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US-China Tensions in South China Sea – Pankaj Jha | Modern Diplomacy

13 October 2018

Following the end September incident in South China Sea when a Type 052 destroyer of Chinese Navy cut ‘across the bow’ of US Navy destroyer USS Decatur  when the US vessel was passing near the Gaven Reef in Spratly islands, Trump administration has taken a serious note of this incident . It was a very close encounter which reminded of the U.S. Navy EP-3 surveillance plane disaster in 2001 when Chinese navy plane rammed into the US surveillance plane, and what followed was a diplomatic crisis. Just a week later after the two destroyers crossed each other paths, President Trump made a very curt remark on the earlier Obama administration and called it “impotent” for its lackluster approach in containing Chinese activities in South China Sea. President trump added that as Obama administration did not undertake necessary counter measures, Beijing is posing serious challenges to US ships which are operating in the contested waters of South China Sea. The impending confrontation was expected but the problem for Trump is the magnitude and timing of such confrontation would jeopardize its deft maneuvers in diplomacy. Trump has held first summit meeting with North Korean dictator Kim Jong Un to manage the nuclear threat that the dictatorial regime poses to US, South Korea and Japan. Any escalation of maritime tensions would have a cascading effect on its peace initiatives with North Korea.

Woody Island, as seen in a Google Maps satellite image

According to rough estimates South China Sea contains 17.7 billion tons of crude oil and more than 190 trillion cubic feet of natural gas. Given these large estimated reserves and also very rich fishing grounds in the shallow waters of South China Sea, many nations around its periphery have claimed sovereignty over the more than 80 islands /islets islands. South China Sea is also a commercial shipping route which witnesses $4.5tn of maritime trade passing through its waters. China claims more than 80 per cent of the maritime m area of South Chain Sea citing the nine dash line drawn by Chiang Kai Shek’s nationalist government in 1949. South China Sea had a history of close encounters which were seen when Chinese navy killed 70 Vietnamese sailors in 1988 over occupation of Johnson South Reef, and thereafter when during confrontation with Philippines in 1995, it occupied Mischief reef. The features in South China Sea are islets and rocks which at times of low tide are barely 4-5 meters above the sea level and these get submerged during the high tide.

The island building process that China has undertaken has started threatening the safety and security of the sea lanes. In few of the islands under Chinese occupation in the South China sea, China has developed necessary infrastructure to support operations of the military aircraft and also missile defence batteries creating serious challenge to the US navy, and also challenging freedom of navigation for navies of other ASEAN countries as well as those of India, Japan and Australia. This assertive approach that China has adopted has resonated in the ASEAN multilateral meetings but a strong counter narrative, and criticism from the multilateral institution is missing. The ASEAN nations fearing Chinese riposte along with Chinese aggressive behaviour have tried to engage China so as to bring about a Code of Conduct in the disputed waters. China has imposed fishing ban in certain months each year in the third richest fishing grounds in the world, and also has intimidated the other claimant states fishing vessels in the past. Chinese navy had harassed Philippines Coast Guard and had snapped the undersea cables laid by a Vietnamese ship. In 2009 USS Impeccable also had to weather annoying tactics by Chinese fishing boats who have been acting as the third line of defence after Chinese navy and Coast guard. This aggressive behavior and demarcation of safe zones by the Chinese navy in and around the islands that China occupies, have threatened lives and livelihood of fishing communities of Malaysia, Indonesia, Vietnam and Philippines who make their living out of the fisheries that they catch in South China Sea.

In July2016, the Permanent Court of Arbitration (PCA) had given a verdict in favor of Philippines when the country took the issue of illegal Chinese occupation of features particularly islets and small islands in the EEZ of the Philippines to the international tribunal. It adjudicated that all those features which could not sustain human habitation have not right to seek an Exclusive Economic Zone(EEZ) of 200 nautical miles, and also declared that Chinese occupation and reclamation activities is illegal. The Philippines while awaiting an international support and US action given the fact that US and Philippines have a Visiting Forces Agreement (VFA) sought refuge with China to resolve the crisis. For a long time, China has been insisting on bilateral negotiations with other claimant states including Vietnam, Philippines, Malaysia and Brunei. Taiwan also occupies the largest island in South China Sea known as Itu Iba which is centrally located and it of immense strategic importance. The island building and the installation of military support and logistics structure has annoyed US and it has made very strong remarks with regard to Chinese construction activities. However, in terms of dissuading Chinese activities there has been a sublime response from US. As a result of US non–intervention, China has built nearly 2,000 acres of reclaimed land in and around its islands in South China Sea.

With South China sea heating up because of the recent incident, India will have to be cautious with regard to safeguarding its interest. The reported near confrontation between US and Chinese navy in the end of September 2018 is a matter of concern. India has also faced such intimidation tactics in the past when in July 2011 its naval ship AIRAWAT leaving the Vietnamese coast received radio message warning it of transgressing the Chinese territory in South China sea. Given this one off incident cannot be a parameter for the tension germinating in the disputed waters, India will have to be prepared for close encounters with the Chinese navy in future.

This article is originally published on Modern Diplomacy

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US says Chinese destroyer was ‘aggressive’ and ‘unsafe,’ coming dangerously close to American ship – Reuters & AP | CNBC

01 October 2018

  • China expressed anger on Tuesday after a U.S. Navy destroyer sailed near islands claimed by Beijing in the disputed South China Sea.
  • The operation was the latest attempt to counter what Washington sees as Beijing’s efforts to limit freedom of navigation in the strategic waters, where Chinese, Japanese and some Southeast Asian navies operate.
  • “China’s military is resolutely opposed to this,” China’s defense ministry said.

Diana Quinlan | U.S. Navy | Reuters
Guided-missile destroyer USS Decatur (DDG 73) operates in the South China Sea.

China expressed anger on Tuesday after a U.S. Navy destroyer sailed near islands claimed by Beijing in the disputed South China Sea, saying it resolutely opposed an operation that it called a threat to its sovereignty.

Beijing and Washington are locked in a trade war in which they have imposed increasingly severe rounds of tariffs on each other’s imports.

A U.S. official, speaking on condition of anonymity, said the destroyer the USS Decatur traveled within 12 nautical miles of Gaven and Johnson Reefs in the Spratly Islands on Sunday.

The operation was the latest attempt to counter what Washington sees as Beijing’s efforts to limit freedom of navigation in the strategic waters, where Chinese, Japanese and some Southeast Asian navies operate.

China’s Defense Ministry said a Chinese naval ship had been sent to warn the U.S. vessel to leave.

The ministry said China has irrefutable sovereignty over the South China Sea islands and the waters around them, and the situation there is progressing well thanks to the hard work of China and countries in Southeast Asia.

“The U.S. side repeatedly sends military ships without permission into seas close to South China Seas islands, seriously threatening China’s sovereignty and security, seriously damaging Sino-U.S. military ties and seriously harming regional peace and stability,” the ministry said.

“China’s military is resolutely opposed to this,” it said. The Chinese armed forces will continue to take all necessary steps to protect the country’s sovereignty and security, the ministry said.

China’s Foreign Ministry said in a separate statement it strongly urged the United States to stop such “provocative” actions and to “immediately correct its mistakes”.

For its part, the U.S. Pacific Fleet said Tuesday that the Chinese destroyer came aggressively close to a U.S. Navy ship in the South China Sea, forcing it to maneuver to prevent a collision, describing an encounter that could worsen tensions between the nations.

The Chinese warship approached the USS Decatur in an “unsafe and unprofessional maneuver” on Sunday near Gaven Reefs in the South China Sea, said U.S. Pacific Fleet Spokesman Lt. Cmdr. Tim Gorman.

The Chinese destroyer “conducted a series of increasingly aggressive maneuvers accompanied by warnings for Decatur to depart the area,” Gorman told the Associated Press in an emailed statement.

It approached within 45 yards (41 meters) of the Decatur’s bow, forcing it to maneuver, Gorman said.

The operation also comes as military ties between the two countries have dived, with China also angered by U.S. sanctions on China’s military for buying Russian arms and by U.S. support for self-ruled Taiwan, which Beijing claims as its own.

U.S. Defense Secretary Jim Mattis said on Monday he did not see relations between the United States and China worsening, a day after his trip to China was canceled.

Reuters reported on Sunday that China canceled a security meeting with Mattis that had been planned for October. A U.S. official, speaking on the condition of anonymity, said Mattis was no longer going to China.

China has not yet commented on the matter.

Chinese Defense Minister Wei Fenghe is due to visit the United States later this year but China’s Defense Ministry suggested last week that may not happen.

This article is originally published on CNBC

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Neighbors square off with Beijing in South China Sea | Christopher Bodeen, The Associated Press

27 August 2018

by Christopher Bodeen, The Associated Press  (BEIJING) — A look at recent developments in the South China Sea, where China is pitted against smaller neighbors in multiple disputes over islands, coral reefs and lagoons in waters crucial for global commerce and rich in fish and potential oil and gas reserves:

A Vietnamese protester holds up a placard and shouts slogans along with dozens during a 2014 protest rally against China outside the Chinese Consulate in Ho Chi Minh City, Vietnam. Vietnam’s government stated its concerns to Ukraine over plastic globes being sold in the country that showed the Vietnamese province of Quang Ninh as Chinese territory. (AP)


VIETNAM UPSET AT CHINESE GLOBE

Vietnam’s government stated its concerns to Ukraine over plastic globes being sold in the country that showed the Vietnamese province of Quang Ninh as Chinese territory.

The state-run Tuoi Tre newspaper quoted the Ukrainian company that sold the globes as saying they were purchased from Chinese traders in Kharkov, Ukraine’s second-largest city. It said Vietnam’s embassy in Ukraine had sent letters to the Ukrainian foreign ministry and the company involved and that sales had been discontinued.

The issue was reported in a briefing paper produced by a consultancy run by Carlyle Thayer, an expert on Southeast Asia and emeritus professor at Australia’s University of New South Wales.

Quang Ninh borders China and is home to the famed Ha Long Bay scenic area.

China’s military seized islands claimed by Vietnam in the Paracels group in a bloody 1974 battle and the two continue to feud over the chain and other South China Sea territories.

In May, Vietnamese anger was sparked by a group of Chinese tourists who arrived in the country wearing T-shirts featuring the so-called “nine-dash line” demarcating Beijing South China Sea claims, many of which overlap with Vietnam’s own.

 

A Taiwan Coast Guard ship, left, and cargo ship take part in a search-and-rescue exercise off of Taiping island in the South China Sea as part of Taiwan's efforts to cement its claim to a key island in the strategically vital waterway in 2016. Taiwan’s coast guard said annual live-fire exercises conducted at Taiping island in the Spratly island group were routine and didn’t endanger shipping. Neighboring countries were informed in advance of the exercises carried out on last week, the coast guard said. (Johnson Lai/AP)

 

 

A Taiwan Coast Guard ship, left, and cargo ship take part in a search-and-rescue exercise off of Taiping island in the South China Sea as part of Taiwan’s efforts to cement its claim to a key island in the strategically vital waterway in 2016. Taiwan’s coast guard said annual live-fire exercises conducted at Taiping island in the Spratly island group were routine and didn’t endanger shipping. Neighboring countries were informed in advance of the exercises carried out on last week, the coast guard said. (Johnson Lai/AP)
 

TAIWAN REASSURES OVER DRILLS

Taiwan’s coast guard said annual live-fire exercises conducted at Taiping island in the Spratly island group were routine and didn’t endanger shipping.

Neighboring countries were informed in advance of the exercises carried out on last week, the coast guard said.

Taiping island, also known internationally as Itu Aba, is Taiwan’s sole possession in the highly contested Spratly chain. It is the largest naturally occurring islet in the group but has been dwarfed by China’s construction in the area of seven man-made islands atop coral reefs equipped with airstrips and other military infrastructure.

China, the Philippines and Vietnam also claim Taiping, and Vietnamese foreign ministry spokeswoman Nguyen Phuong Tra last week had said her country “resolutely opposed” the drill. Tra said the exercises violated Vietnam’s sovereignty and posed a threat to navigation and aviation security in the region, Vietnam’s official news agency reported.

Taiwan’s formal claim to virtually the entire South China Sea mirrors that of China’s, but it has limited its activities to Taiping and the Pratas group to the north.

 

Taiwan's Ministry of Defense shows an aerial view of Taiwan's Taiping island, also known as Itu Aba, in the Spratly archipelago, roughly 1,000 miles south of Taiwan in 2016. Taiwan’s coast guard said annual live-fire exercises conducted at Taiping island in the Spratly island group were routine and didn’t endanger shipping. Neighboring countries were informed in advance of the exercises carried out on last week, the coast guard said. (Taiwan's Ministry of Defense via AP)

 

 

Taiwan’s Ministry of Defense shows an aerial view of Taiwan’s Taiping island, also known as Itu Aba, in the Spratly archipelago, roughly 1,000 miles south of Taiwan in 2016. Taiwan’s coast guard said annual live-fire exercises conducted at Taiping island in the Spratly island group were routine and didn’t endanger shipping. Neighboring countries were informed in advance of the exercises carried out on last week, the coast guard said. (Taiwan’s Ministry of Defense via AP)
 

PHILIPPINES CONCERNED ABOUT DEPLOYMENTS

The Philippines says it is concerned about possible Chinese nuclear deployments in the South China Sea following the issuing of a Pentagon report warning Beijing could use nuclear energy to provide power to man-made islands.

Presidential spokesman Harry Roque said last week that Manila was “concerned about the entry of any and all nuclear weapons into the Philippine territory because our constitution provides that we are a nuclear-free zone.”

Roque also cited an Association of Southeast Asian Nations treaty designating the entire region a nuclear-free zone.

“We are concerned about the possibility that any foreign power, be it American, Russian, Chinese may bring nuclear warheads into our territory and into ASEAN,” Roque said.

In its 2018 annual report to Congress on military and security developments involving China, the Pentagon said China’s plans to use floating nuclear power plants to power its islands “may add a nuclear element to the territorial dispute.

“In 2017, China indicated development plans may be underway to power islands and reefs in the typhoon-prone South China Sea with floating nuclear power stations; development reportedly is to begin prior to 2020.”

The report said nothing about the possibility of China deploying nuclear weapons in the South China Sea.

MALAYSIA CANCELS CHINESE PROJECTS

Malaysia has suspended a multibillion-dollar raft of construction projects financed by Chinese loans, possibly stymieing Beijing’s drive to strengthen its hold over Southeast Asia’s economy.

China has sought to downplay the move announced by Prime Minister Mahathir Mohamad on the final day of a visit to Beijing on Aug. 20, but it is still seen as a blow to Chinese President Xi Jinping’s signature “Belt and Road” initiative.

Mahathir said he was seeking support from China’s leaders over Malaysia’s situation as it deals with a mass of debt and other economic problems created under previous administrations.

Mahathir is a vocal critic of large-scale investment in his country backed by loans from Beijing and has tested Malaysia’s ties with China by suspending Chinese-financed infrastructure projects. The suspended projects comprise a Chinese-backed $20 billion East Coast Rail Link and two energy pipelines worth $2.3 billion.

Malaysia has claims to territory in the South China Sea that overlap with those of China, but under Mahathir’s predecessors, took a low-key approach to asserting those in deference to strongly positive ties with Beijing.

Mahathir is seen as possibly taking a firmer approach.

Associated Press writer Tran Van Minh contributed to this report from Hanoi, Vietnam.

This article is originally published on Navy Times

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ASEAN Summits 2017: A Common Agreement Needed for South China Sea Issues? – Khuong Nguyen & Tri Vo | Futura Institute

11 September 2017

Khuong Nguyen & Tri Vo | Futura Institute – For a long time, China has used a variety of political, diplomatic, economic and commercial pressures to influence public opinion in countries to not internationalize internationalizing the South China Sea issue.[1]

For ASEAN countries that are directly involved in the South China Sea dispute, China imposes its views and attempted to drive changes in viewpoint in these countries through bilateral negotiation or avoidance of mentioning about the subject matter in ASEAN conferences and dialogs.[2] In so doing, China has indeed achieved some success evidenced by changes and adjustments in the International Relations policy of the Philippines, views of some Cambodian and Lao leaders…

The Senior Officials’ Meeting (SOM) of the ASEAN Regional Forum (ARF)
took place in Manila, the Philippines. Hanoi Times

In 2017, at the Conference of the ASEAN Foreign Ministers’ Meeting on 20-21st February 2017[3], the 30th ASEAN Summit on 26-29th April[4], and the Senior Officials Meeting – ASEAN SOM on 22nd May[5], apart from talking about measures to demonstrate determination towards building a community of solidarity, ASEAN leaders also paid special attention to the South China Sea issue.

Most leaders have expressed their concerns about recent developments in the South China Sea that have caused increased tensions, directly affecting the security of the Asia-Pacific region. At the same time, the need to continue to strengthen measures to alleviate tensions in the region by promoting confidence, restraint, and lack of action also complicates the situation. The point is to resolve all disputes by peaceful means, on the basis of respect for the diplomatic and legal process, not to use or threaten the use of force, in accordance with international law, including the 1982 UN Convention on the Law of the Sea. ASEAN leaders have also stressed the importance of fully implementing the DOC Declaration, pushing the efforts of ASEAN and China to reach agreement on the COC framework for the year. 2017 proceeds to sign and put the COC into operation.

At these conferences, high ranking officials of Vietnam expressed their high consensus on the discussion topics among ASEAN countries, while highlighting the role of the Block as a whole and that of each member states in applying the basic principles and shared positions adopted at conferences to contribute to the upholding of peace, stability, security, and safety in the South China Sea.

It is expected that at ASEAN conferences from now until the end of 2017, ASEAN members and the Philippines will reach an agreement to take on the South China Sea issue in their official agenda. In particular, focus will be placed upon solutions to achieve signing and implementation of the Code of Conduct for the South China Sea (COC) with China which, according to geopolitical experts, is internationally binding and signifies an important milestone in the process of retaining peace, stability, security, and air travel and sea travel safety in the South China Sea. Without a mutual consensus of the Block on the way forward, immense challenge is still ahead.

REFERENCES:

[1] China’s Dangerous Game. The Atlantic. November 2014.

[2]China’s Curious South China Sea Negotiation Policy. The Diplomat. June 2016.

[3]Press Release by the Chairman of the ASEAN Foreign Ministers’ Retreat (AMM Retreat). ASEAN. February 2017.

[4]ASEAN Declaration on the Role of Civil Service as a Catalyst for Achieving the ASEAN Community Vision 2025. ASEAN. April 2017.

[5]ASEAN Regional Forum meeting discussed in SOM. Hanoi Times. May 2017.

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US to counter China with more patrols in disputed waters | Gordon Lubold, Jeremy Page – The Wall Street Journal

03 September 2017

Gordon Lubold, Jeremy Page The Wall Street Journal – The Pentagon for the first time has set a schedule of US naval patrols in the South China Sea in an attempt to create a more consistent posture to counter China’s maritime claims there, injecting a new complication into increasingly uneasy relations between the two powers.

Sailors conduct flight operations on the aircraft carrier USS Carl Vinson, which made a scheduled deployment near East Asia earlier this year.

The US Pacific Command has developed a plan to conduct so-called freedom-of-navigation operations two to three times over the next few months, according to several US officials, reinforcing the US challenge to what it sees as excessive Chinese maritime claims in the disputed South China Sea.

Beijing claims sovereignty over all South China Sea islands and their adjacent waters.

The plan marks a significant departure from such military operations in the region during the Obama administration, when officials sometimes struggled with when, how and where to conduct those patrols. They were cancelled or postponed based on other political factors after what some US officials said were contentious internal debates.

The idea behind setting a schedule contrasts with the more ad hoc approach to conducting freedom-of-navigation operations, known as “fonops” in military parlance, and establish more regularity in the patrols. Doing so might help blunt Beijing’s argument that the patrols amounted to a destabilising provocation each time they occurred, US officials said.

Chinese officials didn’t immediately respond to a request for comment on the latest US plans. Beijing has accused the US of militarising navigation in the region by conducting military patrols. There have been three navigation patrols so far under President Donald Trump; there were four during the Obama administration, according to the Congressional Research Service.

Officials described the new plan as a more predetermined way of conducting such patrols than in the past, though not immutable. The plan is in keeping with the Trump administration’s approach to military operations, which relies on giving commanders leeway to determine the US posture. In keeping with policies against announcing military operations before they occur, officials declined to disclose where and when they would occur.

The added military pressure on China comes while the US is seeking greater co-operation from Beijing in reining in North Korea’s nuclear weapons and missile program. The Trump administration has complained that Beijing hasn’t done all it can to pressure its allies in Pyongyang not to develop weapons or threaten the US and its territories and allies.

In a new facet, some freedom-of-navigation patrols may be “multi-domain” patrols, using not only US Navy warships but US military aircraft as well.

Thus far, there have been three publicly disclosed freedom-of-navigation operations under the Trump administration. The last one was conducted on August 10 by the navy destroyer, the USS John S. McCain, which days later collided with a cargo ship, killing 10 sailors.

That patrol around Mischief Reef — one of seven fortified artificial islands that Beijing has built in the past three years in the disputed Spratlys archipelago — also included an air component.

According to US officials, two P-8 Poseidon reconnaissance aircraft flew above the McCain in a part of the operation that hadn’t been previously disclosed. More navigation patrols using warships likely now will include aircraft overhead, they said.

Pacific Command officials had no comment on the matter.

The first such patrol under Mr Trump was conducted by the destroyer USS Dewey May 24 around Mischief Reef. In July, the guided-missile destroyer USS Stethem conducted a patrol near Triton Island in the Paracel Island chain in the South China Sea, coming to within 12 nautical miles of the island.

Together, the moves amount to a more extensive US posture in the South China Sea, where the US has attempted to counter what it sees as excessive Chinese claims around two island chains, the Paracels and the Spratlys, where Beijing has conducted reclamation activities, building or expanding islands using sand dredged from the ocean floor to establish runways, ports, buildings and other facilities for military purposes.

Those structures worry the US and other nations, which believe China’s presence there could impede shipping lanes through which billions of dollars of cargo transit each year.

The US doesn’t make claims to any of the islands, but conducts the patrols to challenge China’s claims, which overlap with those of Vietnam, Malaysia, Brunei, Taiwan and the Philippines, a US treaty ally.

Colonel Rob Manning, a Pentagon spokesman, said US forces operated throughout the Asia-Pacific region every day, including in the South China Sea. “All operations are conducted in accordance with international law and demonstrate that the United States will fly, sail and operate wherever international law allows.”

Col Manning declined to comment on the new Pacific Command plan.

Countries in the region have welcomed the more unhesitating Pentagon approach under Mr Trump, said Bonnie Glaser, director of the China Power Project at the Center for Strategic and International Studies, a think tank in Washington, and a former consultant to the Pentagon and State Department.

“I think there has already been a positive reaction from the region that we see in the aftermath of the three fonops we’ve seen so far,” Ms Glaser said.

She said the Obama administration was “too risk averse” when it came to freedom-of-navigation patrols. “We need to conduct fonops on a regular and consistent way that sends a signal about our unwillingness to accept excessive maritime claims, to challenge those claims, and to underscore that our operations in the South China Sea are no different in other parts of the globe,” she said.

A former Obama administration official said a move to increase the number of navigation patrols was a good idea, but must be accompanied by a broader strategy.

“I think regularised fonops are a good idea,” said David Shear, an assistant secretary of defence at the Pentagon under Mr Obama. “I think they should be conducted in the context of a broader South China Sea and regional strategy, and it’s not clear to me that this administration has devised a strategy for the South China Sea or the region, so I’m not sure what purpose the fonops serve outside of that context.”

The Wall Street Journal

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Australia, Japan And U.S.: The South China Sea Isn’t China’s Own Sea – Panos Mourdoukoutas | Forbes

09 August 2017

Panos Mourdoukoutas | Forbes – Australia, Japan and the U.S. have a clear and loud message for China: The South China Sea isn’t China’s own sea. It’s an international sea. That’s why the Association of South East Asian Nations (ASEAN) and Beijing must establish a set of rules that were “legally binding, meaningful, effective, and consistent with international law.”

China’s Foreign Minister Wang Yi (3rd R) arrives at Manila International Airport in Manila on August 5, 2017 to attend the 50th Association of Southeast Asian Nations (ASEAN) Foreign Ministers Meeting. (NOEL CELIS/AFP/Getty Images)

The message, which came at a recent gathering of the foreign ministers of the three countries in Manila, echoes a similar message America and its naval allies, France, Japan and Britain sent to Beijing six months ago stating that the South China Sea should be open to all military vessels.

That’s according to a recent Chinatopix.com report. “Japan and the United States are worried by China’s efforts to exercise unilateral control over the South China Sea, a concern shared by France, which controls several Pacific islands, including New Caledonia and French Polynesia.”

Financial markets in the region do not seem that concerned, at least for now, focusing on the economic fundamentals rather than the geopolitics of the region.

Fund 1-Month Performance 3-Month Performance
ishares MSCI China (FXI) 8.72% 14.22%
iShares MSCI Philippines (EPHE) 2.18 -1.99
Market Vectors Vietnam ETF (VNM) 1.37 5.79

Source: Finance.yahoo.com 8/8/2017

Meanwhile, Philippines President Rodrigo Duterte called himself a “humble” friend of America in Southeast Asia, suggesting that he is getting ready for another in a series of flip-flops in the South China Sea dispute.

China considers the waterway its own sea, and is building artificial islands, defying international tribunal rulings, though Philippines President Rodrigo Duterte isn’t prepared to stop Beijing — Philippines is the country that won an international tribunal ruling against China.

Nonetheless, the ruling fueled a wave of blunt messages and naval demonstrations between China on the one side and America’ and its close ally, Japan, on the other. Last August, for instance, China told Japan to stay away from its “own” South China Sea, as three China Coast Guard vessels entered Japanese waters around the disputed Senkaku Islands in the East China Sea, according to the Japan Coast Guard.

And there’s China’s warning to Japan a month earlier, when Beijing told Japan “not to send Self-Defense Forces to join U.S. operations that test the freedom of navigation in the disputed South China Sea,” according to a Japan Times editorial.

While it is still unclear whether America and its allies will manage to tame China’s South China Sea ambitions, investors should keep a close eye on the ongoing disputes in the region, as accidents can and do happen, taking financial markets for a wild ride.

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Vietnam challenges China at security talks | The Sun Daily

06 August 2017

The Sun Daily – MANILA: Vietnam urged other Southeast Asian nations to take a stronger stand against Chinese expansionism in the South China Sea on Saturday, as a tense regional security forum began with North Korea also under fire over its nuclear programme.

(L-R) Malaysia’s Foreign Minister Anifah Aman, Myanmar’s Minister of State of Foreign Affairs U Kyaw Tin, Thailand’s Foreign Minister Don Pramudwinai, Vietnam’s Foreign Minister Pham Binh Minh, Philippines’ Foreign Secretary Alan Peter Cayetano, Singapore’s Foreign Minister Vivian Balakrishnan, Brunei’s Foreign Minister Lim Jock Seng, Cambodia’s Foreign Minister Prak Sokhonn, Indonesia’s Foreign Minister Retno Marsudi, Laos’ Foreign Minister Saleumxay Kommasith and Asean Secretary-General Le Luong Minh join hands for a family photo during the opening ceremony of the 50th Association of Southeast Asian Nations (Asean) Regional Forum (ARF) meeting in Manila on Aug 5, 2017. — AFP

Ahead of the launch of the annual gathering of foreign ministers from the 10-member Association of Southeast Asian Nations (Asean), Vietnam made a bold play against China with a raft of suggested changes to a planned joint communique.

It set the stage for a fiery few days of diplomacy in the Philippine capital, with the top diplomats from China, the United States, Russia and North Korea to join their Asean and other Asia-Pacific counterparts for security talks from Sunday.

The meetings will take place as the United Nations Security Council votes this weekend on a US-drafted resolution to toughen sanctions against North Korea to punish the isolated regime for its missile tests.

The United States said it would also seek to build unified pressure on the North at the Manila event – known as the Asean Regional Forum.

After their own day of meetings on Saturday, Asean foreign ministers released a joint statement expressing “grave concerns” over the North’s first two intercontinental ballistic missile tests that were conducted last month.

“These developments seriously threaten peace, security and stability in the region and the world,” the statement said.

But on the South China Sea dispute – one of Asia’s other top powder keg issues – there was far less consensus with the Philippines seeking to placate Beijing, and Vietnam leading the resistance, diplomats told AFP.

Vietnam on Friday night sought to insert tough language against China in an Asean statement that was scheduled to be released after the Southeast Asian ministers wrapped up their own talks on Saturday.

According to a copy of a draft obtained by AFP, Vietnam lobbied for Asean to express serious concern over “construction” in the sea, a reference to China’s ramped up building of artificial islands in the disputed waters in recent years.

Vietnam also wanted Asean to insist in the statement that a planned code of conduct for the sea with China be “legally binding”, which Beijing opposes.

Malaysia also pushed for some tougher language, including with a reference to “military assets” in the contested waters, according to the draft and discussions with diplomats involved in the discussions.

Tense talks

China claims nearly all of the strategically vital sea, including waters approaching the coasts of Vietnam, the Philippines, Malaysia and Brunei.

China has in recent years expanded its presence in the sea by building the artificial islands, which are capable of holding military bases.

The Philippines used to be the most vocal critic of Beijing’s expansionism.

But, since President Rodrigo Duterte was elected last year, the Philippines has sought to downplay the dispute with China in return for billions of dollars in Chinese investments and aid.

China has in recent years also successfully lobbied other Asean nations, particularly Cambodia, to support its diplomatic manoeuvring in the dispute.

The joint statement that was scheduled to be released after the Asean ministers was delayed because of the dispute over the wording on the sea issue, one diplomat told AFP.

“There is no consensus yet,” the diplomat said, adding the drafting committee was tasked with continuing the negotiations on Saturday night.

Asean is on Sunday set to adopt a framework with China for a code of conduct, which is meant to pave the way for more concrete action.

But security analysts point out that the framework comes 15 years after negotiations on the issue first began, and China has used that time to cement its claims with the artificial islands.

Another pressing issue in Manila will be the growing terrorism threat in the region.

The event is taking place as Philippine security forces battle Islamic State-aligned gunmen who have since May been occupying parts of Marawi, the nation’s main Muslim city about 800 kilometres (500 miles) to the south of Manila.

US Secretary of State Rex Tillerson is also set to meet Duterte on the sidelines of the event, with those talks expected to cover the Philippine president’s controversial drug war that has claimed thousands of lives. — AFP

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Will a China-ASEAN South China Sea Code of Conduct Really Matter? – Prashanth Parameswaran | The Diplomat

05 August 2017

by Prashanth Parameswaran | The Diplomat – As we hear an agreement being talked up, it’s worth being clear about what it means.

Image Credit: Indonesia Coordinating Ministry for Maritime Affairs

Ahead of the next round of Asian summitry led by the Association of Southeast Asian Nations (ASEAN) set for Manila later this week, reports have surfaced that, as expected, ASEAN countries and China will endorse a framework on the code of conduct (COC) in the South China Sea that had first been agreed to in May.

Even though we ought to recognize any amount of diplomatic progress, however small, when it comes to the contentious South China Sea disputes, we also need to keep things in perspective by asking: what does the so-called ASEAN-China draft framework on a code of conduct in the South China Sea actually mean, and to what extent does it matter?

Three main things are clear in this respect: there is no real meaningful breakthrough between Southeast Asian states and Beijing on the South China Sea; there is no real code of any kind to speak of; and even if this agreement is built out, evidence suggests it will do little to regulate actual Chinese conduct in the maritime realm.

In other words, the draft framework as it stands now, and even an eventual, concluded COC for that matter, may not really matter that much if the past is any guide to how the future will play out.

No Real China-ASEAN Breakthrough

First, there is no real breakthrough between China and ASEAN states on the South China Sea. Instead, what we have seen thus far is more of the same.

China’s trumpeting of a new “cooling down” period in the South China Sea is nothing new. It is consistent with its tendency to calibrate its maritime assertiveness between coercive actions to enforce its extensive claims and periods of charm to consolidate gains it has made and to manage the losses it has incurred with ASEAN states, major powers, and the international community (See: “Will China Change its South China Sea Conduct in 2015?”). Or, as one Southeast Asian official in an ASEAN claimant state put it to me much more darkly in a candid conversation last summer, “like an abusive husband” with the repeated cycles of hits and makeups.

It is no coincidence, for instance, that China only conceded to a non-binding Declaration on the Conduct of Parties (DOC) in 2002 after it had executed the first seizure of a feature from an ASEAN member state (Mischief Reef from the Philippines in 1995) and had tested the resolve of Southeast Asian states as well as Washington and encountered more pushback than expected.

Similarly, China is now playing up this “cooling down” period after both completing its island-building activities and sensing that a number of fortuitous events – most notably the weakening of the Philippine South China Sea position under Rodrigo Duterte – gives it a way to “turn a page” (to borrow a favorite phrase among Chinese officials over the past year) from the humiliating defeat in last year’s arbitral tribunal ruling (See: “Beware the Illusion of ASEAN-China South China Sea Breakthroughs”).

Meanwhile, Beijing has shown no signs of departing from its decades-long goal in the South China Sea: to acquire the capabilities and to undertake calibrated actions that will allow it to eventually enforce its extensive (and now unlawful) claims in the South China Sea at others’ expense while not entirely alienating neighboring states and jeopardizing its rise.

China’s construction of military facilities on the Spratly Islands has continued, along with other familiar sorts of behavior such as the coercion of other claimant states (most notably Vietnam on energy exploitation) and pressure on other regional and extraregional states not to “interfere.” Meanwhile, Chinese leaders continue to restate, as President Xi Jinping did this week at his speech during the 90th anniversary of the People’s Liberation Army (PLA), that China will not cede an inch of territory, a rather unhelpful stance as it only hypes up nationalist sentiment at home and makes agreements like joint development harder to strike abroad.

We are seeing more of the same from ASEAN states as well. Beyond the diplomatic niceties, claimant countries and interested parties, to varying degrees and though still being aware of their limitations relative to China and the divisions within ASEAN, continue to speed up their own unilateral, bilateral, and minilateral steps to safeguard their interests while acceding to the slow progress in the multilateral realm that Beijing has agreed to.

There is no doubt that Duterte’s seemingly sudden about-face on the South China Sea during the Philippines’ ASEAN chairmanship, and, to a lesser degree, other factors as well like the uncertainty over the U.S. role under President Donald Trump, have combined to water down the degree of ASEAN consensus for now (though, as I have pointed out previously, this tends to ebb and flow because of the divided nature of the grouping). (See: “The Truth About Duterte’s ASEAN South China Sea Blow”).

But the steps we have seen from individual Southeast Asian states of late, be it Indonesia’s recent announcement of the North Natuna Sea designation, Vietnam’s attempt at furthering energy exploitation earlier this year, or even for that matter Malaysia’s hardening rhetoric and tougher enforcement against maritime encroachments even as Prime Minister Najib Razak continues to engage Beijing economically, illustrate that we are far from any kind of ASEAN-China understanding or cooling down period of any sort (See: “Beware the Illusion of South China Sea Calm”).

No Real Code of Conduct

Second, there is not yet any meaningful code of any kind to speak of.

The so-called draft framework for a COC is a continuation of a quarter century of “agreeing to disagree” between ASEAN and China on some form of binding framework to regulate conduct in the South China Sea. In that time, a 1992 ASEAN declaration was ignored by China; the quest for a binding COC among some Southeast Asian states in the mid to late 1990s was eventually watered down to a non-binding DOC in 2002; and China has since then been dragging its feet on a binding COC up till recently, with the draft framework introduced this May.

Considering that we are now a quarter century into discussing a framework on the South China Sea and 15 years have passed since the DOC, the draft framework is quite simply an embarrassment. The working version that I had seen was essentially a skeletal one-page outline, consisting of a series of bland principles and provisions, some of which China has already violated, and a few operational clauses – the ones that ought to be the focus of a meaningful, binding COC of any sort – that have been left vague.

Southeast Asian officials familiar with the issue and ongoing discussions no doubt realize that this all amounts to very little substantively. Though there have been a series of sobering analogies I have heard in the region, my favorite came from one diplomat from an ASEAN claimant state at the sidelines of the Shangri-La Dialogue in Singapore this year, who said that this was the equivalent of submitting a table of contents to an editor years after a much-delayed manuscript was expected and then attempting to pass that off as progress.

Of course, this is at least a start, and ASEAN countries and China have been clear that this is a framework to build on, rather than a final document. But that misses the point. The issue is the extent to which diplomatic progress achieved in regulating the conduct of claimants and other relevant actors in the South China Sea is keeping pace with the changing facts on the water, primarily driven by Beijing’s actions.

The past quarter century has shown that the former has proceeded glacially while the latter has advanced blazingly, to the benefit of China and at the expense of other ASEAN claimant states and interested parties like the United States who have a stake in the issue as well. The draft framework does not even come close to changing that grim reality, and it will take a lot more work before it does.

No Real Regulation of Behavior

Third and finally, even if a draft framework is built out and we eventually do see a COC concluded in the distant future, the reality is that it is unlikely to actually help regulate China’s behavior in the South China Sea.

The past quarter-century has shown that China has not just been blatant about its foot-dragging on future commitments, but is equally unafraid to flout commitments it has already made in order to realize its goal of acquiring capabilities and undertaking actions to eventually enforce its extensive claims in the South China Sea at others’ expense.

Even as China continues to call for the full implementation of the DOC – mostly as a delaying tactic to stall the negotiation of a binding COC – it has itself violated the DOC through various actions including land reclamation activities. Other indicators, from Xi’s violation of his pledge in Washington not to militarize the Spratlys to Beijing’s reluctance to comply with the binding arbitral tribunal ruling, also do not inspire confidence in this regard.

Nor, by the way, do the artful diplomatic dodges and endless legal loopholes that Chinese officials and scholars, along with their proponents, continue to use. To seasoned observers, this is nothing more than duplicity under the guise of intellectual masturbation.

Some continue to hope for future shifts in China’s position in this respect, be it an eventual clarification of the notorious nine-dash line or a gradual acceptance of binding frameworks. But that (seemingly endless) wait misses the point. The issue is not whether the extent of Chinese compliance will evolve at all, but whether it will evolve to a degree that will keep pace with the facts on the water.

So far, what we have seen instead is that the elusive quest to regulate Chinese behavior (or to get Beijing to regulate its own behavior) has been vastly overtaken by the facts on the water. If this continues to be the case, even if we eventually get a binding and meaningful COC, it would have been rendered meaningless because Beijing would essentially have de facto control of the South China Sea by then.

Philippine Supreme Court Justice Antonio Carpio, a shrewd South China Sea observer, has been warning that even as the focus is on getting to Beijing to agree on a COC, we should not discount a scenario where China eventually does agree to do this, along with further steps like a freeze by all claimant states on island-building, reclamation, and militarization — once it achieves its objective of assuming control of the South China Sea through steps like reclaiming Scarborough Shoal and developing the capabilities for an effective, enforceable (and perhaps undeclared) air defense identification zone (ADIZ).

In other words, China may indeed accede to the COC once it succeeds in achieving its goal in the South China Sea. And by that time, a COC will not really matter much.

Even as we acknowledge the incremental progress — real or imagined — being touted in the diplomatic realm on the South China Sea disputes between Southeast Asian states and Beijing, these broader realities as important to keep in mind.

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Trump just approved a plan for the US Navy to check Beijing in the South China Sea – Alex Lockie | Business Insider

23 July 2017

Alex Lockie | Business Insider – President Donald Trump approved a plan to check Beijing over its continued militarization of and actions in the South China Sea, Breitbart News Kristina Wong reports.

USS Lassen (DDG 82) patrols the eastern Pacific Ocean. US Navy photo by Mass Communication Specialist 2nd Class Huey D. Younger Jr.

Over the last few years, China has ambitiously built up islands on reefs and atolls in the South China Sea and militarized them with radar outposts, military-grade runways, and shelters for missile defenses.

Military analysts believe China hopes to expand its air defense and identification zone into the western Pacific and build a blue-water navy to rival the US’s, but six other countries also lay claim to parts of the region.

In 2016, an international court at The Hague deemed China’s maritime claims unlawful and excessive, but China rejected the ruling outright and has continued to build military installations and unilaterally declare no-fly and no-sail zones.

When a country makes an excessive naval claim, the US Navy challenges it by sailing its ships, usually destroyers, close to the disputed territory or through the disputed waters as a way of ensuring freedom of navigation for all. In 2016, the US challenged the excessive claims of 22 nations — China’s claims in the South China Sea, through which $5 trillion in annual shipping passes, were the most prominent.

China has responded forcefully to US incursions into the region, telling the US the moves were provocative and that they must ask permission, which doesn’t align with international law or UN conventions.

“China’s military will resolutely safeguard national sovereignty, security and regional peace and stability,” China’s Foreign Ministry said in response to US bombers flying in the region.

Photo(C)Reuters

Under former US President Barack Obama, the US suspended freedom of navigation operations in the South China Sea from 2012 to 2015. In 2016, the US made just three such challenges. So far, under Trump, the US has made three challenges already.

“You have a definite return to normal,” chief Pentagon spokesperson Dana White told Breitbart News.

“This administration has definitely given the authority back to the people who are in the best position to execute those authorities, so it’s a return to normal,” she said.

Freedom of navigation operations work best when they’re routine in nature and don’t make news.

They serve to help the US establish the facts in the water, but in the South China Sea, those facts all indicate Chinese control.

When Chinese military jets fly armed over head, when Chinese navy ships patrol the waters, and when Chinese construction crews lay down the framework for a network of military bases in the South China Sea, the US’s allies in the region notice.

An increased US Navy presence in the area won’t turn back time and unpave runways, but it could send a message to allies that the US has their back and won’t back away from checking Beijing.

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Chinese boats attack Vietnamese fishermen in South China Sea – Elizabeth Shim | UPI

30 June 2017

Elizabeth Shim | UPI — China may be flexing its muscle in the South China Sea with attacks on Vietnamese fishing boats.

Vietnamese boats are increasingly under attack in the South China Sea. 
Photo(C)Luong Thai Linh/EPA 

Vietnamese newspaper Tuổi Trẻ reported Thursday two Chinese ships assailed a Vietnamese fishing boat near the disputed Paracel Islands in the South China Sea.

The attack took place on June 18, according to the report.

Authorities in Vietnam’s Quang Ngai province said a similar incident occurred on June 15, also involving a Vietnamese fishing boat near the Paracels, known as the Xisha Islands in China and Hoàng Sa in Vietnam.

The archipelago is roughly equidistant from the Chinese and Vietnamese coastlines.

The June 18 attack took place around 7 a.m., when two small Chinese boats, manned by officers in military uniform, approached the Vietnamese boat, which was in the middle of a fishing operation.

The uniformed men proceeded to smash the fishermen’s gear and the hull of the boat, then physically assailed the boat’s captain, according to the Vietnamese press report.

The earlier attack on June 15 also involved Chinese officers climbing onto a Vietnamese boat uninvited, destroying equipment and incurring more than $6,000 worth of damages.

The newspaper quoted sources from the Vietnamese Fisheries Society, who said they have received detailed reports on the attacks, initiated by members of the Chinese coast guard.

China has been enforcing an annual ban on fishing since 1999 in international waters. The ban is enforced for three months, beginning in May, and Vietnamese fishing vessels have remained prime targets, South Korean news service Newsis reported.

The ban has at time resulted in fatalities. In November 2015, a Vietnamese fisherman was shot to death, in an incident involving armed Chinese vessels near the disputed Spratly Islands.

About 84 percent of attacks on Vietnamese boats take place near the Paracels, Vietnamese media reported.

 

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