea, leading eventually to formal legal control. To that end, China is expanding its administrative claims to the entire South China Sea. It is also asserting physical control at specific points through the use of coast guard vessels to protect its fishing rights and to chase others off. It is deploying flotillas of fishing and maritime enforcement ships to protect the interests of a national oil company while drilling in disputed waters and now physically enlarging and developing atolls in the Paracel islands, 750 miles south of China. While carefully avoiding the use of its increasingly modern southern fleet, it is nonetheless playing a supportive over-the-horizon role. American efforts to protect its interests against this campaign have been ineffective. In its public statements, the US takes no position on the disputed claims and then calls for peaceful resolution of disputes. Meanwhile, the governments in the area rush to establish their claims, with China accounting for about three quarters of the individual activities. The US must achieve two objectives: first, protecting the global commons and preserving the freedom to operate its naval and air forces and civilian vessels throughout the South China Sea; second, preventing Chinese domination of the region through military and economic coercion and unilateral civil aggression. Recent American statements have been more definitive about US interests, but have not amounted to a strategy. American objectives for the South China Sea must be a part of our larger strategy toward China that welcomes a greater Chinese economic and diplomatic role. But it must set clear boundaries on Chinese expansion of its territory by coercion or conquest, and on its ability to deny the United States full freedom of action in the Western Pacific.”

The Risks of a Falling China.
"Have we hit peak China? The country’s rapid rise long seemed inexorable. The collapse of the Shanghai stock market is a reminder that behind the eye-popping numbers lie some scary risks. The global zeitgeist is beginning to shift, viewing China as a source of worries, whether in economics or politics, rather than an engine of growth or a status quo player. Preparing contingency plans for a falling China is a prudent approach in the face of the country’s uncertainties. The danger for China’s leadership is that perception will become a self-fulfilling reality, leading to greater instability in Asia. It’s worth remembering that China’s stock market remains a relatively minor part of the overall economy, accounting for less than 1.5% of banking assets and 15% of household wealth. Nonetheless, wiping out over one-third of the value of those holdings is a huge blow to confidence in the economy. Yields on Chinese government bonds have spiked, the yuan has fallen and neighboring Asian stock markets have declined in response to Shanghai’s slide. The globalization of China’s economy that the world has pushed for three decades is now showing its dark underside. The broader health of China’s economy is being called into question. The steady lowering of official GDP growth targets likely understates the slowdown in production and economic activity, as pointed out by economists like Patrick Chovanec and Derek Scissors. China’s massive debt problem, its tightening labor market and the failure of reform under President Xi Jinping all point to an economy facing increasingly strong headwinds. Economics is just part of the story of peak China. Years of promoting the idea that China would develop into a pillar of international order has run aground on the rocks of national interest and territorial disputes in the seas around China. While far from the only nation to assert territorial claims through land reclamation in the South China Sea, the scale and speed of Beijing’s building is shocking. The People’s Liberation Army is creating new military bases in the contested Spratly Islands for power projection and further intimidation of its smaller neighbors. Beijing’s stated intention to defend the “sovereignty” of its 12-mile maritime territorial limits around newly built islands poses a threat to free navigation. An Asian ambassador in Washington asserts that China is attempting to present the Obama administration with a new status quo in Asia. Even President Obama, who just concluded another annual Strategic and Economic Dialogue with top Chinese officials, has called Beijing’s actions in the South China Sea “aggressive.” Far from being seen as a factor contributing to stability in Asia, a more assertive and confident China is perceived as a destabilizing element. As in the economic realm, decades of the world encouraging a larger Chinese role both regionally and globally has resulted in Beijing feeling emboldened to define its interests in opposition to the rules-based political order that promotes free exchange."

The Real New Type of U.S.-China Relations. 
"Early 2013, President Obama yielded to Beijing’s insistent backstage pressure and, with China’s authoritarian chief Xi Jinping beaming by his side, announced a “new type of major power relationship” with China:  In other words, a formulation of Chinese parity with the United States.  Since that meeting in California, even the pretense of positive feelings evaporated. Make no mistake, nothing in the world needs resolute American leadership more than dealing with a China that’s both on the march and economically erratic—as misguided steps to buttress Shanghai share prices this past week show. In short, and despite renewed uproar in Ukraine and the Middle East, China and Asia will be dominating the 2016 U.S. elections as the most consequential foreign issue, bar none. It’s not just a matter of “managing” or even “counterbalancing” China. Nor should we succumb to a temptation to “democratize” China, as some Republican commentators would have us do. The root cause of the Chinese challenge lies in two sources, whatever that country’s form of government—Han Chinese chauvinism and cascading wealth enabling military expansion that was unimaginable a few years ago. From these two fonts come Beijing’s intent to marginalize and then displace America in Asia. Despite Obama’s claim to have “rebalanced” America’s Asia policy, it was the previous administration that, by 2007, had resumed strategic discourse with China’s neighbors, all anxious about bad behavior going far beyond Beijing’s “assertiveness” in the South China Sea. The Obama administration didn’t craft but, instead, inherited a renewed emphasis on America’s place as a “resident power in Asia.” By 2007, bilateral discussions became the norm with anxious countries, large and small, along China’s long periphery. Sadly, while the incoming Obama administration adopted and even (as in normalizing with Burma) expanded the Bush agenda with Asia, White House fecklessness elsewhere in the world has telegraphed hesitation and lack of resolve. Asians watch Obama’s failure to prioritize U.S. foreign issues using a metric of immediate, as well as of long term, importance. The latter counts most in Asia, where China is playing a long game, using “sweet & sour” diplomacy to telling effect. Bluster now greets U.S. indictments of Chinese officials for cybercrime. We get the same response to major or minor frictions, from car tariffs to rare earth mineral export controls. In recent months, Beijing’s “island creation” in the South China Sea (dredging to create permanent land on shoals and atolls) has put a big butcher’s thumb on the scales of regional balance, tilting them away still more from the United States, whose presence prevents Chinese hegemony. Once again, the Obama administration has responded tepidly, belatedly, and reactively. Yet the U.S. military, especially the U.S. Navy, knows that China, and the region, need American clarity. Luckily, much of what is now occurring in the western Pacific never reaches the public domain."

The China Iran Nuclear Pipeline: How to Shut it Down.
"President Barack Obama has said that the final nuclear deal with Iran will “cut off every pathway that Iran could take to develop a nuclear weapon.” U.S. Secretary of State John Kerry has likewise said that the deal “shuts off the four principal pathways to a bomb for Iran”—the Natanz uranium facility, the Fordow uranium facility, the Arak plutonium facility, and covert Iranian attempts to produce fissile material. The Natanz, Fordow, and Arak pathways would involve Iran building a bomb mostly through work at known locations, with technology and materials that it already possesses. So long as the deal is in place, keeping these three pathways closed will depend largely on the vigor with which the United States and the International Atomic Energy Agency (IAEA) monitor known locations and respond to readily detectible violations. The fourth pathway, in contrast, would include Iran creating a secret, parallel new nuclear program with technology and materials covertly procured from foreign suppliers. Even with the nuclear deal’s managed access arrangements and dedicated procurement channels, both the United States and the IAEA will have limited capacity to detect either secret nuclear facilities within Iran or the covert receipt by Iran of nuclear-related materials.  It is therefore critical to be able to deter or prevent foreign suppliers from sending nuclear-related materials to Iran. Despite this, little attention has been paid to the longtime leading suppliers of Iran’s nuclear program: ostensibly private brokers based in China. Foremost among them appear to be Karl Lee (also known as Li Fangwei) and Sihai Cheng, who, according to U.S. federal and state prosecutors, have shipped vast quantities of key nuclear materials to Iran.  Even at the peak of international sanctions against Iran, China has reportedly made little to no effort to stop these or other such brokers. Although China claims otherwise, it seems likely that the Chinese government uses these so-called private brokers as proxies to assist Iran’s nuclear program. In that way, Beijing can both benefit from the illicit transactions with Iran and appear an adherent of various nonproliferation agreements. The massive scale of Iran’s nuclear and missile program procurement from China in recent years, and the United States’ remarkable inability to halt it, even with stringent UN Security Council sanctions in place, is a sign that China serves as a potentially pivotal back door source of nuclear materials for Iran. If a nuclear deal is to succeed, its implementation will require both intense monitoring of Iran and also much more cooperation from Beijing than it has provided thus far."

Indonesia Protections for Land And Maritime Borders Ramp Up.
"Indonesia is ramping up its military posts and reinforcing its borders as tension in the South China Sea continues to bubble. The country's military authorities said planning was underway to make a comprehensive defense plan in order to protect the archipelago’s sovereignty and territorial claims from potential threats. Border reinforcements were part of a defense plan presented to President Joko Widodo and National Development Planning Minister Andrinof Chaniago, according to the Defense Ministry, as the Jakarta Globe reported. Other features of the plan include building a military base in Tanjung Datuk, an area in North Kalimantan’s Tarakan Island. That island is part of the Riau Island province, near waters claimed by China. Defense Minister Ryamizard Ryacudu has endorsed the border reinforcement plan, insisting it should be one of the country’s top priorities as territorial lines on land and sea continue to be debated and contested all around the Asia-Pacific region. Malaysian warships were reportedly spotted in Indonesian waters nine times over the past year, according to a Jakarta Post report last month. The Indonesian government issued a diplomatic notice in response, demanding the Malaysian government offer an explanation. The multiple territory violations raised concern in Jakarta, which answered by intensifying monitors of land borders and sea patrols. Territorial disputes are not new between Indonesia and Malaysia. In 2009, Indo-Malaysian relations took a hit when both countries claimed Ambalat, a resource-rich maritime area off the coast of east Kalimantan that is one of five disputed territories between the two countries, Malaysia’s Star Online reported. China’s increased military and civilian presence in the disputed South China Sea waters has become a problem with several Southeast Asian nations, including Vietnam, Brunei and the Philippines. Though Indonesia is not involved in any territorial dispute with China, regional government authorities have become hyper-sensitive of demarcations."

Philippines Reinforcing Rusting Ship on Spratly Reef Outpost.
“The Philippine navy is quietly reinforcing the hull and deck of a rusting ship it ran aground on a disputed South China Sea reef in 1999 to stop it breaking apart, determined to hold the shoal as Beijing creates a string of man-made islands nearby. Using wooden fishing boats and other small craft, the navy has run the gauntlet of the Chinese coastguard to move cement, steel, cabling and welding equipment to the BRP Sierra Madre since late last year, two navy officers who have been inside the vessel told Reuters in recent interviews. The 100 meter-long (330-foot) tank landing ship was built for the U.S. Navy during World War Two. It was eventually transferred to the Philippine navy, which deliberately grounded it on Second Thomas Shoal to mark Manila's claim to the reef in the Spratly archipelago of the South China Sea. A small contingent of Philippine soldiers are stationed onboard. Manila regards Second Thomas Shoal, which lies 105 nautical miles (195 km) southwest of the Philippine region of Palawan, as being within its 200-nautical mile exclusive economic zone. China, which claims virtually all the South China Sea, says the reef is part of its territory. "We know China has been waiting for the ship to disintegrate but we are doing everything to hold it together," said one of the officers, adding that while the work was progressing slowly, it should be finished by the year-end. The other naval officer said welding was being done at night because of the heat. Concrete foundations were being laid inside the ship's hull to try to stabilize it, he added. Without giving exact dates, both sources said they witnessed the repairs taking place earlier this year. They declined to be identified because they were not authorized to speak to the media. The soldiers currently stationed on the ship, who are demolition experts, were doing the work, said the second source. Just to the west of Second Thomas Shoal is Mischief Reef, one of seven coral formations in the Spratlys that China is rapidly turning into islands that Beijing says will have undefined military purposes. Vietnam, Malaysia, Taiwan and Brunei also have overlapping claims to the Spratly waterway, which is some 1,100 km (680 miles) from the Chinese mainland. Asked about the repairs, Philippine Foreign Ministry spokesman Charles Jose declined to comment. But such work would not violate an informal code of conduct signed in 2002 by China and Southeast Asian states that prohibited any change to the status quo in disputed areas, he said.”

China Steps Up Harassment of Vietnamese Fishermen. "As Nguyen Phu Trong, the general secretary of Vietnam’s ruling Communist Party, wrapped up an historic visit to the United States, reports emerged in the Vietnamese press that a Vietnamese fishing boat was pursued and sunk by two Chinese vessels. According to Vietnam’s Tuoitre News, a fishing boat operated by 11 Vietnamese fishermen off the coast of Quang Ngai was intercepted, harassed, and sunk by two Chinese ships in waters off the Paracel archipelago. China and Vietnam dispute the sovereignty of the Paracel Islands. The sinking of this fishing boat comes weeks after China redeployed its Haiyang Shiyou 981 (HD-981) oil rig near disputed waters. That oil rig was at the center of a major dispute between the two South China Sea claimant states last summer. According to Vietnamese press reports, the Chinese vessels approached the Vietnamese fishing boat and initially used “high-powered lights” and loudspeakers, demanding that the fishermen leave the area. According to Tuoitre, the owner of the fishing boat “ran his ship away, fearing a possible attack, but was run after by the [Chinese] ships, which eventually rammed the fishing boat to sink [sic] at 11:00 p.m.” on Thursday, July 9. According to the report, the fishermen were left “floating at sea while clinging to the lifebuoys,” and were later “rescued and taken ashore after several other Vietnamese fishing boats found them at about 2:00 am on Friday.” Vietnamese authorities have been closely monitoring such incidents. Two weeks ago, similar reports emerged of Chinese vessels coercing Vietnamese fishermen from Quang Ngai province. Nguyen Thanh Hung, head of a local fisheries union in Quang Ngai, noted back then that the Chinese vessels were military vessels, rather than coastguard or civilian ships. In an incident earlier in June, a Chinese vessel demanded that Vietnamese fishermen hand their catch over as well, causing nearly $25,000 in losses for the fishermen. In last week’s sinking incident, Vietnamese reports did not indicate whether the vessel belonged to the People’s Liberation Army Navy or China’s coastguard. The flare-up in incidents of Chinese vessels ramming Vietnamese fishing boats in recent weeks has come as Vietnam increases high-level contacts with the United States. In late May, U.S. Defense Secretary Ashton Carter visited Vietnam and announced that the U.S. would be extending $18 million to Vietnam to help Hanoi acquire coast guard patrol vessels."

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

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