Category Archives: South China Sea

The South China Sea is a marginal sea that is part of the Pacific Ocean, encompassing an area from the Singapore and Malacca Straits to the Strait of Taiwan of around 3,500,000 square kilometres (1,400,000 sq mi). The area’s importance largely results from one-third of the world’s shipping transiting through its waters, and that it is believed to hold huge oil and gas reserves beneath its seabed.

Is War in the South China Sea Inevitable?

image

If China is not actually preparing for conflict in the South China Sea over disputed archipelagos and islets and their rich offshore resources, from fish to hydrocarbons, then consider the comments made on 6 December by Chinese President Hu Jintao to the Central Military Commission, as reported by Xinhua. Hu said that China’s navy should “make extended preparations for warfare,” adding that the navy should “accelerate its transformation and modernization in a sturdy way, and make extended preparations for military combat in order to make greater contributions to safeguard national security. Our work must closely encircle the main theme of national defense and military building.”

Is Beijing’s big nautical stick about to be deployed against other Southeast Asian nations contesting China’s South Sea sovereignty claims?

At issue are the Spratly islands’ 750 islands, islets, atolls and cays, which China, along with the Philippines, Taiwan, Vietnam, Malaysia and Brunei, are claimed by all. While there are no native Spratly islanders, about 45 archipelago’s islands are now occupied by Vietnamese, Chinese, Taiwanese, Malaysian and Filipino forces, hardly a recipe for concord.

Whatever China’s intentions, what is beyond doubt is the exponential growth of the Chinese navy, which can now field 66 submarines, an undersea arsenal the Chinese government is intending to increase to 78 by 2020 as planned, putting it roughly equivalent to the U.S. Navy’s submarine forces in numbers, if not in quality. Furthermore, China’s defense budget is growing nearly 10 percent annually and China’s first aircraft carrier, a renovated Soviet vessel, has begun its second set of sea trials from its Yellow Sea port in Dalian in northeastern China. The 990-foot-long former Soviet Kuznetsov-class carrier, originally called the Varyag and now apparently renamed the Shi Lang, was completely overhauled and is currently based in China’s northeast Dalian port. It is perhaps not coincidental that “Shi Lang” was a famous 17th century Chinese admiral who conquered Taiwan.

China is applying some not so subtle gunboat diplomacy to advertise its new maritime capabilities. Last month a delegation composed of 42 military attaches from 37 countries including the United States, Canada, Britain and Germany make a two-day-long goodwill visit to the North China Sea Fleet of the Navy of the Chinese People’s Liberation Army, visiting a ship-borne aircraft regiment of the aviation force under the North China Sea Fleet.

Their Chinese hosts demonstrated a number of capabilities, including platform-based flying and overland rescue. Lest the attaches be in any doubt about the Chinese Navy’s new capabilities, they also visited the Shenyang guided-missile destroyer.

But at least one contestant in the South China Sea is rising to the challenge. Later this month the Philippine Navy will deploy its biggest and most modern warship, the BRP Gregorio Del Pilar, to the South China Sea, which Manila labels the West Philippine Sea.

Regional diplomats are still trying to defuse the situation. Indonesia’s Foreign Affairs Minister Marty Natalegawa said that the Bali Concord III, signed last month, could serve as a guide for East Asian countries in dealing with the dynamic situation in the South China Sea, commenting, “We are aware of the dynamic situation in the South China Sea. However, we must remember that now we have the Bali Concord III that was signed by the heads of state/government during the East Asia Summit last November 19.”

Washington’s take on the squabble? Pentagon spokesman George Little said, “They (China) have a right to develop military capabilities and to plan, just as we do.”

Translation for Manila, Ho Chi Minh City, Taipei, Kuala Lumpur and Bandar Seri Begawan – you’re on your own. It’s worth remembering that the People’s Republic of China fought two brief but savage border wars with both India (1962) and Vietnam (1979.)

For those with a sense of history, today is the 70th anniversary of the Japanese attack on Pearl Harbor, which occurred prior to a declaration of war. For those with a greater sense of history, Dalian is close to the Chinese port of Lushunkou. Previously known as Port Arthur, it was the major base of the Russian Navy Pacific Fleet and attacked on 8 February 1904 by the Imperial Japanese Navy.

Without a formal declaration of war.

By. John C.K. Daly of Oilprice.com

Source – Oilprice.com

China getting ready for war, alerts Navy

image

Posted by Mohan Ramraj on December 9, 2011

Beijing, Dec 8 (TruthDive): Chinese President Hu Jintao has asked the Chinese navy to get ready for war as regional tensions over maritime disputes were on the increase in recent times. His call also came in the wake of a campaign portraying U.S as a Pacific power.

The Navy should “accelerate its transformation and modernization in a sturdy way, and make extended preparations for military combat in order to make greater contributions to safeguard national security,” he said.

In an address to the Central Military Commission, Hu said: “Our work must closely encircle the main theme of national defense and military building.”

His comments, which were posted in a statement on a government website, come as the United States and Beijing’s neighbors have expressed concerns over its naval ambitions, particularly in the South China Sea.

The whole of the fight is for the South China Sea, which accounts for one-third of the global sea-trade, also believed to have huge oil and gas reserves. Many countries accused China’s move to build tension over there.

The country’s official news agency quoted the President as saying China’s Navy should “make extended preparations for warfare.”

The U.S carefully responded acknowledging its right to develop its military and called for transparency.

“They have a right to develop military capabilities and to plan, just as we do,” said Pentagon spokesman George Little, but he added, “We have repeatedly called for transparency from the Chinese and that’s part of the relationship we’re continuing to build with the Chinese military.”

“Nobody’s looking for a scrap here,” insisted another spokesman, Admiral John Kirby. “Certainly we wouldn’t begrudge any other nation the opportunity, the right to develop naval forces to be ready.Our naval forces are ready and they’ll stay ready.”

State Department spokesman Mark Toner said: “We want to see stronger military-to-military ties with China and we want to see greater transparency. That helps answer questions we might have about Chinese intentions.”

It is very obvious that the Chinese Premier’s call came in the wake of several American top officials’ visit to Asian countries including President Barack Obama, Defense Secretary Leon Panetta and Secretary of State Hillary Clinton.

Source

Washington’s Clumsy China Containment Policy

image

by Ted Galen Carpenter

Although U.S. officials have insisted for years that they do not regard China’s rise to great-power status as a threatening development, Washington’s statements and actions increasingly belie those assurances. Any doubt on that point disappeared following President Obama’s November 17 speech in Canberra, Australia. In his address to the Australian parliament, Obama boldly asserted that “the United States is a Pacific power, and we are here to stay.” Observers in Australia and throughout the region interpreted that comment as sending a message to China that the United States was not about to quietly relinquish its hegemony in East Asia and let the PRC become the leading power.

The Canberra speech was not the only measure that suggested that Washington was adopting a harder line toward Beijing on security issues. Just hours before his address to parliament, Obama announced that the United States would send military aircraft and as many as 2,500 Marines to northern Australia over the next few years to develop a training hub to assist allies and protect American interests throughout the region.

The next day, while attending an East Asian economic summit in Bali, the president went out of his way to emphasize the importance of the U.S. defense alliance with the Philippines and pledged to strengthen that relationship. His comment followed a blunt statement from Secretary of State Hillary Clinton regarding the ongoing dispute between China and several of its neighbors (including the Philippines) over territorial claims in the South China Sea. “Any nation with a claim has a right to exert it,” Clinton stated during a visit to Manila on November 16, “but they do not have a right to pursue it through intimidation or coercion.” She added that “the United States will always be in the corner of the Philippines and we will stand and fight with you.” Although the latter remark could be interpreted merely as a restatement of the rationale for the six-decade-old mutual-defense treaty, given the secretary’s comments about the South China Sea dispute Beijing could certainly view her statement as a specific warning regarding that issue.

Those moves, along with previous efforts to strengthen cooperative military ties with other traditional allies such as South Korea and Japan and one-time U.S. adversaries such as Vietnam, have all the earmarks of a rather unsubtle containment policy directed against China. It is a foolish strategy that will complicate and perhaps permanently damage the crucial U.S.-China relationship. Perhaps even worse, it is a containment strategy that is long on symbolism and short on substance, thereby managing to be simultaneously provocative and ineffectual.

Take the U.S. decision to send 2,500 Marines to Australia. It is hard to imagine a scenario in which such a small deployment would be militarily useful. If there is a security contingency somewhere in East Asia, it is likely to be decided by air and naval power, not a meager force of Marines. Yet, while militarily useless, such a deployment conveys a hostile message to Beijing, thereby managing to antagonize the Chinese.

A similar conclusion is warranted with regard to the Obama administration’s transparent effort to revitalize the nearly moribund alliance with the Philippines. That chronically misgoverned, third-rate military power would hardly make a good security partner in any crisis. Yet by siding with a country that is deeply embroiled with China over territorial claims in the South China Sea, the United States once again appears to be going out of its way to antagonize Beijing.

That would be an ill-advised approach under the best of circumstances. But to embrace a containment policy—especially one that is primarily bluster and symbolism—when Washington badly needs China to continue funding the seemingly endless flow of U.S. Treasury debt verges on being dim-witted. It’s never a good idea to anger one’s banker. And one can assume that Beijing is watching U.S. actions, not just the pro-forma assurances that the United States wants good relations and does not regard China as a threat. Those assurances ring increasingly hollow, and one can assume that Chinese leaders will react accordingly. That does not bode well for the future of the U.S.-China relationship.

Source

Have US policymakers (POTUS) gone crazy?

image

By: Justin Raimondo | Published: November 30, 2011

Is there a single region of the world where the United States government isn’t scheming to grab more control, more influence, and have more of a military presence?

In Pakistan, a memo has been unearthed from “President” Zardari to Admiral Mike Mullen, head of the joint chiefs of staff, proposing a coup d’etat in which the military and intelligence chiefs would be replaced – with US “political and military support” – in favour of individuals more compliant with the American agenda. Also in Pakistan: an outright attack by US and Afghan forces on a Pakistani military base, a “mistake” in which 24 Pakistani soldiers were killed.

Is the United States government actively trying to destabilise Pakistan – in order to be able to pull off a “coup” and move in with US troops in support of “democracy”? Are we, in effect, at war with Pakistan? Sure seems like it.

In Iran, we’re running a terrorist operation that strikes at both military and civilian targets, and we’ve just announced a new round of sanctions. Not content with a campaign of economic strangulation, prominent US lawmakers and former top national security officials are harbouring, succouring, and defending a known organisation whose goal is “regime change” in Iran. Hardly a day goes by without a threat of military action emanating from Washington.

In Syria, we are supporting armed “protesters” whose goal is the overthrow of the Syrian government. In Libya, our proxies recently succeeded in doing the same. In Egypt, we are reprising our record of support for mobs demanding the ouster of the government – while in Bahrain, we take the side of the reigning king as angry mobs gather in the public square.

In Eastasia, we are intervening in a regional dispute, claiming to be a “resident Pacific power,” and scheming to make the South China Sea (of all places!) an American lake. The much-vaunted “Pacific pivot” has us setting up a new military base in Australia and sending 2,500 US troops to man it. Is this because China is planning to send the Peoples Liberation Army Down Under – or because the Americans are looking to expand the string of major military bases that allows them to project power (and impose their will) all over the globe? Of course it’s just a coincidence that, in tandem with our Asian offensive, we’re about to announce an agreement to base US warships in Singapore, right on China’s doorstep.

Our ambitions, however, are hardly limited to Eastasia. In Central Asia, aside from our decade-long campaign to subjugate Afghanistan, we’re spending tens of millions of US taxpayer dollars to prop up some of the most repressive regimes on earth. The idea is to encircle both Russia and China: toward this end we are courting the dictators of Uzbekistan, Kazakhstan, and Tajikistan, and haggling with the newly-elected government of Kyrgyzstan to retain our basing rights.

In Europe, we are intervening massively – via the Federal Reserve, this time – in order to shore up insolvent banks, support the Euro, and prop up the decadent welfare states of the EU. On a more militaristic note, via Nato we’re intervening – again! – in Kosovo, Serbia’s lost province, where rebellious Serbs are defying the gangster “government” in Pristina and defending their autonomy: naturally, we aim to crush them. Since the Obama administration has come into office, new bases have sprung up in Poland, Bulgaria and Romania. And if the long reach of Uncle Sam into the very heart of Europe isn’t evident in the legal troubles of Julian Assange, then one is wearing blinders.

In Africa we are invading Somalia, sending the Marines to Uganda, and scheming with Kenya and Ethiopia to pacify great swathes of the continent. This is being done in the name of the “war on terrorism,” but in reality it is a response to Chinese economic penetration of the dark continent, which the US sees as a threat. A ring of new military bases is being set up in Yemen, Ethiopia, Saudi Arabia, and the Seychelles from which to run our ongoing “drone war” against alleged “terrorist” outposts in Somalia and the Arabian peninsula. This is not to mention the “secret” bases reportedly operating in “Israel, Kuwait, the Philippines and many other places,” as Catherine Lutz points out in an excellent overview of what the late Chalmers Johnson called our “empire of bases.”

In South and Central America, the American military presence is rapidly expanding, with seven new bases in Colombia since 2008, two new naval bases in Panama – and those are just the ones we know about. What we don’t know is the extent of Washington’s covert operations south of the border, including supplying arms to Mexican drug cartels – a truly shocking scandal which is being steadfastly ignored by the openly pro-Obama “mainstream” media.

Source

The Coalition Against Chinese Hegemony

To resist Beijing’s maritime claims, Asean members will have to compromise and form a common front.

image
By PHILIP BOWRING

Manila

Ownership of the islands, seabed resources and navigation rights in the South China Sea is now very much on the international agenda. The Association of Southeast Asian Nations is more united on this issue than it has been for about a decade, and the U.S. is turning more attention diplomatically and militarily to the Pacific. Nevertheless, sustaining the coalition of interests disputing China’s claimed hegemony over the sea will not be easy.

In fact, the wonder is that the Chinese leadership managed to get itself into this predicament by so clumsily arousing neighboring countries’ fears. Having suffered constant Chinese provocations over the preceding few years, Hanoi used its chairmanship of the Association of Southeast Asian Nations in 2010 to first bring the issue of Chinese aggression to the table. Vietnam and the Philippines encouraged the U.S. to make clear its own interest in freedom of navigation and settlement of territorial disputes according to international principles.

At that point Beijing could have backed off and allowed the subject to fade from view. Instead, the People’s Liberation Army tried to punish Vietnam and the Philippines by harassing their exploration ships. Under the confident new administration of President Benigno Aquino, Manila responded with unprecedented vigor, carrying on exploration and offering new blocks for drilling.

Even this has not given China’s nationalists second thoughts. Recently the Global Times newspaper, owned by the People’s Daily, warned those who dispute Chinese claims to be “mentally prepared for the sound of cannons,” a threat that was noted around the world.

There is a sense that China’s provocations have been driven by the military, probably against the advice of its diplomats. If wiser heads among Beijing’s civilian leadership can reassert control, they will re-adopt Deng Xiaoping‘s maxim about keeping a low profile. If so, China will tone down its rhetoric and offer economic benefits on a larger scale to increase its neighbors’ dependence. It will likely quietly offer bilateral exploration deals which would divide the Asean claimants who are just starting to work together.

China has tried this before and nearly succeeded with Manila. Although the Philippines has relatively little reliance on China trade, its need for investment and pervasive corruption are vulnerabilities. The preoccupation of its armed forces—who are anyway poorly equipped—with insurgencies at home limits its ability to police the seas and protect exploration.

However, democracy can be a powerful force when it comes to protecting national interests. The Philippine public’s determination to stand up to bullying can be stronger than that of elites with business deals with China or autocracies reliant on good relations.

Vietnam’s nationalistic instincts are sure enough but Vietnam is still a relatively small and weak nation quite dependent on trade with China and likely to become more so. Good ties with India, Japan and Russia and emerging ones with the U.S. are an offset but China’s threats have already deterred some exploration on the continental shelf.

China’s efforts to divide the littoral states by pressing for bilateral negotiations have so far not met with success. But they could do so if Vietnam, the Philippines, Malaysia and Brunei do not resolve their own differences. Significantly, China has refrained from overt threats against Malaysia even though oil and gas wells off Borneo are within its claimed territory. Malaysia in return has urged caution and cooperation with China. If Vietnam and the wider Malay world do not hang together they will surely be hung separately.

The difficulty lies in sacrificing some overlapping claims to form a united front. Vietnam claims all the Spratlys, the Philippines most but not all of them, Malaysia just a few, and Brunei only a couple of banks. Many of the islets, rocks and reefs lie outside their 200-mile exclusive economic zones and none qualifies for its own EEZ as none is capable of independently supporting permanent habitation.

Vietnam’s claim is as successor to its French colonial rulers as well as Vietnamese imperial assertions and the legacy of the Cham trading kingdom which flourished in central Vietnam until about 1500. The U.S. never claimed the Spratlys but an independent Philippines did so on the basis of proximity and as part of the Philippine archipelago. Malaysia and Brunei make claims based on rights to the continental shelf off Borneo.

Compromise among these four countries, who together own two-thirds of the coastline, is essential to prevent China from establishing hegemony over Southeast Asia. If the Asean nations cannot agree among themselves they could ask the International Court of Justice for a ruling, as did Malaysia, Singapore and Indonesia in previous island disputes. The court could also be asked to adjudicate the EEZ boundaries. China would object, but that would only underline its unwillingness to agree to arbitration based on the U.N. Law of the Sea Convention.

In the end, only leadership from Indonesia, the largest Malay state and the cornerstone of Asean, can resolve this conflict. It can do more to refute China’s history-based claims, which ignore centuries of Malay trading across the sea a thousand years before the Chinese. And Jakarta can be the honest broker in finding a compromise to share resources that lie outside the EEZs of the claimants.

Vietnam, the Philippines and the other smaller states are never going to be able to remove China from the Spratly Islands that it now occupies, let alone the Paracels that it seized from Vietnam in 1974. But if they can maintain a common front with backing from Indonesia, they should be able to defend their interests in the South China Sea and their future sovereignty.

Source

New realignments in Asia

image

Eric S. Margolis
20 November 2011, 7:29 PM

I’ve a lovely little painting in my study of Germany’s first emperor, Kaiser Wilhelm I.

It was painted soon after the 1870-71 Franco-Prussian War and the creation of a united Germany with Wilhelm as its monarch – thanks to the great German statesman, Prince Bismarck.

United Germany’s fast-rising economic and military power was seen by the British Empire, which then ruled a quarter of the globe, as a dire threat.

Bismarck managed to cleverly divide or distract Germany’s foes. But the new young Kaiser Wilhelm II dismissed the domineering Bismarck and soon plunged his nation into confrontation with Imperial Britain over naval power, colonies, and trade. Britain determined to crush rival Germany. The fuse of World War I was lit. We see the first steps of a similar great power clash taking shape today in South Asia.

A usually cautious China has been aggressively asserting maritime claims in the resource-rich South China Sea, a region bordered by Indonesia, Vietnam, Brunei, the Philippines, Malaysia, Taiwan and China.

Japan, India, South Korea and the United States also assert strategic interests in the hotly disputed sea, which is believed to contain 100 billion barrels of oil and 700 trillion cubic feet of natural gas. China has repeatedly clashed with Vietnam and the Philippines over islets and rocks in the South China Sea. Tensions are high.

In 2010, the US strongly backed the maritime resource claims by the smaller Asian states, warning off China and reasserting the US Navy’s right to patrol anywhere.

The US is increasingly worried by China’s military modernisation and growing naval capabilities. Washington has forged a new, unofficial military alliance with India, and aided Delhi’s nuclear weapons development, a pact clearly aimed at China.

US forces are now training Mongolia. China may deploy a new Fourth Fleet in the South China Sea. Washington expresses concern over China’s new aircraft carrier, anti-ship missiles and submarines. The US may sell arms to Vietnam. The US is modernising Taiwan’s and Japan’s armed forces.

These moves sharpen China’s growing fears of being encircled by a network of America’s regional allies.

They also disturbingly recall the naval race between Britain and Germany during the dreadnaught era that played a key role in triggering World War I.

As a historian, I’m most concerned. Youth in China and India are seething with mindless nationalism caused by too much testosterone and propaganda. A decade ago, I wrote a book that dealt with a future war between China and India over the Himalayas and Burma.

The US, the inheritor of Britain’s Empire, is struggling to finance its vast sphere of influence. The Republican Party is in the grip of extreme elements and primitive nationalism. The Pacific Ocean has been an American Lake since 1944. Washington’s ’s biggest foreign policy challenge is keep peace with China while gradually lessening its domination of the Asian Pacific coast, allowing China to assert its inevitable sphere of influence in the region

The bankrupt US cannot hope to compete long-term with cash-rich China to be top dog in south Asia. But history shows that managing the arrival of a new super-power is dangerous, tricky business.

Clever diplomacy, not more Marines, is the answer. The over-extended American Raj has got to face strategic reality or it risks going the way of the Soviet Empire.

But Washington’s global domination crowd won’t face facts. The US, which accounts for 50 per cent of world military spending, is now sending troops to East Africa, Congo, West Africa, and now, Australia.

US foreign policy has become militarised; the State Department has been shunted aside. The Pentagon sees Al Qaeda is everywhere.

The US needs the brilliant diplomacy of a Bismarck, not more unaffordable bases or military hardware.

A clash in the Pacific between China and the US is not inevitable. But events last week brought one closer.

Eric Margolis is a veteran US journalist

Source

U.S.-China tensions risk spilling over into Asia summit

image

By Caren Bohan and Laura MacInnis
NUSA DUA, Indonesia | Fri Nov 18, 2011 6:12am IST

(Reuters) – Tensions between the United States and China threaten to spill over into meetings of Asia-Pacific leaders from Friday, with U.S. President Barack Obama declaring his intention on the eve of the gathering to assert U.S. influence in the region.

Obama said in Australia on Thursday, on his last stop before jetting to the meetings in neighboring Indonesia, that the U.S. military would expand its Asia-Pacific role despite budget cuts, declaring America was “here to stay” as a Pacific power.

And days earlier, as host of the Asia Pacific Economic Co-Operation forum in Hawaii, Obama had voiced growing frustration at China’s trade practices and pushed for a new Asia-Pacific trade deal with some of Beijing’s neighbors.

The Indonesia meetings, on the resort island of Bali, bring together the 10-member Association of South-East Asian Nations (ASEAN) and eight dialogue partners, including the United States, China, Russia and Japan. Bilateral meetings are held on Friday before a full East Asia summit on Saturday.

Earlier this week, U.S. Secretary of State Hillary Clinton urged claimants to the South China Sea not to resort to intimidation to push their cause in the potentially rich waters, an indirect reference to China ahead of the Bali summit.

China and several ASEAN countries have clashed over sovereignty of the waters, believed to be rich in natural resources and straddling vital trade lanes.

Clinton called for candid discussion of the maritime dispute at the summit, which could embolden some Southeast Asian countries with maritime claims, though China says it does not want such talks to take place and that the issue should be resolved via bilateral negotiations.

“Introducing a contentious subject into the meeting would only affect the atmosphere of cooperation and mutual trust, damaging the hard-won setting of healthy development in the region,” Chinese Foreign Ministry spokesman Liu Weimin said on Wednesday. “That’s is beyond any doubt.”

Obama has declared that U.S. engagement in the Asia-Pacific region was “absolutely critical”, feeding China’s longstanding fears of being encircled by the United States and its allies.

“As we end today’s wars, I have directed my national security team to make our presence and missions in the Asia Pacific a top priority,” Obama said on Thursday in a major speech on Washington’s vision for the Asia-Pacific region.

“As a result, reductions in U.S. defence spending will not — I repeat, will not — come at the expense of the Asia Pacific.”

Nervous about China’s growing clout, U.S. allies such as Japan and South Korea have sought assurances from the United States that it would be a strong counterweight in the region.

A first step in extending the U.S. military reach into Southeast Asia will see U.S. Marines, naval ships and aircraft deployed to northern Australia from 2012.

That deployment to Australia, which by 2016 will reach a taskforce of 2,500 U.S. troops, is small compared with the 28,000 troops stationed in South Korea and 50,000 in Japan.

But the presence in Darwin, only 820 km (500 miles) from Indonesia, will allow the United States to quickly reach into Southeast Asia and the Indian Ocean.

Obama acknowledged China’s unease at what it sees as attempts by Washington to encircle it, pledging to seek greater cooperation with Beijing.

He added: “We’ll seek more opportunities for cooperation with Beijing, including greater communication between our militaries to promote understanding and avoid miscalculation.”

The new de facto U.S. base in Australia expands the direct U.S. military presence in Asia beyond South Korea and Japan and into Southeast Asia, an area where China has growing economic and strategic interests.

It will also put more U.S. troops, ships and aircraft much closer to the South China Sea.

CHINA QUESTIONS U.S. DEPLOYMENT TO AUSTRALIA

China has questioned the new U.S. deployment, with a foreign ministry spokesman raising doubts about whether strengthening such alliances helped the region pull together at a time of economic gloom.

But overall its official reaction has been restrained, with an impending leadership succession preoccupying the ruling Communist Party and leaving Beijing anxious to avoid diplomatic fireworks.

Reaction from some state media was harsher.

“It wouldn’t come as a surprise if the United States is trying to seek hegemony in the region, which would be in line with its aspirations as a global superpower,” China’s state news agency Xinhua said in a commentary.

Obama said the increased focus on the Asia-Pacific region was essential for America’s economic future.

“As the world’s fastest-growing region – and home to more than half the global economy – the Asia Pacific is critical to achieving my highest priority: creating jobs and opportunity for the American people,” he said.

Source

U.S. China Policy: A Snake with Three Heads

image

By PATRICK SMITH, The Fiscal Times

It’s dismaying to consider that the world’s largest economy may not know what it’s doing when faced with the planet’s No. 2 economy (and one of the fastest growing). But three of Washington’s most recent moves toward mainland China—the security pact with Australia, a compromise defense deal with Taiwan, and the threat of retaliatory tariffs on Chinese imports—suggest that this may be the case. Are we trying to smooth relations with Beijing and exit a long era of mutual suspicion? Or is China our latest scapegoat, the Japan of the early 21st century?

With President Obama just agreeing to an expanded military presence in Australia, much to the dismay of Beijing, a fair question is: What exactly is U.S. policy toward China? A better one might be: Does Washington actually have a China policy?

The Obama administration’s decision to deny Taiwan a big new arms agreement suggested that the U.S. is finally learning that Beijing and Taipei can manage relations across the Taiwan Strait by themselves. It looked for a minute as if Washington was beginning to understand that U.S.–China relations have entered a productive period of close interdependence, mutual regard, and a new balance in cross-Pacific ties.

But almost as soon as the administration made this sensible judgment, the Senate decided that it was time to have yet another antagonistic run at the Chinese for manipulating their currency to enhance exports. China isn’t even named in the bill that would impose retaliatory tariffs on countries that keep their currencies artificially low, but the bill is all about the undervalued yuan, and pre-election politics on our side of the ocean.

These two decisions, one following the other by less than 10 days, had nothing to do with one another except that they both will affect our ties with Beijing. And that is precisely the point. You can’t blame the Chinese for concluding that the U.S. simply does not have a coordinated policy toward the mainland. The State Department and the Pentagon do one thing and the Senate another, and who cares if they are in direct conflict as far as advancing healthy cross-Pacific relations with our largest trading partner (and creditor)?

And in Australia yesterday, the AP said, “the president sidestepped questions about whether the security agreement was aimed at containing China. But he said the U.S. would keep sending a clear message that China needs to accept the responsibilities that come with being a world power. …And he insisted that the U.S is not fearful of China’s rise.”

That must have further wrenched many necks in Beijing.

In the case of the Taiwan arms deal, Taipei wanted to buy a fleet of 66 top-of-the-line fighter jets from Lockheed Martin. The administration instead decided to upgrade the earlier-generation Lockheeds (146 of them) that Taiwan already has in its arsenal. That deal alone is worth nearly $6 billion.

This was astute for several reasons. It signaled to Beijing a respect for its policy toward Taiwan, which it considers a breakaway province, while observing the Taiwan Relations Act, a Cold War relic that obliges the U.S. to defend the island against aggression from the mainland. Equally, the decision will do no harm to the growing economic ties that Beijing and Taipei are using to warm relations between them.

Chinese officials grumbled at the U.S. announcement, but it was ritualistic—and intended to be read as such. “China firmly opposes U.S. arms sales to Taiwan,” was all the foreign ministry in Beijing had to say. Plainly, the Obama administration hit the bull’s eye with the upgrade-but-no-sale policy, and it was a tricky bit of navigation.

Then along comes the Senate and its bill to impose currency-related tariffs clearly aimed at China. This idea has managed to inflame the Chinese: The foreign ministry is suddenly talking about the potential for a “trade war.” Before the Senate vote on October 11, Fed Chairman Ben Bernanke piled on in testimony before a congressional committee. “Our concern is that the Chinese currency policy might be blocking a more normal recovery,” he said. “It is to some extent hurting the recovery.”

Wait a minute. To what extent would that be? What it looks like is that in the run-up to next year’s presidential election, the administration and its allies on Capitol Hill—it’s the Democrat-controlled Senate that is pushing the tariff idea—are getting ready to spread the blame to China for the inevitable criticism the Obama campaign will take for the weak U.S. economy.

There are a couple of things wrong with this tactic. For one thing, the Chinese yuan has appreciated slowly but without serious interruption since July 2010. It now costs 6.34 yuan to buy a dollar; a year and a half ago it cost nearly 6.8 yuan.

All right, a 6 percent to 7 percent appreciation is nothing to write to mother about; more is needed. But clearly, Beijing made a policy decision in mid–2010, and this is reason No. 1 for not threatening retaliatory measures now. It is not the time to provoke Chinese ire: The markets expect continuing improvement.

Reason No. 2 is that we’ve been down this road before. Remember the Plaza Accord in 1985, after which the Japanese yen doubled in value against the greenback? Then what happened? Japan went on a politically touchy buying spree abroad, and the U.S. trade deficit went from $46 billion in 1985 to $56 billion two years later. (It’s now steady at about $60 billion a year. Fat lot of good the Plaza Accord did.)

Reason No. 3 is that a more expensive yuan will mean more expensive Chinese goods on American shelves. And we do not want an inflation fight on our hands right now, considering the overall weakness of the economy and, in particular, the anemic growth in U.S. jobs.

In effect, the bill the Senate passed after hasty debate would export one problem, a political tangle over the economy next year, and import another, higher prices on Chinese goods coming into the U.S. market.

Washington needs to get its act together, develop a coherent approach to China, and stop looking for someone else to blame for our economic woes. China will not be as graceful in such matters as Japan was a quarter-century ago. Beijing has already made this clear: It dropped the value of the yuan immediately after the Senate vote.

Source

%d bloggers like this: