US-China (& Japan, South China Sea-- Taiwan, Vietnam, Philippines, etc)

[Crafty_Dog]

A Glimpse Into China's Military Presence in the South China Sea is republished with permission of Stratfor."

Does this URL work for you guys?

[ccp]

http://www.breitbart.com/london/2016/08/11/fbi-chinese-build-uk-nuclear-plant-stolen-us-technology/

[G M]

A Glimpse Into China's Military Presence in the South China Sea is republished with permission of Stratfor."

Does this URL work for you guys?

Yes.

[Crafty_Dog]

Good to know-- the maps and the pictures add mightily to the value of Stratfor's work.

[G M]

Good to know-- the maps and the pictures add mightily to the value of Stratfor's work.

Indeed.

[G M]

http://www.japantimes.co.jp/news/2016/08/21/national/china-hinted-at-military-action-if-japan-sends-sdf-to-south-china-sea/

No worries, team smart power is on it.

[bigdog]

https://www.lawfareblog.com/military-activities-continental-shelf

[G M]

https://www.lawfareblog.com/military-activities-continental-shelf

Expect more. China knows that they won't be stopped.

[bigdog]

http://warontherocks.com/2016/08/red-teaming-the-rebalance-is-the-united-states-good-for-asia/

[G M]

http://warontherocks.com/2016/08/red-teaming-the-rebalance-is-the-united-states-good-for-asia/

The Seward segment was worthwhile. The fact that China has checkmated us and Obama deliberate sabotage of power is ignored.

[Crafty_Dog]

Sub race. China is fueling a submarine race in the Pacific, FP’s Elias Groll and Dan De Luce tell us in a smart new story, writing that thanks to China’s huge increases in defense spending “and making aggressive claims to disputed island chains, Beijing’s regional rivals are investing in the one weapon that can undercut the increasingly potent People’s Liberation Army. Across South and East Asia, China’s neighbors are spending heavily on submarines, purchasing silent diesel-electric machines capable of slipping past Chinese defenses.”

But it’s not only subs. New Zealand recently signed a $26 million contract with Boeing to upgrade its fleet of five P-3 Orion submarine hunting surveillance planes. “This is particularly important in the Asia-Pacific region which is home to two-thirds of the world’s submarines” New Zealand’s defence minister Gerry Brownlee said.
 

[bigdog]

Sub race. China is fueling a submarine race in the Pacific, FP’s Elias Groll and Dan De Luce tell us in a smart new story, writing that thanks to China’s huge increases in defense spending “and making aggressive claims to disputed island chains, Beijing’s regional rivals are investing in the one weapon that can undercut the increasingly potent People’s Liberation Army. Across South and East Asia, China’s neighbors are spending heavily on submarines, purchasing silent diesel-electric machines capable of slipping past Chinese defenses.”

But it’s not only subs. New Zealand recently signed a $26 million contract with Boeing to upgrade its fleet of five P-3 Orion submarine hunting surveillance planes. “This is particularly important in the Asia-Pacific region which is home to two-thirds of the world’s submarines” New Zealand’s defence minister Gerry Brownlee said.
 

This discussion could extend to the Arctic as well.

[Crafty_Dog]

I still have that Red Team article on my "to read" list.  Looks very interesting.

[Crafty_Dog]

China’s summit games. While the Americans and Russians danced around one another at the summit, China made some seriously provocative moves over the past several days, sailing eight ships around the disputed Scarborough Shoal, which both the Philippines and Beijing claim as their own. The flotilla, spotted by a Philippine Air Force patrol, may have contained two ships capable of carrying troops and a dredging ship. China and the Philippines have clashed over territorial disputes in recent months, including a protracted legal battle at the International Court of Arbitration, which rejected some of Beijing's claims to territory in the South China Sea.

Despite this, don’t expect the ongoing Association of South East Asian Nations (ASEAN) conference attended by President Barack Obama in Laos, to make much of a stink over the latest Chinese provocations. A draft of a joint statement to be released at the summit, seen by Reuters, completely ignores the July ruling by the Permanent Court of Arbitration at The Hague. The statement is a diplomatic victory for China, coming on the heels of ASEAN's leaders during a meeting in July to reject a U.S.-backed proposal to insert the ruling in the text of a joint statement.

[G M]

Note that China has quite deliberately and publicly humiliated Empty Suit Buraq at the G20, yet somehow our professional journalists seem to have missed that.

[G M]

http://www.jerusalemonline.com/news/world-news/around-the-globe/watch-china-humiliates-obama-with-disrespectful-greeting-23401

Watch: China greets Obama in unusual manner, sparking controversy
In the past eight years, the US President has never been received in such a humiliating manner. The Chinese government apparently wanted to relay a message to Washington when it forced the US President to descend Air Force One via the back door and without a red carpet.
Sep 4, 2016, 2:00PM
Becca Noy

 

http://www.jerusalemonline.com/news/world-news/around-the-globe/watch-china-humiliates-obama-with-disrespectful-greeting-23401


Chinese leaders sparked a diplomatic storm when they welcomed US President Barack Obama in a humiliating manner yesterday (Saturday). Obama, who arrived in China for the G20 summit, was forced to descend the plane without the usual red carpet and from the backside of the plane while no senior level Chinese officials greeted him.

The Chinese authorities pulled out the red carpet for Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, French President François Hollande, Brazilian President Michel Temer and British Prime Minister Theresa May. However, Obama, who is in the middle of what appears to be his last trip to Asia, was forced to leave the plane from the back door.

On the ground, one of the Chinese officials was seen shouting: “This is our country, this is our airport.” A New York Times reporter who was at the scene said that the way Obama and the White House staff members were greeted was insulting.

Mexico’s former ambassador to China Jorge Guajardo told The Guardian that he is certain that Obama’s humiliating greeting was not a mistake. “These things do not happen by mistake. Not with the Chinese,” said Guajardo.

[Crafty_Dog]

http://www.breitbart.com/national-security/2016/09/08/russia-weighs-south-china-sea-belongs-china/

[G M]

http://www.breitbart.com/national-security/2016/09/08/russia-weighs-south-china-sea-belongs-china/

Who is going to stop them?

[bigdog]

https://www.lawfareblog.com/water-wars-series-summits-highlights-persistent-divisions-south-china-sea

[G M]

http://www.stripes.com/news/philippines-reversal-on-troops-patrols-could-upend-us-china-strategy-1.429070

Another big win for Team Smart power!

Fundamentally changed.

[Crafty_Dog]

 

[G M]

http://atimes.com/2016/09/china-may-be-waiting-for-the-perfect-timing-to-strike-in-south-china-sea/



Strong horse.



Weak horse.


Hey Australia,

[G M]

http://atimes.com/2016/09/counter-pivot-china-russia-hold-large-scale-s-china-sea-war-games/

They are calling it "Operation Obama is a p*ssy"

[Crafty_Dog]

 By Andrew Browne
Updated Oct. 4, 2016 1:13 a.m. ET
45 COMMENTS

With the exception of the Vietnam War, America’s alliance system in East Asia has helped keep the peace for more than half a century.

Now it is in trouble. Philippine President Rodrigo Duterte’s progression from abusive name-calling to a more broadly articulated anti-American hostility has been swift and stunning. It threatens one of Washington’s crucial Asian alliances and sets back U.S. President Barack Obama ’s signature “pivot” to the region.

China is jubilant over Mr. Duterte’s cooling relations with Washington after it clashed for years with the Philippine leader’s predecessor.

“The clouds are fading away,” China’s ambassador to Manila, Zhao Jianhua, said at a Chinese National Day reception. “The sun is rising over the horizon, and will shine beautifully on the new chapter of bilateral relations.”

At first it looked like a fit of pique: One month ago, Mr. Duterte called Mr. Obama a “son of a whore” over U.S. criticism of his war on drugs that has strewn the country with thousands of corpses. His rage quickly hardened.

A few days later Mr. Duterte proposed removing American military advisers from the troubled southern region of Mindanao. Then he declared he was shopping in China and Russia for military supplies readily available in the U.S. Mr. Duterte will lead a Philippine business delegation to Beijing this month.

And last week he declared an end to joint U.S.-Philippine naval exercises in the South China Sea to avoid provoking China. The last exercises, ostensibly, began on Tuesday.

Mr. Duterte’s outbursts come at a moment of rising doubt in America about the country’s role in the world. Donald Trump thinks that alliances are a bad deal for America—essentially a form of charity for countries rich enough to pay for their own defense. He seems to be in tune with growing numbers of Americans. Asked in 2013 whether the U.S. “Should mind its own business internationally” 52% of respondents to a Pew poll said “yes.”

In their recent book “America Abroad: the United States’ Global Role in the 21st Century,” Stephen G. Brooks and William C. Wohlforth, two academics at Dartmouth College, say that “the vast majority” of scholars who write on American grand strategy believe the time has come for America to pull back. They argue against such a move, saying it would lead to arms races and nuclear proliferation.

Now, Mr. Duterte is going a step further, calling into question an accord to let U.S. forces use Philippine military bases. That landmark 2014 deal was poignant in that Manila ejected U.S. troops in the early 1990s. It sent a powerful message: America is back.

Specifically, it was back in Southeast Asia, the focus of Washington’s “pivot” aimed at countering China’s rising power. There was little doubt about America’s commitment to Japan, where the Seventh Fleet is headquartered or to South Korea, home to 28,500 American service personnel. Southeast Asian countries, however, felt neglected as they faced China’s rapidly expanding naval and militia armadas.

Mr. Obama offered diplomatic reassurance and military assistance. To the Philippines, America’s only ally with territorial claims in the South China Sea, he sent decommissioned Coast Guard cutters, radar and other equipment to defend its long coastline. He eased a U.S. embargo on lethal weapons sales to Vietnam, which has clashed with China over offshore oil and fishing rights. Mr. Obama nudged Myanmar—a virtual Chinese client—along a path to democracy.

Mr. Duterte says he’s pushing a more independent foreign policy but still supports the U.S. alliance. His inflammatory rhetoric, though, suggests he’s trying to blow up a friendship. Last week, in a bizarre twist of logic, he invoked Adolf Hitler and the Holocaust to defend his antidrug campaign.

For China, Mr. Duterte’s turn is sweet revenge for its humiliation this year by an international tribunal in The Hague that struck down its claims to almost the entire South China Sea in a case brought by Mr. Duterte’s predecessor.

Chinese diplomats had branded Manila the chief recalcitrant in a part of Asia from which they expect deference.

If the Pentagon is alarmed, it isn’t showing it. Support for the American alliance runs high among both the Philippine public and armed forces; ditching America for China would be politically risky for Mr. Duterte. U.S. Defense Secretary Ash Carter told sailors last week the Philippine alliance was “ironclad.”

Meanwhile, China has found a new target for its browbeating: Singapore, which isn’t a U.S. ally but hosts American warships and spy planes.

The Global Times, a Communist Party-controlled tabloid, recently took aim at the city-state for allegedly trying to insert harder language about the South China Sea into a communiqué at the end of a summit of nonaligned nations. Singapore’s envoy to China took the rare step of publicly criticizing the paper for an “irresponsible report replete with fabrications.”

Expect more of that kind of pressure from Beijing. A key lesson that China is likely to draw from Mr. Duterte’s geopolitical about-face: Unrelenting attacks on America’s regional friends and allies eventually pay off.

Write to Andrew Browne at andrew.browne@wsj.com 

[G M]

Meanwhile, China has found a new target for its browbeating: Singapore, which isn’t a U.S. ally but hosts American warships and spy planes.

The Global Times, a Communist Party-controlled tabloid, recently took aim at the city-state for allegedly trying to insert harder language about the South China Sea into a communiqué at the end of a summit of nonaligned nations. Singapore’s envoy to China took the rare step of publicly criticizing the paper for an “irresponsible report replete with fabrications.”

Expect more of that kind of pressure from Beijing. A key lesson that China is likely to draw from Mr. Duterte’s geopolitical about-face: Unrelenting attacks on America’s regional friends and allies eventually pay off.


*Chip, chip, chip.

China plays the long game. The US is a weak enemy and a treacherous friend.

[Crafty_Dog]

Australia Cedes the Seas
The ruling Liberals won’t conduct patrols of the South China Sea.
Oct. 17, 2016 6:54 p.m. ET
WSJ

Canberra confirmed last week that the Australian Navy won’t conduct freedom-of-navigation patrols in the international waters of the South China Sea, giving China’s bid to dominate the strategic area a boost. Such patrols are a basic requirement for the rules-based global order that Australia says it is committed to upholding.

An international tribunal ruled in July that China’s bid to claim most of the sea violates international law. But the verdict will be rendered moot unless law-abiding states are willing to push back. That would give Beijing effective control over the 60% of Australian trade that transits the sea.

Some Aussies understand the importance of defending maritime law, including current leaders of the opposition Labor Party. “In our view, there should be full authorization to engage in freedom-of-navigation operations, which are entirely consistent with international law and entirely consistent with the Court of Arbitration’s ruling,” said Labor’s Shadow Defense Minister Richard Marles this month. “It’s important that in supporting the rule of law internationally and the rules-based order that we do everything we can to assert that.”

The ruling Liberals rejected this. Naval patrols within 12 miles of Chinese-claimed features would “escalate tensions,” said Foreign Minister Julie Bishop, echoing language often used by Chinese officials. Prime Minister Malcolm Turnbull condemned Labor’s position as a “highly political” sign of “immaturity and unreadiness to take responsibility for these issues.”

These political battle lines are a surprise. The right-of-center Liberals are usually tougher on defense, and their former leader Tony Abbott, who was Prime Minister until last year, backs stepped-up sea patrols. “We should be prepared to exercise our rights to freedom of navigation wherever international law permits,” he said in February.

Labor has lately been caught up in scandals over Chinese influence-peddling, with rising star Senator Sam Dastyari resigning from the leadership last month after he accepted gifts from Chinese interests and endorsed Beijing’s position on the South China Sea. Several retired Labor grandees, including former Prime Minister Paul Keating and former Foreign Minister Bob Carr, have called for accommodating China and moving away from the U.S. So kudos to current Labor leaders for getting this one right, but they’re not in charge.

The Liberals’ climbdown is particularly damaging because it follows a long campaign of bullying from Chinese officials and state media. “Australia is not a party to the South China Sea issue” and must “carefully talk and cautiously behave,” Beijing’s Foreign Ministry warned after Aussie officials praised the tribunal verdict in July. The state-run Global Times threatened, “If Australia steps into the South China Sea waters, it will be an ideal target for China to warn and strike.”

Canberra’s decision can’t be separated from Washington’s ambivalence. As U.S. officials encouraged Australia to step up, the Obama Administration authorized a mere three U.S. freedom of navigation patrols, all under the minimalist doctrine of “innocent passage” and after months of hand-wringing that undermined the intended signal of resolve. If the next U.S. President takes a more serious approach, it might inspire Canberra to do the same.

[G M]

China=winning

Australia Cedes the Seas
The ruling Liberals won’t conduct patrols of the South China Sea.
Oct. 17, 2016 6:54 p.m. ET
WSJ

Canberra confirmed last week that the Australian Navy won’t conduct freedom-of-navigation patrols in the international waters of the South China Sea, giving China’s bid to dominate the strategic area a boost. Such patrols are a basic requirement for the rules-based global order that Australia says it is committed to upholding.

An international tribunal ruled in July that China’s bid to claim most of the sea violates international law. But the verdict will be rendered moot unless law-abiding states are willing to push back. That would give Beijing effective control over the 60% of Australian trade that transits the sea.

Some Aussies understand the importance of defending maritime law, including current leaders of the opposition Labor Party. “In our view, there should be full authorization to engage in freedom-of-navigation operations, which are entirely consistent with international law and entirely consistent with the Court of Arbitration’s ruling,” said Labor’s Shadow Defense Minister Richard Marles this month. “It’s important that in supporting the rule of law internationally and the rules-based order that we do everything we can to assert that.”

The ruling Liberals rejected this. Naval patrols within 12 miles of Chinese-claimed features would “escalate tensions,” said Foreign Minister Julie Bishop, echoing language often used by Chinese officials. Prime Minister Malcolm Turnbull condemned Labor’s position as a “highly political” sign of “immaturity and unreadiness to take responsibility for these issues.”

These political battle lines are a surprise. The right-of-center Liberals are usually tougher on defense, and their former leader Tony Abbott, who was Prime Minister until last year, backs stepped-up sea patrols. “We should be prepared to exercise our rights to freedom of navigation wherever international law permits,” he said in February.

Labor has lately been caught up in scandals over Chinese influence-peddling, with rising star Senator Sam Dastyari resigning from the leadership last month after he accepted gifts from Chinese interests and endorsed Beijing’s position on the South China Sea. Several retired Labor grandees, including former Prime Minister Paul Keating and former Foreign Minister Bob Carr, have called for accommodating China and moving away from the U.S. So kudos to current Labor leaders for getting this one right, but they’re not in charge.

The Liberals’ climbdown is particularly damaging because it follows a long campaign of bullying from Chinese officials and state media. “Australia is not a party to the South China Sea issue” and must “carefully talk and cautiously behave,” Beijing’s Foreign Ministry warned after Aussie officials praised the tribunal verdict in July. The state-run Global Times threatened, “If Australia steps into the South China Sea waters, it will be an ideal target for China to warn and strike.”

Canberra’s decision can’t be separated from Washington’s ambivalence. As U.S. officials encouraged Australia to step up, the Obama Administration authorized a mere three U.S. freedom of navigation patrols, all under the minimalist doctrine of “innocent passage” and after months of hand-wringing that undermined the intended signal of resolve. If the next U.S. President takes a more serious approach, it might inspire Canberra to do the same.

[G M]

http://www.scmp.com/news/china/diplomacy-defence/article/2038577/philippines-president-rodrigo-duterte-gets-red-carpet


‘We’re neighbours and blood brothers’: Xi tells Duterte as firebrand leader announces ‘separation’ from US

Rodrigo Duterte given red carpet treatment in Beijing amid strained ties between two countries over their sovereignty claims in the South China Sea
PUBLISHED : Thursday, 20 October, 2016, 12:05pm
UPDATED : Thursday, 20 October, 2016, 11:29pm

19 Oct 2016

President Xi Jingping told his Philippines counterpart Rodrigo Duterte on Thursday that the two countries could put aside disputes and improve ties.

“This truly has milestone significance for China-Philippines relations,” Xi said, praising Duterte’s landmark visit to Beijing to reset the relationship that had been damaged by territorial disputes in the South China Sea.

In a further sign of his shifting allegiances, Duterte said he was announcing his “separation” from the United States at a business forum in the afternoon in the presence of Chinese Vice Premier Zhang Gaoli.

On the South China Sea issue, Xi suggested the two sides “temporarily put aside” the disputes, and learn from the “political wisdom” of history when the two nations had successfully kept their differences in check through talks.

“As long as we stick to friendly dialogue and consultation, we can frankly exchange views on any problem, manage differences, discuss cooperation, and temporarily put aside what is hard to reach by consensus,” Xi said.

Xi said although relations had “weathered storms, the foundation ... of their relations would not be changed” as the two countries were neighbours across the sea and the two peoples were blood-linked brothers.

South China Sea dispute to ‘take back seat’ in talks with Xi, Duterte says

“We have no reason to take a hostile attitude or confront each other,” he said. “I hope we can follow the wishes of the people and use this visit as an opportunity to push China-Philippines relations back on a friendly footing and fully improve things.”

Duterte said improved and developed relationships would benefit both peoples.

“Even as we arrive in Beijing close to winter, this is the springtime of our relationship,” he told Xi at the Great Hall of People.

He hoped the China-led Asian Infrastructure Investment Bank could play a role in Philippine economic development, and said his country would work to promote China-ASEAN relations in regional issues.

The two leaders later oversaw the signing of 13 of agreements on ranging from trade and investment to drug control, maritime security and infrastructure.

[Chinese president Xi Jinping welcome the visiting Philippine president Duterte in Beijing on Thursday. Photo: Simon Song]

Vice-Foreign Minister Liu Zhenmin told reporters that China and the Philippines had agreed on Thursday that disputes in the South China Sea were not the sum total of their relations and that the two countries would restore consultations on diplomatic and defence matters.

“It means that a new page has now opened between the two countries in addressing the South China Sea issue through bilateral dialogue and consultation,” Liu said.

He also said China would restore Philippine agricultural exports to China and that Beijing would provide financing support for Philippine infrastructure projects.

On the eve of the meeting Duterte said that “it’s time to say goodbye” to the US as his foreign policy veered towards China.

“I will not ask but if they (the Chinese) offer and if they’ll ask me, do you need this aid? [I will say] Of course, we are very poor,”” he told hundreds of Filipinos in Beijing on Wednesday night.

“I will not go to America anymore … We will just be insulted there,” he added.

But Xu Liping, a senior fellow at the China Academy of Social Sciences, said Duterte’s statement did not necessarily mean that the Philippines would lean to China.

“It’s a pendulum effect,” said Xu. “Duterte is just adjusting and revising his predecessor’s excessive one-sided policy towards the US. I would not call him ‘inclining to China’”.

As ties warmed up, China might be able to resume some of the Philippines halted infrastructure projects like a railway in the northern Philippines, and open other, Xu said. The Philippines form an important part of Xi’s One Belt One Road development plan.

Geopolitically, Duterte’s distancing from the US would reduce the stake the US has in the region, which could lower the pressure on China from the US “Asia rebalance” strategy and improve China’s strategic environment, said Zhang Mingliang, a Southeast Asia expert at Jinan University in Guangzhou.

Next year the Philippines will be the rotating chair of the Asean, where the South China Sea disputes have been on the agenda.

“Without an improved relationship, the Philippines would use the Asean platform to embarrass China on the South China Sea issue,” said Zhang.

Playing the US against China may prove a smart move for Rodrigo Duterte

“China and the Philippines are neighbours across the sea and the two peoples are blood brothers,” Xi said.

He added that both sides should “appropriately handle disputes”, although he did not specifically mention conflicts over the South China Sea.

“I hope we can follow the wishes of the people and use this visit as an opportunity to push China-Philippines relations back on a friendly footing and fully improve things,” he said.

[ccp]

Another obama reset.

[Crafty_Dog]

http://www.nbcnews.com/news/world/philippine-leader-duterte-ditches-u-s-china-says-america-has-n670066?cid=sm_fb

So much for the pivot to Asia , , ,

This is HUGE.  Toss in Australia giving up sailing in the South China Sea and the Russian Navy sailing with the Chinese in support , , ,

[G M]

http://www.nbcnews.com/news/world/philippine-leader-duterte-ditches-u-s-china-says-america-has-n670066?cid=sm_fb

So much for the pivot to Asia , , ,

This is HUGE.  Toss in Australia giving up sailing in the South China Sea , , ,

It's a fundamental transformation. Chalk up another big win for Team Smart Power!

[G M]

How long until the People's Liberation Army Navy (yes, that is what it's called) has a base there?

[DougMacG]

How long until the People's Liberation Army Navy (yes, that is what it's called) has a base there?

Construction can start in 3 weeks.  (

'Tell Xi we will have more flexibility after my chosen successors' election'.

We want Russians to be the force of freedom in the Middle East, why not have a communist-expansionist military run the Taiwan to Singapore Sea?  Saves us money in the short run.  And it brings them to the diplomatic bargaining table - to laugh at our demise.

[Crafty_Dog]

http://foreignpolicy.com/2016/10/20/rodrigo-dutertes-flip-flop-into-bed-with-china-is-a-disaster-for-the-united-states-south-china-sea/?utm_source=Sailthru&utm_medium=email&utm_campaign=New%20Campaign&utm_term=Flashpoints

[Crafty_Dog]

1/12/16-- note date
Stratfor



Less than two weeks into the new year, a new diplomatic flare-up in the South China Sea is already on our radar. This time, Japan rerouted maritime surveillance aircraft to locations that abut the contested waters. Given the sensitivity of the region, the move will surely invite scrutiny from Beijing.

The decision to reroute the aircraft came Jan. 10, when the Japanese Defense Ministry said aircraft returning from anti-piracy operations in Africa would refuel in places such as Vietnam, Malaysia and the Philippines, not in their traditional destinations like Singapore and Thailand, which are far from the disputed maritime zone. The aircraft in question — two P-3C Orion maritime patrol and anti-submarine warfare aircraft — were first deployed to the East African country of Djibouti in May 2008 as a contribution to counter-piracy efforts in the Horn of Africa region, and they will touch down first in Vietnam's Cam Ranh Bay — a direct inlet of the South China Sea — in February.

Notably, the refueling stops appear to be the direct result of a series of high-level defense meetings that Japan held with South China Sea claimant countries in 2015. In other words, the decision was deliberated before it was executed.

What is a Geopolitical Diary?

Japan is not officially conducting reconnaissance patrols from these bases. Indeed, Tokyo insists that the flights are meant to be the naval aviation equivalent of port calls, or transit stops. But considering the aircraft's capabilities, China is understandably nervous. The P-3s are equipped with a powerful surveillance suite, including a maritime search radar, designed to spot very small targets such as submarine periscopes. Such a capability would be extremely useful when tracking and monitoring maritime traffic, or a military presence for that matter. Tokyo has clearly stated that the refueling stops do not equate to the permanent basing of P-3s in any country, nor do they obligate Japan to share maritime surveillance data (should it be acquired) with the host country.

In fact, on the surface the rerouting of aircraft appears to be only a modest step by the Japanese. Many observers believed Tokyo was preparing to conduct joint patrols with the U.S. Navy after the Japanese Diet passed long-awaited defense reforms in September 2015, authorizing the Japan Self-Defense Forces (JSDF) to employ force abroad to defend its allies.

But those observers may have simply expected too much, too soon. The passage of security legislation was politically taxing for Prime Minister Shinzo Abe and his ruling Liberal Democratic Party (LDP). Intent on expanding its majority, the LDP can ill-afford to squander popularity ahead of upper house elections in the summer through overly assertive military deployments.

Aside from managing its own domestic politics, Japan must also manage political sensitivities in its partner countries — all of which experienced brutal Japanese occupation during World War II. Japanese investment is, of course, welcomed in Southeast Asia, but military cooperation with a former occupier is often seen as a bridge too far. Discussions between Tokyo and Manila to set up a Visiting Forces Agreement, which would give the JSDF basing rights in the Philippines, have so far yielded nothing. This suggests considerable domestic opposition in the Philippines — the claimant country in the South China Sea that needs military assistance the most. But even if the Philippines remains opposed to basing, refueling stops are a low-key and politically palatable way to revitalize a military relationship.

When these refueling stops occur, China will almost certainly react with protest and will accuse Japan of emboldening its rival in the South China Sea. Consequently, Beijing may redouble its efforts to construct military and civilian infrastructure on reclaimed islands in the South China Sea, actions designed to make China's presence impossible to dislodge. Tempting as it may be to regard Chinese opposition as an overreaction, Beijing is actually reacting to a future in which Japan slowly overcomes operational and political barriers to routinize its presence in the South China Sea. After all, refueling stops, like port calls, are not just a logistical necessity: They also give navies experience in interacting with their foreign counterparts, building the basis for increased cooperation down the line.

Japan wants to play a more active military role in the Pacific — indeed, it may have no other choice — but to do this Tokyo needs countries that are willing to host its forces. It is safe to say that Japan is not going to the trouble of altering its flight plans just so its aircraft will have a small number of additional refueling options over the next decade. Starting with these modest visits, Tokyo hopes to lay the foundation for a greater, more sustainable presence. China is justifiably concerned.

[Crafty_Dog]

second post, posted today by Stratfor

Japan plans to give Malaysia two 90-meter-long second-hand patrol vessels to boost its maritime security capabilities in the contested South China Sea, unnamed Malaysian government sources said Oct. 21, The Star reported. In September, Japan pledged to give the Philippines two similar vessels, and it expressed willingness to give Vietnam patrol boats as well. Malaysian Prime Minister Najib Razak is expected to visit Japan in mid-November.
Stratfor

[Crafty_Dog]

Cooperation as a Means to All Ends in the South China Sea
Analysis
September 26, 2016 | 09:30 GMT Print
Text Size
Beijing understands that constant conflict with its neighbors works against its desire to maintain good relations with them -- a particularly important aspect to its emerging global policy. (HOANG DINH NAM/AFP/Getty Images)
Forecast

    Despite China's rejection of the ruling by the Permanent Court of Arbitration in the South China Sea dispute, Beijing is adopting a more conciliatory posture over its territorial claims, at least in the short term.|

    The shifting status quo in the South China Sea may give claimant states, especially China, second thoughts about entering into joint development deals.
    Any meaningful joint arrangements will hinge on Beijing's strategic intentions, although domestic pressure in respective states will also play a key role.

Analysis

South China Sea claimant states are adjusting to the new status quo in the region. The arbitration ruling the Philippines won over China in July gave it and other claimants rare leverage over Beijing, but China's rejection of the decision has diminished the possibility of legal intervention over maritime disputes in which it is embroiled. Beijing must also contend, however, with an increasingly complex set of circumstances in the waters — with greater potential for involvement by outside powers and potentially more hostile relations with nations on its periphery.

The ruling's potential to disrupt relations in the South China Sea may help to explain the generally lower-key rhetoric and conciliatory gestures by actors on all sides in the region over the past two months. China and other claimant states all appear willing to seize the opportunity to move some stagnant agendas forward, at least for now. Their gestures include an agreement between China and the Association of Southeast Asian Nations (ASEAN) to finalize a framework for the Code of Conduct in the South China Sea before mid-2017 and a host of accommodating trilateral arrangements among China and new leaders in the Philippines and Vietnam.


Fish: The Overlooked Destabilizer in the South China Sea

Despite the region's focus on minerals and oil, fish are a more important factor in the maritime disputes surrounding a rising China. Read more…

Some regional joint development proposals, moreover, have re-emerged. Shortly after the court ruling, the Chinese Foreign Ministry issued a high-profile white paper that, in addition to reiterating its positions and sovereignty claims in the South China Sea, said Beijing's openness to joint development in the waters had not changed. That position was reinforced shortly after when former Philippine President Fidel Ramos, the special envoy for current President Rodrigo Duterte, was invited to visit with Chinese policy experts, who raised the possibility of jointly developing fishing farms in the disputed waters, including around Scarborough Shoal. Separately, Chinese President Xi Jinping told Vietnamese Prime Minister Nguyen Xuan Phuc that both countries should actively push forward with joint exploration of waters beyond the Gulf of Tonkin — in other words, in the South China Sea — where both signed a comprehensive delimitation agreement in 2000. In addition, China and Japan appear ready to resume a long-stalled dialogue on natural gas exploration in the East China Sea.

Taken individually, these proposals are unremarkable. Joint development is a well-trodden path in East Asia. Mutually agreed joint-development mechanisms have a proven record of easing maritime tensions in the face of overlapping claims elsewhere. Therefore, it is seen by many, including the claimant governments of Southeast Asia, as a potential option to calm the waters in the South China Sea with its vast traditional fishing grounds and its rich oil and natural gas potential. But early attempts at joint development, notably an arrangement among China, Vietnam and the Philippines in 2005 for seismic surveys, failed largely because of domestic sentiment in the Philippines. And over the years, suspicions about Beijing's strategic intent, coupled with its unceasing territorial expansion and escalation of maritime tensions, thwarted any potential dialogue — let alone joint arrangement — in the South China Sea that involves China. In recent years, Beijing has put pursuing such joint arrangements on a back burner. Thus, the recent refashioning of these proposals from Beijing provides an opportunity both to understand the strategic intent behind these arrangements and to assess their application under the new paradigm in the South China Sea.

Pragmatic Policy or Stalling Strategy?

Setting aside disputes and pursuing joint development of natural resources have been central components of China's maritime policy since the late 1970s. The concept was promoted by Deng Xiaoping as he opened the country's economy and promoted domestic reform. Seeking to ease external pressures on the country, he embraced the practicality of joint economic development in the East and South China seas.

Most of those who lay claim to territory in the South China Sea have similarly endorsed joint development as a way to acquire undersea resources. (Notably, only a handful of oil and natural gas blocks in the disputed areas of the sea have proved commercially viable, and the financial risks and technological demands required for energy exploration in those areas have made it impossible for many claimants to do so without foreign partners.) But while Beijing has been pursuing joint development opportunities since the 1990s, in practice, other claimants generally believe those opportunities disproportionately benefit Beijing. Suspicions of its strategic objectives have repeatedly caused those arrangements to fail.

A major stumbling block to such agreements has been an insistence by the Chinese government that its claims of sovereignty over disputed territories in any deal would have to be recognized for it to go forward. In other words, a joint development deal with China would require the other party to recognize Chinese territorial claims in disputed areas, making the arrangements politically difficult to accept. Disagreement over sovereignty recognition resulted in repeated disruptions of initial joint exploration arrangements, including the one made in 2011 between the Philippines and China's state-owned China National Offshore Oil Corp. around Reed Bank, near the Spratly Islands. Suspicion of Beijing's intent has remained a central concern for Vietnam and the Philippines even though they would profit from such deals.

Offers by China for joint development often come in areas within the exclusive economic zones of other claimant states. Those offers can be interpreted as a ploy by China to expand its territory into areas that it otherwise would have no legitimate claim to under international law. For example, Vietnam has objected to a decision by China to open up nine areas for joint development to foreign partners near the Vietnamese-controlled Vanguard Bank (about 160 nautical miles from the Vietnamese coast) in a disputed part of the Spratly Islands. Vietnam views that offer as essentially a Chinese claim of: "What is mine is mine, what is yours is mine, and we are willing to share." Part of the reason for the murky boundary status stems from the ambiguity of Chinese sovereignty claims in the South China Sea under the nine-dash line, which has resulted in a largely undefined boundary between areas with overlapping claims. Any joint development deals struck before agreements over the disputed areas are ironed out could amount to legitimizing China's nine-dash line claims. In 2011, Manila proposed a mechanism to separate disputed and non-disputed areas in the South China Sea and promote joint cooperation in the disputed zone. Beijing, however, viewed that proposal as a serious challenge to its sovereignty claims, and its opposition kept the proposal from generating momentum within ASEAN.

China's Tactical Advantages

Intentionally or not, the stalled progress on joint development deals — along with its ambiguous maritime claims — has given Beijing a much-desired result: time. Beijing's strategy of not asserting its claims too strongly before the 1990s allowed it to reduce potential conflicts that would result from overlapping claims, allowing its economy and military to develop. As China grew more powerful, its naval and maritime enforcement, along with its technological capabilities for island building and deep-sea exploration, dramatically shifted the status quo in the South China Sea. And these evolutions have naturally shaped Beijing's approach to any joint development mechanism.

China's technological and military abilities give it a tactical advantage when pushing its claims in the South China Sea. That means China can take unilateral measures to pressure other claimants, leaving Vietnam and the Philippines, the most vocal opponents of Chinese claims, with limited options for unilateral development. Because they have little capability to develop the sea's resources independently, they have to seek foreign assistance. In addition, however, to the uncertain prospects of oil and natural gas exploration in the South China Sea, military and economic pressure from China has also deterred foreign companies from entering agreements with those nations in the disputed areas. Meanwhile, as demonstrated in the case of Scarborough Shoal, Beijing's advanced coast guard vessels and armed fishing fleets have effectively stopped Philippine fishermen from plying their trade in their traditional grounds since 2012. In short, Beijing is forcing other claimants to accommodate or at least tolerate China's maritime boundary assertions before it will consider any meaningful arrangements — if that ever happens.

Resolving Conflicting Imperatives

Many policymakers in Beijing believe the policy has had mixed results for its foreign policy agenda. Claimant states — most notably Vietnam and the Philippines, and to a lesser extent Indonesia and Malaysia — have responded to Beijing's maritime aggression by expanding their naval and security capabilities and by seeking cooperation from external powers, such as the United States, Japan and India, for defense, energy and political support. This has resulted in a much broader international intervention and has justified moves by those powers to counter China. Beijing has meanwhile come to understand that constant conflict with its neighbors works against its desire to maintain good relations with them — a particularly important aspect of its emerging global policy.

At this point, Beijing probably understands the risks and repercussions of claiming the entire South China Sea — or pressing its claims based on the nine-dash line. In fact, there appears to be at least partial agreement among decision-makers that Beijing's "strategic ambiguity" over its maritime claim — combined with its ungrounded nine-dash line, lack of a clearly defined sovereignty claim and defiance of international law — has reached a limit. Over the past two years, official rhetoric from Beijing has repeatedly repudiated that the nine-dash line is the basis for the country's sovereignty claim. At the same time, its policymakers are in the process of reinterpreting its sovereignty claim and attempting to more closely adhere to international law.

It is unlikely that Beijing will ever ease its assertive behavior in the South China Sea. Rather, the new maritime status quo — coupled with the court ruling — may allow Beijing to rethink what strategies best fit its interests, even if those strategies take years to develop and result in even greater maritime disruption. But at the very least, its imperatives to avoid outright military confrontations, circumvent further "interference" from international players and to refrain from antagonizing all of its ASEAN neighbors at once makes its current course of behavior counterproductive.

Joint Development: a Possible Way Out?

To many claimant countries, developing maritime resources in disputed areas of the South China Sea has become more of a crucial economic imperative than ever. With its near-shore oil and natural gas blocks long past their peak productivity, Vietnam needs new energy sources to satisfy its domestic economy and provide export revenue to pay for its growing demand for imported refined oil products. The Philippines has some natural gas production but imports virtually all of its crude oil. The oil and natural gas potential in the South China Sea, particularly around Reed Bank and its commercially viable proven reserves of natural gas, is too high to ignore. Though China has similar needs — it depends heavily on oil and faces a growing need for natural gas — developing the sea's resources meets Beijing's strategic interests far more than its economic ones. In addition, the regional reliance on the sea's fish stocks — and the fluidity of fishing — makes exclusive development of that resource impossible. As more claimants desire to develop the sea's resources and as Beijing rethinks its strategies, both might give joint development ventures more attention.

Even though there has not been a joint arrangement in the South China Sea involving China, it will remain an option. Beijing has repeatedly expressed the hope that its relatively successful joint development and delimitation package with Vietnam in the Gulf of Tonkin can serve as a model for future arrangements in the South China Sea. According to the International Crisis Group, Beijing and Hanoi have carried out several rounds of consultations on possible cooperation in the South China Sea based on the Tonkin model, though no progress has been made. Meanwhile, Beijing has shown greater flexibility with claimants that it sees as cooperative as they pursue their own joint development deals. For example, it made little response to the joint oil and natural gas exploration agreement between Malaysia and Brunei in 2015, despite the fact that the development falls in an area that China also claims. The difference in China's reaction likely reflects the fact that Malaysia and Brunei tend not to trumpet their differences with China, but it could also point to how much flexibility Beijing has in its sovereignty claims.

In theory, joint development arrangements could allow Beijing to justify its dominance of the South China Sea and expand outreach in areas in which it has no legal claim in a more cooperative manner, all while allowing claimants to acquire the resources they want. But before any meaningful arrangements can be made, there are several obstacles to overcome.

Chief among them is the question of whether Beijing is willing to dampen its sovereignty claims now that it has established its tactical advantages in the South China Sea. But such a move may run afoul of domestic nationalist sentiment, which would see any joint arrangement as a surrender of sovereignty, thereby challenging the core of the government's legitimacy. Similar obstacles can be found in Vietnam and the Philippines, where years of assertive behavior by China have hardened the public's attitudes against accepting any arrangement with Beijing. In fact, in the Philippines, such sentiment, combined with a public perception of government misbehavior and corruption, was a key reason that Manila pulled out from the 2005 trilateral arrangement on seismic surveys. Meanwhile, the Philippine Constitution dictates that Philippine entities must retain 60 percent capital and ownership when it comes to joint exploration with foreign companies — a condition that Beijing can hardly accept unless both sides are willing to caveat their stances.

[Crafty_Dog]

By Euan Graham
Updated Nov. 1, 2016 11:39 p.m. ET
12 COMMENTS

Are dominoes teetering again in Southeast Asia? The limitations of that metaphor were clear in the Cold War, and are even more so now given the region’s much greater geopolitical fluidity. Nevertheless, anxiety is mounting among the U.S. and its stalwart Pacific allies after the Philippines’ abrupt tilt toward Beijing. President Rodrigo Duterte’s kowtow from Davao suggests a wave of realignment could happen within the Association of Southeast Asian Nations.

Malaysia’s Prime Minister Najib Razak is the latest Southeast Asian leader to be feted with red-carpet treatment in Beijing. In advance of this week’s trip, Mr. Najib confidently exclaimed that new heights will be scaled in Malaysia’s already strong economic relationship with Beijing, worth $56 billion in annual trade last year.

China’s planned investments in “maritime silk route” infrastructure astride the Malacca Strait are likely to receive a further boost during the visit. A Chinese firm has been awarded a $13 billion contract to build a new 620-kilometer east-coast rail link to Kuala Lumpur.

The most eye-grabbing element of the agenda concerns Malaysia’s anticipated decision to order at least four, and as many as 10, Chinese-designed warships. Arms deals don’t automatically signal strategic reorientation. But Kuala Lumpur’s first major defence purchase from China has particular symbolism in a South China Sea setting, where Beijing claims territory occupied by Malaysia, and Chinese fishing and coast-guard vessels routinely appear in its exclusive economic zone.

The context is discouraging. Malaysia’s recently announced defense budget will sharply cut air-force and navy spending, denying capabilities that Malaysia needs most as a maritime nation bisected by the South China Sea. Plans for a new amphibious unit within the armed forces have been ditched, curtailing a promising area of engagement with the U.S. Marines. Under these circumstances, earmarking funds to buy Chinese ships looks like supplication.

Malaysia counts less in strategic terms to the U.S. than the Philippines. That is as much a function of geography as of alliance fealty, given the Philippine archipelago’s bulwark position in the South China Sea. But Malaysia also carves a long crescent around the Sea’s southern periphery, from the Gulf of Thailand to eastern Borneo.

Malaysia has longstanding military links with the U.S., but is more directly and historically important to Australia, through the Five Power Defence Arrangements. Australia continues to play a role in Malaysia’s air defence and flies scheduled surveillance patrols over the South China Sea from the peninsula.

There is little risk that Mr. Najib is contemplating a full-fledged “defection,” à la Mr. Duterte, on his visit to China. Nor is he likely to renounce Malaysia’s existing ties to Western defense partners. Malaysia’s security establishment by and large values these links over others. Past acquisitions, including Russian fighters, don’t commend the addition of another untried foreign supply chain, especially one with unseen conditions attached.

But politics trump such reservations. Mr. Najib has none of Mr. Duterte’s visceral animus towards America. Indeed, his balancing inclinations brought Malaysia into the Trans-Pacific Partnership trade pact. But U.S. legal probes, lodged this July, into the country’s sovereign wealth fund, personally stung him.

Battling domestic political opponents on multiple fronts and reliant on Chinese investment to prop up distressed government assets, Mr. Najib’s diplomatic compass has fixed north on China, the obvious source of nonjudgmental largesse. He harks back to the legacy of his father, who normalized relations with China back in 1974. But in reality bonds of political expediency tie him to Beijing.

More likely, Malaysia will gradually shy away from exercises or activities deemed potentially “provocative” to Beijing. Kuala Lumpur is likely to tread with increasing caution in the South China Sea, seeking bilateral accommodation where it can.

Thailand is the other U.S. treaty ally beside the Philippines in Southeast Asia, but its political fate is deeply uncertain and a submarine purchase from China is still potentially in the works. Singapore, a non-ally, is currently Washington’s most dependable defense partner. If the Philippines holds its eccentric course under Mr. Duterte, this odd state of affairs will become the new normal.

Mr. Najib’s visit could also be a nadir. Reports this week that Australia and Indonesia are discussing maritime patrols together in the South China Sea send a countervailing message that exploratory “rules-based” alignments are also possible outside of the traditional U.S. alliance framework. Tenuous as this bilateral undertaking remains, it should ease fears of dominoes collapsing in the South China Sea.

Mr. Graham is director of the international security program at the Lowy Institute in Sydney.

[G M]

Another big win for Team Smart Power!

http://www.the-american-interest.com/2016/11/01/malaysia-cozies-up-to-china/

Pivot to Asia! 8 more years!

By Euan Graham
Updated Nov. 1, 2016 11:39 p.m. ET
12 COMMENTS

Are dominoes teetering again in Southeast Asia? The limitations of that metaphor were clear in the Cold War, and are even more so now given the region’s much greater geopolitical fluidity. Nevertheless, anxiety is mounting among the U.S. and its stalwart Pacific allies after the Philippines’ abrupt tilt toward Beijing. President Rodrigo Duterte’s kowtow from Davao suggests a wave of realignment could happen within the Association of Southeast Asian Nations.

Malaysia’s Prime Minister Najib Razak is the latest Southeast Asian leader to be feted with red-carpet treatment in Beijing. In advance of this week’s trip, Mr. Najib confidently exclaimed that new heights will be scaled in Malaysia’s already strong economic relationship with Beijing, worth $56 billion in annual trade last year.

China’s planned investments in “maritime silk route” infrastructure astride the Malacca Strait are likely to receive a further boost during the visit. A Chinese firm has been awarded a $13 billion contract to build a new 620-kilometer east-coast rail link to Kuala Lumpur.

The most eye-grabbing element of the agenda concerns Malaysia’s anticipated decision to order at least four, and as many as 10, Chinese-designed warships. Arms deals don’t automatically signal strategic reorientation. But Kuala Lumpur’s first major defence purchase from China has particular symbolism in a South China Sea setting, where Beijing claims territory occupied by Malaysia, and Chinese fishing and coast-guard vessels routinely appear in its exclusive economic zone.

The context is discouraging. Malaysia’s recently announced defense budget will sharply cut air-force and navy spending, denying capabilities that Malaysia needs most as a maritime nation bisected by the South China Sea. Plans for a new amphibious unit within the armed forces have been ditched, curtailing a promising area of engagement with the U.S. Marines. Under these circumstances, earmarking funds to buy Chinese ships looks like supplication.

Malaysia counts less in strategic terms to the U.S. than the Philippines. That is as much a function of geography as of alliance fealty, given the Philippine archipelago’s bulwark position in the South China Sea. But Malaysia also carves a long crescent around the Sea’s southern periphery, from the Gulf of Thailand to eastern Borneo.

Malaysia has longstanding military links with the U.S., but is more directly and historically important to Australia, through the Five Power Defence Arrangements. Australia continues to play a role in Malaysia’s air defence and flies scheduled surveillance patrols over the South China Sea from the peninsula.

There is little risk that Mr. Najib is contemplating a full-fledged “defection,” à la Mr. Duterte, on his visit to China. Nor is he likely to renounce Malaysia’s existing ties to Western defense partners. Malaysia’s security establishment by and large values these links over others. Past acquisitions, including Russian fighters, don’t commend the addition of another untried foreign supply chain, especially one with unseen conditions attached.

But politics trump such reservations. Mr. Najib has none of Mr. Duterte’s visceral animus towards America. Indeed, his balancing inclinations brought Malaysia into the Trans-Pacific Partnership trade pact. But U.S. legal probes, lodged this July, into the country’s sovereign wealth fund, personally stung him.

Battling domestic political opponents on multiple fronts and reliant on Chinese investment to prop up distressed government assets, Mr. Najib’s diplomatic compass has fixed north on China, the obvious source of nonjudgmental largesse. He harks back to the legacy of his father, who normalized relations with China back in 1974. But in reality bonds of political expediency tie him to Beijing.

More likely, Malaysia will gradually shy away from exercises or activities deemed potentially “provocative” to Beijing. Kuala Lumpur is likely to tread with increasing caution in the South China Sea, seeking bilateral accommodation where it can.

Thailand is the other U.S. treaty ally beside the Philippines in Southeast Asia, but its political fate is deeply uncertain and a submarine purchase from China is still potentially in the works. Singapore, a non-ally, is currently Washington’s most dependable defense partner. If the Philippines holds its eccentric course under Mr. Duterte, this odd state of affairs will become the new normal.

Mr. Najib’s visit could also be a nadir. Reports this week that Australia and Indonesia are discussing maritime patrols together in the South China Sea send a countervailing message that exploratory “rules-based” alignments are also possible outside of the traditional U.S. alliance framework. Tenuous as this bilateral undertaking remains, it should ease fears of dominoes collapsing in the South China Sea.

Mr. Graham is director of the international security program at the Lowy Institute in Sydney.

[Crafty_Dog]

http://www.bangkokpost.com/news/asia/1120649/china-pushes-kung-fu-fighting-to-boost-soft-power 

And exactly what are we exporting culturally these days?  The Kardashians?

[Crafty_Dog]

Does this support Trump's assertion of Chinese currency manipulation or does it cut against it by keeping exchange rate higher than it otherwise would be?


==========================
By Lingling Wei
Updated Nov. 25, 2016 10:32 a.m. ET
63 COMMENTS

BEIJING—China plans to clamp tighter controls on Chinese companies seeking to invest overseas, intensifying efforts to slow a surge in capital fleeing offshore amid tepid growth and an uncertain economic outlook.

The State Council, China’s cabinet, will soon announce new measures that subject many overseas deals to reviews of “strict control,” according to people with direct knowledge of the matter and documents reviewed by The Wall Street Journal.


Targeted for particular scrutiny by the pending measure are “extra-large” foreign acquisitions valued at $10 billion or more per deal, property investments by state-owned firms above $1 billion and investments of $1 billion or more by any Chinese company in an overseas entity unrelated to the investor’s core business.

While the government has been plugging holes to keep more money at home in recent months, the new measures are the first to go after big deals by China Inc.

In doing so, the controls underscore Beijing concerns about capital flight and a weakening currency. They also come amid an overseas buying binge by Chinese companies. Total overseas direct investment rose more than 50% to $145.9 billion in the first nine months of this year from the same time a year earlier, according to official data.

Chinese companies have been moving to scoop up needed technology and management expertise—much of it at Beijing’s blessing. Headline-grabbing deals include petrochemical giant China National Chemical Corp.’s pending $43 billion acquisition of Swiss pesticide maker Syngenta AG, and a bevy of real estate, finance and other investments by Anbang Insurance Group Co., a recently obscure company that has emerged as global deal maker.

In all, Chinese buyers have announced $212.7 billion of overseas acquisitions in 2016, a year in which announced global deal volume has reached $3.28 trillion.

Concerns have grown among officials that the investment splurge may in some cases serve as a cover for getting around capital controls and sending money overseas. “Greater caution definitely is warranted when it comes to what kind of overseas direct investment is allowed and which ones aren’t,” said a senior government adviser in Beijing.

The State Council’s information office did not immediately respond to a request for comment on the new measures. The new controls will apply to deals yet to receive approval from China’s top economic planning agency, the people familiar with the matter say.

The new controls, once in place, are to remain in effect until the end of September and thus are intended as a temporary tool to stabilize outflows ahead of a major reshuffle of the top echelon of the ruling Communist Party late next year, the people familiar with the matter said. That’s in keeping with other efforts by Beijing to try to keep the economy on an even keel before the leadership change.

China has been a magnet for foreign capital in recent decades, bolstering the economy. In the past couple of years, however, money has been flowing out as the long economic boom ebbs and the consumerism and services expected to drive new growth have yet to gather momentum.

A steady depreciation of the Chinese yuan, after years of overall strength, has ensued, and as businesses and individuals try to take more money out, the pressure for further weakening is piling on. In the past week the yuan has fallen to its lowest level against the dollar in eight years.

The country’s foreign-exchange reserves plunged $45.7 billion in October from September to $3.12 trillion. The Institute of International Finance, a Washington-based group of financial institutions world-wide, estimates that net outflows doubled to $207 billion in the third quarter from the previous three months. That figure is just shy of the estimated record $226 billion in outflows in the third quarter of last year.

Since then, authorities have sought to buttress the country’s financial borders, mostly by curtailing options for individuals to invest overseas. Those measures included a suspension of a quota-based program intended to allow more Chinese to buy foreign stocks and bonds and a ban on purchasing most types of foreign insurance policies with domestically-issued credit cards.

Attention on outbound investments has broadened recently. Officials at China’s foreign-exchange regulator warned in September that some companies as well as individuals may have fabricated deals as a way to circumvent capital controls and move money offshore.

Earlier this week, the central bank announced it will use a new risk-control system to monitor capital flows through Shanghai’s much promoted free trade zone, which previously was hailed as a bold experiment to liberalize China’s financial markets.

A five-page action plan released by the Shanghai branch of the People’s Bank of China stresses efforts to ensure that currency inflows exceed outflows in the zone—a backhanded suggestion that more money may be moving out of the zone than coming in.

The soon-to-be announced controls empower the Commerce Ministry and the top economic planning agency to take a closer look at larger deals, the people familiar with the matter said.

Under the current rules, companies trying to undertake many of the targeted transactions in foreign markets only need to register with the authorities and don’t have to go through any lengthy approval process.

Aside from the major transactions, other deals covered by the pending rules are: overseas direct investments made by limited partnerships, investments in overseas-listed companies that are less than 10% of those firms’ total equity, and Chinese capital trying to participate in the delisting of overseas-listed Chinese companies.

— Kersten Zhang and James T. Areddy contributed to this article.

[Crafty_Dog]

https://www.bloomberg.com/news/articles/2016-12-02/china-grappling-with-trump-turns-to-old-friend-kissinger

BTW, I tangentially note that many years ago that the Investors Business Daily went after Dr. Kissinger REALLY hard for all the consulting money the Chinese were paying him.  I also note that under Trump's lobbying rules, Kissinger could not have done this.

[Crafty_Dog]

Americans had to get used to Donald Trump breaking all the rules of presidential campaigning, and it looks like the world will have to adjust to a President Trump who will also violate diplomatic convention. One early lesson is not to overreact to every break with State Department protocol as if it’s the start of World War III.

The U.S. media had their 19th nervous breakdown Friday after the Trump transition said the President-elect had taken a congratulatory call from Taiwan President Tsai Ing-wen. Mr. Trump also later tweeted that he had spoken to “the President of Taiwan.” Doesn’t he understand this simply isn’t done? No American President or President-elect has talked to a Taiwanese President since 1979, and this violation of tradition is being portrayed as a careless, bone-headed provocation to Beijing.

Well, maybe it was calculated—and perhaps even useful. Trump Asia adviser Peter Navarro has advocated cabinet-level visits to Taiwan and an end to the U.S. bow to Beijing’s “one China” policy, which insists that Taiwan is part of China and shouldn’t be treated as an independent state. Perhaps that goes too far, but it is past time for the U.S. to recalibrate its Taiwan policy.
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Ned Price, spokesman at the Obama National Security Council, suggested that Mr. Trump made a mistake, saying the U.S. remains “firmly committed to our ‘one China’ policy based on the three Joint Communiqués and the Taiwan Relations Act.” But the communiqués from the 1970s and ’80s do not say that the U.S. supports Beijing’s view of “one China,” only that the U.S. acknowledges that both China and Taiwan agree on that principle. That is a crucial distinction.

Taiwan and the world have also changed since those communiqués. Taiwan has become a prosperous and democratic polity integrated into the world economy. Most Taiwanese now want to maintain their de facto independence. They resent Beijing’s bullying to force their leaders to move toward reunification.

Previous U.S. Presidents have eased restrictions on contact with Taiwanese officials to reflect this reality. Bill Clinton let President Lee Teng-hui give a speech at Cornell University in 1995. George W. Bush allowed President Chen Shui-bian to visit the U.S. in transit to countries in Latin America that maintain diplomatic relations with Taiwan.

The U.S. is obligated to assist the self-governing territory in defending itself under the 1979 Taiwan Relations Act, and every Administration since has sold weapons to Taiwan. Mr. Clinton sent a U.S. carrier through the Taiwan Strait in 1996 when China was especially threatening.

Previous Taiwanese leaders tried to exploit U.S. support to push for a formal declaration of independence, which Beijing warns would be cause for war. Mr. Trump has to be careful not to encourage Ms. Tsai, who has advocated for independence in the past, to make the same mistake. But Ms. Tsai has studiously avoided such declarations since her election earlier this year, and she has been careful to say she wants good relations with Beijing despite China’s attempt to isolate her.

Mr. Trump shouldn’t concede Beijing’s power to intimidate the world’s democracies into isolating Taiwan. The U.S. has an interest in supporting Taiwan as a model for China’s future development. And adapting Taiwan policy could benefit the wider U.S.-China relationship.

Beijing says denying sovereignty for Taiwan is a core interest. But the U.S. has a core interest in preventing North Korea from threatening the world with nuclear-armed missiles. The rest of Asia has a core interest in preventing China from unilaterally asserting its dominance over the East and South China Seas. Respect for core interests goes both ways.

It’s notable that China has reacted better than the U.S. media to Mr. Trump’s phone conversation. Beijing protested but its Foreign Minister dismissed it as a “petty trick” by Ms. Tsai. Beijing censored the news inside China, while the English-language China Daily suggested Mr. Trump simply made a mistake.

President Obama had no success convincing China to rein in Pyongyang, and Chinese officials walked all over him on his first visit in 2009. Mr. Trump’s tougher stance may prove to be a better opening move in the deal-making to come.

[Crafty_Dog]

second post: 

By Rupert Hammond-Chambers
Dec. 4, 2016 4:24 p.m. ET
7 COMMENTS

President-elect Trump’s phone conversation Friday with Taiwan’s democratically elected leader is the kind of engagement that any new U.S. president should undertake as he prepares to take office. In talking with President Tsai Ing-wen, Mr. Trump demonstrated why his presidency has the potential to return badly needed credibility to a host of global challenges where the Obama Doctrine has left vacuums, rising tensions and conflict.

America’s relationship with Taiwan is a good example of the drift in U.S. interests. The Obama administration likes to declare that we are experiencing the “best relationship ever.” But this assessment is predicated on an expectation that neither the U.S. nor Taiwan has ambitions for their relationship. Both have been far too preoccupied with their ties with China—a focus that has emboldened Beijing and fostered instability in the Taiwan Strait.

As a result, a dangerous vacuum has opened up in the U.S. relationship with Taiwan. The administration has all but halted arms sales to Taiwan even though such sales are guaranteed under U.S. law and have long been a mainstay of U.S. security relations with the island. So, too, the trade relationship has faltered. Our trade ties are better suited to those between the U.S. and Malta than with our ninth-largest trading partner. Trade ties drift aimlessly in the absence of broader goals such as investment and tax agreements or a bilateral free-trade accord.

Meanwhile, the Chinese have been pressing their objective: the unification and occupation of Taiwan through peaceful or military means. Beijing pursues economic integration and its smothering embrace, while its military modernization focuses on invading and occupying Taiwan. It points nearly 2,000 cruise and ballistic missiles at Taiwan’s people.

The U.S. has failed to meet this challenge, and it is into this vacuum that Ms. Tsai was elected in January. China’s response to her election has been to pressure Taiwan’s remaining allies, cut off direct communications with Taipei, and damage commerce by restricting mainland Chinese tourism to the island. It has also undermined Taiwan’s efforts to broaden its engagement with the global health community and to integrate better into the world’s global aerospace and transportation organizations.

Tensions have risen between Taiwan and China as a function of Beijing’s belligerence, and the Obama administration has done next to nothing in response.

It is a point of deep frustration in both Taiwan and the U.S. that China can pursue hostile activity in the South China Sea, regularly violate the sovereign airspace of Japan and Taiwan, and steal American commercial and military technology, putting companies out of business and threatening American forces with new Chinese capabilities created out of U.S. technology. It is China’s actions that destabilize Asia—and Mr. Trump appears to understand that.

Many in the U.S. presume that China would willingly hurt its own interests in a range of areas in pursuit of gains on Taiwan. This is a deeply flawed argument. Beijing will continue to act in its own core interests as they relate to North Korea, Iran, climate change and many other issues. On Taiwan matters, the U.S. likes to negotiate with itself in a vain attempt to ward off “China’s anger.” Unilaterally curbing military support to Taiwan and turning a blind eye to Chinese provocations after democratic elections in Taiwan are but two examples.

Mr. Trump made a bold statement of support by talking with Ms. Tsai. Instead of throwing another Trump tantrum, America’s media might consider encouraging Chinese President Xi Jinping to follow Mr. Trump’s example and have his own phone conversation with her. Who knows? It might actually reduce tensions in the Taiwan Strait.

Mr. Hammond-Chambers is president of the U.S.-Taiwan Business Council and a managing director at Bower Group Asia.

[Crafty_Dog]

Third post

Summary

The contested waters of the South China Sea are a geopolitical flashpoint, but for now they exist in a period of comparative calm. Following a July ruling by the Permanent Court of Arbitration, countries with territorial claims in the waters struck a conciliatory tone, most prominently over the Scarborough Shoal — a barely submerged coral atoll that has become a touchstone for affairs between China and the Philippines, traditional adversaries in the South China Sea. A normally recalcitrant Beijing, forced to accept a more delicate and complex maritime arrangement in the region, is making placating gestures at last.

The shoal is emblematic of deeper issues at stake, namely the nature of maritime boundaries and bilateral concerns over fishing rights and exploitation of strategic territory. Philippine President Rodrigo Duterte made a high-profile visit to China in October and, following a strategic recalibration on both sides, Beijing and Manila appeared to be moving toward a joint mechanism of control over the shoal. The aspiration is that the countries will eventually be able to achieve some form of coexistence. That said, such a delicate arrangement is susceptible to domestic pressure, especially from nationalist movements, and to additional sovereignty disputes that may develop.
Analysis
Since early November, China has quietly eased its naval blockade around Scarborough Shoal, which it seized in 2012 after a hostile standoff. As part of the ongoing appeasement process, Beijing not only allowed access to Filipino fishermen and vessels but also offered fishing assistance. Although Philippine coast guard vessels have also been permitted to return to the locale, many points of contention are unresolved. Beijing still exercises some degree of control over the shoal, including conducting routine patrols, and Manila will not ease its attempts to push maritime boundaries. China has blocked access to the shoal's central lagoon. In return, Duterte has called for a fishing ban in the lagoon itself. And there is the matter of the underlying claim of sovereignty, which remains unresolved. Even with this diplomatic chafing, however, Beijing and Manila appear to have enough strategic reasons to sustain the current arrangement, at least for now.
 
An Evolving Strategy

EEZ

The 1994 U.N. Convention on the Law of the Sea grants nations an exclusive economic zone of up to 200 nautical miles from the coast and around some islands, carrying rights to marine resources. This makes the official status of tiny rocks, reefs and islands essential.

Located 120 nautical miles from the Philippine mainland — well within Manila's internationally recognized exclusive economic zone — Scarborough Shoal also rests within the eastern edge of China's maritime claim, known as the nine-dash line. The shoal is crucial to Manila's territorial integrity and is a buttress when it comes to external security. Yet, it is also key terrain in Beijing's plan to become a maritime power. The net result of these incompatible positions is that neither side will back off its claim. For Manila, Beijing's seizure of the shoal — and subsequent expansionism — not only dealt a serious blow to Philippine maritime defense but also represents a diminishing opportunity to counter Beijing's broader maritime aggressiveness in a practical manner.
 
In achieving international legal intervention, Manila won a diplomatic upper hand, but despite the July arbitration ruling, effectively resisting Beijing physically proved impossible. Furthermore, the Philippines' vocal opposition to China and its orientation toward Washington (and, to a lesser extent, Tokyo) put Manila at risk of Chinese maritime aggression as well as economic and diplomatic alienation. In context, Duterte's diplomatic reorientation allows Manila to amend its volatile relationship with Beijing while attaining desirable economic concessions. At the same time, Duterte hopes to restore a Philippine presence along the maritime boundary. This, in turn, could help alleviate domestic resistance toward the regional rebalancing act.
 
Similarly, Beijing perceives eased relations with Manila over the South China Sea as an opportunity to expand its own strategic space. China's immediate concessions are a luxury afforded by its significant tactical advantage in the shoal: Its strong military presence and its naval and maritime enforcement advantage over the Philippines would allow Beijing to achieve full control if it so desires. Indeed, the chances of China reasserting itself there are high, despite Washington's warnings against such an action.
 
By offering some concessions on Scarborough Shoal, however, Beijing shows its far-reaching aspirations. An effective arrangement to manage the dispute demonstrates Beijing's willingness to negotiate, encouraging other South China Sea claimants to rethink their approach. Beijing hopes the diplomatic track will help reduce external involvement, leading to international acknowledgement of its maritime interests. Shortly after the Permanent Court of Arbitration ruling, Beijing refashioned its joint energy exploration proposals — which had been stalled for years — and reached out to a number of claimant countries through significant economic concessions. Meanwhile, China also enticed Malaysia and Vietnam back toward bilateral negotiations, but with mixed results.
Beijing Tries Diplomacy
China's charm offensive is in part driven by an evolving strategic recalibration at home. Despite its ambition for maritime domination, Beijing's policy of expansionism over the past six years led to contradictory outcomes for its foreign policy agenda. South China Sea claimant states — most notably the Philippines and Vietnam, and to a lesser extent Indonesia and Malaysia — have responded to Beijing's activities by expanding their military capabilities while seeking cooperation from external powers, such as the United States, Japan and India. The result has been increasingly internationalized waters that, from China's perspective, equate to hostile competitors stalking its periphery. At the same time, Beijing understands that the strategic ambiguity over its maritime claims — its ungrounded nine-dash line, lack of clearly defined sovereignty and defiance of international law — has reached a limit.
 
It is unlikely that Beijing will ever ease its assertive behavior in the South China Sea. Rather, the new maritime status quo, aided by the court ruling, could lead China to reconsider which strategies best suit the country's immediate interests. New courses of action might take years to develop, but for now, Beijing's current imperatives — to avoid outright military confrontations, circumvent further interference from the international community and not provoke all of its Association of Southeast Asian Nations neighbors at once — make further antagonistic behavior counterproductive.
A High-Stakes Game
The fate of Scarborough Shoal speaks to the new maritime reality for most South China Sea claimants: China's dominant military and technological advantages. Lacking options to effectively counter Beijing's practical control, either by force or international intervention, claimant countries are rendered powerless. This also feeds the prevailing regional perception of Washington's reduced sway in the Asia-Pacific and explains the generally conciliatory gestures made by Malaysia, Vietnam and the Philippines. Beneath the status quo, however, one thing is assured: Every stakeholder in the South China Sea is working behind the scenes to strengthen its footing. Claimant countries continue to search for external supporters to bolster their defense and negotiation positions; China plots to take control of what it considers to be its rightful territory; and the United States, working within its regional alliance, must somehow continue to assert itself, even though the future presidential administration's intentions remain unknown for now.
 
Whether Beijing's conciliatory stance over Scarborough Shoal marks a genuine strategy shift or is simply a facade, the underlying fervor surrounding territorial rights will not dim anytime soon. China is a past master at manipulating sovereignty for its own ends and is more than content to provoke through words, if not actions. Beijing's talk of "allowing access" to the shoal rather than conceding a claim fuels nationalist sentiments in Manila. In many respects, Scarborough Shoal is a testing ground for China, and any future territorial challenges will depend on the political climate in claimant countries as well as abroad. There is also the question of Beijing's maritime ambitions, which might render the need for diplomacy obsolete.
 
As peaceful as things may appear on the surface, when it comes to Scarborough Shoal, the stakes are as high as they ever were. And when China no longer feels inhibited by the desire to play nice, there will be no dispute as to who physically owns the shoal. The question then switches to what, if anything, the region or the international community is prepared to do about it.

[ccp]

http://www.nationalreview.com/article/442753/trumps-taiwan-phone-call-good-sign-shifting-balance-power

[Crafty_Dog]

http://www.reuters.com/article/us-usa-taiwan-arms-idUSKBN0TZ2C520151216

[G M]

I love how China has been slapping Obama in the face with their dicks and the US MSM has done zero coverage of it, and now suddenly Trump taking a phone call from Taiwan is the end of the fcuking world.

[DougMacG]

I love how China has been slapping Obama in the face with their dicks and the US MSM has done zero coverage of it, and now suddenly Trump taking a phone call from Taiwan is the end of the fcuking world.

Great move by Trump even if he was only taking an incoming call.

Mike Pence to Stephie Stephanopoulus:  “It's a little mystifying to me that President Obama can reach out to a murdering dictator in Cuba in the last year and be hailed as a hero for doing it and President-elect Donald Trump takes a courtesy call from a democratically elected leader in Taiwan and it’s become something of a controversy,”

Well put.

A democratically elected leader of 24 million people in a crucial and strategic area of the world, why wouldn't you take the call?

[Crafty_Dog]

BTW, apparently last week the Chinese flew nuclear capable planes around Taiwan.