China Caucus Blog

Posted by The Congressional China Caucus | July 16, 2015

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

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

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

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

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

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

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

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

Posted by The Congressional China Caucus | July 15, 2015

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

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

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

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

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

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

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

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

Posted by The Congressional China Caucus | July 14, 2015

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

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

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

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

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

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

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

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

Posted by The Congressional China Caucus | July 13, 2015

Here’s the Biggest Difference Between US and Chinese Military Policy. "On July 1, the U.S. published its new national military strategy, just a few months after China released its own. Both papers are intended for broad public consumption; neither addresses specifics about weapons and strategy. Taken together, they paint an interesting contrasting portrait of the military thinking guiding the two superpowers. China’s document underlines a deepened commitment what it calls “civil-military integration.” “And in response to the new requirement arising from China’s all-round and deepening reform, the armed forces will continue to follow the path of civil-military integration (CMI), actively participate in the country’s economic and social construction, and firmly maintain social stability, so as to remain a staunch force for upholding the CPC’s ruling position and a reliable force for developing socialism with Chinese characteristics,” it states. Further on, the strategy document mentions efforts to “coordinate national defense development and economic development and deepen the integration of the military and civil sectors … joint exploration of the sea, outer space and air, and shared use of such resources as surveying and mapping, navigation, meteorology and frequency spectra.” This adds up to an argument for “the intertwining of civilian science and technology sectors with its military as necessary to gain a leading edge over any potential adversary,” writes privacy and international law researcher Heather Roff. “In short, it plans on embedding the military with everything.” What does that look like in real terms? An even more robust military-industrial complex than in the United States. But there’s something darker at work, too. China has long been more focused on calming internal threats, or so-called “stability maintenance,” than outspending external enemies. If you think U.S. police are militarized, take a trip to Beijing. In 2014, China surpassed the U.S. as the world’s No. 1 market for surveillance equipment and technology. In 2011, as the Arab Spring was taking root across the Middle East, Beijing bumped spending on internal security by more than 13 percent to 624.4 billion yuan ($95 billion). That outpaced the budget for the Chinese Liberation Army, which rose 12.7 percent to 601.1 billion yuan. Not long after, China stopped publishing figures on how much it was spending for internal vs. external security. The CMI language in its new strategy document in many ways alludes to this continued focus on militarized policing as central to the country’s broader security strategy."

Shaping the Asia-Pacific Order: Don’t Count the US Out.
"For all the hand-wringing about China remaking Asia in its image – as evidenced in the recent controversy over Beijing’s new investment bank, the Asian Infrastructure Investment Bank – reports of a U.S. retreat are greatly exaggerated. Congress’s recent approval of Trade Promotion Authority (TPA) and the likely approval of the Trans-Pacific Partnership (TPP), the Obama administration’s legacy trade deal, is the sort of economic statecraft that can update and sustain the open, ruled-based order. Yet as the pending demise of the EXIM Bank illustrates, such efforts have been all too rare. Yes, a global diffusion of power from West to East is unfolding with potentially profound challenges to the international system under which the global economy has flourished since 1945. And yes, a shift in the center of economic gravity to the Asia-Pacific region has occurred. China’s re-emergence is raising questions about the underlying bipartisan premise in the U.S. that as rising powers like China integrated into the global system, they would develop a stake in the stability of the international system and its norms, and would advance their interests within established institutions, rather than challenge its structures or seek to create alternative institutions. China’s pursuit of the AIIB, efforts to make its currency, the RMB a global reserve currency, and pursuit of other parallel institutions like the BRICS Bank are calling those assumptions into question. Yet the problem is as much a reflection of inertia in the international system as it is Beijing’s hope of a Sino-centric world. In fact, no nation has benefited more from the current economic order than China has: Its economy grew from $202 billion in 1980 to $10.3 trillion in 2014. China’ new assertiveness under President Xi Jinping is more a grievance-driven desire to be treated respectfully as a great power than it is a blueprint for a Sino-centric world. China has accepted many aspects of the existing order – the IMF, World Bank, WTO – but seeks to expand its influence globally and regionally while also hedging its bets by trying to gin up new, more Sino-centric institutions. No small part of the problem is a dearth of U.S. foresight and proactive leadership. Five years after the G20 agreed to IMF reform, giving China and other emerging economies a larger voting share, the U.S. Congress has yet to approve it. China has the same number of voting shares in the IMF as France, though its economy is four times larger. Neither has the Asian Development Bank boosted China’s role. So it should not have been a surprise that China, with $4 trillion in foreign reserves and a chip on its shoulder over past humiliations, would go out and start its own multilateral bank."

This Semisubmersible Cargo Ship Strengthens Beijing's Hand in the South China Sea.
 "China has added a semisubmersible ship to its naval fleet to strengthen the country's presence in the disputed South China Sea, state television reported on Friday. The ship, which bears the number 868, can be used to transport small vessels and as a temporary dock to repair damaged naval ships, according to the official microblog of China Central Television (CCTV). The ship is the first of its type to join China's South China Sea fleet according to the TV station. It could be used in conducting large-scale landings in the event of conflict in the Taiwan Strait, and as a mobile base in the South China Sea, according to a report on Chinese news website Sina. China has ramped up defence spending in recent years to modernise its military forces, the world's largest. China is also aiming to develop an ocean-going "blue water" navy capable of defending the growing interests of the world's second-largest economy as it take a more assertive stance in territorial disputes in the South and East China seas. Five different countries control some land features in the Spratly Islands, while just one state controls the Kuril Islands, Liancourt Rocks, Senkaku Islands, and Paracel Islands. China's increasingly assertive moves to press sovereignty claims in regional waters have rattled its neighbours and aroused concern in Washington, although the country says it has no hostile intent. China has overlapping claims with the Philippines, Vietnam, Malaysia, Taiwan and Brunei in the South China Sea, through which $5 trillion in ship-borne trade passes every year."

A Closer Look at China's Divine Eagle Drone.
"Since photos in May 2015 emerged of the Divine Eagle, China's giant UAV has been getting a lots of international attention. With its giant, double bodied design, carrying high performance anti-stealth radars, the drones are a potential key part of China's offensive and defensive military strategy in the coming years. Formations of Divine Eagle UAVs are expected to provide an early warning line to detect threats to China's airspace, like cruise missiles and stealth bombers, as well as be able to take on such missions as hunting for aircraft carriers in the open waters of the Pacific. By using the single deck bus in the background (probably 3.2 meters tall, like most buses of its type) as a very crude visual yardstick, a very rough comparison suggests that the Divine Eagle is about 6 meters tall, and 15 meters long (since most high altitude large UAVs have a wingspan to body length ratio of 2.5:1 to 3:1, the wingspan of the Divine Eagle is likely its be 35 to 45 meters across). With a maximum take off weight of at least 15 tons, the Divine Eagle is the world's largest UAV, edging out the RQ-4 Global Hawk. In late June 2015, new photos emerged of the Divine Eagle prototype, allowing a clearer look at its details. The Divine Eagle has a single engine nestled between its tailfins, with a diameter of over 1 meter. This makes the engine likely to be a medium non-afterburning turbofan producing 3 to 5 tons of thrust, which in turn is usually enough to power a UAV of 12-18 tons in maximum takeoff weight. In comparison, the largest American UAV in open service, the RQ-4 Global Hawk, uses a F-137-RR-100 turbofan engine with 3.4 tons of thrust. The Divine Eagle has a five wheel landing gear layout. The double bodied layout was chosen in order to provide the surface area for carrying large radars, while minimizing internal volume and weight. By using the single deck bus in the background (probably 3.2 meters tall, like most buses of its type) as a very crude visual yardstick, a very rough comparison suggests that the Divine Eagle is 6 meters tall, and 15 meters long (since most high altitude large UAVs have a wingspan to body length ratio of 2.5:1 to 3:1, the wingspan of the Divine Eagle is likely its be 35 to 45 meters across). The differing yellow, green and grey blue primer coatings on the Divine Eagle suggest the usage of different materials like composite and aluminum alloys for different sections of the UAV."

Thai Chinese Sub Buy Challenges US Pivot.
"Thailand's move to purchase Chinese submarines has exacerbated tensions with the US and poses a challenge to Washington's "pivot" to the Pacific. The military junta, which declared a coup in May 2014 and created the National Council for Peace and Order, could turn to China for political and military support and cooperation, analysts said. The junta-led Cabinet approved the purchase of three Type 039A (Yuan) attack submarines in early July. After the coup, the US reduced its presence at the annual Cobra Gold military exercises held with Thailand, and postponed further discussion on planning 2016 exercises. There are fears in the region that US sanctions are pushing Thailand into China's political sphere, said Martin Sebastian, head of the Centre for Maritime Security and Diplomacy, Maritime Institute of Malaysia. "The US is giving the junta the cold shoulder, apparent during the Cobra Gold Exercise," he said. The sub decision will worsen the drift in Thai-US relations and frustrate the US' rebalance strategy, said Thitinan Pongsudhirak, director of the Institute of Security and International Studies at Bangkok's Chulalongkorn University. "It is building into a kind of brinkmanship from Bangkok which will require the US to weigh its values and interests carefully," he said US criticism might be the prime driver for the turn toward China, Pongsudhirak said. "Evidently, Thailand's military government has found superpower support in Beijing, as China has embraced Thai generals in both coups in 2006 and 2014," he said. "Having China on its side is hugely important to the Thai military because it confers 'face' and international legitimacy while Western countries generally shunned and downgraded dealings with Thailand." The new constitution drafted by the junta will no doubt cause more problems with the US, Sebastian said. Critics and activists are warning that the constitution includes anti-democratic provisions designed to prevent any group loyal to Thaksin Shinawatra, who served as prime minister from 2001 until the 2006 military coup, from returning to power. "The current completed draft reportedly confirms these fears. Unelected individuals can become prime minister with parliamentary support, while most lawmakers would be appointed rather than elected. And parliament will also be elected via proportional representation, a system that would dilute the power of any large party and favor small parties and coalitions," he said."

China Military to Prosecute Another Senior Officer for Graft.
"China's military will prosecute another former senior officer for corruption, the Defence Ministry said on Friday, part of a sweeping campaign against graft which has already felled dozens of top people, including high ranking military personnel. Weeding out corruption in the military is a top goal of President Xi Jinping, chairman of the Central Military Commission, which controls China's 2.3 million-strong armed forces. In a brief statement, the ministry said that Deng Ruihui, former political commissar for the Joint Logistics Department in the Lanzhou military region, is suspected of serious "breaches of discipline", the usual euphemism for corruption. "He is suspected of breaking the law, and has already been handed over to the military prosecutor for handling in accordance with the law," it added, without elaborating. The Lanzhou military region is one of seven military regions in China, and is in charge of security for a large swathe of western China, including the restive region of Xinjiang, where Beijing says Islamist militants operate. Serving and retired Chinese military officers have said military graft is so pervasive it could undermine China's ability to wage war, and dozens of senior officers have been taken down. The anti-graft drive in the military comes as Xi steps up efforts to modernize forces that are projecting power across the disputed waters of the East and South China Seas, though China has not fought a war in decades."

China and Russia's Evolving Relationship.
 "The Shanghai Cooperation Organization (SCO) concluded a two-day meeting July 10 in Ufa, Russia, just two days after the BRICS (Brazil, Russia, India, China and South Africa) summit in the same city. These meetings serve as a benchmark of evolving relations between China and Russia. The BRICS grouping is a more recent invention, but the SCO emerged in 2001 as successor to the so-called Shanghai Five, which comprised Russia, Kazakhstan, Kyrgyzstan, Tajikistan and China. The grouping now includes those five states in addition to Uzbekistan. Begun as a forum to settle newly created borders after the dissolution of the Soviet Union, it has expanded and redefined itself in recent years. But while China and Russia also used the SCO to maintain a dialogue, contemplating their respective strategic interests in Central Asia and the grouping's potential value, they had different visions, which stalled the SCO's development. China has steered the organization toward an economic grouping while Russia has emphasized the organization's political role and pushed for greater security cooperation. The diverging visions have their roots in Russia's and China's different national strategies. Russia, which believes military might is the basis for national strength, power and influence, saw the group as a potential political and even security bloc, a way for Moscow to guarantee regional security while maintaining its interests in Central Asia. The group, Russia hoped, would also draw in China to provide greater leverage in dealing with the United States. China, by contrast, sees economics as power. For Beijing, military might rests on a strong economic base, and global power stems as much from the ability to shape global markets as it does from military force. China shared Russia's hope that the grouping would strengthen Beijing's hand when dealing with Washington, but it saw the SCO more as a potential economic bloc, one that would help China take full advantage of the region's natural resources. These different assessments of the nature of power shape Russia's and China's national strategies as well as their actions in the SCO and the more recently formed BRICS grouping. Both countries measure their strength by comparing themselves to their neighbors and one another. The SCO is now in the midst of an expansion to incorporate India and Pakistan, after years of keeping the two at arm's length."

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

Posted by The Congressional China Caucus | July 09, 2015

US Predicts 42,000 Unmanned Chinese Military Planes by 2023. "United States claims its arch superpower rival China is poised to become the world leader in unmanned military aircraft with up to 42,000 pilotless aircraft aloft by 2023. According to the United States Defense Department’s latest report on China’s military build-up the “Middle Kingdom” will spend more than $10 billion on land and sea based unmanned aircraft. These will include fixed wing and rotary aircraft to conduct surveillance, attack and even air combat missions. Stolen blueprint? ... China’s Yilong UAV bears a strong resemblance to the US Reaper. “The acquisition and development of longer-range UAVs will increase China’s ability to conduct long-range reconnaissance and strike operations,” the Pentagon report says. Three of the systems being developed by China — the Yilong, Sky Saber and Lijian — are capable of launching precision strike missiles. According to a US Naval Intelligence report the People’s Liberation Army (Navy) — the PLA(N) — would most likely emerge as the most prolific user of Unmanned Aerial Vehicles (UAVs). “In addition to land based systems the PLA(N) is also pursuing ship-based UAVs as a supplement to manned helicopters,” the report says. “To date we have observed the PLA(N) operating the Austrian Camcopter S-100 rotary wing UAV from several surface combatants.” In 2013 China revealed that it was developing four new types of UAVs including the Yilong and Lijian which look very similar to US built aircraft such as the General Atomics Reaper and the Northrop Grumman X-47B carrier based Unmanned Air Combat Vehicle (UCAV).  The Lijian, also known as “sharp sword”, is a stealthy flying wing design that first flew in November 2013 and is very similar to the X-47B that has been operated from a US aircraft carrier. China is notorious for stealing and copying ideas and even military blueprints and it operates a massive cyber warfare department to conduct such activities. The Pentagon report also warned that China’s military modernisation had “the potential to reduce core US military technological advantages. ”UAV expert at RMIT University in Melbourne David Schaefer, who published a report on China’s drone build-up earlier this year, said the US assessment was probably exaggerated and he doubted that China would ever have 42,000 UAVs."

Vietnamese Leader Predicts Closer US Military Ties.
One of Vietnam's top leaders says his country will continue to open up to the international community in coming years, a shift that he claims will benefit both Vietnam and the United States. Nguyen Phu Trong, general secretary of Vietnam's ruling Communist Party, also told the audience at the Center for Strategic and International Studies that military and security needs of his country are "huge" and likely to lead to expanded military partnerships with the US. "We will continue with the foreign policy of diversification and multilateralization, of mutual benefits, of non-interference, of equality," Trong said through a translator. "Vietnam is ready and willing to be a partner, a friend and a constructive and responsible member of the international community." Trong's comments came as part of a broader visit to the Washington area, highlighted by a meeting in the Oval Office with President Barack Obama, the highest level meeting between the two nations since relations stabilized 20 years ago. He also met with members of the Senate. The visit coincided with events honoring the 50th anniversary of the Vietnam War. The selection of Vietnam's 12th Party Congress, expected in early 2016, will provide an opportunity for the country to continue reforms laid out in its 2013 constitution, Trong noted. "Vietnam in particular would like the United States to recognize the market economic status of Vietnam, open up its market for more Vietnamese goods and remove all barriers which still exist today," he said. "On its part, Vietnam will open up our market and welcome American goods, especially those of high-technology density." Technology sharing would benefit his country in the oil and gas exploration fields, Trong said, but also in the realm of military and security. Asked about what military technology he hopes to procure from the US, Trong avoided specifics. But he made it clear that is a priority for his nation, in particular because of the massive South China Sea area that is contested with an increasingly aggressive China. "The needs are huge," Trong said. "I think that for our maritime cooperation, Vietnam has 3,000 kilometers of sea coast. Vietnam considers our 'blue' economy, our sea economy, as a major part of our socioeconomic development, and this is closely linked with our efforts to defend and safeguard our sovereignty and territorial integrity." During a May visit to Vietnam, US Defense Secretary Ash Carter announced the government would supply Vietnam with $18 million to procure coast guard patrol boats."

The Island of 120 People Staring Down China's Military Might.
​"On a clear night, the Filipinos who live on Pagasa Island -- a speck in the vast South China Sea -- can see the floodlights from giant Chinese cranes working around the clock, dredging sand to build on a nearby reef. Life on the atoll with its clutch of buildings was for decades leisurely and quiet, with sporadic Internet access and not much to do but fish and stroll on the beach. Now its 120-odd residents find themselves on the doorstep of a dispute over territory that has fed tensions among some of the world’s biggest powers. Change has come to Pagasa in the constant presence of China. More than 510 miles (820 kilometers) from the Philippine capital, and defended by a platoon of soldiers with limited weapons, the island is a gateway to reefs claimed and occupied by China. Separated from the nearest big Philippine island by a 36-hour boat ride in rough seas, it relies on ad hoc military flights and a quarterly visit from a resupply ship that has to dodge Chinese vessels to dock. “We’ve become used to the sight of big Chinese ships around Pagasa,” said Nelly Dalabajan, a 28-year-old nurse who went to Pagasa in February for a four-month rotation. “Seeing 30 ships and boats at one time is normal. We’re worried about the Chinese driving us out.” As China and other South China Sea claimant states bicker, the waters that are a conduit for energy supplies to Asia and carry about half the world’s merchant tonnage -- $5.3 trillion in goods each year -- are increasingly tense. Amid the posturing, with China warning the U.S. military away from reclaimed reefs and the U.S. patrolling the area, the question is: Where does this end? For the people who live and work in the waters the risk of a mishap is real, and China -- the Philippines’ second-biggest trading partner -- is seen as unstoppable despite the efforts of other countries’ militaries. With a string of reefs on which to base its military it’ll have the potential to better control shipping lanes, fishing grounds and unproven energy reserves, and cause environmental damage to a sea that’s famous for its pristine diving waters. China has accelerated its reclamation, dumping sand to build airstrips on tiny rocks that may otherwise be submerged at high tide. It has built 1,500 acres of a total of 2,000 acres of land since December."

Both China and Taiwan have South China Sea Obligations, says Beijing.
​"Both China and Taiwan have an obligation to assert claims to the South China Sea, China's Foreign Ministry said on Wednesday, in a sign of rare political agreement between the old foes on either side of the Taiwan Strait. Rivals China and Taiwan share claims to virtually the entire South China Sea, a legacy of the Chinese civil war when the Communists beat the Nationalists and took control of the Chinese mainland in 1949. The Nationalists settled on Taiwan and as the "Republic of China" still claim to be the legitimate rulers of greater China. Beijing regards Taiwan as a breakaway province and has never renounced the use of force to bring it under its control. This week, Taiwan's Foreign Ministry reiterated its claims to the South China Sea. Taiwan occupies the largest of the Spratly Islands, Itu Aba, as well as the Pratas Islands, which lie between southern Taiwan and Hong Kong. Asked about the Taiwan comments, Chinese Foreign Ministry spokeswoman Hua Chunying said that after World War Two, the then Nationalist government of China had made "positive efforts" to protect the country's claims in the South China Sea. This was something the Communist government carried on, she added. "In the present situation, Chinese people on both sides of the Taiwan Strait have a responsibility and obligation to maintain national territorial sovereignty and maritime rights," Hua told a daily news briefing. Itu Aba boasts the larger of two landing strips in the archipelago and is the only island with its own fresh water supply, making a long-term presence possible. Taiwan has tended not to take sides with China in the South China Sea, despite the historical ties, given the political mistrust between them - and because of its need to maintain good relations with its biggest ally and arms supplier, the United States, a vocal critic of Beijing's policies in the disputed waters. Vietnam, the Philippines, Malaysia and Brunei also have competing claims in the strategically located waters, situated on a major shipping lane. Taiwan and China have signed a series of landmark economic agreements since the pro-China Ma Ying-jeou took power in 2008, but deep suspicions remains, especially in now proudly democratic Taiwan."

Adam P. Liff and Andrew S. Erickson: Japan-China Crisis Management--The Urgent Need for Air-Sea Contact Mechanism.
“Since September 2012, two concrete drivers of Sino-Japanese tensions have soared to unprecedented highs: Chinese military and paramilitary activity in the waters and airspace surrounding the Senkaku (Chinese: Diaoyu) Islands, and Japanese fighter jet scrambles against approaching Chinese planes. Meanwhile, Sino-Japanese antipathy has reached post-normalization peaks, polls suggest. The United States pledges to support Japan in the event of a conflict--a commitment U.S. President Barack Obama reiterated at April’s Washington summit with Prime Minister Shinzo Abe. Since the summit between Abe and Chinese President Xi Jinping last November, the ice between Tokyo and Beijing has begun to thaw. But crowded waters and airspace in the East China Sea still make the risk of miscalculation or low-level encounters escalating into a major crisis too great for comfort. If Japan (with its U.S. ally) and China somehow went to war, the results could be catastrophic. Tokyo and Beijing must establish and effectively implement long-overdue bilateral maritime and aerial crisis management mechanisms. True statesmanship is needed to ensure that an avoidable catastrophe doesn't occur. Neither side wants a conflict. But to ensure that one won’t happen, they need an affirmative answer to the following question: Are China’s and Japan’s military crisis management mechanisms sufficiently mature to prevent possible escalation in the event of an unintended clash in the water or air? So far, there are grounds for concern, especially their ability to diplomatically defuse a crisis rapidly and effectively. High-level dialogue, deeply politicized in Beijing, remains irregular. Seven years of Tokyo-championed negotiations have not produced any bilateral crisis management mechanism. Meanwhile, China has responded to the Japanese government’s September 2012 “nationalization” of the Senkaku Islands with measures increasing the probability of miscalculation or unintended incidents that could escalate. For starters, by sending Chinese Coast Guard vessels into waters within 12 nautical miles of the islands Japan has administered for decades--387 cases between September 2012 and May 2015--Beijing now actively challenges the status quo.”

Crisis Averted in China's Stock Markets for Now.
"Drastic times call for drastic measures. Since early June, China's stock markets have been in free fall, losing 29 percent of their value in three weeks. No matter that all of the lost value was originally gained in the first part of this year, particularly since April, this ranks up with other historic market corrections. In October 1987, the Dow Jones Industrial Average fell 23 percent, and in late 2008 it fell 54 percent. Between 2000 and 2002, during the bursting of the dotcom bubble, the Nasdaq Composite lost 78 percent of its value. Fearing the continued erosion in its stock markets and the wrath of investors big and small, not to mention state-owned enterprises (SOEs) watching their balance sheets crumble before their eyes, Chinese authorities took a series of measures to stem the tide, including: suspending any new initial public offerings (IPOs), organizing securities brokerages to create an investment fund to soak up shares and have them commit to not sell shares while the Shanghai Composite Index remains below 4,500 points, having fund management firms promise to buy stocks, and ordering the country's social security fund to not sell any shares whatsoever. The only thing they could have done more drastic would have been to suspend trading altogether. The result: Shanghai opened Monday up 8 percent, and although it declined throughout the day, ended up 2.4 percent, at 3,776. The Shenzhen and Hong Kong markets did not fare as well, falling a couple percentage points (see Fig. 1), but China has avoided the financial cliff for the foreseeable future. Some observers believe we may even be in for another modest bull run over the next few months. The intervention comes with some real costs that will not be easy to overcome. The scale and aggressiveness of these measures make a mockery of the leadership's claim to allow the market to play a "decisive role" in determining the allocation of resources and the direction of the economy. Granted China needed to avoid a full-blown crisis, but these actions reinforce the distinct impression that when push comes to shove, Beijing will always choose administrative intervention rather than markets, signaling once again to investors (and local officials) that they can take excessive risks because someone else (higher up the system) will always clean up the mess. Over the past two years, Beijing has started to permit corporate bonds to default as a way of signaling that there is genuine risk that issuers and investors need to heed. Breaking the vicious cycle of moral hazard necessary to have a financial system operate efficiently on a commercial basis is now that much harder, as the stock market rescue may reinforce the older lessons Beijing was trying to unteach."

Poisoning the Well of U.S.-China Relations.
“It was bound to happen. As China’s stock market continued its wild ride, dropping 30 percent by early July from a seven-year high only a month prior, rumors started swirling that Goldman Sachs, Morgan Stanley, and George Soros, among other vague forces of international capital, were to blame for the stock market plunge. No matter that foreign investors have only limited access to mainland Chinese stock exchanges, the current Chinese leadership has become addicted to the foreigner blame game. The phrase “hostile foreign forces” has become a catch-all for Chinese officials, scholars, and media commentators who cannot acknowledge the reality of China’s current political and economic situation. In the past few years, virtually no area of Chinese policy has remained untouched by the influence of “hostile foreign forces.” China’s education minister Yuan Guiren argues that “young teachers and students are key targets of infiltration by enemy forces” and condemned Western concepts such as the rule of law, civil society, and human rights. The Chinese Academy of Social Sciences (CASS) accused “hostile Western forces” of exaggerating the number of people who died during the Great Leap Forward in order to undermine the legitimacy of the party. CASS also worked with China’s National Defense University and the General Staff department of the People’s Liberation Army to produce a film that claims. U.S.-China military-to-military exchanges offer Americans a chance for infiltration and attacks the longstanding Fulbright program as an element of “America’s cultural invasion.” Western reports of police violence in Xinjiang were attributed to hostile foreign forces in August 2014. The vice chairman of the All-China Federation of Trade Unions, Li Yufu, blamed hostile foreign forces for attempting to undermine the solidarity of the Chinese workers. Early in China’s clean air movement, as well, some officials argued that the activists were being used by hostile foreign forces. And, of course, hostile foreign forces were a major contributor to the protests in Hong Kong. Even President Xi Jinping has warned against outside forces intruding on Chinese religions, although virtually all major religions in China today came to the country from outside its borders, and two of the largest, Buddhism and Catholicism, are led by religious figures who reside outside China.”

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

Posted by The Congressional China Caucus | July 08, 2015

State Media: China Needs Long-Range Bomber. “China needs to develop a long-range strategic bomber to strike adversaries farther away from its coast in the event of conflict, state media reported Tuesday, quoting defense experts. Beijing has been steadily beefing up its military through years of double-digit increases in defense spending, rapidly expanding its naval power, commissioning its first aircraft carrier and adding to its submarine and surface fleets. But the government-run China Daily newspaper said in a full-page article that a recent military meeting had deemed the country's air force a "strategic force," citing the latest issues of Kanwa Defense Review, a Canada-based defense and weapons technology publication. The title had previously been reserved for the military's Second Artillery Corps, which the paper described as China's "de facto strategic missile force." The meeting agreed that a long-range strategic bomber would enable the air force to attack farther out into the Pacific Ocean, the paper quoted Kanwa Defense Review as reporting, as far as the "second island chain." Chinese strategists conceive of the "first island chain" as the arc stretching from Japan to Taiwan, which includes numerous US military bases on the Japanese island of Okinawa. The second chain refers to islands farther east in the Pacific, including the Marianas, the Carolines, and the US territory of Guam with its Andersen Air Force Base. A third "island chain" encompassing Hawaii is also sometimes mentioned. China's increased military posture has come as Beijing asserts its territorial claims in the East and South China Seas, where it has disputes with several Asian neighbours including Japan and the Philippines. Its moves have raised tensions with the United States, still the region's top military power. A capacity to strike the second island chain would hinder foreign militaries from intervening in "an emergency or conflict," the China Daily said, citing the report. In May, China's State Council, or cabinet, said in a white paper that the country would project its military power further beyond its sea borders and more assertively in the air. The Chinese military defines a long-range strategic bomber as one that can carry more than 10 tonnes of air-to-ground munitions and with a minimum range of 8,000 kilometers (5,000 miles) without refuelling, the China Daily said.”

Court Begins Hearing Philippines, China Dispute Over South China Sea.
“The Philippines argued at a closed hearing on Tuesday that an international court should intervene in its dispute with China over the right to exploit natural resources and fish in the South China Sea. Although China has declined to participate, the case at the Permanent Court of Arbitration in The Hague is being closely watched by Asian governments and Washington, given rising regional tensions as Chinese naval power grows. A panel of five judges will hear arguments this week and decide whether the treaty-based court has jurisdiction. Manila filed suit at the court in 2013, seeking to enforce its right to exploit waters in a 200-nautical mile "exclusive economic zone" off its coast, as defined under the U.N. Convention on the Law of the Sea. The Philippines argues that the arbitration court is the correct venue for resolving disputes covered by the treaty, which both countries have signed. "The Philippines believes the court has jurisdiction over all the claims it has made," said lawyer Paul Reichler, representing the Philippines. He said he was confident the court would ultimately rule in the Philippines' favor. Chinese Foreign Ministry spokeswoman Hua Chunying said China did not accept the court's jurisdiction and would not participate. "China opposes any form of arbitration process proposed and promoted by the Philippines," Hua told a daily news briefing in Beijing on Tuesday. In a position paper in December, China argued the dispute was not covered by the treaty because it was ultimately a matter of sovereignty, not exploitation rights. China claims most of the South China Sea. The Philippines, Vietnam, Malaysia, Taiwan and Brunei claim overlapping parts of the strategic waterway.”

New Chinese Security Law Opens Door to Tighter Restrictions: UN.
“China's new national security law is too vague and could lead to tighter restrictions on civil liberties, the United Nations High Commissioner for Human Rights said on Tuesday. China's legislature adopted a sweeping national security law last week that covers everything from territorial sovereignty to measures to tighten cyber security, a move likely to rile foreign businesses. The Xinhua state news agency said the law would "protect people's fundamental interests". "This law raises many concerns due to its extraordinarily broad scope, coupled with the vagueness of its terminology and definitions,” U.N. High Commissioner Zeid Ra'ad al Hussein said in a statement.  “As a result, it leaves the door wide open to further restrictions of the rights and freedoms of Chinese citizens and to even tighter control of civil society by the Chinese authorities than there is already.”  The U.N. statement said the law's scope included such areas as the environment, defense, culture, education and religion. "It also defines the meaning of national security extremely broadly: it is described as the condition in which the country’s government, sovereignty, unification, territorial integrity, well-being of its people, sustainable development of its economy and society and other major interests are relatively safe and not subject to internal and external threats," it said. Under the law, individuals must not act to endanger national security nor help people or organizations who are endangering national security, the U.N. statement said.  Zeid said he was concerned about the lack of independent oversight of how the law was applied and said restricting freedom of expression and peaceful assembly needed to serve a legitimate aim and be necessary and proportionate. China, a permanent member of the U.N. Security Council, deeply resents outside criticism of its domestic policies, especially concerning security issues and human rights, and often responds forcefully to such rebukes. Zeid said China's National People's Congress would soon consider laws on regulating foreign non-governmental organizations and counter-terrorism. He said security and human rights should be mutually reinforcing and complementary. A spokeswoman for China's parliament said in March that there were 6,000 foreign NGOs operating in the country and they needed to be effectively managed "to sufficiently protect our country's security and social stability."

Obama’s Policy on Arms Sales to Taiwan Needs Credibility and Clarity.
“Just as President George W. Bush raised doubts with a much-criticized “freeze” on arms sales to Taiwan, President Barack Obama has raised questions about his adherence to the 1979 Taiwan Relations Act (TRA). The TRA guides US policy in making available to Taiwan defense articles and defense services for its “self-defense.” US leadership and credibility regarding the “Rebalance” to Asia requires decisive, urgent action regarding Taiwan. That policy should include tangible follow-up actions to support Taiwan, maintain stability in the Asia-Pacific, and help Taiwan avoid coercion and conflict. In May, the Office of the Secretary of Defense submitted to Congress its annual report on China’s military power, a report that is coordinated throughout the administration. In it, the administration claimed that “consistent with the TRA, the United States has helped to maintain peace, security, and stability in the Taiwan Strait by providing defense articles and services to enable Taiwan to maintain a sufficient self-defense capability. To this end, the United States has announced more than $12 billion in arms sales to Taiwan since 2010.” The next month, Taiwan President Ma Ying-jeou boasted that “the U.S. has sold a total of $18.3 billion worth of arms to Taiwan since he took office seven years ago.” While this is a high-profile, political (perhaps disingenuous) sign of support for Taiwan, it is also incomplete. Compared to Bush’s “freeze,” President Obama’s inaction and changes to policy have dragged on longer with less critical attention. Obama has failed to notify Congress of major Foreign Military Sales (FMS) to Taiwan for almost four years. As Congress will soon recess in August, the president has an imperative to submit arms sales for Congressional review. The last time that the president notified Congress of major FMS to Taiwan occurred on Sept. 21, 2011. Though not a so-called “package,” the president waited to send to Congress on a single day three notices of proposed programs worth $5.9 billion, including upgrades for Taiwan’s F-16A/B fighters. Why has the president failed to exercise leadership and sell arms to Taiwan under the TRA since then? First, his inaction cannot be explained by a lack of defensive requirement. Officials and experts are increasingly concerned about China's potential use of coercion or attacks against Taiwan. The Defense Department’s reports to Congress have warned annually that “preparing for potential conflict in the Taiwan Strait remains the focus and primary driver of China’s military investment.” Moreover, the PRC has been determined to reach military and economic benchmarks by 2020, moving toward a goal of fighting and winning potential conflicts that include those related to Taiwan. Ominously, this year’s report warned that, while Taiwan historically has relied upon multiple military variables to deter aggression by the PRC, its increasingly modern weapons and platforms have “eroded or negated many of these factors” in Taiwan’s defense.”

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

Posted by The Congressional China Caucus | July 07, 2015

China Risk Prompts Wargames Ramp-Up. “Australia, India, Japan and the U.S. are all stepping up wargames in the Indo-Pacific in response to China's sabre rattling over disputed islands in the South and East China Sea. Australia will despatch warships and aircraft to the Bay of Bengal in October to take part in inaugural wargames with India. The moves come with Japan joining Australia's massive bilateral exercise with the U.S. – Talisman Sabre – which is now under way in Australia's north and involves up to 30,000 U.S. and Australian troops. Japan has also been invited to the India's premier wargame with the U.S. – Exercise Malabar, which will also be staged later this year – China bitterly protested when New Delhi extended an invitation to Australia and Japan to take part in the same exercise in 2007. Australia also dispatched 70 troops and an AP-3C Orion surveillance aircraft to Exercise Balikatan staged by the U.S. and the Philippines in April – a drill carried out close to one of the South China Sea territorial dispute flashpoints. Australian Strategic Policy Institute capability analyst Dr. Andrew Davies said there were two drivers for what appeared to be an unprecedented level of wargaming in the region. "The U.S., India, Japan and Australia are all increasing their involvement in military exercises and a lot of that is being driven by concern about China," Dr. Davies said. "And there are a lot more warships being bought by regional navies and more kit means more strategic competition," he said. Dr. Davies said he didn't believe the wargaming reflected a reconstitution of the "gang of four" that involved the U.S., Australia, Japan and India in formal talks during the the late Howard era. Australia and India pulled out of the process after Beijing complained it was part of a U.S.-led containment policy. "But you can almost see these countries coming together without the formality of an agreement ... an agreement would be a poke in the eye to China," Dr. Davies added.The first joint Australia-India exercise was agreed to as part of a strengthening of defence ties announced by former Defence Minister Stephen Smith in 2013 and his then Indian counterpart AK Antony. But further details have been thrashed out since Prime Minister Tony Abbott struck a security co-operation agreement with his Indian counterpart Narendra Modi in November last year where he declared India "the emerging superpower of Asia.” Mr. Modi in a veiled reference to China's involvement in maritime disputes told the Australian parliament, Australia and India could work together "to promote a currency of coexistence and co-operation.” The Australia-India wargames will be staged from November 30 to November 4 with India-Japan wargames also to be staged later this year.”

Another Sign that U.S.-China Relations are Souring.
“The 7th Round of the U.S.-China Strategic and Economic Dialogue (S&ED) concluded last month. Once again, the work of hundreds of senior officials and dozens of agencies produced a mountain of literature. China watchers are still parsing the 127 outcomes of the Strategic Track, but one important change seems to have slipped through the cracks. Unlike last year, the factsheet contains no reference to a “new model of U.S.-China military-to-military relations,” an offshoot of President Xi Jinping’s signature foreign policy concept, the “new type of great power relations (NTGPR).” In fact, a careful reading of recent Pentagon speeches and reports confirms this is no accidental omission. Despite some recent progress in areas of practical cooperation like the signing of an Army-to-Army Dialogue Mechanism Framework, Secretary Ashton Carter has systematically purged the term from the Defense Department’s engagement rhetoric. Exasperated with Beijing’s maritime assertiveness and cyber activities, views of China within the Pentagon—and Washington in general—are unmistakably hardening. Observers on both sides of the Pacific should take note of this latest sign of deepening strategic mistrust. First introduced by then-Vice President Xi during a state visit in 2012, the NTGPR framework has since come to dominate Chinese public diplomacy towards the United States. Like the “China Dream” and “One Belt, One Road,” the “new model” of Sino-American relations occupies an important ideological space for the Party’s 5th generation leadership and is closely tied to Xi’s personal prestige. A big push for the United States to agree to the concept came in 2013, when President Obama pledged to foster “a new model of cooperation” at the informal Sunnylands summit. Despite U.S. concerns that the NTGPR’s calls for “no conflict, no confrontation, mutual respect, and win-win cooperation” might mean accommodating Chinese hegemony in Asia, the phrase quickly gained currency in other high-profile exchanges. At the 5th S&ED later that year, the two sides agreed to build “a new model of relations between the United States and China,” and Deputy Secretary of State William Burns spoke of “major powers looking to forge a new model of relations.”

With an Absent United States, China Marches On.
"In January 2007, not long after George W. Bush announced his surge of troops into Iraq, I happened to be having lunch with a Chinese friend who is a well-connected member of the Communist Party. I asked him how the news was being received in Beijing. He replied in words to the effect of: “We would hope that you would send the entire American Army into Iraq and stay for another 10 years. Meanwhile, we will keep building up our economy.” I thought of that story this week while traveling in Southeast Asia. As the Islamic State, Iran and Greece occupy the attention of the Western world, China marches forward, except now it is not just building its economy but also a new geopolitics in Asia. Recently released satellite photos show that China has almost completed an airstrip on one of the many artificial islands it has created in the Spratly archipelago over the past year and a half. Its actions in the area are intended to consolidate its claims to 90 percent of the South China Sea, through which $5 trillion in trade flows every year. (These claims are disputed by the Philippines, Vietnam, Malaysia, Brunei and Taiwan.) President Xi Jinping has marked a break with his predecessors in openly embracing an activist foreign policy, speaking about the “Asia-Pacific dream” and announcing ventures such as the Asian Infrastructure Investment Bankand the “Maritime Silk Road.” Behind this rhetoric is an avalanche of cash. Scholar David Shambaugh points out that if you add up China’s promised investments in all of these regional ventures, the total is $1.41 trillion. The Marshall Plan, by comparison, cost $103 billion in today’s dollars. A senior Southeast Asian diplomat explained to me that China is using money and pressure to “suborn” countries in the region. He pointed out that aid is often carefully targeted, so that money to Malaysia, for example, is directed specifically to the state of Pahang, the political base of the prime minister. “In Myanmar and Thailand, [the Chinese] make sure the generals get their share of the contracts,” he said. In smaller countries such as Cambodia and Laos, Chinese money dominates the economy. Beijing is also enlarging its military options, with the Spratly reclamation and a significant expansion of the country’s land-based missile systems. In addition, Beijing has been quietly damming rivers that flow across its borders — from the Mekong to the Brahmaputra — which would give it the ability in a crisis to cut water supplies to Cambodia and India, respectively.”

A Milestone Visit to Washington by Vietnam’s Communist Party.
“Few nations have changed the course of their relationship as profoundly in as little time as Vietnam and the United States have. This week, the official U.S. visit of Nguyen Phu Trong, general secretary of the Communist Party of Vietnam, will mark yet another milestone in the relations between our countries. Over the past 20 years, we have progressed from an embargo to fuller diplomatic relations, a bilateral trade agreement and a comprehensive partnership. Now the visit by the general secretary at the invitation of the Obama administration signals U.S. respect for Vietnam’s choice of political regime. To be sure, Vietnam’s political system does not mirror that of the United States, but in important ways we seek to move in the same direction — a market economy, stronger investor protections, and peace and stability in international affairs. Strong partners — and good friends — are not necessarily those who are most alike but those who can accept each other as they are and have a frank dialogue about their differences. Those differences are not core elements. When President Ho Chi Minh declared the independence of the Democratic Republic of Vietnam, he quoted from the U.S. Declaration of Independence. That historic moment could have been the beginning of a positive relationship with the United States. Unfortunately, history took a different path. But seven decades later, in the spirit of shelving the past, looking to the future, we are back on track with Ho’s vision: two nations, proud and independent, working as partners wherever common interest suggests. The most substantial area of our common interest is the economy. Starting from virtually no exchange until the mid-1990s, trade between our countries has grown to impressive levels, rising from $451 million in 1995 to some $35 billion in 2014. U.S. consumers benefit from the many products that are made efficiently and cheaply in Vietnam. Contrary to common assumptions, this does not harm the U.S. job market; it only replaces imports from other Asian countries. In return, Vietnamese consumers earn the income they need to buy U.S. products. American cellphones are in millions of pockets, and Boeing sells aircraft to a multitude of new airlines. It is clear that our trade relationship is not a zero-sum game. We both win. Of course, our relationship is not just about doing business. Our security cooperation has improved, and the Obama administration has partially lifted the U.S. embargo on the sale of lethal arms. Vietnam and the United States share a common goal of peace and stability in the region. Both our governments believe in the settlement of disputes by peaceful means through negotiations, on the basis of international law, and the respect for freedom of navigation in international waters. As a result, we are natural partners when it comes to promoting stability in East Asia."

Is Vietnam Pivoting Toward the United States?
“Nguyen Phu Trong, the Secretary General of the Vietnam Communist Party, will visit Washington from July 6-9 to mark the twentieth anniversary of the normalization of diplomatic relations between the Socialist Republic of Vietnam and the United States. Trong’s visit is unprecedented because it marks the first time that the leader of the Vietnam Communist Party will visit the United States in an official capacity. Diplomatic sources report that Vietnam lobbied for this visit and that one sticking point was protocol. The Vietnamese side wanted Secretary General Trong to be received by President Barack Obama in the White House. This created a protocol issue because Secretary General Trong has no counterpart in the U.S. political system. Media sources report that Secretary General Trong will be received by Vice President Joe Biden in the The White House and that President Barack Obama will join in the discussions. There are rumors that Trong may meet with Hillary Clinton. In 2013, Obama and his Vietnamese counterpart Truong Tan Sang signed an Agreement on Comprehensive Partnership. This is the key framework document for bilateral relations. Earlier this year Secretary of Defense Ashton Carter signed a Joint Vision Statement in Hanoi with his counterpart General Phung Quang Thanh that set out twelve areas of future defense cooperation. The Obama-Trong meeting is significant because both leaders will be leaving office next year. Whatever understandings are reached during Trong’s visit will set the foundation for U.S.-Vietnam relations as leadership transitions play out in both countries. Vietnam is scheduled to hold its twelfth national party congress in early 2016. This congress will adopt key strategic policy documents for the next five years. It is significant that since the HY981 oil drilling platform crisis in May-July last year, a number of members of the party Politburo have visited the United States, including Pham Quang Nghi (the party boss of Hanoi) and Tran Dai Quang (Minister of Public Security). It is expected that Prime Minister Nguyen Tan Dung will make a sideline visit to Washington following his appearance at the annual meeting of the Untied Nations General Assembly in New York. Nguyen Sinh Hung, chairman of the Standing Committee of Vietnam’s National Assembly also is likely to make a visit according to the rumor mill.”

South China Sea: David v Goliath as Dispute Goes to Court.
"It's a David and Goliath struggle at a United Nations tribunal in The Hague on Tuesday. Or it would be if Goliath had turned up. In 2010, China's then foreign minister, Yang Jiechi, told uneasy neighbours: "China is a big country, other countries are small countries, and that's just a fact." But size is not legal currency when it comes to competing claims in the South China Sea. The five judges in the Court of Arbitration will decide the case of the Philippines versus the People's Republic of China, according to the United Nations Convention on the Law of the Sea (UNCLOS) to which both countries are signatories. Legal challenges are cheaper than military build-up, and a more level playing field for the tiny Philippines against its giant neighbour. Manila cannot seek a sovereignty ruling at the International Court of Justice without China's agreement. But it can invoke dispute settlement procedures under UNCLOS even if China refuses to take part.  Beijing has refused to take part, making its presence felt only by challenging the tribunal's jurisdiction. It is playing for time. These things do take time. The case was brought by Manila two and a half years ago to establish its right to exploit waters in a 200 nautical mile exclusive economic zone. But in the past 18 months, China has gone about creating facts on the ground, reclaiming perhaps 2,000 acres of land from the sea in what one American admiral described as a "great wall of sand". The objective seems to be to force rivals like the Philippines to negotiate on new terms. But again, this has no legal basis. The convention says you can't build sovereignty out of sand or anything else. The Hague decision will be legally binding but unenforceable as there is no UN body to police such rulings. But China likes to present itself as a responsible UN player and however it may bluster about not acknowledging the tribunal's jurisdiction, a decision against it would be a diplomatic blow. It would also set a worrying precedent, possibly emboldening other territorial rivals to follow the Philippines down the same path. So in the Hague, China is on the defensive. But in general, China plays offence in the South China Sea. Offence with a rhythm of tactical attacks and retreats and an overlay of strategic ambiguity. The ambiguity is fairly staggering. Firstly it does not clarify its actual claims. The nine-dash line that appears on Chinese maps encompassing almost the entirety of the South China Sea includes no coordinates.”

China May Lose Friends in Southeast Asia.
"Several Southeast Asian countries have expressed concern over Beijing’s belligerent behavior and aggressive posturing in the South China Sea. A litany of complaints of harassment of innocent fishermen by Chinese Coast Guard vessels has been reported by Vietnam and the Philippines, who are visibly angry with China. These incidents have led to stand-offs between maritime security forces, shadowing and buzzing by aircraft, including obstruction of exploration ships and rigs. Issues such as freedom of navigation and the possibility of China announcing an ADIZ over the South China Sea have also unnerved regional countries. If these trends continue, these could potentially result in deterioration of relations between China and the Southeast Asian countries and Beijing may soon lose friends. In light of these developments, the ongoing standoff between Malaysia and China over the presence of a Chinese coast guard ship Haijing (CCG-1123) anchored in Malaysia’s Economic Zone (EEZ) merits attention. Following the sighting of the Chinese coast guard ship off Luconia Shoals (Beting Patinggi Ali in Malay) nearly 90 nautical miles north of Sarawak, the Malaysian government ordered the navy and the Malaysian Maritime Enforcement Agency (MMEA) to deploy ships and aircraft and monitor the activities of the Chinese ship. The Malaysian Navy chief Abdul Aziz Jaafar expressed concern over the intrusion by the Chinese ship and announced that his forces were continuously monitoring and shadowing the Chinese vessel. Further, since September 2014, intrusion by Chinese vessels in Malaysian waters had increased and “We protest every time. We see them every day.” Jaafar was also disappointed that there was no response from the Chinese ship when it was contacted by radio with warnings to leave Malaysian waters using international distress and calling frequencies. Malaysian National Security Minister Shahidan Kassim stated that Luconia Shoals fall in the Malaysian EEZ and warned that Prime Minister Najib Razak would raise the issue directly with Chinese President Xi Jinping. There is a history of Chinese Coast Guard ships intruding into the waters of other claimants in the South China Sea. The Philippines has accused China of harassing its fishermen by firing water cannons at them and, in a recent case, ramming into boats. In 2014, in a television interview, Philippines President Benigno Aquino stated that two Chinese hydrographic survey ships were sighted in the Recto Bank, about 80 nautical miles off Palawan, within the Philippines claimed EEZ.  Aquino also made known that Chinese Coast Guard ships were often spotted patrolling around Second Thomas Shoal."

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

Posted by The Congressional China Caucus | July 06, 2015

China’s Insatiable Appetite for Power. "One of the defining features of communism in the Chinese experience has been the fierce determination of party leaders to maintain a monopoly on power and obliterate any competition. China’s bosses have largely abandoned communism as an economic principle and embraced capitalism, but when it comes to the levers of power, they don’t give an inch. Yet the reality is that China simply cannot fulfill all the needs of its citizens, and there has been plenty for nongovernmental organizations to do. Over the past two decades, all kinds of nongovernmental organizations have sprung up, many funded from abroad, helping with health care, business and environmental protection and filling other needs. While China has often refused to formally register these groups, they have operated anyway, in a sort of legal gray zone. Now, China has put forward a draft law that could potentially wipe out these organizations, both those supported from overseas and homegrown. The law would require all nongovernmental organizations to be vetted by China’s security police, require them to find an official government “sponsor” and subject them to intrusive inspections, controls and hiring rules. Failure to follow the law could bring criminal penalties. The draft law is written in a vague way to give the security police wide discretion. Almost any group could become a target. Ira Belkin and Jerome A. Cohen of New York University Law School’s U.S.-Asia Law Institute wrote recently that “even a single lecture by a Harvard professor, an art exhibit by New York’s Museum of Modern Art, an act of charity or humanitarian disaster relief by the Red Cross, an athletic competition, a performance by a high school marching band, or a scholarship offered to a Chinese student could fall under the purview of the law — so long as the event is carried out within China by, or on behalf of, a foreign nonprofit.” As The Post’s Simon Denyer reported last month, the draft law has also drawn objections from the U.S. and European business communities, which fear it could crimp foreign industry associations, universities and science and technology institutes, among other entities. The draft law appears to reflect a drive by President Xi Jinping to purge Western ideas and values from contemporary China, a theme that ran through a long internal party memorandum known as “Document No. 9” that circulated two years ago.”

China’s Market Rout Is a Double Threat.
"For nearly three years, President Xi Jinping of China has crushed opposition by silencing and often locking up anyone who dares defy the government. But that aura of invincibility has been shaken by stock market speculators who have made a mockery of efforts to halt a steep slide in share prices. The losses — Chinese shares have shed more than a quarter of their value in three weeks — pose an added risk, and possibly greater danger, to a global economy grappling with Greece’s difficulties in repaying foreign loans and its possible exit from the euro. About $2.7 trillion in value has evaporated since the Chinese stock market peaked on June 12. That is six times Greece’s entire foreign debt, or 11 years of Greece’s economic output. The government rolled out further initiatives in hopes of forestalling another market rout on Monday: 21 brokerage firms agreed on Saturday to set up a fund worth at least $19.4 billion to buy blue-chip stocks, and both of the country’s stock exchanges halted all new initial public offerings.Skeptical investors have so far shrugged off each step the government has taken to keep share prices aloft: an interest-rate cut, threats to punish rumormongers, allowing the national pension fund to buy stocks and even plans to investigate short-sellers who have placed bets that the market will fall.The faltering of these measures has put an embarrassing dent in the halo of unruffled supremacy built up around Mr. Xi’s administration, and this past weekend his government doubled down again, betting that it could beat bearish market sentiment into submission. On Sunday, the government brought in the central bank, the People’s Bank of China, and an investment arm of the country’s sovereign wealth fund to support the effort. The China Securities Regulatory Commission, which governs the stock markets, said that the central bank would give financial support to the state-controlled China Securities Finance Corporation to “enhance its capacity to safeguard market stability.” The finance corporation lends to brokerage firms, which then lend the money to customers wanting to buy shares. In addition, Central Huijin Investment, a company owned by the country’s sovereign wealth fund that usually invests in banks and other financial institutions, said on its website that it had recently bought into investment funds traded on the stock exchanges, and would continue to play a role in “market operations.” China’s willingness to throw government money into the market showed early results, with the Shanghai stock market up 7.8 percent at the start of trading Monday, but it shed nearly half of those gains in the first 10 minutes.”

China Stresses Nationalism in War Anniversary Propaganda Push. 
China plans to mark the 70th anniversary of the end of World War Two in Asia, and its fight against Japan, with a stream of movies, concerts, performances and exhibitions, officials said on Monday, in an effort to strengthen "nationalism and culture". The centerpiece of the events is a military parade through central Beijing in September, although few top Western officials are likely to attend, for fear of sending the wrong signal in a region fraught with territorial disputes and bitter war memories. China-Japan relations have long been affected by what China sees as Japan's failure to atone for its occupation of parts of the country before and during the war. Beijing rarely misses a chance to remind the world of its suffering at the hands of Japan. Over the next three months, the Chinese government will promote 20 documentaries, 12 television dramas and three animated programs. Items already presented include more than 180 children's shows, dramas and musicals. "By highlighting the spirit of patriotism, uprightness and heroism in their creations, artists can help the public to strengthen their values on history, nationalism and culture, (and) therefore increase their self-confidence and dignity as Chinese," Vice Minister of Culture Dong Wei said in written remarks before a news briefing. At least five new films have finished shooting and will be screened at major cinemas beginning in early September, Tian Jin, vice minister at the State Administration of Press, Publication, Radio, Film and Television, told reporters. Dong, Tian, and several other officials, including those from the People's Liberation Army (PLA) and the State Archives Administration, declined to answer a Reuters question on concerns whether the works would stoke regional tension. Many of the works will highlight the efforts of China's ruling Communist Party in the war againstJapan. An exhibition organized by the PLA will focus on the Party's "critical role" in the war and a concert titled "The Great Wall Built by Flesh and Blood", will show the spirit of China's armed forces "under the leadership of the Communist Party", Li Zhensheng, deputy publicity chief of the PLA's General Political Department, said in a statement. President Ma Ying-jeou of self-ruled Taiwan said on Saturday it was Nationalist Chinese forces which won the war against Japan, challenging Beijing's official line, which focuses on the heroics of the Communist army. After the war, Chinese Communists and Nationalists resumed a civil war that resulted in Nationalist forces withdrawing to Taiwan in 1949, though China still claims the island as its own.”

The Other Islands in the West Pacific.
"Quartz, the online media site aimed at a millennial audience, reported on June 22 that Ding Yihui of the Chinese Academy of Engineering had told the People’s Daily that China’s island building effort in the international waters of the South China Sea several hundred miles south of the mainland is intended for “enhancing and improving marine meteorological monitoring, warning, forecasting, prediction, and scientific research.” This, of course, is nonsense. China recently placed motorized artillery on one of its newly created artificial islands. No one needs a 35-ton self-propelled 155mm howitzer to defend weather forecasters. China’s deliberately hostile actions in the West Pacific’s international waters are strategic. If successful, Beijing’s claims based on dubious readings of law, establishment of air defense zones, naval confrontations with neighbors, and now island-building will allow China to control the international waters up to and beyond the first chain of islands that separate the East Asian mainland from the open Pacific. These are the islands that matter.  The little specks that China is creating in the South China Sea are political stepping stones to strategic dominance over the South China and adjacent seas. Establishing such control would greatly complicate the U.S.’s ability to honor its obligations to defend the ocean-encircled or coastal states of Taiwan, Japan, the Philippines and South Korea. Dominance in the Yellow, South, and East China Seas would also establish Chinese hegemony over Indonesia, Malaysia, Singapore and Vietnam, none of which will welcome it. China, like most states, prefers to accomplish its objectives without fighting. But if accident, miscalculation or calculation lead to war, American bases in the region would be as important to victory as they are in reminding Beijing in peacetime that military confrontation with the U.S. is not in their interest. Vladimir Putin knows this. In an article that appeared on 8 June he urged the Italian newspaper Corriere della Sera “to publish a world map and mark all the U.S. military bases on it.” Putin is right that the U.S. still has a useful global network of support. He is wrong to compare the beneficent purpose of this network with Russia’s increasing aggressiveness. Chinese leaders’ attempt to separate the U.S. from its East Asian allies along with American or jointly operated bases in the region show that they too understand the link between power and the bases that support it.”

Japan joins U.S.-Australia War Games amid Growing Tensions with China.
"The United States and Australia kicked off a massive joint biennial military exercise on Sunday, with Japan taking part for the first time amid looming tensions with China over territorial disagreements. The two-week “Talisman Sabre” exercise in the Northern Territory and Queensland state involves 30,000 personnel from the U.S. and Australia practicing operations at sea, in the air and on land. Some 40 personnel from the Ground Self-Defense Force (GSDF) — were to join the American contingent, while more than 500 troops from New Zealand were also to take part in the exercise, which concludes July 21. “It is a very, very important alliance,” Prime Minister Tony Abbott said Friday, referring to Australia-U.S ties. “It’s a very important relationship and right now we are facing quite significant challenges in many parts of the world but particularly in the Middle East,” Abbott added in Sydney on board the USS Blue Ridge, which is taking part in the exercises. The war games, being held for the sixth time, come as China continues to flex its strategic and economic muscle in the region. Beijing has been building artificial islands and facilities in disputed waters in the South China Sea, and has a separate territorial dispute with Tokyo over the Japanese-controlled Senkaku Islands — which it calls the Diaoyus — in the East China Sea. “There’s subtle message going out that at every level — from hardware to technical and strategic expertise and cooperation — the main American allies and America are working very closely together largely to account for China,” said John Lee, a China specialist at the University of Sydney. “It’s definitely linked to the notion that China is becoming more assertive and that it seems to be putting money into military capabilities to back up its assertiveness in the South China Sea in particular.” Beijing rejected U.S. criticism of its reclamation works in the South China Sea during the annual Shangri-La Dialogue meeting in May, saying it was just exercising its sovereignty. The U.S. has been pursuing a foreign policy “pivot” toward Asia, which has rattled China, and is rotating marines through northern Australia — a move announced by President Barack Obama in 2011. While Beijing would not be pleased with Japan’s involvement in the drills, it would also not be surprised, experts said. Australia has stepped up its relationship with Japan in recent years and last July, Abbott described Prime Minister Shinzo Abe as “a very, very close friend” during a state visit to Canberra. The Australian government is also considering buying Soryu-class submarines from Japan, which Lee, the China expert, said would be fully integrated with U.S. weapons systems.”

Rivals Pakistan, India to Start Process of Joining China Security Bloc.
“Nuclear-armed rivals Pakistan and India will start the process of joining a security bloc led byChina and Russia at a summit in Russia later this week, a senior Chinese diplomat said on Monday, the first time the grouping has expanded since it was set up in 2001. The Shanghai Cooperation Organisation (SCO) groups China, Russia and the former Soviet republics of Tajikistan, Uzbekistan, Kazakhstan and Kyrgyzstan, while India, Pakistan, Iran,Afghanistan and Mongolia are observers. "As the influence of the SCO's development has expanded, more and more countries in the region have brought up joining the SCO," Chinese Vice Foreign Minister Cheng Guoping told a news briefing."...India and Pakistan's admission to the SCO will play an important role in the SCO's development it will play a constructive role in pushing for the improvement of their bilateral relations." India and Pakistan have fought three wars since 1947, two of them over the divided Muslim-majority region of Kashmir which they both claim in full but rule in part. Pakistan also believesIndia is supporting separatists in resource-rich Baluchistan province, as well as militants fighting the state. The SCO was originally formed to fight threats posed by radical Islam and drug trafficking from neighboring Afghanistan. Cheng said that the summit, to be attended by Chinese President Xi Jinping, would also discuss security in Afghanistan. Beijing says separatist groups in the far western region of Xinjiang, home to the Muslim Uighur minority, are seeking to form their own state called East Turkestan and have links with militants in Central Asia as well as Pakistan and Afghanistan. China says that Uighur militants, operating at the East Turkestan Islamic Movement (ETIM), has also been working with Islamic State. "It can be said that ETIM certainly has links with the Islamic State, and has participated in relevant terrorist activities. China is paying close attention to this, and will have security cooperation with relevant countries," Cheng said.”

Chinese Tourists Warned over Turkey Uighur Protests.
China has issued travel advice to its citizens travelling to Turkey after it said several tourists were attacked in protests over the Chinese government's treatment of ethnic Uighur Muslims. Over the weekend, hundreds of protesters gathered outside the Chinese consulate in Istanbul. Tourists have been warned to avoid filming protests or going out alone. China said it has always attached great importance to and fully respects the freedom of Muslim religious beliefs. A statement from the government said accusations in the Western media that religious rites had been banned in western China's Xinjiang province this Ramadan were "completely at odds with the facts". Turkish Muslims and Chinese Uighurs share ethnicity and have close cultural and religious ties. The Chinese government issued safety advice, saying accusations in the Western media were at odds with the factsThere has been a crackdown in Xinjiang on what China describes as 'terrorism driven by religious extremism' Ankara summoned the Chinese ambassador last week over reports that Beijing had banned Uighurs from fasting and worship during the holy month. Hundreds have died in violent attacks in Xinjiang in recent years. China blames the violence on Islamist terrorist groups but Uighur groups say the unrest is being fuelled by Beijing's repressive policies. On Sunday, protesters at the Chinese consulate were pictured burning the Chinese flag and holding banners, one of which said "Turkey save your Brother - China get out from East Turkestan". A propaganda mural in Kashgar, Xinjiang, shows Uighurs reading a Chinese book China crushed the short-lived state of East Turkestan in 1949. It established the Xinjiang Uyghur Autonomous Region in 1955. The Chinese foreign ministry said there had recently been "multiple" demonstrations in Turkey targeting the Chinese government and "several" Chinese tourists had been attacked. Turkish media reported a group of Korean tourists believed to be Chinese were attacked and tear gas was used by police to disperse protesters. The last year has seen a crackdown in Xinjiang on what China describes as "terrorism driven by religious extremism". In some places, the government has banned Uighurs from buying knives and women from wearing veils. Security check points have been set up on roads and near markets and shopping malls. In previous years, students have told the BBC they have been prohibited from taking part in Ramadan fasts, and government departments have restricted civil servants. On microblog Weibo, one Chinese user, Dan Duo Duo 35, said: "Our policies towards ethnic minorities are still not good enough? They have less strict requirement for university exams, special prayer rooms in airports, and food labelled with Halal. "The Han people are the disadvantaged one."

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

Posted by The Congressional China Caucus | July 02, 2015

The Caucus Brief will return on Monday, July 6th. Happy Fourth of July!

Dempsey Releases National Military Strategy.
"The chairman of the Joint Chiefs of Staff cannot predict exactly where the next threat to the United States and its interests may come from, but he knows it will happen faster than in the past and the U.S. military must be prepared. The National Military Strategy released today by Army Gen. Martin E. Dempsey provides the blueprint for how the military will use its forces to protect and advance U.S. national and security interests. “Globalization, diffusion of technology, and demographic shifts are driving rapid change as state actors and trans-regional networks challenge order and stability,” said Dempsey. “This strategy addresses these dynamics and our strategy to ensure that our force remains the best-led, trained and equipped military on the planet.” The National Military Strategy follows the release of the 2015 National Security Strategy in February this year, as well as the 2014 Quadrennial Defense Review. The strategy recognizes that the application of military power versus traditional state threats is far different than military power against non-state actors. It also posits that the most likely scenario is prolonged campaigns rather than short, intense battles. The strategy also states that as a “hedge against unpredictability with reduced resources we may have to adjust our global posture.” According to the strategy document, the U.S. military also must be ready to counter “revisionist states” such as Russia that are challenging international norms as well as violent extremist organizations such as the Islamic State of Iraq and the Levant. “We are working with allies to deter, deny and -- when necessary -- defeat potential state adversaries,” the document says. But at the same time, the U.S. military is building and leading an extensive network to take on ISIL. Globalization is allowing people and technology to move around the world in a way never seen before, complicating an already complex security situation, according to the strategy. Globalization has positive effects in stimulating trade and making many nations prosperous, but it also can exacerbate social tensions, cause competition for resources and may engender political instability. Technology speeds everything up. The strategy noted that individuals and groups, today, have more information at their beck and call than governments had in the past.”

Just How Strong Will China's Military Be in 2025?
“The People’s Liberation Army and its constituent branches have undergone extraordinary change over the last fifteen years.  Doctrine, equipment, training, and strategic orientation have all evolved to the point that the PLA, the PLAN, and the PLAAF have become nearly unrecognizable from the vantage of the 1990s, when they used antiquated equipment, concentrated on making money rather than preparing to fight, and still looked for threats from the north rather than from the east. The PLA has taken great steps forward over the past decade, just as it took great steps forward in the previous decade. What might it look like ten years from today?  What trends do we expect to continue? One area in which China remains dramatically behind the United States is in operational experience.  For good or (mostly) ill, the United States has embroiled itself in a series of “wars on terror” which have given its armed forces tremendous experience in the day-to-day execution of military force.  These wars have not, to be fair, allowed the military services of the United States to engage in high intensity combat against a peer competitor, but they have nevertheless illuminated key concepts, provided the opportunity for training under fire, and forced the various elements of the U.S. military machine to figure out how to work together. This is experiential, tacit knowledge, and it sets functional military organizations apart from ones that look good but have never been tested under fire. The PLA lacks such hands on experience, and it’s not clear that China is planning to start an endless, pointless series of wars in order to acquire it. However, there’s little question that China has stepped up its efforts at building experiential knowledge through improving its realistic training procedures (China’s version of Red Flag) and by conducting more overseas deployments of air, land, and naval forces. In every war, the U.S. armed services grow closer together, developing the procedures and communications techniques they need in order to perform as an effective team. In every peace, the U.S. armed services grow farther apart, as each pursues internal, parochial goals at the expense of joint training, procurement, and planning.”

South China Sea: China’s HD-981 Oil Rig Is Back.
 "The latest oil rig gesturing shows an inconsistency between rhetoric and action in China’s policy in the South China Sea. Together with its mass reclamation activities, the use of the oil rig is part and parcel of coercive diplomacy. It affirms China’s territorial ambition in the highly strategic seawater. Still, though, it is hard to see the situation escalating to the point of conflict. China’s Haiyang Shiyou 981 oil rig is back, following on from last year’s headline dispute with Vietnam. Only this time, the rig is being reintroduced in timely fashion, just weeks before the first visit by the general secretary of Vietnam’s Communist Party to Washington. According to reports, the platform is currently located 17°03’75’’ North latitude and 109°59’05’’ East longitude. While the rig’s present location is not as close to Vietnam as it was last year, the intent is fairly obvious. Yet it is unlikely that Vietnam will overreact to this provocation. It has no immediate reason to do so and it is, after all, accustomed to Chinese displays of power. For Hanoi, continuing an approach of carefully balancing and engaging China and more distant powers seems prudent.  The move itself, announced by China’s maritime safety authorities, comes soon after Beijing indicated it was close to setting up new outposts in the maritime heart of Southeast Asia, as it nears completion of land reclamation in the South China Sea. This dispute originates from a group of small islands and atolls in the South China Sea, which are claimed in whole or in part by a host of nations: China, Taiwan, Vietnam, Malaysia, Brunei, and the Philippines. The contested area, about the size of Iraq, is one of the busiest sea transport routes in the world, features potentially lucrative oil and natural gas deposits, and offers fishing grounds that are still diverse and bountiful. The practice of land reclamation is not exactly of Chinese innovation. The 1982 United Nations Convention on the Law of the Sea (UNLOS) stipulates rights to different maritime features that are relevant to the South China Sea situation. Fully fledged islands enjoy territorial rights up to 12 nautical miles (nm), while their Exclusive Economic Zones (EEZ) extends to a maximum of 200 nm. Most acutely, the EEZ setup increases the potential for overlapping territorial claims in enclosed seas like the South China Sea. The result is that littoral states have hastened to establish settlements – in most cases by military outposts – on the small islands of the region in a bid to establish unique territorial claims to both an EEZ and a continental shelf."

Explained: Why China and Japan Simply Don't Trust Each Other.
“At the Asia-Pacific Economic Cooperation (APEC) summit late last year, Prime Minister Shinzo Abe and President Xi Jinping began to restore their nations’ relations, attempting to overcome differences over islands in the East China Sea. Again this year, the leaders of Asia’s two largest powers met at the Bandung Conference, demonstrating a slightly more relaxed and encouraging demeanor, suggesting that the maritime talks between their two governments were bearing some fruit. But it is not the territorial dispute itself that threatens improvement in the Japan-China relationship; it is their deep skepticism of each other’s ambitions in the region. Chinese officials have not been shy in suggesting that the changing balance of power between their nation and Japan is the root cause of their diplomatic difficulty. The most recent statement of China’s perception of the change in regional influence comes from Foreign Minister Wang Yi. After his speech at Beijing’s World Peace Forum last week, China’s foreign minister was asked about the prospects for Japan-China relations, and Xinhua, quoted him as follows: “the crux of China-Japan relations is whether Japan can sincerely accept and welcome China’s revival and rise.” Wang was further quoted as saying, “China’s development has brought important benefit to Japan, but Japan is not fully prepared in its mindset for an increasingly powerful China.” The solution, from Wang’s perspective, is simply that the Japanese have to accept China’s growing power. Wang is not off the mark about Japan’s concerns about Chinese ambitions, and this too was amply demonstrated last week in Tokyo. Japan’s chief of the Joint Staff of the Self Defense Force, Admiral Katsutoshi Kawano agreed to an interview with the Wall Street Journal, and openly acknowledged his concerns about China’s behavior in the South China Sea. Admiral Kawano noted that China’s program of island building in the disputed islands of the South China Sea created serious concerns for Japan because of its dependence on the sea lanes through the Malacca Straits.”

See China’s Rapid Island-Building Strategy in Action.
“New images taken just this week show China building what look like military bases on reclaimed land in the South China Sea, a development likely to add to concerns in the United States and among its Asian neighbors. China said on Tuesday that land reclamation had now finished on "some islands" in the South China Sea. But the focus is now likely to shift to the construction work that China is carrying out, which many fear will lead to further militarization of the South China Sea. Images taken as recently as June 28 show how China has almost completed the construction of an airstrip at Fiery Cross Reef. The images were taken by Digital Globe and supplied to The Post by the Asia Maritime Transparency Initiative (AMTI) at the Center for Strategic and International Studies. Land reclamation is now complete at Fiery Cross Reef. AMTI says construction of the air base is continuing “with ongoing paving and marking of the airstrip, an added apron, construction of a sensor array and development of additional support facilities.” According to AMTI, features here include: a small port with limited berth space and two loading stations, two helipads, three possible satellite communication antennae, one large multi-level facility, two possible radar towers under construction, six possible security and surveillance towers for weapons and or sensors, four possible weapons towers, a lighthouse, a possible solar farm with 44 panels and two wind turbines. AMTI Director Mira Rapp-Hooper says the facilities have “all the trappings” of military capabilities and applications and would improve China’s ability to monitor other nations’ activities in the disputed Spratly Islands. The construction work, she says, “is going to be the new diplomatic challenge, not just for the United States, but also for all the regional countries which have been very keen to deter China from militarizing the islands.” On June 16, China’s Foreign Ministry announced that the land reclamation work on some islands in the South China Sea would be completed in the near future and that it would now begin to build more infrastructure on the islands. On Tuesday, it confirmed the land reclamation “on some islands” was now complete. It says that infrastructure will mainly be for civilian purposes but acknowledges it will also be used for “military defense.” That does not reflect a change in policy but simply an acknowledgement of the fact that the project to stake China’s territorial claims in the South China Sea more forcefully had moved onto a new phase, experts say."

Images Show Chinese Airstrip on Man-Made Spratly Island Nearly Finished.
"China has almost finished building a 3,000-meter-long (10,000-foot) airstrip on one of its artificial islands in the disputed Spratly archipelago of the South China Sea, new satellite photographs of the area show. A U.S. military commander had told Reuters in May that the airstrip on Fiery Cross Reef could be operational by year-end, although the June 28 images suggest that could now be sooner. The airstrip will be long enough to accommodate most Chinese military aircraft, security experts have said, giving Beijing greater reach into the heart of maritime Southeast Asia. China said on Tuesday some of its land reclamation in the Spratlys, where it's building seven islands on top of coral reefs, had been completed, although it gave few details. The latest photographs were taken by satellite imagery firm DigitalGlobe and published by the Asia Maritime Transparency Initiative (AMTI) at the Center for Strategic and International Studies in Washington.  AMTI said the airstrip was being paved and marked, while an apron and taxiway had been added adjacent to the runway. Two helipads, up to 10 satellite communications antennas and one possible radar tower were visible on Fiery Cross Reef, it said. The images also showed a Chinese naval vessel moored in a port. Recent images of Chinese-occupied South Johnson Reef also showed a large multi-level military facility in the center of the reef with two possible radar towers under construction, AMTI added. Two helipads and up to three satellite communications antennas were also visible, it said. China claims most of the South China Sea, through which $5 trillion in ship-borne trade passes every year. The Philippines, Vietnam, Malaysia, Brunei and Taiwan also have overlapping claims.”

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

Posted by The Congressional China Caucus | July 01, 2015

Weapons of the Next War. “For the last two decades, the Asia-Pacific has represented a positive story in geopolitics, at least compared to the chronic instability in the Middle East. There was an integration of economies on both a regional and global level, a rise in prosperity unprecedented in human history, and a relative absence of major conflicts either between nations or within them. This era of stability is ending, however. In the 21st century, this very same good news story has put the region on the geopolitical center stage, and not in a good way. China has enjoyed a political, economic, and now military rise that Foreign Affairs magazine has said may be the “most important international relations story of the 21st century.” The problem is that no one knows how that story might end. Disputes with every one of its maritime neighbors over islands and sea rights are helping to fuel a regional arms race. But underlying these disputes are larger geopolitical questions centering on Beijing’s vision of emerging as the leading global power of the next 100 years, the American response, and whether this reordering will be one that remains only within the realm of politics and economics. Henry Kissinger remarked in a 2012 essay that U.S.-China relations have long been “…heading for confrontation rather than cooperation.” This confrontation is purposeful, not careless. Even the “China Dream” now has the country becoming, in strategist Liu Ming Fu’s concept, “the most powerful country in the world” – a world that he defines as “post American.” This is not merely top-down thinking: The Chinese Communist Party is carefully encouraging a more nationalist Chinese public to become aligned with this ambition. According to one survey, more than 80 percent of those polled think China should return to its status as the world’s strongest power in both political and military terms. It is an alignment that combines historical longing and 21st century ambitions, nurtured by a Party leadership that has harmonized its strategy with popular priority. Indeed, the Party’s Global Times newspaper last September featured an editorial “As possibility of a Third World War Exists, China Needs To Be Prepared” by a professor at PLA Defense University who made the case as explicitly as possible: “Without large-scale military power, securing China’s overseas interests seems like an empty slogan.”

Meet China's East China Sea Drones.
“China has stationed at least three BZK-005 unmanned aerial vehicles (UAVs) on Daishan Island in Hangzhou Bay, an inlet of the East China Sea near Shanghai. The development confirms Chinese drone operations in the East China Sea, where it unilaterally declared an air defense identification zone (ADIZ) in November 2014. Satellite imagery analysis by Chris Biggers over at Bellingcat shows the three medium altitude, long range drones sitting at the Daishan airfield, which Biggers describes as “one of the few dedicated facilities for drone operations known in China.” Chinese military UAVs were thought to have been operating in the East China Sea since at least late 2013. Reports from fall 2013 noted that Japan’s Air Self-Defense Force (ASDF) had scrambled a jet to monitor a “drone of unidentified nationality” flying over the East China Sea. Later, Japan’s defense ministry released imagery all but confirming that the unidentified UAV was likely a Chinese BZK-005. These means that these drones have been operating off Daishan and into the East China Sea for at least two years. Tensions between Japan and China spiked over the East China Sea in late-2013 and early-2014 over the Senkaku/Diaoyu dispute. In recent months, the situation in the East China Sea has been calmer and relations have improved between Tokyo and Beijing (meanwhile, the South China Sea continues to heat up). Biggers’ report offers additional detail outlining the development of the Daishan airfield. He notes, for example, that “according to historical imagery, China began renovations at the airfield patching concrete runway tiles and removing encroaching vegetation between mid-2010 and 2013.” This suggests longer-term planning for UAV use in the context of the East China Sea, even before Chinese President Xi Jinping became president. In September 2010, the East China Sea issued flared up momentarily between Japan and China after a Chinese fishing boat captain was arrested by Japanese authorities in disputed waters after colliding his vessel with a Japanese patrol ship.”

China Approves Sweeping Security Law, Bolstering Communist Rule.
The Chinese government announced Wednesday that it had enacted a new national security law, one that amounts to a sweeping command from President Xi Jinpingto maintain the primacy of Communist Party rule across all aspects of society. The law is expected to bolster the power of the domestic security apparatus and the military. The law says “security” must be maintained in all fields, from culture to education to cyberspace. A draft version of the law was released in May, leading to intense discussion about its long-term impact, but the version approved Wednesday is even wider in scope — adding, for instance, that security must be defended on international seabeds, in the polar regions and even in outer space. The law is one of three that are being scrutinized by foreign leaders and corporate executives, who say Mr. Xi is moving to severely restrict the influence and actions of foreign organizations in China. The other two laws are expected to be passed soon; one would regulate foreign nongovernmental organizations and place them under the oversight of the Ministry of Public Security, and the other is a counterterrorism law. While those two laws, currently in draft form, have specific details on controlling foreign groups, the national security law is a more abstract statement of principles, aimed at exhorting all Chinese citizens and agencies to be vigilant about threats to the party. Legal scholars and analysts in China say it will probably lead to the security apparatus amassing more power, and to courts employing a broad definition of national security violations. Human rights advocates expect the same and say they are worried that defendants accused of such violations will have little legal protection. “It is as much to do with protecting the Communist Party and punishing those that criticize the leadership as addressing national security,” William Nee, a researcher at Amnesty International, said of the law. The law, which was passed Wednesday by a committee of the National People’s Congress, a pro forma legislature, also assigns oversight of national security to a central agency. Analysts say this is a reference to the National Security Commission, established and run by Mr. Xi, which is widely seen as a party rather than a government organization.”

Disdain in Beijing and Edginess in Tokyo.
“At the APEC summit late last year, Prime Minister Shinzo Abe and President Xi Jinping began to restore their nations’ relations, attempting to overcome differences over islands in the East China Sea. Again this year, the leaders of Asia’s two largest powers met at the Bandung Conference, demonstrating a slightly more relaxed and encouraging demeanor, suggesting that the maritime talks between their two governments were bearing some fruit. But it is not the territorial dispute itself that threatens improvement in the Japan-China relationship; it is their deep skepticism of each other’s ambitions in the region. Chinese officials have not been shy in suggesting that the changing balance of power between their nation and Japan is the root cause of their diplomatic difficulty. The most recent statement of China’s perception of the change in regional influence comes from Foreign Minister Wang Yi. After his speech at Beijing’s World Peace Forum last week, China’s foreign minister was asked about the prospects for Japan-China relations, and Xinhua quoted him as follows: “the crux of China-Japan relations is whether Japan can sincerely accept and welcome China’s revival and rise.” Wang was further quoted as saying, “China’s development has brought important benefit to Japan, but Japan is not fully prepared in its mindset for an increasingly powerful China.” The solution, from Wang’s perspective, is simply that the Japanese have to accept China’s growing power. Wang is not off the mark about Japan’s concerns about Chinese ambitions, and this too was amply demonstrated last week in Tokyo. Japan’s chief of the Joint Staff of the Self Defense Force, Admiral Katsutoshi Kawano agreed to an interview with the Wall Street Journal, and openly acknowledged his concerns about China’s behavior in the South China Sea. Admiral Kawano noted that China’s program of island building in the disputed islands of the South China Sea created serious concerns for Japan because of its dependence on the sea lanes through the Malacca Straits.”

China's Afghanistan Moment.
The 7th Strategic and Economic Dialogue (S&ED) with China has recently concluded in Washington.  Hawks will no doubt opine that the Obama Administration has not shown adequate backbone in standing up to China in the South China Sea.  Doves, by contrast, will complain that progress on key issues, such as North Korea’s expanding nuclear arsenal, have been superseded by tense discussions about reefs and rocks. It has become increasingly clear that close U.S.-China cooperation is a prerequisite to managing problems across the globe, from the Ebola crisis in West Africa to the deteriorating security situation in the Persian Gulf to maintaining the delicate ecological balance in the polar regions.  A rather ripe area for regional cooperation that has not received adequate attention concerns the future of Central Asia, and the Afghanistan imbroglio, in particular.  Continuing grave instability in Afghanistan was once again underlined last week as the Taliban attacked the Parliament building in Kabul. In a perfect world perhaps the United Nations together with the new Afghan President Ashraf Ghani would invite China to enlarge its role in fostering regional stability and PLA soldiers clad in blue helmets would flood the narrow alleyways and valleys of dangerous Helmand Province to finally accomplish what Washington has been unable or unwilling to do.  There is emphatically no support whatsoever for that scenario – least of all in Kabul and Beijing.  Still, Chinese strategists are talking about Afghanistan with an unmistakable urgency of late.  This edition of Dragon Eye will make a close examination of an early 2015 Chinese-language academic analysis of the situation in Afghanistan published in the State Council’s journal 亚非纵横 [Asia and Africa Review] by two Shanghai academics. “The new generation leadership group’s policy toward Afghanistan will be clearer.  China’s foreign policy activity and dynamism concerning Afghanistan is obviously increasing,” these authors assert at the outset of the essay.  But that was not always the case, as they readily admit.”

PLA Plays Down Indian Ocean Visits, But Says Ocean Not India's Backyard.
“As the People's Liberation Army (PLA) Navy expands its profile in the Indian Ocean with recent submarine visits to Sri Lanka and more recently Pakistan, its officials have moved to assuage India's concerns by emphasising its motivations were driven by trade and security and not aimed at India, although with one important caveat: it would be a mistake for New Delhi to consider the ocean's international waters as "its backyard". In an interaction with visiting Indian reporters in Beijing, officials from the Chinese Defence Ministry and the PLA's top think-tanks, such as the National Defence University, PLA Air Force Command Academy and PLA Navy Academic Institute said they believed that India and China needed to expand military ties to reduce strategic mistrust, and bolster exercises between the armies, navies and air force. Especially as the two navies more frequently encounter each other on the high seas of the Indian Ocean, where the PLA Navy (PLAN) has taken part in anti-piracy escorts since 2008, and in the South China Sea and the Pacific Ocean, where India is devoting more attention, Beijing is of the view the two sides need to do more to build trust - and be more open. Senior Captain Zhao Yi, who is Associate Professor at the Institute of Strategy of the elite National Defence University, said: "I admit that geographically speaking India has a special role to play in stabilising the Indian Ocean region and South Asian region. But [for the Indian Ocean], backyard is not a very appropriate word to use for an open sea and international areas of sea. If the Indian side views the Indian Ocean as its backyard," he added, "it cannot explain why navies from Russia, the United States, Australia have the right of free navigation in Indian Ocean." He said one American scholar had warned of the possibility of "clashes" in the Indian Ocean. "I don't agree," Senior Captain Zhao said, but added: "If some countries view it as their backyard, then this [possibility] could not be eliminated." The Chinese experts did, however, acknowledge the need for more transparency, especially in the wake of concerns in Indian strategic circles over submarine visits by the PLAN to Sri Lanka last year and to Pakistan earlier this year. China described both visits as routine.”

Thailand Tilts Away From the U.S.
“Thailand’s navy has long pushed to buy conventional submarines, with U.S. allies Germany or South Korea the expected suppliers. So the decision to buy Chinese boats, reported Friday by the Bangkok Post, suggests America’s oldest ally in Asia is edging toward Beijing. This development is particularly concerning because the two countries’ militaries have a deep and abiding relationship. The U.S. helped Bangkok fight a communist insurgency and flew bombing missions from Thai air bases during the Vietnam War. Started more than 30 years ago, the annual Cobra Gold joint exercises are among the largest in the world. In 2003 President George W. Bush made Thailand officially a “major non-NATO ally,” a designation that brings the benefits reserved for the most trusted security partners. The relationship started to sour after the May 2014 Thai coup, with Cobra Gold downgraded and other U.S. aid and contacts curtailed. Washington has called for an early return to democracy and warned against a politically motivated prosecution of deposed Prime Minister Yingluck Shinawatra. While this mirrors American condemnations of past coups, the generals bridled at the perceived interference. Thailand’s polarized politics makes it doubtful they will allow fresh elections soon, and a new constitution is expected to neuter elected politicians. The junta has tried to get Washington to mute its criticism by strengthening ties with Beijing, which is all too happy to lend support to fellow authoritarians. Such signaling is one thing, but the sub deal would be a concrete step away from the U.S. alliance. The Thai navy would need a continuing relationship with Beijing to maintain and operate the boats. Naturally Beijing has sweetened the deal to secure this opening. The three subs will cost $355 million each, including technology transfer and training, which makes them cheaper than the competition. And on paper at least they are more capable vessels, with advanced air-independent propulsion that allows them to stay submerged for extended periods. If the submarine deal goes ahead, it will represent the breakdown of trust between the U.S. and Thailand. Clearly there has been a divergence of values as the Thai elite has turned against democracy. But the U.S. has exercised a stabilizing influence in the neighborhood and will continue to do so. Thailand’s generals need to think twice about squandering their most important alliance.”

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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