China Caucus Blog

Posted by Alex Gray | June 27, 2016

Top Chinese Envoy In Vietnam As Tension Looms Before Court Ruling. Martin Petty and Mai Nguyen, Reuters. “China's top diplomat arrived in Vietnam on Monday for a scheduled meeting to strengthen historically close relations, at a time when ties are strained by squabbles over the South China Sea. The trip by State Councillor Yang Jiechi, who outranks the foreign minister, comes amid a Chinese public relations blitz to try to discredit a looming verdict by an international tribunal that could aggravate tensions if it undermines Beijing's vast claims to waters extending far into Southeast Asia. Yang was due to co-chair a "steering committee" that aims to strengthen ties and ward-off disputes. He will make courtesy calls on the Vietnamese leadership later on Monday. "We're glad to realize that the two nations' relationship over the time continues its positive development, despite some existing problems that need to be solved," Vietnam's Foreign Minister and deputy premier Pham Binh Minh said after greeting Yang. China has said at least 47 countries have offered support for its refusal to recognize a high-profile case brought by the Philippines in 2013 to the Permanent Court of Arbitration in the Hague. A senior U.S. official last week voiced scepticism about that claim. Chinese diplomats have written editorials in regional newspapers denouncing the Philippine case, which seeks clarification of parts of United Nations maritime law and is seen as a bold challenge, with scope for repercussions. Experts say it is unlikely Yang would seek a sympathetic ear from Vietnam, which has trust issues with China and has recently grown closer to the Philippines. Though Vietnam is not part of the Hague case, it stands to benefit from a positive ruling for Manila and has echoed its opposition to China's fortification of artificial islands, the conduct of its coastguard and perceived intrusions into Vietnam's exclusive economic zone. Ha Hoang Hop, a Vietnamese academic who has advised the government, said there was "no hidden agenda" behind Yang's visit and there were no compromises to be made over the South China Sea. The Hague ruling is expected in the coming months and there are concerns in the United States about how China could react should the verdict not work in its favor. China and the United States have accused each other of trying to militarize a shipping route vital to the stability of the global economy.”

PLA Capable Of Removing Philippines Military Base In Disputed Area Of South China Sea. Liu Zhen, South China Morning Post. “China is fully capable of removing a Philippine naval vessel set up as a permanent base in a disputed atoll in the South China Sea, but has so far shown restraint, the Chinese Communist Party mouthpiece said on Monday. The commentary in the People’s Daily comes ahead of an imminent ruling from a international court in The Hague on China’s claims to territory in the region’s disputed waters. The case was bought by the Philippines. The Philippines Navy deliberately grounded an old US built landing craft on the disputed Second Thomas Shoal in the South China Sea in 1999. It has since kept a team of about a dozen military personnel on the ship to maintain occupation. The shoal in the Spratly Islands chain is also claimed by China and is called Renai in Chinese. China has repeatedly protested and asked for the removal of the craft. Chinese coastguard vessels blocked Philippine supply ships’ attempts to approach the shoal two years ago and forced them to drop provisions by air to the already severely corroded craft. “The story of the Renai Shoal best explains that China is fully capable of dragging away that Philippine vessel hanging in there,” said the People’s Daily. “But for the stability of the South China Sea, China offers goodwill and patience and has always shown high restraint.” China was, however, committed to defending every inch of its territory, the commentary said. “It is determined by China’s will and capability,” it added. The commentary repeated that China would not accept any ruling from the international tribunal in The Hague. It has refused to take part in the hearings. It also accused the Philippines of launching the arbitration process without consulting China. By playing this “meaningless games” the Philippines and “the power behind them ”would only end up shooting themselves in the foot, the article said. The commentary also criticised US involvement in South China Sea disputes. It said it was militarising the region and raising tensions. The US demonstration of its military power had deepened China’s concerns about security and triggered its determination to strengthen its defence capability, the article said.”

China's 'Cape Canaveral' Lifts Lid On Secretive Space Program. Joan Johnson-Freese, CNN. “Just as visitors to Florida can visit Kennedy Space Center -- and if they're lucky see a rocket launch -- go to the beach and even visit Disney World, Chinese visitors to Wenchang on Hainan Island now have much the same options. Hainan, sometimes known as China's Hawaii, is the location of China's newest space launch site at Wencheng, in the northeast corner of the island. Wenchang city planners and tourist officials are developing the area around the launch site with hotels to accommodate tourists to the beaches, the launch site, and even a space-related theme park. The development of this launch site began in 2009, and will host its maiden flight of a new Chinese launcher, the Long March 7, as early as Saturday. Other Chinese launch sites were developed during the Cold War and specifically located in sometimes remote, inland locations: Jiuquan in the Gobi Desert, Xichang near Chengdu, and Taiyuan near Beijing. That has meant rocket stages had to be transported by rail, thus imposing size limitations based on the curvature of rail lines and the width of train tunnels. Transport of rocket stages and payloads to Hainan can be done by sea. Additionally, the Hainan site is closer to the equator, to better accommodate satellite launches to geostationary orbit, and allows rocket debris to fall into water instead of back to land. Removing the size limitations on Chinese spacecraft is important because a new, modernized family of Chinese launchers are much wider than older ones, necessary to obtain the lift necessary for interplanetary flights and a large, 20-ton space station intended as the culmination of a three-part human spaceflight plan put in place in 1993. The upcoming maiden flight of the medium-lift Long March 7 will carry a test version of a new, next-generation, human-rated spacecraft and several small satellites to orbit. This is one of several planned precursor missions leading to the development of the 20-ton station, including Tiangong-2, a small, human-tended space laboratory to be launched in September 2016. That launch will then be followed by China's first astronaut mission since 2013, with the two-person crew scheduled to visit Tiangong-2 for 30 days, making it China's longest duration mission yet. However, human spaceflight missions will still be launched from Jiuquan. The large space station should be in orbit sometime between 2020 and 2023. When the large space station will be in orbit is largely dependent on successful testing and launch of the Long March 5 heavy lift vehicle, capable of lifting up to 25 metric tons to low Earth orbit and 14 tons to geostationary transfer orbit. That vehicle more than doubles China's current lift capacity, and development has already suffered numerous delays. The new launcher family uses a different, kerosene based, more environmentally friendly fuel mixture. But it's been the larger width of the launchers that has especially posed challenges for Chinese manufacturers. Eventually, the Long March 7 will be used for space station resupply missions. Also notable about the upcoming launch is that for the first time, spectators will be allowed at public viewing areas that can accommodate 25,000 people. The Chinese space program has been carefully controlled, and in some aspects, opaque. But China has gained considerable regional and international prestige from its space efforts, prestige that can translate into geostrategic influence. That only happens though when people -- the public and the media -- know what is going on. Gradually, as they have felt more confident about success, Chinese officials have lifted the veil of secrecy on efforts associated with the Shenzhou human spaceflight program and the Chang'e robotic lunar exploration program. In fact, Chinese officials have already invited astronauts from other countries to visit their space station once in orbit, with potential European visitors already said to be learning Chinese. China has been excluded from the currently orbiting International Space Station (ISS) due to U.S. political objections and legislative restrictions. Thus, the Chinese invitation gives China the edge in perceived international inclusiveness and cooperative space spirit. The downside of a seaside launch site is that weather is unpredictable, potentially causing launch delays. Wenchang tourist officials have said if weather creates unfavorable conditions, such as abnormal seas or slippery roads, the viewing stations will be closed. Meanwhile, they are working on building more hotels. All hotel rooms in the area -- which is said able to accommodate 80,000 tourists -- are already booked.”

China Says Has Stopped Communication Mechanism With Taiwan. Ben Blanchard, Reuters. “The Chinese government said on Saturday it had stopped a communication mechanism with Taiwan because of the refusal of the self-ruled island's new government to recognize the "one China" principle, in the latest show of tension between the two. China, which regards Taiwan as wayward province, is deeply suspicious of Taiwan President Tsai Ing-wen, who took office last month, as they suspect she will push for formal independence. Tsai, who heads the pro-independence Democratic Progressive Party, says she wants to maintain the status quo with China and is committed to ensuring peace. But China has insisted she recognize something called the "1992 consensus" reached between China's Communists and Taiwan's then-ruling Nationalists, under which both agreed there is only one China, with each having their own interpretation of what that means. In a brief statement carried by the official Xinhua news agency, China's Taiwan Affairs Office said that since May 20, when Tsai took office, Taiwan has not affirmed this consensus. "Because the Taiwan side has not acknowledged the 1992 consensus, this joint political basis for showing the one China principle, the cross Taiwan Strait contact and communication mechanism has already stopped," spokesman An Fengshan said. The announcement came as Taiwan expressed anger at Cambodia's deportation of 25 Taiwanese nationals wanted on fraud charges to China on Friday, ignoring attempts by Taiwanese officials to have them returned to the island. Taipei has accused Beijing of kidnapping when other countries such as Kenya and Malaysia have deported Taiwanese to China, also in fraud cases. Taiwan's Mainland Affairs Council said on Friday it had expressed its concerns to the Taiwan Affairs Office about the Cambodia case using the communication system. In a statement on Saturday, the council said both sides of the Taiwan Strait had a responsibility to maintain peace and stability. "The government will continue to keep open the door to communication and dialogue," it said. The regular communication mechanism had been ushered in following a rapid improvement of ties under the rule of Taiwan's then-president Ma Ying-jeou, who took office in 2008 and signed a series of landmark trade and tourism deals with China. Tsai is currently on her first trip overseas as president, visiting diplomatic allies Panama and Paraguay, with transit stops both ways in the United States. Defeated Nationalist forces fled to Taiwan after a civil war with the Communists in 1949, which has never formally ended. China has also never renounced the use of force to bring Taiwan under its control.”

China A Potential Winner In Britain-EU Breakup. Joe McDonald, ABC News. “China is a potential winner if Britain and the European Union rework trade deals and look for investors after a British exit. Beijing faces a blow from weaker European demand for its exports and pressure to hold its yuan steady in turbulent currency markets. But economists and political analysts say if Britain and the EU split, both sides will look to cash-rich Chinese companies that are expanding abroad — with the possible bonus for Beijing of closer political ties. "One of the benefits China can gain from 'Brexit' is a stronger and closer economic relationship with the U.K. and even with the EU," said Zhang Lihua, director of the Center for China Europe Relations at Tsinghua University in Beijing. "Both the U.K. and the EU need that kind of cooperation with China under the current circumstances." Chinese leaders urged Britain to stay in the 28-nation EU and have avoided mentioning possible benefits of a split. On Monday, Premier Li Keqiang, the country's top economic official, said Beijing wants to see a "united and stable" EU and a "stable and prosperous" Britain — a possible reference to concern the vote might inspire separatist sentiment in other EU members or parts of the United Kingdom. "We are seeing increasing uncertainties in the world economy," Li said in a speech at the World Economic Forum in the eastern city of Tianjin. "We need to jointly handle challenges, strengthen confidence and create a stable international environment." Europe is China's biggest trading partner, and Chinese investors already see the region as more welcoming than the United States, where some acquisitions have been stymied by security concerns. Chinese companies own France's Club Med, the makers of Pirelli tires, Volvo cars and Weetabix cereal and football teams Inter Milan of Italy and Aston Villa of Britain. London is the second-biggest center outside mainland China for settling transactions valued in Beijing's yuan. Britain has technology China needs as the ruling Communist Party tries to evolve beyond low-skilled manufacturing, said Lu Zhengwei, chief economist for Industrial Bank in Shanghai. "China will benefit from industrial development experience in the U.K.," said Lu. "I do recommend seizing the opportunity to establish China-U.K. free trade to enhance bilateral cooperation between the two countries." Closer economic ties could lead to warming political relations, Zhang said. "The U.K. and the EU may become more friendly with China politically, but this is not what China tries to seek," he said. Dealing separately with the two sides also might allow Beijing to reach agreements that might have been blocked previously by the need for Britain and Europe to agree, said Liu Yuanchun, executive dean of the National Academy of Development and Strategy of Renmin University. "The political gain for China is bigger than the economic gain," Liu said. Still, China also faces a risk that Britain's departure might leave other EU members free to take more forceful action on trade disputes including steel. The EU and the United States accuse China of exporting steel at improperly low prices, hurting foreign competitors and threatening thousands of jobs. Washington imposed anti-dumping duties of up to 522 percent but British resistance blocked the EU from imposing higher tariffs. In the short run, European uncertainty might depress demand for Chinese goods, but trade matters less to China than it did a decade ago. China is the world's biggest trader but exports as a share of the economy declined last year to 22 percent from 2007's 33 percent. A more serious problem is downward pressure on China's yuan in currency markets, according to economists. The British pound and the euro currency used by 17 EU countries have sunk relative to the dollar. As currencies of other developing countries also weaken, the Chinese central bank will be forced to decide whether to let the yuan, also called the renminbi, fall with them or stick closer to the dollar. Last year, the People's Bank of China spent tens of billions of dollars to prop up the yuan after a change in the mechanism used to set its exchange rate allowed it to fall. That fueled expectations that Beijing was weakening the currency to boost exports and prompted investors to move capital out of China. If the dollar gains against the yuan, "this could set off a renewed bout of fears over renminbi depreciation and a pick-up in capital outflows," Julian Evans-Pritchard and Mark Williams of Capital Economics said in a report.”

How Will China React To The Gavel Coming Down In The South China Sea? Patrick Cronin and Harry Krejsa, War on the Rocks. “Rising tensions in the South China Sea have cast a pall over many actors and issues, but not international law. Indeed, the United Nations Convention on the Law of the Sea (UNCLOS) and its mandatory dispute settlement mechanisms are arguably at the zenith of their popularity. Some believe that the U.S. Senate may soon finally ratify a treaty that has been adhered to by both Democratic and Republican administrations. Perversely, the Obama administration’s focus on international law – with the arbitration ruling likely to be handed down shortly – may be badly undercut depending on how China reacts and behaves. Ideally, China would find in the ruling a diplomatic off ramp to avoid a clash at sea and promote new joint development of maritime resources. However, such a diplomatic tack should not be assumed to be that probable. One hint is China’s long-adamant position that the panel’s ruling will be a legal nullity because of Beijing’s alleged indisputable sovereignty over South China Sea land features. Another less obvious clue is China’s systematic attempt to use diplomacy and economic inducements to enhance the malleability of each Southeast Asian claimant state. Certainly the Obama administration is making no assumptions. Secretary of Defense Ash Carter and Secretary of State John Kerry, along with Senator John McCain and Pacific Command Commander Admiral Harry B. Harris, Jr., have signaled that actions such as declaring an Air Defense Identification Zone (ADIZ), starting reclamation at Scarborough Shoal, or overtly militarizing land features in the Spratly Islands would require tough, cost-imposition measures by Washington. The temporary deployment of airborne electronic attack and close-air support aircraft (Navy EA-18 Growlers and Air Force A-10 Warthogs, respectively) put an exclamation mark on recent diplomatic signals. Chinese leaders no doubt know that an ADIZ could not be enforced by Beijing, that assertive actions over disputed features would risk direct military engagement with the U.S. military, and that President Xi himself has pledged not to militarize at least the Spratly Islands (having now made clear that militarizing the Paracel Islands was not part of that pledge to made to President Obama last fall). Indeed, on this last point, Beijing insists it is Washington that is militarizing the South China Sea. Although China often appears busy building what Secretary of Defense Carter called a “Great Wall of self-isolation” with its maritime assertions, it’s simultaneously seeking to outmaneuver the world in shaping a new geopolitical order – or at least keeping a step ahead of international law. The imminent ruling from The Hague on disputes in the South China Sea could be a momentous occasion for international jurisprudence, or just a footnote in the war of words over rocks and reefs. Dueling narratives may be the decisive factor, pitting Beijing’s preference for bilateral, à la carte diplomacy against Washington’s preference for universal rules and principles. Although China will likely be rebuffed in court on its many technical violations of international maritime law, the arbitrators may avoid the most vexing issue – the legality of the controversial 9-dash line covering the vast majority of the South China Sea. Moreover, the arbitrators will probably have to stop short of issuing a cease and desist order. But even if the arbitrators lean as far forward as international law permits, their work may change little. Amidst the long, drawn-out legal case, which was filed by the Philippines in 2013 and painstakingly researched and argued before the Permanent Court of Arbitration (PCA), China has been assiduously preparing to render the ruling virtually meaningless by positioning itself to win the contested peace through a campaign of might, money, and moxie. It does so through its own interpretation of international law, as well. The case has been a target of China’s public ire and private diplomacy ever since. The People’s Republic has fought to undermine and discredit the Philippines v. China case, both in legal legitimacy and geopolitical import. Yet these efforts are only the tip of the strategic iceberg. Now Beijing is maneuvering to ensure the verdict lands no more than glancing blows on Xi Jinping’s “China dream.” In the court of law, China has steadfastly refused to recognize the PCA’s jurisdiction. Decrying the trial as judicial overreach, the Chinese seats during the proceedings remained conspicuously empty. Under UNCLOS, the arbitration ruling is binding regardless of whether both parties assent, but China has sought to ensure the court of international opinion reaches a far murkier conclusion.”

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 Alex Gray | June 24, 2016

Editor’s Note: The National Bureau of Asian Research is holding an event entitled “Approaching Critical Mass: Asia’s Multipolar Nuclear Future” on Wednesday, June 29th 2016 at the Willard Intercontinental Hotel. For information please see this link:

Russia And China Learn From Each Other As Military Ties Deepen. Charles Clover, Financial Times. “Russia and China staged a bold new series of military manoeuvres last month. Not a single ship left port, nor did any tank fire up its engine. Instead, a team from China’s People’s Liberation Army sat with their Russian counterparts in Moscow, running a five-day computer simulation of a joint response to a ballistic missile attack. Held in the Central Research Institute of Air and Space Defence in the Russian capital, the drill “was not directed against any third country”, according to Russia’s defence ministry. But few were under any illusion that the “aggressor” in the simulation was anyone other than the US. The exercise — which analysts note involved sharing information in an extremely sensitive sphere — was highly significant because it indicated “a new level of trust” between the two former adversaries, says Vasily Kashin, an expert on China’s military at the Higher School of Economics in Moscow. “The ability to share information in such a sensitive area as missile launch warning systems and ballistic missile defence indicates something beyond simple co-operation,” he says. China and Russia fought a brief border war in 1969, but the end of the cold war and emergence of the US as the global military leader have seen them drawing closer as they seek to confront western military power. Few believe they will ever be close allies, as they were in the days of Mao and Stalin, but the policy of active co-operation appears to be deepening on a number of fronts. On Saturday Russian President Vladimir Putin is set to travel to Beijing where he will meet his Chinese counterpart Xi Jinping to discuss economic ties. Western sanctions on Russia over its role in the Ukraine crisis have fuelled efforts by Moscow to forge financial links to Beijing. The two governments have also signed a number of new business deals, mainly for hydrocarbons. But their most significant area of co-operation is the armed forces, say analysts, with military leaders in both countries increasingly looking to each other for lessons on how to counter a superior western enemy. Recent years have seen numerous weapons deals and joint exercises between the two, and experts say they have adopted remarkably similar strategies to reform and upgrade their militaries. President Xi Jinping’s reform of the People’s Liberation Army, launched in November 2013, is aimed at transforming the world’s largest fighting force from a land army equipped for mass ground battles to a lighter, nimbler, more high-tech force capable of winning in the air and sea. The strategy closely follows Russian reforms begun in 2009. Prompted by the Russia-Georgia conflict of August 2008, which Russia won easily but which exposed deficiencies in its army, Moscow kicked off an overhaul aimed at increasing professionalism and cutting the number of conscripts; streamlining command structures; and upgrading and modernising its arsenal. “They are doing away with the mass mobilisation force,” said Dmitry Trenin, of the Carnegie Moscow Centre think-tank. “Instead they plan to fight a war with a [professional army].” The lesson has not been lost on China. An article in the People’s Daily, the official Communist party mouthpiece, last October urged the PLA to use the Russian overhaul as a model for its own efforts. “You see that key aspects of Chinese reforms have been influenced by what the Russians did in the aftermath of the Georgia war,” said Tai Ming Cheung, a specialist on China’s military at the University of California, San Diego. “Russia’s experiences of dealing with a stronger western opponent [in the cold war] — those are very important lessons for China.” Beijing has long modernised its military by copying Russian weapons systems, but sanctions-hit Russia is now also sourcing parts and technology from China. In November, Russian officials said they would buy Chinese diesel engines for coastal patrol vessels, after being blocked from purchasing German equipment in 2014. In April, Moscow’s Izvestia newspaper quoted a senior Russian official saying the two countries were in discussions on exchanging Chinese electronic components used in spacecraft construction for Russia’s liquid-fuel rocket engine technology. First outlined in 2013 by President Xi, China’s military revamp has gathered pace. In February this year China replaced seven military regions with five military “theatres”, while last year Mr Xi announced the PLA would reduce troop numbers by 300,000. Troupes of dancers, drivers and other non-combat personnel are also being cut, and the army-dominated command system is being replaced with a joint command that will give the naval and air forces their own joint staff structure. “China has always been very pragmatic and they will take whatever they think works,” said Gary Li, a military expert at consulting company Apco in Beijing. The US has identified another common thread in Russian and Chinese strategy, says Mr Cheung: the use of “hybrid warfare”, a strategy that blends conventional and irregular warfare techniques. Russia deployed the strategy in its use of “little green men” — troops in unmarked uniforms — in its annexation of Crimea and, critics allege, to aid pro-Moscow rebels in eastern Ukraine, leaving opponents perplexed about how to respond and giving Russia time to consolidate gains. China’s strategies have included island-building in the contested waters of the South China Sea and the “use of civilian and coast guard vessels and even oil rigs to accomplish strategic objectives”, says Mr Cheung. “It’s about muddying the waters in order to push military objectives without crossing the threshold into a shooting war,” said Mr Cheung. “When US experts look at China’s island-building in the South China Sea compared with what Russians are doing in Ukraine, they see a lot of similarities.”

The Brexit Result Will Have China Worried. Hannah Beech, Time. “It was hailed by British Prime Minister David Cameron as “something of a golden era,” a trade relationship so cozy that Britain was lured from the U.S. camp to join the Asian Infrastructure Investment Bank (AIIB), China’s effort to create an alternative global financial institution to the World Bank. On the eve of Xi Jinping’s state visit to Britain last fall, during which some $60 billion in trade deals were signed, the Chinese President enthused about ties between his homeland and the onetime imperial power that vanquished China during the Opium Wars. “The U.K. has stated that it will be the western country that is most open to China,” Xi said in written comments to Reuters. “This is a visionary and strategic choice that fully meets Britain’s own long-term interest.” Now, as Britain prepares to exit the European Union after Friday’s historic referendum, that golden relationship looks decidedly tarnished. Cameron, Europe’s China booster, will resign by October. Brexit means that Beijing will lose its strategic access to Europe through Britain. The global market turmoil that followed Friday’s vote sent the Chinese yuan, already propped up by strenuous official intervention, to its lowest point against the dollar in more than five years. Chinese Foreign Ministry spokesperson Hua Chunying tried for a balanced approach on Friday afternoon, according to Chinese state media, noting that China respected the British people’s choice while also hoping that the U.K. and E.U. could reach a successful agreement. Yet during his British tour, Xi was clear about China’s position, saying he supported a “prosperous Europe and a united E.U.” Brexit undermines China’s economic relationship with the E.U. at the precise moment that the Chinese economy is slowing and in search of global partners. Over the past few years, Chinese companies have invested heavily in Britain. Everything from London cabs to Weetabix now survive with help from Chinese investors. These totems of Britannia, though, may lose some of their power when Britain no longer serves as a launching pad for Chinese investment into Europe. Beijing will lose a British ally that had been pushing for completion of an E.U.-China trade deal, as well as for China to gain Market Economy Status—a designation that would shield the world’s second-largest economy from certain E.U. trade tariffs. (Last month, the European parliament, amid protectionist sentiment across the continent, rejected granting market economy status to China, although a further vote is planned for December.) Still, on Friday Chinese state media stayed away from the large-font Brexit headlines that dominated much of global press coverage. Throughout the day, China’s Xinhua state news agency maintained an online banner headline on President Xi’s visits to Serbia, Poland and Uzbekistan, as well as his attendance at the Shanghai Cooperation Organization summit—a Chinese-initiated security grouping. By Friday afternoon, the People’s Daily, the mouthpiece of the Chinese Communist Party, noted that a new nation was keen to join another Chinese-founded organization, the AIIB: Afghanistan.”

South China Sea Clashes Are Fracturing ASEAN. Robert Held, The National Interest. “As The Hague’s arbitration ruling on the South China Sea territorial conflict—levied by the Philippines against China in 2013—is approaching, questions abound whether the United States and its allies can maintain peace amid rising tensions stemming from an increasingly assertive China. While the ruling may set a precedent in strictly legal terms, it will ultimately be nonbinding, with the tribunal lacking the power to enforce its decision. Beijing has not spared the rod in condemning the “unilateral” move by the Philippines, and has managed to coax some forty countries onto its side in an attempt to prevent the UN General Assembly from discussing the territorial disputes any further. Moreover, a number of ASEAN states with no territorial claims in the South China Sea have broken ranks and signed a statement agreeing not to let the dispute affect relations with China. In any case, China has already preemptively rejected the outcome of the tribunal, arguing that the arbitration “is neither well-grounded nor justified” and that the decision “won’t affect China’s sovereignty over South China Sea islands, or whitewash the Philippines’ illegal occupation of China’s islands and reefs in the South China Sea.” As J. Michael Cole has pointed out, this condemnation is based on “the historical narrative of ’national humiliation’ and the belief that as a product of Western imperialism, global institutions and the legal architecture of international law are little more than mechanisms to maintain a skewed distribution of power.” In effect, the court’s ruling against China is “evidence” that the West is attempting to keep China down. In the wake of the ruling against it, China is expected to declare an Air Defense Identification Zone over the disputed area with the Philippines to protect its interests, as it did over the East China Sea in 2013. U.S. officials have expressed concern, stating that an ADIZ would prove provocative and destabilizing. In that context, Vietnam is becoming a key player in the U.S.-led effort to prevent the South China Sea disputes from escalating. Owing to their strategic positions along Vietnam’s coast, Cam Ranh Bay and Da Nang can play decisive roles in granting U.S. vessels better access to the South China Sea, where China seeks to protect its claim through land reclamations near the Spratly and Paracel islands. Vietnam could declare an ADIZ over the Paracels, but for this to be effective in deterring Beijing from establishing an ADIZ, Vietnam needs to be able to credibly signal its resolve. In fact, enhanced cooperation between Vietnam and the United States in recent years might aid in achieving this signaling. Most importantly, however, it is testimony to the fact that the United States regards Vietnam as a pillar in its South China Sea policy. For example, the annual Naval Engagement Activity with the Vietnam People’s Navy, and the Vietnamese Ministry of Defense sending Vietnamese officers to U.S. staff colleges and other military institutions, have promoted cooperation and mutual trust between the former foes. Add the May 2016 lifting of its arms embargo against Vietnam, and all signs point towards a nascent U.S.-Vietnamese partnership. But growing problems within ASEAN, leading to fracturing that could ultimately weaken the organization’s resolve and unity, may offset the benefits of enhanced collaboration between Vietnam and the United States. A glimpse of ASEAN’s weakening was provided on June 14, when ASEAN members officially expressed deep concern over escalating tensions in the South China Sea in a common statement issued at a special meeting in China, only to retract the statement shortly thereafter—probably due to Chinese pressure. A Malaysian foreign ministry spokeswoman stated simply that “we have to retract the media statement by the ASEAN foreign ministers . . . as there are urgent amendments to be made.” This embarrassing display of crumbling under Chinese pressure comes on top of emerging rifts that threaten ASEAN’s efficacy as an organization to help steer and contain China. Philippine president-elect Rodrigo Duterte is likely to embark on a reversal of his predecessor’s hard-line policy towards maritime disputes with China, and pivot away from Japan and the United States. Duterte favors direct multilateral negotiations with Beijing and—alongside voicing doubts about the usefulness of the forthcoming arbitration ruling—offered to backtrack on sovereignty-related issues in exchange for economic deals with China. However, Duterte’s approach plays directly into China’s hands, because the Philippines needs to work together with other claimants such as Vietnam and Malaysia, to be able to push back against China’s actions. However, their support is conditional on Manila’s strategy being aimed at countering China, and since Duterte’s China policy is anemic, the potential for a strong diplomatic front is seriously undermined. Meanwhile, deteriorating relations between Vietnam and Cambodia are stoking fears that the two countries’ smoldering border conflict could reignite. With eyes on the 2018 presidential election, Sam Rainsy and his Cambodia National Rescue Party are running on a platform of strong anti-Vietnamese sentiment, spurring on the dispute by expressing support for provocations committed by activists illegally entering Vietnam. The issue is exacerbated by fears in Hanoi that a Cambodia under Rainsy could use border disputes as a means of distracting Vietnam from the South China Sea, thereby weakening its hand against China. Were this to happen, Vietnam could get sucked into conflict with China and Cambodia alike, diminishing its capacity to meaningfully contribute to U.S. strategy in the Pacific. In the medium term, the tribunal’s hyped-up decision is likely to turn out to be a flop, seeing how the Philippines is unlikely to enforce it, Vietnam is threatened by grave security threats on its western border, and ASEAN’s overall unity is crumbling. As such, South China Sea issues must be championed by the next U.S. president with even greater force. The future administration must not waver and should reaffirm its support for Vietnam in the case of a renewed border flare-up, and push to maintain ASEAN’s relevance as a forum for discussion on South China Sea issues for China and littoral states. Otherwise, the vaunted “Pivot to Asia” will crumble into the waters of the South China Sea.”

China-led Bloc Keeps Iran At Arm's Length Despite Russian Backing. Denis Dyomkin and Mukhammadsharif Mamatkulov, Reuters. “The Shanghai Cooperation Organisation (SCO), a China-led security bloc, refused to initiate Iran's accession on Thursday despite a request from Russia which backs Tehran's bid, indicating possible divisions between Beijing and Moscow. The bloc has served a platform for Moscow and Beijing to project influence in the region. But unlike Russia, China may be reluctant to give it a strong anti-Western flavor. Iran has long knocked at SCO's door and Russia has argued that with Western sanctions against Tehran lifted, it could finally become a member of the bloc which also includes four ex-Soviet Central Asian republics. "The Russian position is clear in its support of initiating the SCO admission process (for Iran) without delays, if possible," Bakhtiyor Khakimov, a special SCO envoy of Russian President Vladimir Putin, told reporters as leaders of the bloc's member countries met in Uzbekistan. "We failed to reach an agreement with our colleagues this time, but the work continues." Khakimov said there were no objections to the idea "in principle", but there were "technical nuances" related to the timing. He did not name the objecting parties. A Chinese diplomat who also spoke to reporters in Tashkent on Thursday declined to comment on Iran's bid. But Chinese foreign minister Wang Yi, who visited Uzbekistan last month for a lower-level SCO meeting, said Beijing wanted to focus on the ongoing accession of India and Pakistan before moving on.”

Indonesian President's Visit To Natuna Islands Sends Waters Warning To China. Jewel Topsfield, The Sydney Morning Herald. “Indonesian President Joko Widodo has held a cabinet meeting on a warship in the Natuna Islands in a defiant gesture to China that it has sovereign rights over the disputed waters in the far north of the archipelago. Diplomatic tensions have been rising after three clashes between Chinese fishing vessels and the Indonesian navy in the region in as many months. Indonesia is not a claimant in the territorial dispute in the South China Sea and China acknowledges that the Natuna Islands belong to Indonesia. However part of the waters surrounding the islands, which are rich in marine life, fall within both Indonesia's exclusive economic zone and the so-called "nine-dash line" on which China bases its claim over most of the South China Sea. China has strongly protested Indonesia's pursuit of its fishing vessels and demands Jakarta release apprehended crew members, saying they were operating in Chinese "traditional fishing grounds". In the latest incident, China claimed a fisherman was injured when the Indonesian Navy apprehended one of 12 Chinese fishing vessels it said were operating illegally in the area over the weekend. Mr Joko's press office released a statement on Thursday saying the development of the Natuna Islands was the government's main priority. "In this working visit President Joko Widodo will lead a meeting on developing the economic potential of the Natuna Islands as one of Indonesia's foremost verandahs and national strategic areas," it said. Mr Joko, who is only the third president to visit Natuna, was accompanied on Thursday by a number of high-powered ministers including Foreign Minister Retno Marsudi, Chief Security Minister Luhut Panjaitan and Maritime Affairs and Fisheries Minister Susi Pudjiastuti, who is famous for her tough stance on poaching, including the sinking of foreign trawlers. Indonesia, which is keen to encourage foreign investment from China, has played down previous maritime spats with its powerful neighbour. "I think it is a big deal," Evan Laksmana, from the Centre for Strategic and International Studies in Jakarta, said of Mr Joko's visit. "Just because we are committed to maintaining a good relationship with China does not mean Indonesia is willing to sell out its waters. That is the delicate balance Jokowi is trying to tread - it needs to be made clear that the islands and waters surrounding the islands are ours." Since the mid-1990s, Indonesia has played an "honest broker" role as a non-claimant in the South China Sea. However Mr Laksmana said China needs to be prepared for Indonesia to be much more assertive if its sovereign rights continue to be tested. An international tribunal convening in The Hague will soon hand down its decision in a landmark legal case that the Philippines has brought against China, including the legality of its nine-dash line claim. "Both domestic and international pressure has been mounting for Indonesia to take a position with regard to the upcoming Permanent Court of Arbitration ruling," Mr Laksmana said. Melda Kamil Ariadno, a professor of international law at the University of Indonesia, said he believed China was deliberately provoking Indonesia. "Very soon the Permanent Court of Arbitration will issue a verdict and I believe it will cancel China's claim of a nine-dash line. That's why China is doing some manoeuvres." Asked if the conflict would lead to deteriorating economic relations between the two countries, Dr Melda said: "Remember, it is not just us who needs China, but China needs us. So we do need to have a good relationship but it should not come at the price of sovereign rights and sovereignty."

Chinese Navy Offers Glimpse Of Secretive Nuclear-Attack Submarine. Douglas Ernst, Washington Times. “China’s navy has allowed the world a brief glimpse of one of its most secretive military platforms ever — the 093B “Shang” nuclear attack submarine. An official image of the communist nation’s stealth submarine was released this month, which gives experts the ability to see how it compares to older models. The picture was released just weeks after the Pentagon published its annual report on the military might of the People's Republic of China. “The biggest [improvement] is the installation of a vertical launch system battery behind the conning tower, which can be seen in a hydrodynamic hump blended into the hull,” Popular Science first reported Thursday. “The VLS cell gives the Type 093B an advantage over older Chinese attack submarines since instead of launching cruise missiles from the torpedo tubes, it can more quickly launch missiles from the VLS. The larger size of VLS cells also makes them a good place to launch future underwater robots and UAVs.” Aspects of the submarine that are similar to the American Virginia class SSN include its conned tower and flared base. The website surmised that its base will reduce hydrodynamic drag and noise at certain speeds. “There are also large installation mounts on the hull sides for side-mounted active sonar that will sweep for both surface warships and submarines,” the website reported. Chinese officials were furious last month when the Pentagon released a 156-page report detailing Beijing’s military spending, its various weapons platforms, and activities in the contested waters of the South China Sea. “China demonstrated a willingness to tolerate higher levels of tension in the pursuit of its interests, especially in pursuit of its territorial claims in the East and South China Sea; however, China still seeks to avoid direct and explicit conflict with the United States,” the report said. “In the long term, Chinese leaders are focused on developing the capabilities they deem necessary to deter or defeat adversary power projection and counter third-party — including U.S. — intervention during crisis or conflict. China’s modernization is producing capabilities that have the potential to reduce core U.S. military technological advantages.” China’s Defense Ministry spokesman Yang Yujun told state news agency Xinhua on May 15 that the U.S. report “severely damaged mutual trust” between the two nations. Mr. Yang also called the report “deliberately distorted.” Experts estimate China’s military spending in 2015 was roughly $145 billion.”  

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 Alex Gray | June 22, 2016

Beijing: Japanese Judge Means South China Sea Tribunal Is Biased. Bethany Allen-Ebrahimian, Foreign Policy. “Tensions over competing territorial claims in the resource-rich South China Sea have spiked in recent months as claimant countries, including China and the Philippines, await an upcoming decision by an international tribunal. That body, located at the Permanent Court of Arbitration in the Hague, is widely expected to rule in the Philippines’ favor. But China has repeatedly stated that it will not accept the upcoming ruling, and has recently engaged in a public relations blitz to gain international support for its position. Now, Beijing is raising an objection unique in the history of arbitration cases of this type: the nationality of the person who oversaw the tribunal’s formation. In January 2013, the Philippines filed a case with the International Tribunal on the Law of the Sea (ITLOS) challenging some of China’s land reclamation actions and claims in the South China Sea, through which over $5 trillion in trade flows annually. In the five-judge tribunal formed to hear the case, each side has the right to select two judges, and the president of ITLOS chooses the fifth. But China declined to participate in the arbitration, ceding its right to select two of the five panel judges. As a result, then-president Shunji Yanai, a Japanese citizen, chose judges on China’s behalf, according to standard procedure. Chinese officials have objected to Yanai’s having played that role, claiming that Japan’s own maritime disputes with China in the East China Sea make a Japanese national unfit to play a role in a case involving other, unrelated maritime disputes with China. Yanai himself does not sit on the tribunal. Objections due to Yanai’s nationality first surfaced in 2013, and have recently become more prominent. “Considering the East China sea dispute between China and Japan,” argued a May 11 commentary in Chinese Communist Party mouthpiece People’s Daily, “Shunji Yanai should have avoided [participation] according to the law. But he deliberately ignored this fact and clearly violated procedural justice requirements.” The commentary, written by “Zhong Sheng,” a pen name often employed to present the paper’s official position, did not specify which law had been violated. It claimed that the selected tribunal judges were biased and had “deliberately ignored the rights and interests of China.” On June 8, the Chinese ambassador to Indonesia, Xie Feng, penned an op-ed in English-language daily Jakarta Post noting the tribunal’s president was “a Japanese national” who “went to great pains to form a temporary tribunal,” adding that the panel of five judges, with four from Europe and one from Ghana, “can hardly be considered as universally representative.” Wang Xining, deputy-director general at the information department at the Chinese Ministry of Foreign Affairs, confirmed that Xie’s perspective mirrors Beijing’s. “We hope there should be no self interest involved in forming an instrument of international justice,” Wang told Foreign Policy via email. He added, somewhat ambiguously, that a “Japanese candidate would be an easy breach of impartiality the existing disputes between China and Japan over certain territorial and maritime issues.” Emphasizing Yanai’s nationality could serve to further delegitimize the tribunal in the eyes of China’s populace. Many Chinese feel Japan has not sufficiently distanced itself from its militarism and wartime atrocities during World War II, when Chinese suffered under brutal Japanese occupation. Anti-Japanese sentiment in China has flared up in recent years over perceived attempts to whitewash history in Japanese textbooks, visits by government officials to a Tokyo shrine which commemorates dead war criminals, and competing claims over rocks in the East China Sea. Grassroots nationalism also flourishes in China’s online spaces, fueled in part by state-run media, with netizens occasionally lashing out to chastise Japan – or to criticize their own government when it doesn’t take a hardline stance. Lingering fear of Japanese aggression has manifested in the context of the South China Sea as well. In March, Chinese Foreign Ministry Spokesperson Hong Lei invoked Japanese wartime actions to express disapproval of Japanese military cooperation with the Philippines, stating, “Japan once illegally occupied China’s islands in the South China Sea during WWII. We are on high alert against Japan’s attempt to return to the South China Sea through military means.” U.S.-based South China Sea commenters have dismissed the claim that Yanai’s Japanese nationality influenced the formation of the tribunal. “It’s not a serious argument,” said James Kraska, a professor of international law and research director in the Stockton Center for the Study of International Law at the U.S. Naval War College in Rhode Island. “It bears about as much weight as what Donald Trump said about the judge of Mexican heritage” – referring to the presumptive Republican presidential nominee’s widely-ridiculed claim that a Mexican-American judge could not be trusted to render an impartial decision on a case related to the failed Trump University, due to Trump’s strong stance against illegal immigration. There have been 25 ITLOS cases since the organization ruled on its first case in 1997; but this is the first time, said Kraska, that the nationality of a judge has been used to question a tribunal’s impartiality.”

Defense Secretary Ashton Carter Offers Olive Branch To China. Dave Majumdar, The National Interest. “While Washington is building a security network in the Asia-Pacific, the Obama Administration is taking pains to transmit the message that it is not trying to exclude Beijing. In fact, the United States wants China to join the American-led liberal-institutional world order as Beijing emerges as a global power. “This Asia-Pacific security network is not aimed at any particular country. The network is not closed and excludes no one,” Defense Secretary Ashton Carter told an audience at the Center for a New American Security’s annual conference in Washington on June 20. “While we have disagreements with China, especially over its destabilizing behavior in the South China Sea, we are committed to working with them and to persuade them to avoid self-isolation.” That is one reason the Pentagon continues to press for stronger bilateral military-to-military relationships with the Chinese People’s Liberation Army. Carter said that as a part of that continuing effort, the U.S. Navy will once again host the People’s Liberation Army Navy in this year’s Rim of the Pacific (RIMPAC) exercises in Hawaii this summer. However, while the United States certainly gives the impression that is willing peacefully to integrate China into the American-led world order, it is not clear if Beijing is willing to accept the current system. Many – like noted realist scholar John Mearsheimer – believe that China will attempt to dominate Asia just like how the United States maintains a regional hegemony over the Western hemisphere. Indeed, in many ways, Chinese actions in the South China Sea seem to echo the United States’ 1823 Monroe Doctrine. Mearsheimer argues that Washington will fight tooth and nail to prevent the emergence of another regional hegemon. The United States has acted as a spoiler every other time another potential regional hegemon has emerged – such as Imperial Germany or the Soviet Union. “My argument in a nutshell is that if China continues to grow economically, it will attempt to dominate Asia the way the United States dominates the Western Hemisphere. The United States, however, will go to enormous lengths to prevent China from achieving regional hegemony,” Mearsheimer wrote for The National Interest. “Most of Beijing’s neighbors, including India, Japan, Singapore, South Korea, Russia, and Vietnam, will join with the United States to contain Chinese power. The result will be an intense security competition with considerable potential for war. In short, China’s rise is unlikely to be tranquil.” Essentially, Washington is holding out the olive branch in the hopes that China will accept the current order without challenging American dominance. But if it doesn’t, Beijing will find itself facing off against Carter’s Asia-Pacific security network. “The bottom line is that the United States worked hard for over a century to gain hegemony in the Western Hemisphere, and it did so for sound strategic reasons,” Mearsheimer wrote. “After achieving regional dominance, it has worked equally hard to keep other great powers from controlling either Asia or Europe.”

Duterte Asks U.S. On Sea Feud With China, 'Are You With Us?' Matthew Pennington, Associated Press. “The Philippine president-elect said Tuesday that he recently asked the U.S. ambassador whether Washington will support the Philippines in case of a possible confrontation with China in the disputed South China Sea. Rodrigo Duterte suggested in a speech in a business forum in southern Davao city that a 1951 Mutual Defense Treaty between the allies does not automatically oblige Washington to immediately help if the Philippines gets into a confrontation with China over a territorial dispute. Duterte said he asked U.S. Ambassador Philip Goldberg in a recent meeting, "Are you with us or are you not with us?" adding that Goldberg responded, "Only if you are attacked." In Washington, the State Department said it would not comment on the details of diplomatic conversations or on the possibility of the U.S. coming to the defense of the Philippines in the South China Sea. But it said the U.S.-Philippine alliance is "ironclad" and the U.S. would stand by its treaty commitments. "President Obama has been clear that we will stand by our commitments to the Philippines, as we do any mutual defense treaty ally," said Anna Richey-Allen, spokeswoman for the department's East Asian and Pacific affairs bureau. "Our dependability and reliability as an ally has been established over decades. Beyond that, we won't comment on hypotheticals," she said. The treaty says each country will "act to meet the common dangers" if one is attacked. Filipino officials have asked in the past whether the U.S. would help if the Philippines gets into a confrontation with China over disputed territories in the South China Sea. The U.S. takes no sides in the long-unresolved territorial disputes. Goldberg hasn't commented publicly on his meeting with Duterte. The long-simmering disputes involving China, the Philippines, Vietnam, Malaysia, Taiwan and Brunei have escalated after Beijing transformed seven disputed reefs into islands, including three with aircraft runways, in the South China Sea. Some fear China can use the islands militarily to reinforce its claims and intimidate rival claimants. Under outgoing President Benigno Aquino III, the Philippines challenged the validity of China's vast claims under the 1982 United Nations Convention on the Law of the Sea before an international arbitration tribunal, which is expected to hand down a ruling soon. The move by Aquino's administration has strained relations with Beijing. Duterte said he would wait for the tribunal's ruling before deciding his move but added he would not confront militarily superior China and risk losing Filipino troops. "Why would I go to war?" he asked. "I will not waste the lives of people there." Duterte pointed out the benefits of nurturing friendly relations with Beijing, including a Chinese offer of financing railway projects in the Philippines. The longtime mayor of Davao city, who starts his six-year term on June 30, said he would send his designated transport secretary, Arthur Tugade, to China "not to talk about war, not to talk about irritations there, but to talk about peace and how they can help us." Apparently referring to the U.S., Duterte asked, "Can you match the offer? Because if you cannot match the offer, I will accept the goodwill of China." Duterte has said he would be a left-leaning president and allowed communist guerrillas to recommend allies who were designated to at least two key posts in his Cabinet. Earlier this month, he said he would chart an independent foreign policy "and not be dependent on the United States," the Philippines' longtime ally.”

China To Launch Cruises To Spratly Islands: Reports. Al Jazeera. “Chinese cruise ships will regularly bring tourists to the contested Spratly Islands in the South China Sea by 2020, according to Chinese media. Tensions have been high in the region as Beijing asserts sovereignty over almost all of the strategically vital South China Sea, despite rival claims from its Southeast Asian neighbours. The China Daily, which is published by the government, said on Wednesday that a new proposal seeks to develop routes to the Spratlys, citing a document released by authorities in the southern island province of Hainan, from where the ships will depart. "The Nansha Islands are virgin territory for China's tourism industry," provincial tourism official Sun Xiangtao told the newspaper, using the Spratlys' Chinese name. Vietnam, Malaysia, Taiwan, Brunei and the Philippines all have rival claims over portions of the Spratlys. Chinese tourists have been allowed to travel to non-militarised areas of the South China Sea since 2013, but foreign passport holders are not allowed to join the trips. Companies have already been operating cruises to the disputed Paracel Islands further north for Chinese nationals only. A previous China Daily report said that the mayor of Sansha city, on Woody Island in the Paracels, estimated that some 30,000 people have already visited the islands, and "many people with a patriotic spirit want to try it". Competing claims to the South China Sea, which covers more than three million square kilometres, have for decades been a source of tension in the region. The sea is the main maritime link between the Pacific and Indian oceans, giving it enormous trade and military value. More than $5 trillion in ship-borne trade passes through the sea each year. Major unexploited oil and natural gas deposits are believed to lie under the seabed. The sea is also home to some of the world's biggest coral reefs and, with marine life being depleted close to coasts, it is important as a source of fish to feed growing populations.”

China’s Offensive in Europe;’ Is There a Master Plan In Beijing? Andrew Browne, Wall Street Journal. “China’s approach to Europe is a contrasting mix of economic opportunism and strategic vision. A continent gripped by economic weakness and debt is crying out for Chinese investment, and Chinese state enterprises and funds are eagerly participating in the sale of the century, buying up ports, prime real estate and technology firms from Greece to the U.K. At the same time, Beijing views Europe as the terminus for its massively ambitious “One Belt, One Road” project – a string of ports, logistics hubs and other trading infrastructure stretching all the way from Southeast Asia to the north of England. Yet a populist backlash against China is building in Europe: recent street demonstrations by European workers over Chinese steel dumping have highlighted the risks of a relationship that increasingly looks troubled. In their book “China’s Offensive in Europe,” Philippe Le Corre, a visiting fellow at the Brookings Institution, and Alain Sepulchre, a senior adviser with BCG in Hong Kong, analyze China’s rapidly expanding footprint on the continent — and what it means in global terms. They set out some of their thinking in a written Q&A with China Real Time: You title your book “China’s Offensive in Europe.” This sounds somewhat alarming. Should we be worried? It may have sounded slightly alarming a few years ago, but China’s economic intentions toward Europe are not just about creating jobs and value: they are about spreading influence on a weakened and somewhat divided continent (the U.K. being perhaps the most obvious example) that is also far away from the U.S., the country seen by China as the ultimate competitor. Europe is part of “the West” where China is willing to leave more than footprints. Overall, how do you assess the relationship between the EU and China?  What are the opportunities and the risks? On one hand, China has offered to take part in major EU projects such as the European Strategic Investment Fund, launched by the European Commission to relaunch European infrastructure. It will probably become the biggest non-European stakeholder in the ESIF. But on the other hand, there is an attempt by China to divide the EU at various levels. A typical example is the “16+1” group created by China and sixteen Eastern and Central European countries in 2011. Once a year, leaders of these countries meet with Chinese Premier Li Keqiang. Last year in Suzhou, they also met with President Xi Jinjping. Seven countries signed memorandums of understanding with China on “one-belt, one-road.” Three of them hosted Mr. Xi recently, and were offered substantial Chinese investment promises. China has also tried to establish similar platforms with Southern Europe and Nordic countries, so far without success, but there is a risk that a large number of smaller countries (some of them non-EU members, a good example being Serbia which is getting a Chinese-made high-speed railway) will take a separate approach from the rest of Europe when dealing with China. This is not what Europe needs now. How coordinated is Chinese investment in Europe? Is there a master plan in Beijing? There is no “master plan” to take over Europe. First, Europe was part of the “China goes out” [investment] policy in the late 1990s. It then started accelerating with opportunities in 2008-2009 during the euro-debt crisis (and thanks to a favorable exchange rate), when China bought eurobonds and started buying into European infrastructure such as Athens’ Piraeus Harbor (which it now controls). Now, Chinese investment is taking a different dimension through the cultivation of individual European countries via the “one belt, one road” initiative as was demonstrated by Mr. Xi’s visits to the Czech Republic in May, and to Poland and Serbia more recently. Although many aspects of OBOR remain unclear, Europe is definitely a final destination for this project. Would “Brexit” make the U.K. a less attractive destination for Chinese capital? As a financial center, London would remain attractive to Chinese investors who would still use it as an renminbi trading hub – but they would also use Frankfurt, Paris and Luxembourg, where they have started trading, too. As for the British market, it would be treated as a medium-sized economy with some prospects but a much less important group than the 450-million consumer common market. For all its flaws, the EU is a powerful trade block with clear interlocutors on issues of importance to China, such as the Market Economy Status. Finally, it is not clear if the U.K. would remain a top destination for Chinese investments. Real estate is one thing, but projects such as the “Northern Power House,” a massive development plan in the north of England, have little chance to receive Chinese financial support if the U.K. votes to exit the EU on Thursday.”

China's One-Time 'Democracy' Village Protests For Fourth Straight Day. James Pomfret, Reuters. “The Chinese fishing village of Wukan staged a fourth straight day of protests on Wednesday against what residents say was the unlawful arrest of the village chief, a rare show of grassroots defiance against authorities in Communist China. Wukan, in the southern province of Guangdong, made international headlines in 2011 as a symbol of grassroots democracy after an uprising against corrupt local authorities and illegal land grabs that resulted in rare concessions being granted by provincial Communist Party leaders. Under a blazing sun, the village of 15,000 once again united to march for the release of Lin Zuluan, the popular and democratically elected village chief who was arrested in a surprise midnight raid over the weekend. Lin was shown on state television on Tuesday confessing to accepting bribes, but many villagers profess his innocence, saying he'd been forced into making a confession. Sources close to the Lin family said his grandson was detained by police soon after Lin's arrest and interrogated for 12 hours. The grandson was released soon after Lin's confession went public, they said. Despite repeated warnings by authorities to the villagers not to stir up trouble, more than a thousand again marched in a loud procession, waving red China flags and chanting for justice. "The villagers of Wukan don't believe Lin Zuluan took bribes," read a hand-written white banner held up by a group of several children at the vanguard of the procession. They also held up banners making a broader appeal to national leaders in Beijing to "save Wukan". "We want the central government to come and investigate," said Wei Yonghan, an elderly villager joining the march. "We won't give up. We'll keep marching every day till they listen to us." Wukan's defiance in 2011 took place during the administration of former president Hu Jintao. It remains unclear whether security forces will take a stronger line under President Xi Jinping who has cracked down on rights activists across China since taking office. Over the past few days, however, authorities seem to have tightened their grip. Some reporters were warned by authorities in nearby Shanwei of "inciting, planning and directing the protests," according to reports carried in Chinese state media. Foreign media outlets including Reuters were urged to leave the village immediately. A villager who was taken into detention by police and interrogated said authorities were aggressively going after potential ringleaders of the protests to quash any escalation of unrest. "They questioned me for hours and wanted to know everything, who was organizing things," the villager, who declined to be identified, said. "They told me to open my Wechat (messaging app) ... and spent hours looking through my messages." While there didn't appear to be a mass deployment of riot police for the protests on Wednesday, at least three drones could be seen hovering in the sky tracking the demonstration. Villagers also occasionally chased off individuals in the crowds they believed to be plain-clothes officers. The village is about a four-hour drive east of Chinese-ruled Hong Kong, where months of pro-democracy protests brought chaos to the streets in late 2014.”

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 Alex Gray | June 21, 2016

What A New Chinese ADIZ Means for Asia. Todd Crowell, Real Clear Defense. “Speculation is rapidly growing that China will soon declare an Air Defense Identification Zone (ADIZ) over parts or all of the South China Sea. It is the most likely response to an unfavorable ruling in the case challenging China’s claims in the South China Sea. In anticipation of the verdict in the next few weeks, many are already speaking up to try and stop Beijing from making such a declaration. U.S. Secretary of State John Kerry warned Beijing that such a move would be “provocative and destabilizing.” For its part China dropped hints it is thinking long those lines: “If the U.S. military makes provocative moves to challenge Chinese sovereignty in the region, it would give Beijing a good opportunity to declare and ADIZ,” said a source quoted in the South China Morning Post. China’s first ADIZ, which it declared in November 2013 over a part of the East China Sea, was generally considered to be a response to Tokyo’s decision to nationalize the disputed Senkaku (Diaoyu) Islands. Much would depend on the boundaries that Beijing chooses to declare. One could be a large circle around the Spratlys; another circle around the Paracels, or both, or possibly even one that approximates the nine-dash line that Manila is challenging in court. Beijing could also declare an ADIZ along its southern coast and Hainan Island. That would make good defensive sense as China has many navy bases and assets in this region. However, it would not serve to protest the tribunal’s expected verdict. In an ADIZ civilian airlines are supposed to file a flight plan with the claiming authority, maintain an open radio contact and respond to inquiries. If they don’t answer, fighter aircraft are scrambled to investigate and conceivably force the aircraft to land. A glance at the map would show how an ADIZ would impact airline traffic in the South China Sea. A Spratly’s ADIZ would sit directly in the path of flights from Manila to Jakarta or Singapore, for example. The East China Seas ADIZ that Beijing announced in 2013 covers only a part of the off-shore waters, though a portion of it covered the Senkaku. Much of mainland China was untouched. Historically, countries that have declared air defense zones, such as the United States or Japan, have done so for the entire coastline, not just pieces of it. That brings into question exactly what was its purpose? Washington famously flew a pair of bombers through the zone after it was declared (and likely to do so again if China declares a new one). On the other hand, it advised American civilian airlines to comply with the rules. According to the Chinese, 55 airlines from 19 countries traverse the zone. China does not seem to be strictly enforcing the current East China Sea ADIZ. By some accounts it has actually stopped enforcing its zone, although it is difficult to tell, as China does not publish figures on fighter scrambles. To date no Japanese airline has been harassed, even though, at the urging of the government, they do not file flight plans with China. Only one incident occurred in 2015 when Chinese authorities turned back a Lao Airlines Flight. But it was determined that it had not received permission to overfly the mainland on its way to Vientiane. “It had nothing to do with the ADIZ”, Beijing said. Whether China will enforce any of its new ADIZs or essentially do nothing will depend a lot on the given situation, especially the impending decision of the tribunal, plus the number of fighter assets that can be deployed to the new Spratly island bases. The Chinese already have fighters stationed on islands in the Paracels in the northern part of the South China Sea that could be scrambled to engage with any suspicious flights. They can also depend on fighters stationed on Hainan Island. Of course, China has already been building bases on several of the marine features in the Spratlys it claims as Chinese territorial waters. A few now have airstrips long enough to handle high performance aircraft, potentially rotated from the mainland. For the present, this contingency remains theoretical, as China has not yet dispatched any jet fighters to the Spratly bases. It claims the features, including a large lighthouse, are for protection of civilian marine commerce and uses as typhoon shelters. However, fully developed military airfields, would “create a mechanism in which China would have de facto control over the South China Sea in any scenario short of war,” says the outspoken commander of the U.S. Pacific Command Adm. Harry Harris. If China should declare an ADIZ in the South China Sea, there isn’t much that anyone can do about it except to sputter in impotence. Secretary Kerry can complain all he wants that the move is “provocative and destabilizing,” to no avail. There is no arbitration tribunal, no Security Council to appeal to. ADIZ’s are not seriously governed by any international agreements. No law requires advanced notice for declaring such a zone. All declared ADIZs, including the United States, have been unilateral. There is no law that says countries must obey them, though most countries do. Russia is an important exception. It doesn’t recognize anybody’s ADIZ and flies through them without a by-your-leave. That is why, until recently, most Japanese fighter scrambles have been against Russian intruders rather than Chinese. Taiwan’s new defense minister recently announced that Taipei will not recognize any new ADIZ declared in the in the South China Sea (where Taipei has its own claims.) Air defense zones are basically relics of the early Cold War when long-range Russian bombers were the main threat. They are obsolete in the age of intercontinental missiles. The U.S. imposed its own ADIZ as far back as 1950 and has not lifted it. It is worth remembering that the first Chinese ADIZ covers only a portion of the country’ coastline, which brings into question whether they are meant serve any real defensive purpose, but rather they are mainly counters in the ongoing struggle over who controls the East and South China Seas.”

Here Is Why The U.S. Military Is Not In Panic Mode Over China's Carrier-Killer Missiles. Dave Majumdar, The National Interest. "The United States Navy will have to live with the proliferation of anti-ship ballistic missiles that have the potential to threaten an aircraft carrier. However, the threat from such weapons is not insurmountable, and in many cases, the danger might be overblown. “I think there is this long-range precision strike capability, certainly. Everybody says A2/AD [anti-access/area-denial],” Adm. John Richardson, the U.S. Navy’s chief of naval operations, told an audience at the Center for a New American Security’s annual conference on June 20. “A2/AD is sort of an aspiration. In actual execution it’s much more difficult.” While U.S. Navy officials – and many Washington, D.C., think tanks – have talked about the potential threat to the service’s aircraft carrier fleet from weapons such as the Chinese DF-21D and DF-26, the difficulty of developing a true A2/AD capability is seldom discussed. As Richardson pointed out, A2/AD strategies have existed since the dawn of warfare. What makes the new Chinese capability different is the combination of intelligence, surveillance and reconnaissance (ISR) capability with long-range precision weapons. “The combination ubiquitous ISR, long-range precision strike weapons take that to the next level,” Richardson said. “It demands a response.” But the threat is not just contained in the South China Sea, Richardson said. The anti-ship ballistic missile threat is increasingly found around the world and will continue to proliferate. Indeed, the hermit kingdom of North Korea has apparently acquired anti-ship ballistic missile technology. As such, the Navy will have to get used to living with the threat of anti-ship ballistic missiles and other similar threats. “I think that the proliferation of anti-ship ballistic missiles is just a fact of life we’re going to have to address,” Richardson said. “That fact that it’s in the hands of North Korea – a leader who has been less predictable than many others brings another dimension to that equation.” However, that does not mean that the aircraft carrier is obsolete or that the carrier air wing is unable to conduct its mission. As Navy officials have mentioned repeatedly in private conversations – weapons such as anti-ship ballistic missiles require an extensive “kill chain” – including ISR sensors, data-networks, command and control and other systems – in order to be effective. That extensive kill chain can be attacked and disrupted through electronic attacks, cyber warfare or some other kinetic means. “Our response would be to inject a lot of friction into that system,” Richardson said – disrupting the enemy kill chain. Indeed, when A2/AD zones are discussed, often the entire radius of where an enemy missile can attack targets – such as an aircraft carrier out at sea – is marked as a no go zone. But in the Navy’s view, it can operate inside those zones, but the service would have to use different tactics. Moreover, the assumption that an area defended by a weapon such as a DF-26 is a no-go zone makes the implicit assumption that the Chinese – or other enemy – has the ISR assets and networks to make their weapon work perfectly. “That’s just not the reality of the situation,” Richardson said. Nonetheless, anti-ship ballistic missiles and China’s growing A2/AD capabilities will remain a potential threat. But that threat is not insurmountable and will not render America’s might super carriers or their air wings obsolete in the near future."

Defeating China's Fortress Fleet And A2/AD Strategy: Lessons For The United States And Her Allies. James R. Holmes, The Diplomat. “To borrow from the strategist Obi-wan Kenobi: Japan and South Korea have the mixed fortune to inhabit a wretched hive of scum and villainy, populated by the likes of China and North Korea. The same goes for U.S. forces based in Northeast Asia. We are all in this together. But how does an alliance like ours uphold freedom of the sea and other important interests in such a neighborhood? How do you deter an ambitious, seafaring great power like China that wants to abridge freedom of the sea, when your navy and its supporting ground and air forces lie constantly within effective weapons range? Can you deter such a power? Henry Kissinger says Yes. You can make a believer out of your opponent by amassing impressive capabilities – capabilities meaning not just widgets but the obvious ability to use them effectively for operational and strategic gain. And you make him a believer by convincing him of your resolve to use those capabilities to defeat his aims should he do things you want to deter. Deterrence is thus a product of multiplying capability by resolve by belief. That’s Kissinger’s equation. As we remember from grade-school algebra, if any variable in a series of variables multiplied by one another is zero, so is the product. If any one of Kissinger’s three factors is zero, so is deterrence. Maximize all three and you have a fighting chance to deter. Let summarize the strategic predicament facing our three countries, then briefly go through those three elements of deterrence – capability, resolve, and belief – and close by sketching one of many prospective strategic courses of action the U.S.-Japan-South Korea alliance could embrace to deter a China that seems bent on remaking the Asian maritime order to our – and the region’s – detriment. Let’s first review the maritime strategic situation. China has constructed a “fortress fleet,” and this represents savvy strategy on its part. Fortress fleet is an obscure term but not a new one. A bit over a century ago, naval historian Alfred Thayer Mahan, the second president of the Naval War College and probably history’s most influential proponent of sea power, savaged the imperial Russian Navy for operating such a fleet – for deploying a fleet, that is, that sheltered timidly under the guns of Port Arthur for protection against the big, bad Imperial Japanese Navy commanded by Admiral Tōgō. The logic of a fortress fleet is straightforward. Forts and other land bases generally outgun fleets. If a hostile fleet comes with range, the fort’s gunnery can pound it. A battleship or a cruiser – the capital ships of yesteryear – is a big gun platform by naval standards, but it’s small by contrast with a fortress that can sprawl out on shore. Forts house bigger weapons boasting greater range and more ammunition. So if a fleet enjoys fire support from a fort, it can hope to withstand or even defeat a stronger foe. That’s what Russian commanders tried to do during the Russo-Japanese War of 1904-5. When the Russian squadron stayed close to Port Arthur, Tōgō’s fleet typically kept its distance to avoid getting whacked. When the Russians ventured beyond range of Port Arthur’s gunners, they lost – catastrophically so. Two Russian fleets were reduced to artificial reefs by the end of the conflict. So there’s safety in fire support. But merely existing is not a navy’s purpose. A century ago artillery had extremely short effective firing ranges, measured in just a few miles. Staying within reach of shore fire support thus meant staying within a very cramped sea area – and surrendering the high seas to the enemy. A fortress fleet could stay safe, then, but if it did it accomplished next to nothing of value. That’s why Mahan blasted Russian commanders for pursuing a “radically erroneous” naval strategy against Japan. Does his critique hold up today? No. I think the day of the fortress fleet has come, courtesy of extended-range, precision, guided-missile technology. Ask yourself: what if the guns of Port Arthur could have rained accurate fire on ships throughout the Yellow Sea or beyond? How would the Russo-Japanese War have turned out if Tōgō had had to worry about getting pummeled as soon as he left port? That would have put a different complexion on things. Technology has granted China’s navy the luxury of operating within range of shore fire support throughout vast sea areas. No longer are ships confined within a short radius of a single point along the coast. Assuming they fulfill their hype, systems like the DF-31D and DF-26 anti-ship ballistic missiles will provide protective cover for PLA Navy warships operating well beyond the first island chain – beyond the second island chain if the DF-26 reaches the upper limit of its estimated firing range. In other words, PLA weaponry can, at least hypothetically, strike at enemy fleets throughout the waters Beijing cares about most – the Western Pacific and China seas. And that’s not all. PLA ASBM batteries are mobile. They’re mounted on trucks. Latter-day “fortresses” can be positioned up and down Chinese shorelines, and repositioned to concentrate fire near potential trouble spots. The imperial Russian Navy had Port Arthur, a single point on the Liaotung Peninsula that could sweep a small offshore area clear of hostile vessels. The PLA Navy has Fortress China, which adjoins all of the embattled expanses just offshore. One imagines this technological progress would give Mahan pause. I doubt the prophet of sea power would castigate China for radically erroneous strategy, the way he did Russia. China has the long arm of advanced weaponry. It can operate a free-range navy while still reaching out from land to smite China’s foes. Weapons technology has superseded Mahan’s critique.”

UN Ruling Won’t End South China Sea Dispute: Navy Studies Next Clash. Sydney Freedberg, Breaking Defense. “A UN tribunal ruling could trigger the next round of brinksmanship in the South China Sea as early as next week. But don’t expect the ruling to end the dispute, especially since the Chinese have already vowed to ignore an adverse ruling. “It’s ... not likely to be resolved this year or by one international ruling, no matter how brilliant the arbitrators are,” said Patrick Cronin of the Center for a New American Security. “So it’s going to be a long term (issue) for the next administration.” The U.S. has taken the rare step of deploying two supercarriers side-by-side in the West Pacific, a dramatic exercise in deterrence. But “if after the arbitration ruling, which may come as soon as next week now, China doesn’t like the result, what if they just ignore the carriers ... and say ‘we’re moving our dredgers into the Scarborough Shoal (and) we’re actually going to build our own artificial island here,'” Cronin asked at the CNAS annual conference this afternoon. “What are you going to do about it?” China is seeking to neutralize U.S. power in two ways. The high-end counter is to build an Anti-Access/Area Denial (A2/AD) network. This layered defense of cyber/electronic weapons, long-range sensors, anti-ship missiles, anti-aircraft missiles, strike planes, submarines, and mines aims to keep U.S. forces from meddling in what China considers its backyard. This is the high-end deterrent. But China’s much more likely to use its low-end force, the maritime equivalent of Vladimir Putin’s deniable Little Green Men: Chinese Coast Guard vessels, dredging ships (as in Cronin’s hypothetical scenario), and fishing boats that can push into disputed territory without raising the risk of a military clash. This is forcing the U.S. Navy to think hard. In fact, “we’ve got a lot of studies going on right now, (and) by the July-August timeframe, we’re going to have a lot of exciting ideas,” Chief of Naval Operations Adm. Jonathan Richardson told the CNAS conference. Press attention has fixated on whether the Navy will say increasing threats require it to grow beyond its current goal of 308 ships (protip: It will). But what’s at stake is much more than that, Adm. Richardson made clear to me after his public remarks. “It’s not just the number, but what shape does that fleet take and what sort of capabilities do we need to be bringing to bear and how are we going to go after those,” the CNO told me. “We’ve got a lot of intellectual energy going on (and) in the late summer-fall, we should be hearing some results.” Those studies, Richardson said, include “my summer project” on how to defeat Chinese-style Anti-Access/Area Denial defenses. Just because someone says they can deny access to an area, he told the conference, doesn’t mean they can. “A2/AD is an aspiration,” Richardson said. “The actual execution of that is much more difficult.” China’s artificial islands in the South China Sea – technically considered “land reclamation” and not recognized by international law as sovereign territory – do complicate the A2/AD calculus, Richardson said, especially when China builds bases on them for long-range sensors, missiles, and strike aircraft. But it’s easy to oversimplify and scare yourself. “What you see often is you see a display (showing) ‘here’s a launcher, here’s a circle with a radius of 700 miles, and it’s solid-color black inside that like, hey, can’t go,'” Adm. Richardson said. “That’s just not the reality of the situation.” “In the cleanest form, (on) the uninterrupted frictionless plain,” Richardson said to laughter, “you have the ability to sense a target much more capably and quickly around the world, you’ve got the ability then to transmit that information back to a weapons system that can reach out at a fairly long range ... out to 100s of miles.”

Indonesia Vows To Stand Firm After Skirmishes With Chinese Ships. Reuters. “Indonesia is determined to assert its exclusive right to a corner of the South China Sea where there has been a run of skirmishes between Indonesian navy ships and Chinese vessels, the vice-president said on Monday. Jusuf Kalla told Reuters that Indonesia would send a message to Beijing demanding that it respect the Southeast Asian nation's sovereignty over waters around the Natuna Islands. China's foreign ministry said over the weekend that an Indonesian naval vessel fired on a Chinese fishing boat near the chain of islands on Friday, injuring one person. Indonesia's navy responded that it had fired warning shots at several boats with Chinese flags it accused of fishing illegally but there were no injuries. It was the third reported confrontation near the Natuna Islands this year and comes amid rising regional tensions over China's assertiveness in the South China Sea. "This is not a clash, but we are protecting the area," Kalla said in an interview with Reuters at the presidential palace. Asked if the Indonesian government had made a decision to be more assertive, he said: "Yes, we will continue." Separately, Indonesia's chief security minister, Luhut Pandjaitan, told reporters the government would seek the advice of legal experts on the matter. "On the South China Sea we want to talk to experts in international maritime laws on what is the most appropriate way to resolve it," Pandjaitan said, without elaborating. Indonesia is not part of a broader regional dispute over China's reclamation activities in the South China Sea and Beijing's claims on swathes of key waterways. But Jakarta has objected to China's inclusion of parts of the Indonesian-ruled Natuna Islands within a "nine-dash line" Beijing marks on maps to show its claim on the body of water. China has said it does not dispute Indonesia's sovereignty over the Natuna Islands, but Kalla said its ships sometimes claim that they have the right to operate in waters around the islands because they are "traditional Chinese fishing grounds". "But we are focused on the legal basis," Kalla said, referring to the United Nations Convention on the Law of the Sea (UNCLOS). "We will send a message to the other side to honour the area in accordance with the law." China claims most of the South China Sea, through which $5 trillion in ship-borne trade passes every year. The Philippines, Vietnam, Malaysia, Taiwan and Brunei have overlapping claims.”

A Wrong Turn For China Could Lead To Economic Stagnation. Mark Mulligan, The Sydney Morning Herald. “China is at a crossroads where a wrong turn could lead to economic stagnation, says the chief China economist for Citigroup. Li-Gang Liu says without much-needed debt restructuring and privatisation of the state-owned enterprises that dominate the country's stock exchanges, China would simply "muddle through", relying on growth to pay down corporate debt until the economy stalled. The alternative involved stake sales to employees and domestic retail and foreign institutional investors to clean up companies' balance sheets while opening up the country's capital markets, he says. "Going forward, if the government does not tackle the medium-term challenges facing the Chinese economy. . . . we will see economic stagnation in China," he said during a visit to Sydney on Tuesday. However, slowing growth, overcapacity and high debt levels still have China-watchers nervous. The Reserve Bank of Australia, in the minutes of its June board meeting, noted on Tuesday that China's "industrial production remained relatively subdued and growth in private-sector fixed asset investment had declined further". It also acknowledged that this had been offset by "elevated levels" of government spending.  China's debt-to-GDP ratio of 250 per cent mainly stems from the build-up of liabilities in the local government and corporate sectors during the massive infrastructure pushes of the past 20 years. Although not as onerous as in several advanced economies, China's debt burden has rattled some potential foreign investors, and led to a series of warnings about possible financial stress that could trigger another global crisis. Mr Liu says much will depend on the government's strategy over the next few years. "If the government is willing to engage in another round of privatisations, by selling down current state ownership from 80 or 90 per cent to, say, 40 per cent, they could use the money to honour bank debt, debt issued through bonds and other obligations," he said. "However, if China still thinks they can muddle through, thinking growth in the future will pick up and those debts will be honoured eventually through economic growth, then we may see potential stagnation in China." Mr Liu said a recent pick-up in residential and commercial property buying and investment, spurred by lower prices and monetary and regulatory easing, had helped reduce oversupply in the sector, alleviating problems in at least one of the country's biggest areas of overcapacity. This improvement, in turn, had helped absorb excess steel, which had buoyed prices. Crucially for Australia, the price of iron ore, too, received a boost from the resurgence of real estate activity, although a clampdown by Chinese authorities on speculative activity in commodity futures markets forced a correction. In any case, neither of these "mini-rallies" were sustainable, warned Mr Liu, and Beijing was committed to cutting steel-making capacity.  "The government is going to reduce China's steel-making capacity by 100 to 150 million tonnes in three to five years," he said. There were also plans to reduce coal output by cutting average working days a year in the sector from 330 to 276, he said. "This is a gradual approach," Mr Liu said. "This year they are going to target two sectors; there are a further four overcapacity sectors which will probably be targeted in the following year."

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 Alex Gray | June 20, 2016

Two U.S. Carriers Sail In Western Pacific In Show Of Force.  Jane Perlez, New York Times. “In a show of strength before an international court’s ruling on China’s claims in the South China Sea, the United States Navy sent two aircraft carriers and their accompanying ships on training drills in the western Pacific Ocean on Saturday. The carriers John C. Stennis and Ronald Reagan sailed close together in the Philippine Sea as part of air defense and sea surveillance operations that involved 12,000 sailors, 140 aircraft and six smaller warships, the United States Pacific Fleet in Hawaii said in a statement. “We must take advantage of these opportunities to practice war-fighting techniques that are required to prevail in modern naval operations,” Rear Adm. John D. Alexander said in a statement. The operations occurred on the eastern side of the Philippines, in a body of water that is not adjacent to the South China Sea but is close, a spokesman for the Pacific Fleet said. China seeks to dominate the western Pacific Ocean as part of its long-term strategy, American strategists say. The message of the exercise by the two carriers and their attendant warships was unmistakable, and the timing was deliberate, said an American official familiar with the planning of the operation who spoke on the condition of anonymity because he was not authorized to speak publicly on the matter. It could have been conducted later, he said. An international arbitration court in The Hague is deliberating a case filed by the Philippines in 2013 against China’s claims in the South China Sea, and its decision is expected in the coming weeks. The Philippines is challenging China’s claims to what has come to be known as the nine-dash line, an area that covers almost all of the South China Sea, including waters close to the Philippine coast. The issue of the nine-dash line is delicate because China has claimed it since ancient times as its territory, and the South China Sea has become part of the increasingly nationalistic vocabulary of President Xi Jinping. In the past two years, China has built artificial islands equipped with military runways in the Spratly archipelago, inside the line and not far from the Philippines. In a statement on the exercise involving the carriers, the Pacific Fleet said: “As a Pacific nation and a Pacific leader, the United States has a national interest in maintaining security and prosperity, peaceful resolution of disputes, unimpeded lawful commerce, and adherence to freedom of navigation and overflight throughout the shared domains of the Indo-Asia-Pacific.” The Stennis conducted exercises with Japanese and Indian naval forces in the western Pacific and the South China Sea earlier in the week, an operation that was shadowed by a Chinese surveillance vessel. The Stennis then joined the Reagan, which had been undergoing maintenance at a United States base in Japan, the Pacific Fleet spokesman said. Early this month, Senator John McCain, Republican of Arizona and the chairman of the Senate Armed Services Committee, foreshadowed the dual-carrier exercise during a speech in Singapore, saying it was part of the United States’ increased vigilance in the Pacific. “The United States will soon have two aircraft carriers operating together in the Pacific, which is a strong statement about America’s enduring commitment to regional security,” Mr. McCain said. Also this past week, the United States dispatched four Navy electronic attack aircraft, known as Growlers, and 120 military personnel to Clark Air Base in the Philippines. At a conference in Beijing on Saturday hosted by Global Times, a state-run newspaper known for its strident coverage, some analysts warned of an arms race in the western Pacific. “The Chinese side is determined to increase its power, and Obama is determined to defend the United States’ position,” said Shi Yinhong, a professor of international relations at Renmin University in Beijing.Both militaries need to be cautious in the South China Sea, said another participant, Teng Jianqun, the director of the department of American studies at the China Institute of International Studies. “Any misunderstanding could lead to a disaster between the two countries,” Mr. Teng said.”

China Has Been Gathering Historical 'Proof' Overseas To Back Its Claim To The South China Sea. Liu Zhen, South China Morning Post. “China has long argued that historical documents prove the legitimacy of its claim to the South China Sea, but mainland researchers have also been looking overseas for supporting evidence. Researchers from Yunnan University and Iran's Tehran University have studied 50 Persian maps dating from the 10th to 17th centuries and translated the script into modern languages, including English and Chinese, according to China News Services. Professor Yao Jide, head of the Chinese side, said the maps mark the region as the "Sea of China" or "Bay of China", with some land masses labeled "islands of China." Yao's team said the maps served as "third party" evidence of China's historical activities in the region. "Those maps have unquestionable authority among all maps of their time," Yao was quoted as saying. A researcher at Renmin University in Beijing, Chen Xiaochen, dug out a journal published by the Japanese government in 1938, which put the contested Spratly Islands under the administration of Kaohsiung, Taiwan. Taiwan was a Japanese colony at the time and handed back to China after the end of the second world war, hence it owned the Spratlys, Chen argued. Meanwhile, Chinese ambassadors and diplomats have been lobbying across the globe for support for Beijing's position that the dispute should be resolved through bilateral talks, and claims to have found wide backing in Africa. China-led international platform including the China-Arab States Cooperation Forum and Shanghai Cooperation Organisation have also reportedly put nations in Central Asia and the Middle East in Beijing's corner. "A just cause gains great support," said foreign ministry spokesman Lu Kang. Reporters from state media such as Xinhua and People's Daily have also been interviewing politicians and legal experts in Brazil, Thailand, Bulgaria, Pakistan and even the Philippines to collect comments supporting Beijing on the South China Sea issue. But with little support emanating from the West, even silence has been viewed positively - German Chancellor Angela Merkel avoided the topic during her recent visit to China, a move state media hailed as a "triumph" for Beijing.”

China, Not ASEAN, The Real Failure On South China Sea At Kunming Meeting. Prashanth Parameswaran, The Diplomat. “Talking to some of the Southeast Asian countries whose representatives were present at the recent ASEAN-China special foreign ministers’ meeting in Kunming this week, it is clear that China once again had a hand in preventing the issuance of a joint statement by the regional grouping on the South China Sea, much like it did in Phnom Penh back in 2012. That might be read by some as yet another success of China’s divide and conquer tactics — whereby it seeks to pick off weaker ASEAN countries to undermine unity within the organization — and another failure for ASEAN. Yet an understanding of China’s intended narrative before the meeting as well as a closer study of the response by ASEAN as a whole and individual Southeast Asian states at both the private deliberations as well as in public statements – issued and not issued – clearly illustrates that this is a case where Beijing failed to achieve its intended objective and the majority of Southeast Asian countries did push back against China, at times far more than they have in the past. From what Chinese officials had both traditionally said and had indicated ahead of the meeting, Beijing would have ideally wanted the narrative that emerged out of the meeting to emphasize three major points or aspects. First, China and individual Southeast Asian states are more than capable of handling their differences with respect to the South China Sea without outside interference, including an upcoming verdict from the Hague-based Permanent Court of Arbitration (PCA) which the Philippines had unwisely consulted. Second, to the extent that the South China Sea issue is affecting China’s ties with some Southeast Asian states, the issue ought not to be blown out of proportion since it is just one issue in China’s otherwise highly successful dialogue partnership with ASEAN as both sides celebrate their 25th anniversary. Third and lastly, the South China Sea remains not an ASEAN-China issue, but a bilateral one between Beijing and the four Southeast Asian claimant states and principally the Philippines, emphasizing the divisions between the organization between claimants, interested states, and laggards, rather than the lowest common denominator position they do share. Though China did succeed tactically in preventing an ASEAN joint statement from being publicly issued, it still failed to achieve all three of the points and shape the narrative as it had intended. Take the first objective – demonstrating China and individual Southeast Asian states are more than capable of handling their differences with respect to the South China Sea without outside interference. If anything, the Kunming meeting was the clearest illustration yet that ASEAN and China alone cannot manage this issue successfully as long as Beijing continues to deliberately undermine the regional grouping’s unity – thereby preventing it from even articulating its own position – while simultaneously castigating both individual Southeast Asian countries for then seeking other means to resolve their differences with China as well outside actors like the United States for demonstrating legitimate concern. According to one Southeast Asian diplomat familiar with the events that transpired at Kunming, ASEAN had already prepared a statement for release as Malaysia initially and correctly claimed, which China, too, was well aware of ahead of time. But instead of allowing ASEAN to collectively and publicly state the position it had already agreed to, Beijing leaned on its friends within the grouping – including, most importantly, Laos, this year’s ASEAN chair – to push for a retraction after the statement that had been released to some media outlets, which ultimately led to it not being formally issued. In short, instead of managing the issue jointly with ASEAN, with each side either reconciling or stating their own positions, China chose to undermine ASEAN’s ability to even articulate its own stance. “China’s win-lose approach makes diplomacy look unworkable and makes other options that it likes less look more reasonable,” the diplomat said, tweaking Beijing’s traditional rhetoric about a “win-win” approach in ASEAN-China relations. A separate diplomatic source from another Southeast Asian country confirmed this general play-by-play account and stressed that there was no “confusion” about what had occurred in Kunming to those present. “It was pretty clear what happened and why it happened,” he said. The second objective – stressing that the South China Sea ought not to be blown out of proportion as it is just one issue in China’s otherwise highly successful dialogue partnership with ASEAN amid the 25th anniversary – was also not achieved. For starters, by reluctantly partaking in the special summit itself – which was an ASEAN effort mostly geared towards addressing the South China Sea issue in spite of the broad ASEAN-China label – Beijing had already lost that battle to downplay the South China Sea issue. But beyond that, if one reads the full statement initially agreed to by ASEAN states but not eventually issued, the document is quite a powerful message in and of itself. Essentially, it is divided into two halves – the first half deals generally with the state of the ASEAN-China relationship and the preparations being made for commemorating the 25th anniversary; which almost seems meant to just soften the blow of the second half, the entirety of which deals extensively and specifically with the South China Sea issue. The second half of the statement does not just include references to broad principles like regional peace and stability or freedom of navigation and overflight or the perennial quest for a binding code of conduct, but deals specifically with how the South China Sea issue is negatively affecting ASEAN-China relations. The length of the second half of the statement, which runs multiple paragraphs long, and the directness of some of the language and terminology used, is nothing short of unprecedented for a formal ASEAN statement and is as close as one can get to a direct rebuke of China on the South China Sea question. For comparison, concern on the South China Sea in ASEAN joint statements is traditionally limited to being buried in either one or at most a few short paragraphs, without direct reference to the frustration of many of ASEAN’s fiercest critics.”

Vietnamese Fishing Boat Hit By Chinese Vessel In Vietnam’s Waters. TUOI TRE NEWS. “A Vietnamese fishing boat on Saturday returned ashore safely with severe damages to its side, with fishermen claiming it was hit on Thursday by a Chinese vessel off Vietnam’s Hoang Sa (Paracel) islands. On May 23, the ship QNg-95821 set off to fish near the islands of Phu Lam, Bom Bay, and Lin Con, which are part of Vietnam’s Hoang Sa archipelago, according to 50-year-old captain Nguyen Tuan. On Thursday, the sailors were having a rest at around 9:00 am when the captain and his chief engineer Truong Van A saw a white vessel number 31102 with the text ‘China’ written on its side approaching their ship, Tuan recalled. The captain tried to maneuver his ship away from the Chinese vessel, but the hostile ship kept close pursuit. “After chasing us for a few hours, the Chinese ship suddenly closed the gap and hit us on our boat on the right side,” Tuan recalled. “They then kept us in sight for fifteen more minutes before heading towards Phu Lam Island. “We were at coordinates 16o11’N 112 o30’E, around seven nautical miles from Bom Bay Island, at the time of the incident”. According to Tuan, during the fishing trip, he had been followed and chased by three different Chinese vessels numbers 44044, 37102, and 31102. Tuan’s ship and its eight-man crew returned safely to Sa Ky Sea Port in the central province of Quang Ngai on Saturday, and the incident has been reported in full to the Border Defense Force of the province’s Tinh Ky Commune as well as provincial police. “We were having a rest when our ship was hit with such force that the cabin windows were shattered and the right boatside was badly torn,” chief engineer A recalled the horrifying moment. A added that everybody then rushed in panic to the left boatside for fear that the ship might sink. “We would have died if the Chinese vessel had pressed the attack.” Vietnam’s Border Defense officials has talked with each of the crew members and evaluated the damage to the ship shortly after it came to shore. Phung Dinh Toan, vice president of Quang Ngai Province Fishery Association, said the body had received information on the incident, and would report to the provincial administration and the Central Fishery Association about the happening. “The fishermen’s fund would also provide financial support for crew members to repair the ship and get back at sea as soon as possible,” Toan said.”

U.S. ‘Hypocrisy’ And Chinese Cash Strengthen Beijing’s Hand In South China Sea. Simon Denyer, The Washington Post. “The latest was Kenya. Before that: Lesotho, Vanuatu and Afghanistan. The list of countries backing Beijing’s stance in the South China Sea just keeps growing – China’s foreign ministry boasted this week that nearly 60 had swung behind their country’s rejection of international arbitration in a case brought by the Philippines. The numbers are questionable, while the idea of gaining the support of distant, landlocked Niger in a dispute about the South China Sea could seem faintly ludicrous. Yet China’s frantic efforts to rally support ahead of a ruling from an international tribunal in The Hague may not be as meaningless as they might seem. Cold, hard Chinese cash and what many see as American double standards are undermining efforts to build a unified global response to Beijing’s land reclamation activities in the disputed waters and employ international law to help resolve the issue. The lure of Chinese money is having an impact in the Philippines, where President-elect Rodrigo Duterte has made wildly contradictory comments on the issue but has suggested some openness to bilateral negotiations — if China builds railways there. A farcical display of disunity from the Association of Southeast Asian Nations this week was another case in point. On Tuesday, China sensed a mild rebuke when ASEAN appeared to issue a statement expressing “serious concerns” over rising tensions in the South China Sea, urging restraint in land reclamation and full respect for international law. Within hours, the statement had been retracted for “urgent amendments.” No revised statement ever emerged. Beijing, experts said, was riled because the statement was issued at a meeting held in China and at a sensitive time in the run-up to the arbitration ruling, expected at any time in the next three months. It was withdrawn after China lobbied close ally Laos, an official at the talks told Bloomberg News. Ian Storey, a senior fellow at the Institute of Southeast Asian Studies in Singapore, called it another “embarrassing” episode of ASEAN disunity. “China didn’t create the disunity in ASEAN, but it does exploit the divisions and uses its economic clout to try to get its way,” Storey said. “China didn’t want ASEAN to in any way support the arbitration process.” The Philippines took China to court in 2013 after the Chinese navy seized control of Scarborough Shoal, set amid rich fishing grounds off the main Philippine island of Luzon. Among other things, it wants the court to rule on whether China’s “nine-dash line” — under which it claims most of the South China Sea — is consistent with international law. China vehemently rejects arbitration and says it will ignore the court’s rulings. It argues the Philippines had previously agreed to settle the dispute bilaterally and that the court has no jurisdiction over issues of territorial sovereignty.”

Indonesian Warship Fires On Foreign Fishing Boats In South China Sea. James T. Areddy, The Wall Street Journal.  “An Indonesian navy vessel fired at foreign fishing trawlers in a confrontation in the South China Sea that resulted in the seizing of a Chinese ship and, Beijing said, injury to one fisherman. An Indonesian warship on Friday fired warning shots after spotting 12 foreign vessels fishing in waters Indonesia claims as an exclusive economic zone, the Indonesian navy said Saturday. The navy caught one vessel that it identified as a Chinese flagged boat plus its crew of six men and a woman. China’s Foreign Ministry, in a statement Sunday, decried “harassment” of Chinese fishing boats by Indonesian navy vessels and said the shots damaged one vessel and injured a crew member. It said a Chinese maritime-law-enforcement vessel was dispatched to the scene and that the injured man is now being treated on the Chinese island of Hainan. Beijing said it lodged a protest with Indonesia over the incident in the southern South China Sea in waters around the Natuna Islands that it claims are its traditional fishing grounds and which it says overlap Indonesian claims. The incident comes as Asian nations await the outcome of a United Nations-backed arbitration court in the Netherlands over a complaint from the Philippines against China’s sweeping territorial claims in the South China Sea. The ruling is expected in coming weeks. Indonesia isn’t a claimant to seas within a nine-dash line that China says demarcates its maritime claims in the South China Sea. Indonesian President Joko Widodo has stepped up defense of waters Indonesia does claim in a bid to expand the country’s maritime presence with stronger patrols and in response to what he says is $20 billion of lost revenue annually from illegal fishing. It has seized and then sunk foreign vessels and at least twice in recent months detained small numbers of Chinese fisherman it accuses of violating its territory. In a standoff in March, China’s coast guard prevented Indonesian authorities from detaining a Chinese fishing vessel.”

Can the US Coast Guard Take on the South China Sea? Aaron Picozzi and Lincoln Davidson, War on the Rocks. “Earlier this week, David Barno and Nora Bensahel laid out the ways the US can step up its efforts to counter assertive Chinese actions in the SCS. We agree with their assessment that China is in large part responsible for an escalation of tensions in the region and that the actions the US government has taken in response have thus far had little effect. And we believe that a number of their policy proposals — such as a focus on US military ties with the Philippines and Vietnam, which we are already seeing — would be helpful in countering China’s aggressive actions in the SCS. However, their argument that the US Coast Guard should have a more visible presence in the region highlights a misunderstanding of coast guard roles, overestimates US Coast Guard capacity, and risks increasing the chance of conflict with China in the SCS. Barno and Bensahel highlight that China has been adept in using “commercial and coast guard-like vessels to advance its claims and intimidate its regional neighbors in the SCS.” This is a concerning development, and recent expansion of the Chinese Coast Guard threatens to make the situation worse. However, the authors misread the biggest challenges offered by Chinese Coast Guard activity in the SCS. From the standpoint of regional governments, coast guard cutters offer a softer touch. But from the perspective of civilian mariners operating in contested waters, the Chinese Coast Guard is much more threatening because its legal authorities give it the ability to board civilian vessels, confiscate goods, and detain crews—all of which are things the Chinese Coast Guard could do based on their territorial claims. The tacit acceptance of this activity by other governments will be far more influential in an ultimate legal resolution of competing SCS claims than simply having more ships—PLAN or coast guard—sailing through the region. Moreover, before claims are resolved, these coast guard activities allow China to reap the benefits of sovereignty over the SCS regardless of the validity of their claims. The islands claimed by the countries surrounding the SCS have little intrinsic value. Their value hinges upon the effective assertion of sovereignty and subsequent control over surrounding waters. With approximately $5 trillion worth of international trade passing through the region annually, an estimated 11 billion barrels of oil and 190 trillion cubic feet of natural gas located under the region, and nearly 10 million tons of fish caught in the SCS each year, the control of these waters is extremely important to regional economies. With use of boarding parties, and vessel control techniques, coast guards are able to exercise their authority within their sovereign waters without an overt and aggressive military presence. Barno and Bensahel’s proposal also overlooks the unfortunate reality that the US Coast Guard simply lacks the capacity to base a “visible” presence in the SCS. The Coast Guard budget is barely able to sustain the service’s current missions, and the Coast Guard simply does not have the ship capacity to carry out effective, sustained patrols in the SCS. In order to maintain responsible regional coverage, the Coast Guard plans for specific cutters to operate in specific locations. The placement of a US Coast Guard cutter in the SCS would leave a vacuum in an area closer to home in need of presence for missions such as law enforcement, or search and rescue. If the US Coast Guard was to send a cutter, it would be one of only three operational 418’ Nation Security Cutters (NSC). This would destabilize the patrol plans set in place for the other two NSCs, affecting long term dry docking and maintenance plans while creating a lasting problem for the longevity of these assets. Problems related to the NSCs are being actively addressed. The planned construction of additional NSCs will continue, but not at a rate that would supplement the addition of the SCS as an area of responsibility. It’s also not clear what exactly Barno and Bensahel envision the US Coast Guard doing in the SCS. If the cutters they propose moving to the region would simply be conducting freedom of navigation operations (FONOPs) on top of the FONOPs already conducted by the US Navy, how would the US Coast Guard’s activities be any different? Barno and Bensahel argue that “as China has demonstrated, Coast Guard vessels are less provocative than warships” and “could confront similar Chinese ships with far less risk of military escalation.” While interactions between the PLAN and the US Navy are tense, they exist within a set of predictable, well-defined rules that govern the way the navies of different countries handle encounters. Interactions between US Coast Guard cutters and Chinese civilian vessels (whether fishing boats or the civilian maritime militia Barno and Bensahel mention), on the other hand, would be inherently volatile, as civilian ships are not as well trained and regimented as naval vessels — nor are they governed by the same established procedures or subject to as robust government oversight.”

 Why China Is Arming Its Fishing Fleet. The Manila Times.  “China will keep expanding the defense role of its fishing fleet, integrating it with the Chinese military. Beijing’s intentions will be filtered through local actors with strong interests of their own and different interpretations of how to carry out their missions, making their actions unpredictable. China’s rivals in the South China Sea will also rely heavily on civilian fleets to further their national goals, raising the risk of short, sharp crises unfolding as the disputed waters become more congested. Over the past four decades, China has gradually abandoned its self-imposed isolation in favor of deep ties with global markets. Though the approach has pushed the Chinese economy to new heights, it has also made the country’s supply lines more vulnerable, a reality to which the Chinese military has had to adapt. The seas—not the land—are now the key to China’s economic security and regional dominance, and protecting them has become one of Beijing’s greatest concerns. But safeguarding the South China Sea, the most valuable of China’s waterways, is no easy task, and Beijing has employed a variety of creative tactics to try to do so. In addition to building up islands and troop numbers alike, China has encouraged its fishermen to venture out into the disputed waters. The civilian fleet, which has spread across the territory staked by the “nine-dash line,” defends China’s claims as any navy might by harrying and diverting the ships of its competitors. Using untrained and unarmed fishermen to carry out foreign policy has its drawbacks, though. Hundreds of thousands of tiny fishing boats are difficult to track, direct and control, and Beijing has little assurance they can be trusted to act on China’s behalf without starting a messy international incident. To fix matters, the Chinese government has made an effort in recent years to build up a small subset of its fishing fleet: the maritime militia. Though these fishermen still complete their normal activities, they do so equipped with light arms, better vessels and monitoring equipment, ready to respond to the needs of China’s leaders. Their movements ebb and flow with those of the fisheries, but they spend more time at sea—and in more obscure locations—than the comparatively conspicuous coast guard or naval vessels, giving Beijing a more granular picture of (and some measure of ambient control over) its sprawling maritime domain. As China continues to expand its reach in the contested waters of the Asia-Pacific, the importance of the maritime militia in defending those claims will only grow.”

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 Alex Gray | June 17, 2016

At Scarborough Shoal, China Is Playing With Fire: Retired Admiral. Dan DeLuce, Foreign Policy. “China would risk a potential military confrontation with the United States if it started dredging on a disputed shoal off the coast of the Philippines, retired U.S. Navy Adm. Dennis Blair said Thursday. And in a clash with the United States and its allies in the Philippines, Beijing almost certainly would lose, he said. “If the Chinese push there, I think there’s going to be trouble,” said Blair, who once oversaw U.S. forces in the region as the former four-star head of Pacific Command. “And it’s trouble that the United States and the Philippines are going to win because the military situation is set up that way.” To assert its power in the South China Sea and back up its expansionist territorial claims, Beijing has sent out fishing fleets in contested waters and built up artificial islands atop reefs in the past two year years, constructing airstrips and deep-water harbors that can accommodate naval ships. In a growing rivalry over the strategic waterway, both China and the United States have stepped up patrols of naval ships, reconnaissance planes, and fighter jets in the disputed waters. The deployments have amounted to “shadow boxing” between the two powers and the risk of conflict has remained relatively low, said Blair, who also served as director of national intelligence during President Barack Obama’s first term. But unlike the disputed Spratly Islands, which are the subject of multiple rival claims from China and several other Southeast Asian countries, the Scarborough Shoal effectively pits Beijing directly against Manila. With the shoal located less than 150 miles from the Philippines, but 500 miles from China, experts believe Manila has a strong legal case in the disputed claims. The stakes are high as the Philippines has a mutual defense treaty with the United States that could possibly be invoked if Manila sought to defend what it considers sovereign territory. “I would be surprised if the United States hasn’t told China it’s a shoal too far for them,” Blair told a group of reporters at a briefing at the Sasakawa Peace Foundation, where he serves as CEO. “It hasn’t been said publicly, but I hope we have done so privately.” Tensions rose this week at the shoal after Chinese coast guard vessels prevented a Philippine nationalist group from planting a Filipino flag on one of the rock outcroppings. The shoal is one of many maritime disputes at the center of a legal case the Philippines has brought against China before an international court in The Hague. The Permanent Court of Arbitration is due to rule this month on the case, but China has already vowed to ignore the tribunal’s decision, which is expected to favor Manila. If China succeeded in taking over Scarborough, it could build airstrips there and enable Beijing to draw a “strategic triangle” linking reefs and islands in the Paracel Islands to the west and the Spratlys to the south, effectively fencing off the South China Sea, experts say. That could pave the way for Beijing to declare a possible air defense identification zone in the area, demanding commercial and military aircraft seek permission before flying through it. Allowing China to seize complete control of the shoal and launch land reclamation work would represent a “geopolitical loss” for Washington that would be unacceptable, Blair said. For the United States, the Scarborough Shoal represents “at least a pink line, if not a red line,” Blair said. If a clash erupted, China would find itself in a difficult position, hundreds of miles from any of its military bases. Any Chinese aircraft would need to be refueled just to arrive at the location. “From everything I know militarily, that would be a bad place for China to pick a fight,” he said. The feud over Scarborough Shoal flared up in 2012, and the United States tried to mediate a deal to defuse the argument. The Philippines complied with the deal and withdrew its ships, but the Chinese never pulled back their vessels and continue to deploy ships at the mouth of the shoal’s bay. The United States has conveyed its solidarity with the Philippines through a number of symbolic steps in recent months, but has stopped short of publicly announcing any red lines. Asked if the United States had issued a warning to China not to undertake land reclamation at Scarborough Shoal, State Department spokesperson Anna Richey-Allen said the United States regularly holds discussions with Chinese officials about developments in the South China Sea. “Beyond that, I cannot comment on the specific content of our diplomatic engagements,” Richey-Allen told Foreign Policy. “Since 2012, Chinese Coast Guard vessels have sought to block fishing access to the area, restricting the long-standing commercial practices of others. We are concerned that such actions exacerbate tensions in the region and are counterproductive,” she added. In April, U.S. Defense Secretary Ash Carter made a point of stepping foot on an American aircraft carrier, the USS John C. Stennis, as it patrolled waters west of the Philippines. He then paid a visit to the annual Balikatan exercise, which involved 5,000 troops from the United States, 3,500 troops from the Philippines, and 80 forces from Australia, included an amphibious operation on a hypothetical South China Sea island. After the exercise concluded, the Pentagon sent out A-10 Thunderbolt warplanes to conduct patrols over Scarborough Shoal. The United States also has announced plans to rotate troops and aircraft at five bases across the Philippines under a new military cooperation agreement, marking a dramatic about-face in relations as Manila kicked out all American forces more than two decades ago. In advance of the ruling from the international court on Manila’s complaint, China has been lobbying other countries for support and launched a public relations campaign to make its case. It apparently scored a diplomatic victory this week when Southeast Asian countries backed off a statement critical of Beijing over its policies in the South China Sea. The original statement issued Tuesday from foreign ministers from the Association of Southeast Asian Nations underlined the importance of freedom of navigation in the waterway and expressed concern over developments that had “eroded trust and confidence.” But Malaysia’s foreign ministry later retracted the statement without offering an explanation.”

Beijing’s Claims of South China Sea Support May Not Hold Water. Jeremy Page, Wall Street Journal. “The landlocked African kingdom of Lesotho doesn’t have an obvious stake in the South China Sea, but it is among some 60 countries that China says stand behind it as it faces potential censure by an international tribunal over its territorial claims there. The sudden involvement of Lesotho and other small nations far from Asia is the product of a Chinese blitz to rally support in the final countdown to a ruling in The Hague, which could come this month, on a case brought against China by the Philippines. The response has been less enthusiastic than China suggests, however: Only eight countries have publicly stated their support for its right to boycott the proceedings in The Hague. They are Afghanistan, Gambia, Kenya, Niger, Sudan, Togo, Vanuatu and Lesotho, according to public statements reviewed separately by The Wall Street Journal and the Center for Strategic and International Studies, or CSIS, in Washington. Five countries on China’s list have outright denied backing Beijing, including two members of the European Union. For a country that has long castigated the U.S. for “internationalizing” the dispute, the drive suggests growing concern in Beijing that the ruling, which can only be enforced through international pressure, could leave it isolated. The mixed results also show the limits of China’s clout, even among nations hungry for its money. “This looks more like a coalition of the equivocal, or the simply unaware,” said Euan Graham, an expert on the South China Sea at the Lowy Institute in Sydney. China says it doesn’t acknowledge the tribunal’s jurisdiction and won’t abide by the ruling on the case brought by the Philippines – one of five governments whose claims in the South China Sea overlap with Beijing’s. The U.S. and its allies – including the Group of Seven nations – have closed ranks in the past month to urge Beijing to respect the verdict, with U.S. Defense Secretary Ash Carter warning that China risks erecting a “Great Wall of self-isolation.” China has responded by accusing the U.S. of “hegemony,” denouncing the tribunal in editorials in local and foreign media, and publicly thanking dozens of nations it says are backing Beijing. It hasn’t published an official list, but the Foreign Ministry put the total at more than 40 nations last month and state media put it at almost 60 this week. “Compared to seven or eight countries, this number speaks volumes,” Chinese Foreign Ministry spokesman Lu Kang said Tuesday. He blamed countries outside the region for broadening the dispute. “That’s why some countries that care about us and are friendly to us want to understand the real situation,” said Mr. Lu. “After understanding the merits of the issue, they decided to take a stand and uphold justice.” The eight nations that explicitly back China have all echoed its arguments that Beijing has the right to choose its own method of dispute resolution, according to their public statements. One, the West African nation of Gambia, has gone as far as to endorse Beijing’s sovereignty claims after switching diplomatic ties to China from Taiwan in March. China also says many Arab states expressed their support in a “Doha Declaration” at a meeting in Qatar last month. But that declaration hasn’t been made public and neither Qatari nor Chinese officials were able to provide a copy. One Chinese official said it was still being translated. Russia, the only major power on China’s list, agrees the dispute shouldn’t be internationalized, but hasn’t explicitly backed Beijing on the tribunal – a position that reflects its close defense ties with Vietnam, one of China’s rivals in the South China Sea. Greg Poling of the CSIS Asia Maritime Transparency Initiative said many countries appeared to have chosen not to publicly contradict China. “Ultimately, China’s ability to spin a compelling counternarrative and get other nations to buy into it will determine how much pressure it faces,” he said. China’s Foreign Ministry didn’t respond to a request for comment on the countries that have yet to echo Chinese statements or that deny backing Beijing. They include Poland, a member of the EU, which as a bloc has backed the arbitration process. Polish officials were taken aback in April when Beijing suddenly issued a statement that hadn’t been approved by both sides following a meeting between their foreign ministers. It said Poland supported China’s policy of resolving the dispute “through dialogues and consultations,” making no mention of arbitration. The statement “did not accurately reflect Poland’s position on the issue of the South China Sea, which has been communicated to the Chinese side,” Poland’s Foreign Ministry said. “That position remains unchanged and is in line with the entire EU’s policies.” Slovenia, another EU member, and the Balkan state of Bosnia and Herzegovina, also denied official Chinese statements that they backed Beijing on the arbitration.”

The Rising Star In China’s Military Tipped As Future Air Force Leader. Choi Chi-yuk, South China Morning Post. “A rising star in the People’s Liberation Army Air Force has reported for duty as deputy commander of the South Theatre Command, making him the youngest PLA officer of his rank and paving the way for further promotions. “The [newly formed] South Theatre Command is now just like a little boy who is not yet strong enough for fighting for the time being,” Major General Chang Dingqiu told the PLA Daily newspaper on Tuesday. “Given that we have patience and, more importantly, confidence, [the boy] will become sturdy and capable…because he has combative genes,” Chang said. At 49, Chang is the youngest deputy commander in the five newly established theatre commands – North, South, Central, East and West – that replaced the seven former military regions. Starting in 2014, he became the youngest officer at corps level when he was promoted to chief of staff of the Air Force in the former Shenyang Military Region. As the present Air Force commander General Ma Xiaotian 67, is expected to step down in the power reshuffle at the Communist Party’s 19th National Congress in autumn next year, the deputy chief of the joint staff Lieutenant General Yi Xiaoguang, 58, is tipped to succeed him. Chang will be one of the strongest contenders for the position of Air Force commander when Yi retires after serving one or two official five-year terms. At last September’s massive military parade in Beijing to mark the 70th anniversary of Japan’s defeat in the second world war, Chang was squadron leader of the formation of PLA fighter jets that conducted the flyover of Tiananmen Square. He told state broadcaster China Central Televison that the event would “further boost the Air Force’s development”. Meanwhile, Chang’s promotion makes him one of six deputy commanders of the South Theatre Command. Under the new military reforms launched this year, each theatre command has two deputy commanders from each of the three service branches. Chang’s fellow deputy commander from the air force is Lieutenant General Xu Anxiang, who holds rank over Chang as Air Force commander of the theatre. The remaining four deputy commanders came are Rear Admiral Wei Gang and Rear Admiral Shen Jinlong from the PLA Navy, and Lieutenant General Chen Zhaohai and Major General Liu Xiaowu from the PLA’s regular ground force. The new command structure is a departure of the older arrangements, in which there was only one deputy commander each from the Air Force and the Navy in the former military region. The reformed structure of two senior officers from each branch was a result of the massive military overhaul championed President Xi Jinping in his capacity of chairman of the Central Military Commission late last year.”

New Provocation By Chinese Navy Ship. The Japan Times. “The Yomiuri Shimbun The Defense Ministry announced Thursday that a Chinese Navy reconnaissance vessel navigated into the contiguous zone surrounding Japan’s territorial waters off Kita-Daitojima island in Okinawa Prefecture. The same vessel also entered Japan’s territorial waters off Kagoshima Prefecture the previous day. Japan, the United States and India are holding a joint naval exercise in the eastern sea area off Okinawa Prefecture. The Chinese vessel was apparently pursuing vessels from the three countries that participated in the joint naval exercise before entering the contiguous zone. It is legitimate under international law to navigate in the zone. Nevertheless, the Japanese Foreign Ministry on Thursday conveyed its grave concerns to the Chinese Embassy in Tokyo as actions by Chinese Navy vessels continue to occur. According to the announcement by the Defense Ministry, the Maritime Self-Defense Force destroyer Hyuga spotted the Chinese Navy’s Dongdiao-class reconnaissance ship crossing into the contiguous zone at a point north of Kita-Daitojima, 360 kilometers east of Okinawa Island, at around 3:05 p.m. The Chinese ship left the zone at a point north-northwest of Kita-Daitojima at around 4 p.m. A Chinese Navy frigate also sailed into the contiguous zone around the Senkaku Islands in Okinawa Prefecture for the first time on June 9. On Wednesday, the Chinese reconnaissance vessel entered Japan’s territorial waters off Kagoshima Prefecture, apparently pursuing two Indian Navy vessels which participated in the joint naval exercise. The Chinese vessel continued sailing pursuing ships from all three countries taking part in the naval exercise and eventually entered the contiguous zone on Thursday. These actions were apparently intended to hinder the exercise. The Japanese government on Thursday refused to accept the Chinese government’s account of the intrusion into Japanese territorial waters off Kagoshima Prefecture. The Chinese Defense Ministry on Wednesday insisted that the Tokara Strait where the vessel had passed is used for international navigation and that freedom of navigation applies there. But the Japanese government said the Tokara Strait is not an international strait where ships can freely sail. The Japanese government does not regard Tokara Strait, which is near Yakushima island and the Amami Islands, as an international strait as defined by the United Nations Convention on the Law of the Sea. A minister at the Japanese Embassy in China conveyed Japan’s message to an official in charge at the Chinese Foreign Ministry. Chinese law requires foreign naval ships to seek advance permission even when making an innocent passage through its territorial waters. China initially told Japan it regards the navigation through Japanese territorial waters as an innocent passage. But China later changed its explanation in what is seen as an attempt to avoid double standards and justify its actions by asserting that its vessel had passed through an international strait.”

China's Dongbei Model Goes National. Salvatore Babones, Al Jazeera. Pittsburgh, Cleveland, Buffalo, Detroit: They're all great American cities. But they have all seen better days. There are endless debates over what turned the United States' industrial heartland into a post-industrial rust belt, but most people agree that some kind of transition was inevitable. The US simply doesn't need hundreds of millions of tonnes a year of cheap steel any more. Neither does China. China is the Saudi Arabia of steel, and then some. China produces half the world's steel, up from a third only 10 years ago. China's steel output is nearly eight times that of Japan, its nearest competitor. But China's steel industry is highly fragmented. Its largest producer, Hebei Iron and Steel, accounts for about 6 percent of the country's output. Compare that with Japan, where the largest steel producer, Nippon Steel, accounts for more than 40 percent. China is chock-full of small, inefficient steel companies. The problem is that they are only "small" by Chinese standards. Nearly two million people work for China's state-owned steelmakers, not counting all the other jobs that directly or indirectly depend on steel. The government plans to fire half a million of them, plus another 1.3 million coal miners. Layoffs in other industries are anticipated as well as government moves to privatise thousands of inefficient state-owned enterprises (SOEs). The government-sponsored consolidation of China's steel industry has hit hardest in heavily industrialised Hebei province, that surrounds Beijing. The proximity of Hebei to the capital has given foreign journalists easy access to its sights and stories of post-industrial apocalypse. Industrial downsizing really began to bite in Hebei province in 2015. But it didn't start there. The Chinese government's programme of privatisations accompanied by mass layoffs began a decade ago in northeast China's little-visited Dongbei region. The Dongbei - literally "Eastnorth" - was post-war China's manufacturing heartland. It consists of the three provinces to the north and east of Beijing and Hebei. Historically known as Manchuria, the region was occupied by Japan from 1931-1945. Many of its industries date to this era and were redeveloped with Soviet help in the 1950s. The three provinces of the Dongbei - Liaoning, Jilin, and Heilongjiang - were once major consumers of the steel produced just to the south in Hebei province. Liaoning has been a centre of electrical equipment manufacturing since the Japanese occupation. Communist China's first indigenous car manufacturer, First Auto Works, was set up with Soviet help in Jilin's provincial capital Changchun in 1953. Heilongjiang sits atop the Daqing oilfield - China's largest - and is the home of many petrochemical plants. All these heavy industries used to be state-owned. No more. Most of the Dongbei's large SOEs were privatised between 1997 and 2005. They weren't so much sold off to private investors as simply given away. Perceived as hopelessly inefficient, many were sold for the nominal price of one yuan. The Dongbei privatisation wave began in Liaoning after a 1997 visit from former premier Zhu Rongji. A bastion of state ownership, Liaoning's capital city Shenyang became famous as the birthplace of thousands of red capitalists - former government officials turned factory owners. Most of Heilongjian's leading SOEs were sold to private investors in 2004. Then in 2005 the Chinese government sold off 816 SOEs in Jilin province in just one year. China has experienced many waves of SOE reform since its 1978 opening to the world, but the Dongbei wave is the one that most resembles the 1990s sell-offs in Eastern Europe and the former Soviet Union, when communist bureaucrats became billionaire oligarchs overnight.

Hong Kong Bookseller Says He Was Detained By China. Alan Wong and Michael Forsythe, New York Times. “One of the five Hong Kong booksellers whose disappearance last year drew international attention told a packed news conference on Thursday that he spent months in Chinese custody. The bookseller, Lam Wing-kee, described his abduction at the border with mainland China in October, his months in solitary custody and his eventual forced confession. “I couldn’t hire a lawyer,” Mr. Lam said. “I couldn’t call my family. I could only look up to the sky, all alone.” Mr. Lam is the only one of the booksellers to speak out about his disappearance. When some of the others returned to Hong Kong several months ago, they refused to discuss any details; one said he had gone to the mainland voluntarily. The Hong Kong booksellers offered rumor-filled and salacious booksfocused on the sex lives and power games of China’s top leaders, including the president, Xi Jinping. The books are banned in mainland China, where the message about politics and politicians is tightly controlled. But publishers in Hong Kong, which has a separate legal system from mainland China, have turned the illicit titles into a lucrative business. The booksellers’ disappearance shocked people in Hong Kong and reverberated internationally. Many saw the development as an expansion of China’s authoritarian legal system beyond its borders, in clear violation of the “one country, two systems” framework that allows Hong Kong to maintain a high degree of autonomy from Beijing. Thousands of people in this city took up their cause, marching to demand their release. Diplomats from Britain, the European Union, the United States and elsewhere also registered concern. Mr. Lam, who returned to the city this week, spoke of being stopped by Chinese security personnel as he passed from Hong Kong to Shenzhen on Oct. 24. He said he was blindfolded, put on a train and sent hundreds of miles north to the city of Ningbo, where he was kept in a room alone for five months. He described being locked up in a dingy room in Ningbo under 24-hour surveillance. He was given a script and directed to make a confession that incriminated Gui Minhai, a Hong Kong publisher, by saying that he was behind the unlawful sale of books that had caused harm to society. “The room had padded furniture,” Mr. Lam said. “It’s obvious that it was for fear that you would commit suicide. They wanted to lock you up until you go mad. He added: “A nylon string was attached to one end of the toothbrush, and an officer held the other end of the string while you brushed, because they fear you’ll kill yourself. It was mental torture.”

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 Alex Gray | June 15, 2016

For First Time Since 2004, Chinese Warship Enters Japanese Territorial Sea In East China Sea. Ankit Panda, The Diplomat. “A Chinese People’s Liberation Army-Navy Type 815 Dongdiao-class spy ship entered Japanese territorial waters on Wednesday, according to Japan’s defense ministry. The move is the first of its kind since 2004, when a Chinese nuclear submarine entered Japan’s 12 nautical mile territorial sea near Sakishima Islands, in Okinawa prefecture. According to a Kyodo News report of the Wednesday’s incident, a “naval intelligence ship was spotted around 3:30 a.m. west of Kuchinoerabu Island.” The ship “left the territorial waters just a few hours later.” (Japan’s Defense Ministry notes that the ship left around 5 a.m.) Kuchinoerabu Island is approximately 38 nautical miles from the Japanese island of Kyushu, which is one of Japan’s four main islands along with Honshu, Hokkaido, and Shikoku. Japan and China have a territorial dispute in the East China Sea over the sovereignty of the Senkaku/Diaoyu Islands, which are administered by Japan, but claimed by China. Wednesday’s incident did not take place in the vicinity of these islands. (The Senkakus are approximately 450 nautical miles from Kuchinoerabu Island.) Last week, however, for the first time ever, a Chinese warship entered the contiguous zone of the Senkaku/Diaoyu Islands, in a move that highlights growing tensions between the two countries in the East China Sea. It’s unclear if Wednesday’s incident saw the Chinese warship comply with international law under the United Nations Convention on the Law of the Sea (UNCLOS), the international treaty on maritime law that both Japan and China have ratified. Under Article 18 of UNCLOS, foreign warships are permitted “continuous and expeditious” passage through another state’s territorial sea provided they comply with the provisions governing “innocent passage,” detailed in Article 19. One of the requirements of innocent passage is that ships traverse across the territorial sea without engaging in intelligence collection activities. The fact that China sent the Dongdiao-class, an intelligence-gathering vessel, and lingered for what Kyodo described as a “few hours” suggests that Japan may have reason to believe that the PLAN vessel did not comply with innocent passage requirements. This, however, remains indeterminate based on what information the Japanese Defense Ministry has disclosed so far. Wednesday’s incident reinforces the notion that the East China Sea is heating up this summer, potentially drawing some attention away from the South China Sea, which has been particularly fraught due to ongoing Chinese militarization and U.S.-China standoffs over freedom of navigation patrols and other activities. As I discussed last week, the entry of PLAN vessels into the contiguous zone around the Senkaku/Diaoyu Islands (accompanied by three Russian vessels) marked an unusual first in the East China Sea, particularly when China, along with several regional states, anticipates the verdict of the Permanent Court of Arbitration in Philippines v. China. The case will rule on the status of several features in the South China Sea; not on sovereignty.”

Japan, U.S. Vow Cooperation On E. China Sea After Senkaku Incident. Kyodo World Service. “Japan and the United States agreed Tuesday that the two countries will work together to ensure stability in the East China Sea in the wake of a Chinese naval ship's sailing in a contiguous zone around Japanese territory there. Japan's Defense Minister Gen Nakatani and Adm. Scott Swift, commander of the U.S. Pacific Fleet, discussed in Tokyo the sighting last Thursday of a Chinese frigate in the zone just outside Japanese territorial waters around the disputed Senkaku Islands. It was the first time a Chinese naval ship had been spotted in the zone, although Chinese coast guard vessels had been seen in contiguous zones and Japanese territorial waters on many occasions. The continuous zone, an area just beyond a country's territorial waters, is defined under international as an area where that country's laws are still applicable. Nakatani praised the two countries' coordinated response to the incident, saying the mechanisms of the Japan-U.S. security alliance allowed Japan to "work in close accord with the United States including in the sharing of information." "It is crucial that we advance our efforts to display an allied Japan-U.S. presence and a deterrent in the East China Sea," he said. Swift cited the importance of a series of defense exercises, including the Malabar maritime defense drills between Japan's Maritime Self-Defense Force and the U.S. and Indian navies currently underway in waters off Okinawa – near the disputed islands – and the Rim of the Pacific Exercise, or RIMPAC, planned for this summer. China and Taiwan both claim the Senkaku Islands, calling them Diaoyu and Tiaoyutai, respectively. China has intensified its claim since Japan purchased a major part of the islands from a Japanese individual and put them under state control in 2012. Reflecting on China's maritime expansion into the South China Sea, Nakatani voiced support for the dispatch of U.S. ships to ensure freedom of navigation is maintained in the area. China has aggressively asserted territorial claims in the South China Sea and has built facilities on man-made islands in the disputed waters, prompting concern in both Tokyo and Washington. The officials also discussed recent events in Okinawa that have fuelled antipathy towards the U.S. military presence in the island prefecture. Anti-base sentiment has been reignited by the arrest of an U.S. air base worker in connection with the violent death of a local woman and the arrest of a U.S. Navy sailor on suspicion of drunk driving. Nakatani protested at the "deeply regrettable and unfortunate" state of affairs, while Swift expressed his desire to work to prevent such events from recurring.”

Fish And Reefs Under Siege As Feuding South China Sea Claimants Refuse To Cooperate. Li Jing, South China Morning Post. “Tensions among China and Southeast Asian countries with territorial claims in the South China Sea are creating a conservation vacuum and taking a heavy toll on the ecology of an area known for its biodiversity, conservationists warn. They say the hostility harboured by rival claimants, and the resultant lack of intergovernmental cooperation, has prevented any meaningful projects to combat illegal fishing, the over exploitation of fisheries, poaching of sea creatures and destruction of coral reefs. The South China Sea, one of the world’s five most-productive fishing zones, suffers from severe illegal, unreported and unregulated (IUU) fishing activities by 12 countries or territories, so much so that its marine resources have been fished down to 5 per cent to 30 per cent of their 1950 levels, according to a study by researchers at the University of British Columbia in Canada, published last year. “Much of the South China Sea is basically a ‘free-for-all’ [area] in terms of fishing ... fishers of all countries in the area are heavily involved in IUU activities,” said Dr. Michael Fabinyi, a senior research fellow at University of Technology Sydney, who has studied the use of marine resources. Destructive fishing practices – including bottom trawling, dynamiting and using cyanide to catch fish – were widely used in the area, severely damaging marine habitats and coral reefs, the Canadian study said. Overfishing and habitat destruction had directly contributed to a reduction in biodiversity, with marine megafauna such as dugongs, formerly abundant along the coasts of Malaysia and southern China, now rarely found. It said countries bordering the South China Sea should work together to address common problems, but competing territorial claims and historical animosity had created strong barriers to intergovernmental cooperation on marine and fisheries issues. Mainland China claims more than 250 islands, reefs and sandbars in the South China Sea that are also claimed in whole or in part by Vietnam, the Philippines, Malaysia, Brunei and Taiwan.”

Expect More Air And Sea Confrontation With China. James Stavridis, Nikkei Asian Review. “China has sailed into dangerous waters, both literally and metaphorically by ordering for the first time an advanced frigate to pass through the seas off the Japanese-controlled Senkaku Islands in the East China Sea on June 9. The Jiankai I class warship crossed the "contiguous zone" – an area within 24 nautical miles of the uninhabited Senkaku rocks, though outside the 12-mile limit considered territorial waters under the United Nations Law of the Sea Treaty. The small group of islands, also known as the Diaoyu by the Chinese, have been administered by Japan or the United States since 1895 but claimed by China since the 1970s, so Beijing's incursion into the zone is an extremely provocative act in Japanese eyes.

Japanese diplomats reacted vigorously, with the Chief Cabinet Secretary Yoshihide Suga telling reporters the government was "deeply concerned" by the Chinese move, adding: "We, in coordination with the United States and the international community, strongly demand that China not repeat such behaviors that unilaterally heighten tensions." The Japanese Foreign Ministry summoned the Chinese ambassador at 2 am in the morning to protest and told him the ship must depart the zone immediately. So what does China intend with what appears to be a very aggressive step, and where does the dispute go from here? Most observers believe China has three objectives. The first and most obvious is to undermine the Japanese territorial claims and establish under international law the "legitimacy" of China's claims. While sailing in another nation's contiguous zone is permitted under the Law of the Sea Treaty in certain circumstances, it is clearly intended as a signal to the Japanese that China does not respect their authority in these waters. Secondly, China (like Japan) covets the oil and gas located in the region. As in the South China Sea, China seeks to legitimize its access to natural resources. And thirdly, there is certainly a domestic component for China to such aggressive activities vis-a-vis the Japanese. It is politically expedient for President Xi Jinping to rattle the old ghosts of World War II in "Asia's Cauldron,” as leading geopolitical analyst Robert D. Kaplan called the South China Sea in his recent book. Aggressive behavior plays well with the increasingly nationalistic Chinese population. A fourth possible explanation for the Chinese patrols is that they are at least partially in response to similar U.S. activities in and around the Chinese-claimed artificial islands and reefs in the South China Sea. As always, the Chinese are playing a long game. The essence of their geostrategic plan for the 21st century is to dominate East Asia, and this will require control of the sea approaches to their landmass. This means continuing to press their claims to both the South and East China Seas. Certainly a key part of their broad strategy is to try and separate the United States, still the strongest military power in the region, from its many allies. They regard the U.S. presence as destabilizing, and also object to the recently negotiated Trans-Pacific Partnership, a sweeping trade pact among the major countries of the region but excluding China. Overall, the United States will respond to this episode by reassuring Japan through the continued basing of U.S. military forces on their territory, constantly operating and exercising with the Japanese Maritime Self-Defense Force, and seeking to broaden the security base in the region through further military-to-military contact with the Philippines, Vietnam, Singapore, and Malaysia. The U.S. will also aggressively continue its own freedom of navigation operations in the South China Sea, despite China's vigorous objections.”\

China Says Dalai Lama-Obama Meeting Will Damage Bilateral Ties. Michael Martina, Reuters. “China has lodged diplomatic representations with the United States over a planned meeting between U.S. President Barack Obama and the Dalai Lama at the White House on Wednesday saying it would damage Chinese-U.S. ties, the Foreign Ministry said. China considers the exiled Tibetan Buddhist spiritual leader a dangerous separatist, and ministry spokesman Lu Kang told a regular briefing the meeting would encourage "separatist forces". "If the United States plans this meeting, it will send the wrong signal to Tibet independence and separatist forces and harm China-U.S. mutual trust and cooperation," Lu said. Any attempt to take advantage of the Tibet issue and undermine stability would not succeed, Lu said, saying China "resolutely opposed" the plan. China urged the United States to abide by its promises to recognize that Tibet is part of China and cease any support for Tibet independence, Lu said. Obama met the Dalai Lama when the latter visited Washington in 2014 and angered China then when he vowed "strong support" for Tibetans' human rights. China describes the incorporation of Tibet into its territory in 1951 as a "peaceful liberation", and says it has brought development to what was a backward region. The Dalai Lama, who fled from Tibet into exile in India in 1959 after a failed uprising against Chinese rule, says he wants genuine autonomy for Tibet, not independence. China says Tibet already has genuine autonomy, and exile groups seek to split the country. Tibetans accuse China of eroding their Buddhist culture and flooding the region with ethnic Han Chinese. The Dalai Lama told Reuters on Monday that Obama was a "a long-time friend" whom he admired for his work to normalize relations with Cuba, and on Iran, and for his recent visits to former U.S. foe Vietnam and the site of the Hiroshima atomic bombing in Japan. Lu said the Dalai Lama was not a purely religious figure, but a political exile who has long used religion to conduct separatist and anti-China activities.”

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 Alex Gray | June 14, 2016

U.S. To Counter China With Combined Pacific Fleet. Ken Moriyasu, Nikkei Asian Review. “The U.S. Navy will use the combined power of its Pacific Fleet – the 7th Fleet and the 3rd Fleet – to counter rising uncertainty in Asia, a senior naval officer told the Nikkei Asian Review on Tuesday."This is real. The commitment of the 3rd Fleet [operating] forward is real," said Adm. Scott Swift, the four-star commander of the Pacific Fleet in an exclusive interview during his visit to Japan. The 7th Fleet, based in Yokosuka, and the 3rd Fleet, based in the U.S. city of San Diego, are separated by the International Date Line near Hawaii. The 3rd Fleet is mainly tasked with protecting the U.S. homeland, while the 7th Fleet is responsible for everything between Hawaii and the India-Pakistan border, including the hotly contested South China Sea. "I have a lack of understanding of why there is such allegiance to the International Date Line. This is a blurring of the demarcation," Swift said, arguing the Navy should utilize the "total combined power" of the 140,000 sailors, the over 200 ships and the 1,200 aircraft that make up the Pacific Fleet. His words come just days after a Chinese frigate entered the "contiguous zone" near the Japanese-administered Senkaku Islands, in the East China Sea. It was the first time a vessel belonging to the People's Liberation Army has come so close to the islands. Swift said he sees a "common theme" occurring in both the South China Sea and the East China Sea, where "a context of uncertainty and angst in the region has brought about a lack of transparency." He said that the U.S. and China have put mechanisms in place to generate dialogue between the two militaries, but that there is more to be done in terms of enhancing mutual understanding. "Is there a signal being sent? Have things changed? We find ourselves, once again, in this wait and see because right now dialogue is not leading to more clarity," he said. Swift also voiced worries about recent Chinese statements regarding the South China Sea. "I was struck by comments that have been made, with claims outside of what the Chinese refer to as the Nine-Dash Line. There is a new reference being made – that I hear about traditional fishing grounds. That has raised concerns," he said. The increased integration of the 7th and 3rd Fleets should mean more 3rd Fleet vessels operating in the western Pacific, which is traditionally the 7th Fleet's area. One such operation is the deployment of the Pacific Surface Action Group, under which the destroyers USS Spruance, USS Decatur and USS Momsen have embarked on a seven-month tour of Asia. The ships will conduct a broad range of operations in the 7th Fleet's area, while remaining under the operational control of 3rd Fleet commander Vice Adm. Nora Tyson. Swift has been sending Tyson to events in the western Pacific in recent months to signal the increased involvement of the 3rd Fleet in the region. "Adm. Tyson represented me at the Japanese International Fleet Review, here. She represented me at conferences and leadership events in New Zealand and Australia. She officiated over the change of command of the John C Stennis strike group in Singapore," Swift said. "This is a recognition that we will continue to operate around the world in accordance with international norms and laws, and in a maritime perspective in accordance with UNCLOS [the United Nations Convention on the Law of the Sea], with the total combined power of the Pacific Fleet, which includes both 7th and 3rd Fleet."

Chinese, SE Asian Foreign Ministers Meet Amid Sea Tensions. Associated Press. “Continuing Beijing's push to ease concerns about its assertions of sovereignty over the South China Sea, China's foreign minister told his Southeast Asian counterparts Tuesday that both sides should take a "long-term perspective" as they try to solve their disputes. Wang Yi's comments underscore China's desire to contain damage to its reputation over its assertive tactics in the highly strategic and resource-rich waterway. Four of the 10 members of the Association of Southeast Asian Nations have claims to South China Sea islands and reefs that overlap with China's own. "We should review our relationship with strategic height and long-term perspective," Wang told the foreign ministers gathered in the southern city of Yuxi, in China's Yunnan province, which borders on ASEAN members Myanmar, Laos and Vietnam. "We should keep on expanding our consensus and cooperation and properly handle and control our differences," Wang said. "We should jointly lead and push forward the China-ASEAN relationship toward a healthy and stable development." Among ASEAN members, Vietnam has strongly protested China's placing of an exploratory oil and gas drilling rig in disputed waters, while the Philippines has brought a case before a U.N. arbitration panel challenging China's claim to virtually the entire South China Sea, including artificial islands it has constructed from coral reefs. ASEAN members Brunei and Malaysia also claim territory there, while Indonesia's exclusive economic zone overlaps with Chinese maritime claims. Fishing craft and law enforcement ships from all sides have clashed on occasion, although China has taken pains to avoid escalating such conflicts by intervening with its powerful navy. China has refused to cooperate with the U.N. arbitration panel and says it will ignore any ruling it makes, although Chinese and foreign analysts say Beijing's desire to be regarded as a trusted member of the rules-based international community will likely suffer as a result. In remarks Monday night at a welcoming banquet ahead of Tuesday's meeting, Wang said that a quarter-century after establishing their dialogue partnership, China and ASEAN should "cherish the peace in this region that was not easily obtained and not allow any force to disturb the tranquility of our common home," the Foreign Ministry said on its website.”

China Sending Remodeled Navy Warships Near Senkaku Islands. Nanae Kurashige, Asahi Shimbun. “China seems determined to keep rattling Japan and the United States over the disputed Senkaku Islands in the East China Sea, but not to the point of an all-out confrontation. Its latest ploy was to dispatch a Navy warship to a contiguous zone just outside Japanese territorial waters around the islands early on June 9, the first time for it to undertake such action. It now turns out that China has been sending remodeled warships into territorial waters around the Senkakus for some time. The vessels were converted for use by the China Coast Guard, but at least one was found equipped with autocannons. Three ships operated by the China Coast Guard entered Japanese territorial waters around the uninhabited Senkakus on June 8. China chose to view matters differently, saying the coast guard ships were patrolling the waters off the Diaoyu Islands, the name used by Beijing to refer to the Senkakus. It also revealed the names of the three ships. According to sources, one of those ships, China Coast Guard vessel 31241, was a former warship known as the 541 Huaibei destroyer that belonged to the PLA (People's Liberation Army) Navy East Sea Fleet. Converted Chinese Navy ships have been entering territorial waters around the Senkakus since late last year when international attention was focused on the South China Sea and China's efforts to strengthen its military presence there while the U.S. Navy pushed ahead with its "freedom-of-navigation operations" in those same waters. According to sources, one of the three Chinese government ships that entered territorial waters around the Senkakus last Dec. 26 was China Coast Guard vessel 31239, which was armed with four 37-millimeter autocannons. That ship was originally the 539 Anqing destroyer that belonged to the East Sea Fleet. The exterior had been repainted white as part of the process of converting it for coast guard use. The revelation that the former warship had entered Japanese territorial waters sent shock waves through the government. Sources said at least three Chinese Navy warships have been converted into government ships. The China Coast Guard vessels 31239 and 31241 have been dispatched to waters near the Senkakus on a rotating basis. A former high-ranking official with the Chinese Defense Ministry said of those converted vessels, "They are equipped differently from warships as radar and other equipment have been removed."

The Danger Of China’s Victim Mentality. Andrew Browne, Wall Street Journal. “In the countdown to a legal verdict on China’s sweeping claims to the South China Sea, an increasingly frantic Beijing is mobilizing a diplomatic offensive around three core arguments: that the U.N.-backed tribunal has no legal right to hear the case, that America has instigated all the trouble and that China is the victim. Pay special attention to the last of these. If, as expected, the panel rules against China there will be a powerful nationalist backlash. It will be heightened by China’s acute sense of victimhood – a conviction that the West, led by the U.S., is out to thwart its rise and once again enslave its people. That belief often stirs violent public emotion, such as when American warplanes accidentally bombed the Chinese Embassy in Belgrade in 1999. This time, a military response cannot be ruled out. Washington is signaling apprehension China may declare an air-defense identification zone over the South China Sea, similar to one it set up over the East China Sea in 2013. U.S. Secretary of State John Kerry, looking ahead to the verdict, warned that Washington would consider such a move “provocative and destabilizing.” Chinese fighter jets have twice come dangerously close to U.S. surveillance flights in recent weeks, according to the Pentagon. A landmark case born of the injured feelings of the Philippines, which launched legal proceedings three years ago after the Chinese navy effectively seized a rich fishing ground off its main island of Luzon, is ending with a display of China’s wounded psyche. “China is the victim of the South China Sea issue,” writes Yang Yanyi, the Chinese ambassador to the European Union. The case is “a vicious act,” says Xu Hong, the director-general of the foreign ministry’s Department of Treaty and Law. Xu Bu, China’s ambassador to the Association of Southeast Asian Nations, argues that the conspirator behind the scenes is a “dictatorial and overbearing” America that “cannot tolerate others challenging its global hegemony.” Manila has challenged China’s claims to a vast body of water – around 80% of the South China Sea – within a “nine-dash line” that skirts the littoral states and encompasses hundreds of islands, rocks, reefs and sandbars. The tribunal hasn’t been asked to rule on sovereignty, only on the legal status of disputed islands and reefs; Beijing contends the issues are inseparable and has refused to take part in the arbitration. To back up its territorial claims, China has sought to command the world’s busiest commercial waterway by building fake islands atop half-submerged reefs fitted with long runways that can land the largest warplanes. Sea lanes swarm with Chinese paramilitary armadas. Gray naval ships lurk in the background. Missile batteries point to the skies; radar installations scan the horizon. Littoral states, eyeing this buildup, are rushing to buy arms and begging the U.S. for protection. Yet China manages to portray itself not as the predator but the prey.”

That Chinese Frigate In The Senkakus Was A Bad Move For China. Steven Stashwick, The Diplomat. “Early last Thursday morning, a Chinese Jiangkai I frigate entered waters near the disputed Japanese Senkaku islands, called the Diaoyu by China. The move sparked an immediate response from the Japanese government, which summoned the Chinese ambassador at 2 am to lodge a protest. When the islands were nationalized by Japan in 2012, incursions by Chinese ships and aircraft increased dramatically, from practically zero to sometimes several per day. This most recent incursion was unique because it was the first time China has used a naval vessel instead of a Coast Guard or other state ship to venture near the islands. One senior Japanese defense official said the warship’s presence meant “the level of crisis has gone up one notch.” However, both the frigate’s route and Japan’s response may actually have confirmed that Japan really has the upper hand in the Senkaku dispute. The Chinese frigate did not enter Japan’s claimed territorial waters around the islands, which extend 12 nautical miles from shore, but instead sailed into what is called the Contiguous Zone, which extends for 24 nm. Under the UN Convention on the Law of the Sea (UNCLOS), states have limited enforcement rights within the Contiguous Zone, mostly related to ensuring foreign vessels comply with customs and environmental laws prior to entering their sovereign territorial waters. For Japan, there was thus no basis under UNCLOS to protest the Chinese ship, as there are no restrictions on passage through the Contiguous Zone. But because China does not recognize Japan’s claim over the Senkakus, the presence of a warship for the first time is uniquely sensitive. In a statement, Japanese Chief Cabinet Secretary Yoshihide Suga said, “the fact that [China] sent a naval ship to the contiguous waters of our Senkaku Islands for the first time is an act that unilaterally increases tension.” China responded to the Japanese complaint saying, “The Diaoyu Islands ... are Chinese territory. For China’s military vessels to pass through waters under the country’s own jurisdiction is reasonable and legitimate...” Japan is rightly concerned by any new activity in the East China Sea. Chinese ships and aircraft enter both the Contiguous Zone and the territorial waters around the Senakakus hundreds of times each year. China has also sent massive new Coast Guard cutters bigger than U.S. Navy destroyers to the region. In response, Japan created a new dedicated Coast Guard unit of 12 cutters tasked exclusively with patrolling the waters around the Senkakus, and established a new long-range radar facility on the island of Yonaguni that can track Chinese ships and aircraft approaching the disputed islands. Japan has also substantially increased its involvement in Southeast Asian affairs, and the South China Sea disputes especially. Both the Japanese prime minister and defense minister have repeatedly voiced concern over China’s island reclamation and construction activities in the South China Sea. Last year, Japan was reportedly considering patrolling the sea jointly with the United States, though this has not yet materialized.”

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 Alex Gray | June 13, 2016

China-United States Relations: Aerial Chicken. Staff, The Economist. “Barack Obama's "pivot" to Asia has been his most important foreign-policy shift. But the continent is causing him more pain than gain, at least to judge by the final cabinet-level meeting of his presidency between China and America. The gathering, called the Strategic and Economic Dialogue, was held in Beijing on June 6th and 7th. It showed that some progress is being made by the mutually suspicious powers. But it has been only tentative. Remaining problems are intractable and dangerous. In one friendly-sounding gesture, China pledged to cut excess steel production, which has been depressing global prices and upsetting steelmakers in America and elsewhere. But the country had already said it would reduce capacity by 100m-150m tonnes by 2020. China admits this will not eliminate the glut. China also agreed to enforce sanctions that were imposed on North Korea by the UN in March. That would please America, which believes China is half-hearted about stepping up pressure on the North to stop making nuclear bombs. But the two countries showed little sign of agreeing on what to do next. America wants more pressure, China more talks. Tension at the meeting was inevitable. An international tribunal is preparing to rule soon on rival claims by the Philippines (an American ally) and China in the South China Sea. China will be furious if, as is expected, the ruling favours the Philippines. It says it will not abide by the verdict, and is reported to be planning to declare an Air Defence Identification Zone (ADIZ) in the South China Sea. This would require planes to identify themselves, or face a military response. On his way to Beijing, America's secretary of state John Kerry warned against the ADIZ idea. During his talks, in a reminder of the risks involved, Chinese fighter jets buzzed an American spy plane in the ADIZ that China already has in the East China Sea. The Pentagon called the interception "unsafe.” That would also apply to the relationship more generally.”

The Malabar Exercise: An Emerging Platform For Indo-Pacific Cooperation? Prashanth Parameswaran, The Diplomat. “On June 7, the United States, India, and Japan began the twentieth iteration of the Malabar Exercise. In the two decades of its existence, the exercise, which began as a joint U.S.-India naval drill back in 1992, has evolved into not just a key aspect of U.S.-India defense ties, but a key platform for engagement in the Indo-Pacific more broadly. First and foremost, the Malabar exercise is testament to the strength and significance of the U.S.-India bilateral relationship. Though there was a temporary suspension of the exercise during U.S.-India tensions back in the 1990s for a few years – practitioners from both sides routinely emphasize today that over the years Malabar has become a robust military exercise that is multi-dimensional and complex in nature. But today, the conversation around Malabar has gone from it being a key part of U.S.-India engagement to a broader platform for Indo-Pacific defense cooperation. Much like the path taken the Cobra Gold exercises – which began as a U.S.-Thailand engagement but is now Asia’s largest multinational drill – Malabar has begun to multilateralize to include other American partners in the region. The initial impetus for this arose during the George W. Bush years, when the 2007 iteration of the exercises included Japan, Australia, and Singapore – two key U.S. treaty allies and one longtime strategic partner (Japan subsequently participated in 2009 and 2014 as well). But the momentum towards this has increased noticeably in recent years, with Japan included as a permanent member last year and calls for Australia to follow suit as well. At the broadest level, the multilateralization of the exercise has been read as part of a growing convergence between the United States, India and other actors like Japan and Australia which are each strengthening their security presence in the Asia-Pacific and all devoted to the preservation of the so-called rules-based order. China’s assertive actions in the East and South China Sea have obviously played a catalyzing role in this convergence, which has manifested itself in growing trilateral and even quadrilateral cooperation within what U.S. Defense Secretary Ash Carter recently called a principled security network at this year’s Shangri-La Dialogue. The holding of the first ever U.S.-India-Japan trilateral ministerial meeting last September exemplifies this growing convergence. While the three countries had been meeting at the assistant secretary level over the past few years, the meeting between their foreign ministers on the sidelines of the United Nations General Assembly in New York – a move mulled since 2011 – represented an official elevation of the trilateral dialogue. As I noted in a piece following that meeting, the move was testament to the growing role that all three democracies – which represent a quarter of the world’s population and economic production power – have played individually in the Indo-Pacific region as well as the convergence between them. But beyond strategic convergence, the multilateralization of Malabar also has implications for defense ties between concerned countries and other regional actors more specifically. Exercises are important in building the foundation for greater military ties in various ways, including fostering interoperability and building personal relationships between officials and officers. This is particularly true of more complex drills like Malabar, which this year includes exchanges on various topics including carrier strike group operations, maritime patrol and reconnaissance operations, surface and anti-submarine warfare, as well as search and rescue. The maritime focus of the exercises is also in line with both their individual priorities as well as the region’s ongoing security challenges which they hope to tackle among themselves and in concert with others. Though the media attention is often focused on China’s actions in the East and South China Seas, in reality there are other threats in the maritime domain which closer defense ties can help address. For example, Washington, Tokyo and New Delhi made humanitarian assistance and disaster relief a key focus of trilateral cooperation at their dialogue last year, agreeing to convene an experts-level group to enhance capabilities to respond jointly to complex disasters. In the longer term, with the permanent participation of Australia and perhaps the involvement of others as well, more bullish defense officials and experts say Malabar could eventually be viewed as not just a platform within which this growing strategic convergence and deeper defense cooperation are realized, but drills where participants even practice operating some common or integrated capabilities to specific ends.”

What China’s Big Nation Complex Means For The Future Of Asia. Shannon Hayden, War on the Rocks. “In two years on the China desk in the Office of the Secretary of Defense, colleagues and I had frequent interactions with China’s People’s Liberation Army (PLA). They were our counterparts out of China’s embassy in Washington, and we had a cordial and productive working relationship. Our job was to help manage the defense relationship between the United States and China, which was characterized by growing cooperation and frequent high-level visits. As representatives of our respective governments, we also communicated on thornier aspects of the relationship. The PLA members sometimes offered clues to their mindset regarding their neighbors in the region. These hints didn’t come off as malicious, just presumptuous, and manifested mostly in asides and off-the-cuff remarks. Of course Vietnam should defer to its “big brother” and be silent. Yes, we can discuss the South China Sea, but the other countries’ claims are a joke. You could feel the frustration coming from our PLA counterparts when we pushed on any number of points. Their response, with varying levels of exasperation —“China is a big country. X is a small country. What more is there to say?” China does not see its neighbors as peers. This thinking is the result of thousands of years of experience and its position as the Middle Kingdom. How does this square with modern concepts of international law and dispute settlement? “If the Law of the Sea is not observed in the China seas today, it will be in jeopardy in the Arctic, the Mediterranean, and elsewhere tomorrow. In order to keep the risk of conflict contained, we must defend the Law and defend ourselves with the Law.” When Jean-Yves Le Drian, France’s minister of defense, spoke these words at the Shangri-la Dialogue in Singapore, he crystalized the threat posed by developments in the South China Sea in recent years. He also prodded audience members to consider what comes next. As well they should, for if China sees the last century as a historical aberration now giving way to a return to its rightful role in Asia and beyond, this process will not stop with the South China Sea. Despite Admiral Sun Jianguo’s assertions of improved trust among China and Southeast Asian nations, China’s land reclamation efforts, its mobilization of civilian and military maritime assets, and its nudging of neighbors further and further back have certainly had the opposite effect. For the last century, China has underperformed. Its own national narrative fixates on a hundred years of humiliation and perpetuates resentment over its treatment at the hand of outside powers  — in past years, the country marked an official “National Humiliation Day.” While that commemoration is now folded into the annual National Defense Education Day in September, Beijing’s leaders explain their policies using this narrative and the concept of national rejuvenation, or a return to China’s rightful place in the world. This rejuvenation is much more than a useful narrative. China has achieved one of the great humanitarian successes in history following economic reforms begun by Deng Xiaoping in 1978. “Rapid economic and social development” resulted, according to the World Bank, and “GDP growth has averaged nearly 10 percent a year — the fastest sustained expansion by a major economy in history — and has lifted more than 800 million people out of poverty.” Massive growth presents challenges of its own, but China argues that this progress should earn them a bigger seat at the table. During President Xi’s visit to Washington, DC last September, President Obama reiterated that “the United States welcomes the rise of a China that is peaceful, stable, prosperous, and a responsible player in global affairs.” But when established international institutions are slow to reform and fail to reflect the makeup of the present world order, China and other countries are incentivized to go their own way. China’s establishment of the Asian Infrastructure and Investment Bank (AIIB) was a response to the limitations it observes in the current system and targeted a void in the region’s development — its $8 trillion infrastructure investment gap. Clumsy and ultimately ineffective attempts to scuttle the AIIB neither aligned with the welcoming tone of Obama’s remarks nor reflected an appreciation for inevitable change that will result from China’s growing strength and influence. China’s growth is a net positive for many hundreds of millions of people both in and outside the country. But while that growth can be a rising tide for the region and the world, components of the accompanying rejuvenation strategy are undeniably zero-sum.”

China Investment Growth Slowest Since 2000. Lucy Hornby, Financial Times. “Fixed-asset investment in China grew at its slowest rate for 16 years in the first five months of this year, as private companies held off spending and left the state sector to keep the economy humming. The figures could weigh on China’s ability to hit its economic growth in line with its annual target this quarter. Beijing targets average annual economic growth of 6.5 per cent until 2020, and reported 6.7 per cent year-on-year growth in the first quarter.  Fixed-asset investment grew 9.6 per cent in the first five months of the year against the same period in 2015. The slowdown, to its lowest level since 2000, was led by the private sector, where investment grew by a meagre 3.9 per cent against 23.3 per cent for the state sector. “The continued deceleration of private sector investment means the risk is growing that as policy support wanes, the economy could face another downturn,” wrote Julian Evans-Pritchard, China economist at Capital Economics. Meanwhile, industrial production rose 6 per cent year on year in May, unchanged from April, while retail sales growth slipped to an annual rate of 10 per cent in May from 10.1 per cent in April. Real estate investment decelerated to 6.6 per cent annual growth from 10.3 per cent in April. Private entrepreneurs’ lack of enthusiasm weighed on the housing market, which is struggling to work through the ranks of empty apartment blocks in provincial cities and county towns. Property sales have slowed in recent weeks after sharp rises in the largest and most sought-after cities in the first quarter. “This figure suggests that the tightening measures by the policymakers, such as window guidance towards property-related lending, are starting to bite,” said Raymond Yeung, analyst with ANZ Bank. In a sign of weak future demand from the construction sector, cement output rose 3 per cent in May. Steel output rose 2 per cent. Despite an eye-catching run-up in steel prices this spring, steel output for the first five months of the year is still lower than it was in the same period last year. Other industrial sectors plagued by overcapacity fared worse. Coal output dropped nearly 17 per cent in May against the same month last year as thermal power plants curbed output more than 6 per cent and hydropower use soared. Power plants also chose to import cheaper, better-quality coal, further denting demand for coal from uncompetitive domestic mines.”

China Urges Philippines To Copy Malaysia’s Handling Of South China Sea Issue. The Japan Times. “The Philippines should emulate Malaysia and resolve its territorial disputes with China over the South China Sea in an “amicable way” instead of resorting to “confrontation” through “unilateral arbitration,” Chinese Ambassador to Malaysia Huang Huikang said Monday. In an opinion piece titled “The Way of Amicable Consultations” that appeared in Monday’s edition of The Star English-language daily, the envoy said while the Malaysia-China relationship is “at the best time of history,” the Philippines-China relationship is experiencing “severe difficulties.” “The reason behind such striking contrast lies in the different ways the two claimants chose to deal with the disputes with China,” Huang said. He praised Malaysia for its “friendly and proper handling” of its disputes with China, unlike outgoing Philippine President Benigno Aquino, whom he said “misjudged the international situation, acted as a pawn of an outsider’s geopolitical strategy and chose to confront China.” “He (Aquino) became world famous as the arbitration case is a farce,” Huang wrote, referring to a pending arbitration case brought by the Philippines before an arbitration court in The Hague. “When his term ends, apart from the severe consequences of undermining the China-Philippines traditional friendship, his political legacy will only be piles of bills from the tribunal,” he added. China’s aggressive expansion in the South China Sea in recent years has raised alarm among claimant states like Malaysia, the Philippines, Vietnam, Brunei, and Taiwan. This has pushed the smaller nations to embrace the Washington’s pivot to the region to counter China’s weight, resulting in heightened confrontation between the two superpowers. Malaysia, which counts China as its largest trading partner, a fact Huang noted in his article, has opted for quiet diplomacy. In contrast, the Philippines filed its case with the Permanent Court of Arbitration at The Hague in 2013, questioning China’s occupation of Scarborough Shoal which the Philippines claimed lies within its territory. The court is expected to make a final decision in the next few weeks at the earliest. Huang said Malaysia has set a “model of amicable consultation” for the region, and as a result of the good relations, Malaysia is China’s biggest trading partner among the 10-member Association of Southeast Asian Nations over the past eight years, with bilateral trade volume reaching $100 billion. “Compared with the breadth, depth and warmth of the friendly interaction between China and Malaysia, shouldn’t the Philippines introspect itself?” he asked. “As a Chinese old saying goes, ‘Close neighbors are more important than remote relatives.’ Forces outside the region may come and go whenever they want but China and Philippines are neighbors that cannot move away from each other.” Huang said China is committed to resolving the disputes through peaceful negotiation bilaterally and with ASEAN through a Code of Conduct in the South China Sea.”

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 Alex Gray | June 10, 2016

Japan Summons Chinese Envoy After Naval Ship Nears Disputed Islands. Jonathan Soble, New York Times. “China sent a warship for the first time on Thursday into disputed waters near a group of Japanese-controlled islands in the East China Sea, the Japanese government said. Japanese officials said they had summoned the Chinese ambassador in Tokyo around 2 a.m., after the warship, a frigate, was spotted less than 24 nautical miles from the uninhabited island chain, known as the Senkaku in Japan and the Diaoyu in China. The ship left after about two hours, the officials said. China regularly sends nonmilitary patrol vessels to the area, where they engage in cat-and-mouse chases with the Japanese Coast Guard. But it was the first time in the long and sometimes tense dispute over the islands and their surrounding waters that China has used a naval ship to so directly challenge Japan’s control, the officials said. “China’s actions unilaterally escalate tensions in the area, and we are seriously concerned,” Yoshihide Suga, the Japanese chief cabinet secretary, said at a news briefing. Prime Minister Shinzo Abe ordered the Japanese Navy and Coast Guard to be on alert, Mr. Suga added. China’s Ministry of National Defense did not explicitly confirm that the ship had entered the disputed waters, but it defended its right to send vessels there. “We’ve noted the relevant reports,” the ministry said in a statement. “The Diaoyu Islands and affiliated islands are Chinese territory. For China’s military vessels to pass through waters under the country’s own jurisdiction is reasonable and legitimate, and other countries have no right to make irresponsible comments.” Beijing’s Coast Guard vessels often pass near the islands, and three did so as recently as Wednesday, according to the Chinese maritime authorities. The country’s Coast Guard is a civilian force, but the government has modernized its ships to the point where they are powerful vessels. Japan, along with the United States, its close ally, has struggled to reckon with China’s growing influence in Asia’s seas. China declared an air defense zone over much of the East China Sea in 2013, including the areas that it disputes with Japan, and it has patrolled the zone with fighter jets. In the South China Sea, Japan has supported the Obama administration in objecting to China’s development of disputed reefs and outcrops into artificial islands with military facilities. The United States has sent warships past the reefs as a way to demonstrate that it does not recognize Chinese sovereignty. China’s sail-by on Thursday seemed calculated to send a similar message. It came just two days after Secretary of State John Kerry and his Chinese counterpart, Yang Jiechi, exchanged sharply divergent views over the South China Sea at a meeting in Beijing, and two weeks after a gathering of Group of 7 leaders in Japan, at which Japanese officials placed discussion of China’s maritime activities high on the agenda. The Chinese frigate entered a band of ocean around the disputed islands that Japan claims as a so-called contiguous zone – an area just beyond a country’s exclusive territorial waters where it can exert a limited degree of control, like by patrolling for activity it considers illegal. Many countries, including the United States, assert such zones. Japanese vessels were in contact with the Chinese frigate as it approached the contiguous zone and warned it for about two hours to change course before it entered, officials in Tokyo said. In a complicating twist, Japan said two Russian vessels were also spotted in the islands’ contiguous zone around the same time, though it was unclear whether their presence was connected with that of the Chinese frigate. Japanese officials said they did not protest the entry of the Russian vessels. “China has its own particular claim” to the area, said the Japanese vice foreign minister, Akitaka Saiki. “Russia doesn’t, so we distinguish between Chinese and Russian actions and respond accordingly.”

U.S., India, Japan To Kick-Off Malabar Joint Naval Exercises In Western Pacific. Deutsche Welle. “The navies of India, Japan and the U.S. are holding trilateral drills from Friday in the Western Pacific Ocean off the east coast of Okinawa, close to a group of disputed islets in the East China Sea. The joint naval drills, called Malabar exercises, will be conducted over eight days and they are expected to focus on anti-submarine warfare, maritime interdiction operations and air-defense training. The maneuvers are aimed at improving co-operation between the navies of the three countries. While Malabar drills began in 1992 as India-U.S. bilateral naval exercise, Japan became a permanent participant last year. The Indian navy this year is deploying two of its new guided missile stealth frigates – equipped with weapons and sensors – a missile corvette, and a supply ship. The U.S. Navy's Seventh Fleet, headquartered in Yokosuka in Japan, is expected to send an aircraft carrier battle group, including F-18 fighters, a nuclear attack submarine and early-warning reconnaissance aircraft. Japan, in turn, will deploy the Hyuga – a new helicopter carrier – as well as patrol aircraft such as the P-3C Orion and rescue aircraft like the US-2. The exercises symbolize the strengthening trilateral strategic partnership between the United States, India and Japan, amid China's expansive territorial claims and increasingly assertive stance in the South and East China Seas. While Beijing claims sovereignty over almost all of the South China Sea (SCS) leading to territorial rows with some Southeast Asian nations like Vietnam and the Philippines, it has a bitter dispute with Tokyo involving a group of uninhabited islands in the East China Sea (ECS). In a bid to counter China's claims, the U.S. Navy has staged freedom of navigation operations in the SCS. And this year's Malabar drills are taking place off Japan's coast, close to the contested Diaoyu/Senkaku islands in the ECS. "The exercises demonstrate greater boldness on the part of all three countries in challenging China's growing assertiveness in the maritime domain while demonstrating their commitment to protecting the freedom of navigation in the region," Chietigj Bajpaee, a military expert at King's College in London, told DW. This view is shared by Milan Vaishnav, a political analyst at the Washington-based Carnegie Endowment for International Peace. He says the drills send a message to China that the three democracies and Asian powers are willing and able to work together to preserve a balance of power in the Asia-Pacific region. The joint exercises are very significant for several reasons, the expert told DW. "First, they highlight increasing cooperation among three big powers in the Asia-Pacific region. In the past, bilateral cooperation has always trumped trilateral cooperation. And second, the exercise enhances military cooperation, coordination, and consultation between the three countries."

Responding To Coast Guard Expansion In The South China Sea. Aaron Picozzi and Lincoln Davidson, Council on Foreign Relations. “South China Sea claimants are awaiting a decision by the International Tribunal for the Law of the Sea in an arbitration case on the legality of the Chinese government’s claims. But regardless of how the UN tribunal decides, South China Sea disputes won’t go away anytime soon. Military activity in the South China Sea is expanding, increasing the risk of “dangerous brinksmanship” over the islands and reefs scattered throughout the region. While the United States Navy has taken the lead in responding to regional military activity, we believe that coast guard-coast guard exchanges can reduce the risk of conflict, while still assuring regional partners of American dedication in the South China Sea. Over the last year, China has conducted dredging activities at an unprecedented scale, using the newly-built islands to base missile systems and military aircraft. The People’s Liberation Army Navy (PLAN) has conducted substantial drills in the region. India has considered joint patrols with the United States in the South China Sea, and the Philippines and Vietnam have considered similar cooperation. Just last week, the French defense minister called on European countries to have a “regular and visible” presence in the region to maintain freedom of navigation. The United States has also long been active in the South China Sea, conducting known freedom of navigation operations near Chinese-controlled features in October 2015 and in January and May 2016. In April, the U.S. Air Force stationed four A-10 Warthogs—which carry one of the most powerful aircraft guns ever built—in the Philippines, sending a clear signal to China that the United States is prepared to deal with military conflict in the South China Sea. The U.S. military has increased the presence and visibility of aircraft and naval vessels to assure regional partners that the United States remains committed to their security, going tit-for-tat with the Chinese military in force escalation. Recent expansion of the Chinese Coast Guard marks a pivot point for America’s posturing, however. Chinese Coast Guard cutters—although lacking sufficient armament to challenge a U.S. Navy vessel in direct combat—are capable of meaningfully affecting the situation in the South China Sea. Lots of ink has been spilled about how China’s reclamation activities “change facts on the ground,” but Chinese Coast Guard activities do at least as much to alter the reality in the South China Sea. When the Chinese Coast Guard threatens or actually uses force to enforce Chinese law within areas that Zhongnanhai claims are their waters, they are effecting functional control of the region.”

The Other Sea That Dominated Asia’s Security Summit In 2016. Prashanth Parameswaran, The Diplomat. “A quick glance at the headlines from this year’s Shangri-La Dialogue – Asia’s premier defense summit – would suggest that the proceedings were overwhelmingly dominated by the South China Sea. But to those who attended the meeting, another body of water also featured prominently in the proceedings. Speech after speech, officials highlighted the importance of the Sulu Sea as a key front in confronting Asia’s manifold maritime challenges. The Sulu Sea – or, more specifically, the one million square kilometer tri-border area in the Sulu-Sulawesi Seas between the southern Philippines, Indonesia and Malaysia – has long been a hub for transnational organized crime and terrorist threats, with its porous borders and weak governance. Following the September 11 attacks, concerns surfaced about Jemaah Islamiyah militants either coalescing around or transiting through the area – concerns that linger with the rise of the Islamic State today. And in 2013, the invasion of Sabah by Filipino militants claiming to be linked to the Sulu sultanate exposed an irritant in Malaysia-Philippine relations and revealed the lingering inter-state tensions that still persist in the area. But the development that thrust this front in Asia’s maritime space into the headlines in recent months once again was a spate of kidnappings of Indonesian and Malaysian nationals by the Philippine-based Abu Sayyaf Group. Though these incidents are far from uncommon, they seemed to have reached an inflection point, with the three countries formally agreeing to pursue trilateral patrols on the sidelines of the ASEAN Defense Ministers Meeting (ADMM) in Laos just a week ahead of the Shangri-La Dialogue. To close observers of Southeast Asian security issues then, it was no surprise that the Sulu Sea played a rather outsized role in both formal and informal discussions at the Shangri-La Dialogue last weekend. Unsurprisingly, in formal proceedings, the states directly involved in the area focused on it the most. During a rather lengthy address at one of the plenary sessions, Indonesian Defense Minister Ryamizard Ryacudu reiterated his country’s concern that if threats were not confronted, the Sulu Sea could become a new Somalia, weakening economic trade and threatening maritime security. Meanwhile, at one of the breakout sessions, Lieutenant General Glorioso Miranda, the acting chief of staff for the Armed Forces of the Philippines, said that managing the maritime border area was one key prong of Manila’s effort to address terrorism and transnational threats. But other countries chimed in as well, reflecting the fact that this maritime front has implications that extend beyond its immediate stakeholders. Singapore’s Defense Minister Ng Eng Hen described the Sulu Sea patrols as a “welcome initiative” to deal with terrorism and smuggling. Malaysian Defense Minister Hishammuddin Hussein had previously floated an observer role for both Singapore and Thailand in the Sulu Sea patrols since both countries were involved in the successful Malacca Straits Patrols (MSP), which commemorates its tenth year in 2016. In his own address at the Shangri-La Dialogue, Hishammuddin again referenced the MSP as a model for cooperation in the Sulu Sea.

Why China Wants U.S. Military Jet Engines. Sophia Yan. “On Thursday, a woman named Wenxia Man was convicted in a Florida court of conspiring to evade U.S. export laws by illegally acquiring and sending fighter jet engines and drones to China, according to the U.S. Department of Justice. Prosecutors said Man was working with an associate in China to buy and export engines made by Pratt & Whitney and General Electric (GE), which are found in a range of top U.S. military aircraft, including the F-35 Joint Strike Fighter, the F-22 and the F-16 fighter jets. She was also found to have tried to export a General Atomics drone, and technical data for the different hardware items. During the investigation, Man referred to her associate as a spy "who worked on behalf of the Chinese military to copy items obtained from other countries and stated that he was particularly interested in stealth technology," the Department of Justice said. The conviction of Man is the latest development in an ongoing saga of corporate espionage between the U.S. and China. Experts say spying has played a role in China's strategy to modernize the country in recent decades. The illicit acquisition of technology has helped China accelerate the process, bypassing problems that would otherwise require years of research and development to resolve, according to analysts. But Beijing has repeatedly denied that it engages in corporate espionage. Boosting jet engine capabilities has long been a priority for China as it seeks to increase its military clout. The most recent five-year development plan for the country identifies domestic development and production of engines and planes as a major goal. But it's a difficult area to master, forcing China to rely heavily on importing technology. Over the last four years, engines accounted for 30% of all its imports, according to the Stockholm International Peace Research Institute. Even the C919, a commercial airliner that China is developing in the hope of rivaling Boeing, is using engines made by a U.S. and French joint venture. The Department of Justice statement didn't provide details on Man's background. The Sun Sentinel in Florida reported that she was born in China but is a naturalized U.S. citizen. She will be sentenced in August and could spend up to 20 years in jail. Hers is the latest in a series of corporate espionage cases in the U.S. that have been linked to China. They have swept across numerous industries from agriculture to aviation. Alleged targets have included a solar panel manufacturer, aluminum and steel producers, and a company that designs nuclear power plants. In March, a Chinese man pleaded guilty to cyber spying on Boeing and other U.S. firms by hacking into their networks to pilfer sensitive information to send to China. China's Ministry of Foreign Affairs didn't respond to faxed questions Friday, which is a public holiday in the country.”

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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