Posts Tagged ‘Senkaku Islands’

Japan to bolster patrols near disputed Senkaku Islands — “Chinese aggression is up again”

April 14, 2018


 APR 14, 2018

Japan will beef up airborne patrols of the disputed Senkaku Islands in the East China Sea, an official has said, in response to increased Chinese activity in the area.

New crew members will operate two extra jets that will be deployed in the next 12 months to strengthen patrols around the Japanese-controlled Senkakus, according to a Japan Coast Guard spokesman.

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“We’ll boost our aviation crew by bringing in 60 more members,” the spokesman said.

Japan will deploy two Falcon 2000LXS jets this fiscal year and one more plane next year to allow a “24-hour patrol system” to monitor the disputed islands, which are also claimed by China, where they are known as the Diaoyus.

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Falcon 2000LXS jet — FILE photo

The move comes after Japan spotted a Chinese nuclear-powered submarine in disputed waters early this year.

The uninhabited islets are at the center of a festering row between Tokyo and Beijing, which is also involved in a widening dispute with several Southeast Asian countries over islands in the South China Sea.

The Japanese government has long complained about China’s routine dispatch of coast guard ships to waters surrounding the islands.

Relations between Japan and China deteriorated in 2012 when Tokyo effectively nationalized three of the five islets.

Since then, the two top Asian economies have taken gradual steps to mend fences but relations remain tense.

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Japan and China prepare to revive high-level economic dialogue amid tensions with U.S.

April 1, 2018


April 1, 2018

Japan and China are gearing up to resume high-level economic dialogue later this month after a hiatus of more than seven years, sources close to bilateral relations said Saturday.

The parley, to be held in Japan, is likely to be timed to coincide with Chinese State Councilor and Foreign Minister Wang Yi’s envisaged visit around April 15, the sources said.

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Wang Yi

The last such dialogue was held in Beijing in August 2010, and it is hoped that a resumption of the dialogue will help deepen a strategic, mutually beneficial relationship between the countries as they mark the 40th anniversary this year of their peace and friendship treaty, they said.

The government has judged that it should pursue a closer relationship with Chinese President Xi Jinping, whose recent re-election to a second five-year term as president solidified his grip on power.

Using the May trilateral summit of Japan, China and South Korea as leverage, Tokyo hopes to get a visit to China by Prime Minister Shinzo Abe done by the end of the year and an early one by Xi to Japan to bolster bilateral relations.

For its part, China is apparently eager to drum up Japanese support for its cross-border “One Belt, One Road” infrastructure initiative under a policy of improving ties with Tokyo.

Beijing is also perceived to be interested in getting Japan on its side amid rising tensions over trade issues with the United States.

According to the sources, Japan accepted overtures from China earlier this month to restart economic dialogue on such issues as trade and investment.

The talks would most likely be co-chaired by Foreign Minister Taro Kono and Wang. Other ministers in charge of economic issues from both countries, including Minister of Economy, Trade and Industry Hiroshige Seko, are also expected to take part.

During the parley, Tokyo will seek to share the view with Beijing that its “free and open Indo-Pacific strategy” and China’s belt and road project can coexist, and that both can work together to improve infrastructure across Asia, the sources said.

With the United States’ import restrictions on steel and aluminum in mind, the talks could also highlight the importance of free trade.

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The high-level economic dialogue, launched in December 2007, has been put on ice since its third session in Beijing seven and a half years ago.

Tokyo, Beijing and even Taiwan have for years been mired in a territorial dispute in the East China Sea over the uninhabited Senkaku Islands, which China claims as Diaoyu and Taiwan as Tiaoyutai.

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Senkaku Islands

They have also been at loggerheads over China’s military buildup in contested parts of the South China Sea, with Japan arguing that disputes must be resolved according to international law and that freedom of navigation must be maintained.

China has overlapping territorial claims with Brunei, Malaysia, the Philippines, Vietnam and Taiwan in the South China Sea.

Japan does not border the South China Sea, a strategic waterway through which over one-third of global trade passes, but relies on shipping channels in the waters.


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China says it has sovereignty over all the South China Sea north of its “nine dash line.” On July 12, 2016, the Permanent Court of Arbitration  in The Hague said this claim by China was not valid. But China and the Philippine government then chose to ignore international law.

China has built seven new military bases in South China Sea, US navy commander says

February 15, 2018

Beijing’s assertive territorial claims in disputed waterway is ‘coordinated, methodical and strategic’, Admiral Harry Harris says

PUBLISHED : Thursday, 15 February, 2018, 1:15pm
UPDATED : Thursday, 15 February, 2018, 1:15pm

South China Morning Post

The commander of the United States Pacific Command on Wednesday warned of China’s growing military might, saying Beijing had unilaterally built seven new military bases in the South China Sea.

“China is attempting to assert de facto sovereignty over disputed maritime features by further militarising its man-made bases,” Admiral Harry Harris said in a congressional hearing.

Harris told the House Armed Services Committee that the new facilities included “aircraft hangers, barracks facilities, radar facilities, weapon emplacements [and] 10,000-foot runways”.

Beijing has overlapping territorial claims with Brunei, Malaysia, the Philippines, Vietnam and Taiwan in the South China Sea, a strategic waterway through which more than a third of all global trade passes.

Harris said he saw Beijing’s assertive territorial claims in the East and South China seas as “coordinated, methodical and strategic, using their military and economic power to erode the free and open international order”.

In the East China Sea, Chinese vessels have repeatedly intruded into Japanese waters around the Senkaku Islands in an attempt to undermine Tokyo’s administration of the uninhabited islets.

Harris said the US alliance with Japan “has never been stronger” and that Washington’s alliance with South Korea was “ironclad”.

Harris, who is set to become the next US ambassador to Australia, also hailed the Washington-Canberra alliance, saying bilateral military ties were “terrific” and that Australia was “one of the keys to a rules-based international order”.



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Chinese military bases near the Philippines

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China has no greater rights than any other in the sea. China says it has sovereignty over all the South China Sea north of its “nine dash line.” On July 12, 2016, the Permanent Court of Arbitration  in The Hague said this claim by China was not valid. But China and the Philippine government then chose to ignore international law.

Japan eyes aircraft carriers to counter North Korea, China

January 2, 2018

Concerns over N. Korea’s unpredictable regime and China’s expansionist policies have forced Japan to seek reinterpretation of parts of the constitution that ban the nation from having an offensive military capability.

Members of the Japan Maritime Self-Defense Force attend a ceremony for the Izumo helicopter carrier in Yokohama (Reuters/T. Hanai)

The Japanese government is considering upgrading the largest ships in the Maritime Self-Defense Force’s fleet to enable it to operate a new generation of fighter aircraft, although there are concerns at home that transforming two Izumo class warships — presently designated as helicopter destroyers — into aircraft carriers will contravene the constitutional clause on Japan not possessing offensive military capabilities.

China has expressed similar reservations, although for “historical” reasons rather than fears over Japan’s constitution. Beijing was quick to warn Tokyo to “act prudently” in the purchase of Lockheed Martin F-35B Lightning fighters, the short take-off and vertical landing variant of the stealth fighter, and carrying out upgrades to the Izumo and the Kaga, the only two helicopter destroyers in the Japanese navy.

Japan helicopter carrier Izumo (picture-alliance/Kyodo)The government insists the constitution does not specifically ban Japan from having aircraft carriers

Commenting on the reports, a spokesperson for the Chinese Foreign Ministry said that enhancing the capabilities of Izumo-class ships would inevitably attract the attention of Japan’s neighbors for “historical reasons” — a clear nod at the nation’s use of aircraft carriers to carry out the attack on the US Pacific Fleet at Pearl Harbor in 1941 and subsequent operations during World War II.

No aircraft carrier ban

Analysts point out that the Japanese government insists that the constitution does not specifically ban Japan from having aircraft carriers and that they should be considered defensive weapons rather than power-projection platforms.

Read more: Japan’s new drive to rewrite constitution amid North Korea threat

“Even though these ships already look very much like aircraft carriers, they are officially classified as helicopter destroyers, but the changing security environment in the Asia-Pacific region means that Tokyo believes it now needs a full flat-top capable of handling stealth fighters,” said Jeff Kingston, director of Asian Studies at the Japan campus of Temple University.

“That is a major development that follows Prime Minister Shinzo Abe’s doctrine of easing the restraints that have been put on the Japanese military since the end of the war,” he told DW.

The Japanese military believes it faces two primary threats. The most immediate is North Korea, which is becoming increasingly belligerent and unpredictable, even though it is under strong international sanctions. Those sanctions have so far not stopped the regime from developing increasingly capable long-range ballistic missiles and a growing stockpile of nuclear warheads.

The other threat is a China that is apparently bent on expanding areas of the Asia-Pacific region that it controls. Beijing has already effectively seized reefs and atolls in the South China Sea that are also claimed by Vietnam, the Philippines, Taiwan and Brunei, while it has also stepped up aggressive military patrolling close to Taiwan.

Read more: Shinzo Abe’s victory: A mandate to amend Japanese constitution?

Fears over Senkaku islands

Tokyo’s biggest concern is related to the Sino-Japanese tensions over Senkaku/Diaoyu islands in the East China Sea, a group of uninhabited islets which lie half-way between Japan and China. They are administered by Tokyo but are claimed by Beijing.

Effectively undefended, Tokyo fears that Chinese troops could very quickly occupy and militarize the islands. Consequently, Japan is developing new defensive capabilities that would be used to retake the islands, with the upgraded Izumo-class ships a key part of that as F-35s would be able to provide close-in support over the territory.

Read more: Japan protests after spotting Chinese ships near disputed islets

Of the two, Kingston believes that North Korea is presently at the forefront of Tokyo’s thinking when it comes to the Izumo warships.

“Japan is clearly very anxious about the threat posed by North Korea, which fired 20 missiles in 2017,” he said. “The feeling is that Japan needs to beef up its anti-missile defenses at home, as well as have the ability to strike at targets in North Korea if there is a direct threat to Japan.

“And the argument is that an aircraft carrier that would be tasked with carrying out a pre-emptive attack on targets inside North Korea, would be acting defensively because it would be protecting Japan,” he said.

Kingston dismisses China’s objections to Japan deploying aircraft carriers.

“Japan will say — quite rightly — that it lives in a dangerous neighborhood, that it cannot continue to bury its head in the sand of unilateral pacifism and that it exists in a very different threat environment than it did in the 20th century,” he said.

Read more: Japan approves record draft defense budget amid North Korea threat

‘China cannot complain’

“China cannot complain; it is developing its own aircraft carrier capabilities and its military budget has seen double-digit growth rates for the last 20 years or so and presently stands at about three times that of Japan,” Kingston pointed out.

Stephen Nagy, a senior associate professor of international relations at Tokyo’s International Christian University, believes that the Japanese government will do everything in its power to portray any enhancement in the ships’ capabilities as defensive in nature.

“The question of ‘projection of power’ is largely a matter of semantics at this point, but the fact is that if they go ahead then the vessels will be able to launch fighter aircraft,” said Nagy, who is also a fellow of the Asia Pacific Foundation of Canada. “So they are walking a very fine line between defensive and offensive power.”

And that ambiguity is “going to create further tensions in the region, most notably with China,” Nagy told DW.


U.S. Pacific commander visits Japanese East China Sea listening post

May 18, 2017


Wed May 17, 2017 | 4:41pm EDT


China upset as Japanese minister visits self-ruled Taiwan — Most senior Japanese gov’t official in 45 years visits Taiwan — “Nothing China hates more than anybody talking to Taiwan…”

March 27, 2017

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Senior Vice Minister of Internal Affairs and Communications Jiro Akama

Most senior Japanese official in 45 years pays visit to Taiwan

Senior Vice Minister of Internal Affairs and Communications Jiro Akama visited Taiwan on Saturday, becoming the most senior government official to visit the island since the two sides severed diplomatic ties in 1972.

Although Akama is in Taiwan to attend a two-day event promoting Japanese culture and tourism, some expressed concern that his visit is likely to upset China, which regards Taiwan as a renegade province awaiting unification, by force if necessary.

Welcoming Akama to Taiwan, Chiou I-jen, president of the Association of East Asian Relations, Taiwan’s semi-official agency for handling relations with Japan, said at the opening ceremony for the event that “it was not easy” for Akama to make the trip and that he had to “go through many difficulties.”

“Both Taiwan and Japan face many difficulties,” Chiou said. “But because we both face the same difficulties, it only shows how closely connected we are.”

Later, when asked about the difficulties he meant, he replied: “Isn’t that a rhetorical question?” Asked whether he could mention the obvious answer, he gave his trademark smile and said, “I will not tell.”

Through a translator, Akama avoided similar questions but acknowledged that Japanese officials sometimes encounter difficulties if they have to travel abroad.

When asked whether he received any pressure from China before making the trip, Akama said, “There was no big problem” but added it was rather difficult that he had to “factor in many international situations before making the final decision,” without elaborating.

Akama also urged the Taiwanese media to promote Japanese tourism and food.

He said he hopes his visit will help the Taiwanese public better understand that many food products from the region hit hardest by the March 11, 2011, earthquake, tsunami and nuclear crisis have passed strict examinations and are safe to consume.

Taiwan and Japan continue to enjoy a close relationship despite the lack of official ties. Since severing diplomatic relations in 1972, the two sides have signed more than 60 trade deals, including a landmark fisheries agreement inked in April 2013 to mollify Taipei after Japan effectively nationalized the Senkaku Islands, which are claimed as Tiaoyutai by Taiwan and Diaoyu by China.

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Senkaku in Japan and Diaoyu in China

Since President Tsai Ing-wen took office in May last year, her administration has expressed hope of bringing bilateral relations to a higher level.

In January, Japan’s de facto diplomatic establishment, the Interchange Association, changed its name to the Japan-Taiwan Exchange Association. It was not surprising that the move angered Beijing, which urged Japan to uphold the “One China” principle, refrain from creating new disturbances in China-Japan ties and from sending a wrong message to Taiwan and the international community.

To reciprocate Japan’s goodwill, Taiwan Foreign Minister David Lee revealed earlier this month that Taiwan will change the name of the ministry-linked Association of East Asian Relations.

The ministry has also been negotiating with Tokyo on changing the name of Taiwan’s representative office in Japan, Lee said.



Mon Mar 27, 2017 | 4:20am EDT

China said on Monday it has complained to Japan after a Japanese minister visited self-ruled Taiwan over the weekend, warning this could hurt relations between Beijing and Tokyo.

Japan’s Ministry of Internal Affairs and Communications said Deputy Minister Jiro Akama went to Taiwan to attend a tourism promotion event in his official capacity, leaving Japan last Friday and returning the following day.

Japanese media said Akama was the highest-level government official to officially visit Taiwan since Japan broke diplomatic ties with Taipei in 1972 and established them with Beijing.

Chinese Foreign Ministry spokeswoman Hua Chunying said the visit clearly ran contrary to Japan’s promises to only have non-governmental and local level exchanges with Taiwan, which China considers a breakaway province.

“China is resolutely opposed to this and has already made solemn representations to Japan,” Hua told a daily news briefing.

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Hua Chunying, China’s foreign ministry

Japan has said it respects its promises on the Taiwan but actually it has been provocative, she added.

“This has caused serious disturbance to the improvement of Sino-Japanese ties.”

Defeated Nationalist forces fled to Taiwan in 1949 at the end of a civil war with the Communists. China has never renounced the use of force to bring Taiwan under its control.

Taiwan is a core interest of China’s that can’t be challenged and Japan should recognize the seriousness of it, stop being “two-faced” and not go any further down the wrong path, Hua said.

Japanese broadcaster NHK showed Akama arriving at Taipei airport, telling reporters there will be no change in Japan-China or Japan-Taiwan ties.

China expressed dissatisfaction in December after Japan’s de facto embassy in Taiwan said it would change its name to include the word Taiwan.

Japan, like most countries in the world, maintains only informal relations with Taiwan while it has diplomatic, if uneasy, ties with Beijing.

Beijing has repeatedly urged Japan to show greater repentance for World War Two atrocities and the two sides have a festering territorial dispute in the East China Sea.

However, Japan’s 1895-1945 rule in Taiwan is seen by some as having been good for the island’s development, unlike perceptions of Japan in other parts of Asia, particularly in China and Korea, which are often deeply negative.

(Reporting by Ben Blanchard; Additional reporting by Ami Miyazaki in Tokyo; Editing by Nick Macfie)

Philippines Prepares Protest vs China Over South China Sea Island Grab

March 21, 2017
Justice Secretary Vitaliano Aguirre II said the administration’s planned course of action was in accordance with Supreme Court Senior Associate Justice Antonio Carpio’s suggestion that a strong formal protest against Beijing be filed with the Permanent Court of Arbitration based in The Hague. File photo

MANILA, Philippines – The Philippines is preparing to formally protest China’s plan to install a radar station at Panatag (Scarborough) Shoal in violation of a ruling by a United Nations-backed international tribunal declaring the shoal a common fishing ground outside any country’s jurisdiction.

Justice Secretary Vitaliano Aguirre II said the administration’s planned course of action was in accordance with Supreme Court Senior Associate Justice Antonio Carpio’s suggestion that a strong formal protest against Beijing be filed with the Permanent Court of Arbitration based in The Hague.

“I think so, there will be (a protest to be filed). Medyo malakas-lakas ang ifa-file (A stronger one will be filed),” Aguirre said when asked about the issue in a chance interview.

Aguirre’s statement came on the heels of President Duterte’s voicing helplessness against China’s continued buildup of its forces in waters within the Philippines’ exclusive economic zone.

But Aguirre assured the public that Duterte is committed to protect and defend the nation’s sovereignty despite the latter’s pronouncement that he could not stop China from building a structure at the shoal. “Definitely, he will not let go of (Panatag shoal),” Aguirre stressed.

“As a matter of fact, we are strengthening the relationship with the US,” Aguirre pointed out, indicating a potential shift from Duterte’s earlier declaration of separation from the US and a pivot to China.

The filing of a protest was among the five-point strategy suggested by Carpio for dealing with China’s reported plan to set up facilities at Panatag shoal.

The SC justice has also suggested sending Philippine Navy vessels to the shoal.

“If the Chinese attack Philippine Navy vessels, then invoke the Philippine-US Mutual Defense Treaty which covers any armed attack on Philippine Navy vessels operating in the South China Sea,” he pointed out.

Carpio also stressed the government may ask the US to declare the shoal part of Philippine territory and accept the superpower’s offer to hold joint patrols in the South China Sea and the West Philippine Sea.

The SC magistrate also advised Duterte to “avoid any act, statement or declaration that expressly or impliedly waives Philippine sovereignty to any Philippine territory in the West Philippine Sea.”

Carpio stressed that Panatag is part of the national territory under Republic Act No. 9522 (Philippine Baselines Law) and that President Duterte has the constitutional duty to defend it from China’s incursion.

He earlier warned that the installation of a radar system at the Panatag shoal will complete China’s air defense identification zone in the South China Sea.

In 2012, the Chinese seized the Panatag Shoal after a tense standoff with Philippine Navy personnel who had tried to arrest Chinese poachers in the area. The poachers were allowed to return to China with their illegal harvest of baby sharks, endangered corals and giant clams. The Chinese have never left the shoal since then.

A ruling in July last year by the UN-backed Permanent Court of Arbitration based in The Hague upheld the Philippines’ entitlements in the West Philippine Sea but declared Panatag a common fishing ground. The shoal is only about 230 kilometers from the nearest coast in Luzon and close to 2,700 kilometers from China’s nearest coast in Hainan.

Defending sovereignty

At Malacañang, presidential spokesman Ernesto Abella made it clear Duterte has not surrendered the country’s sovereignty over Panatag Shoal or any other area within the country’s EEZ either seized or being coveted by China.

“He has said time and again that he will defend and protect the interests of the Filipino people and will take necessary action at a time most fitting and advantageous to us,” Abella said.

“Furthermore, PRRD has repeatedly asserted that RP is not giving up its claims and our entitlements over the area,” Abella said, referring to Duterte by his presidential initials.

He noted even China has not issued an official stand on reports it was preparing to build a radar station at Panatag Shoal. The Department of Foreign Affairs (DFA), he said, is verifying such reports.

“The DFA is in the process of verifying alleged announcements of proposals to build structures in WPS (West Philippine Sea), since these statements do not reflect the official position of China,” he said.

Duterte earlier declared that the Philippines – with its weak armed forces – cannot stop Beijing from building a radar station at Panatag Shoal.

This prompted Carpio to remind Duterte of his constitutional duty to defend the country from Chinese incursion.

Panatag is part of the national territory, Carpio pointed out, as stipulated under the Philippine Baselines Law.

In his speech in Myanmar Monday, Duterte again ruled out invoking the UN arbitration ruling when dealing with Beijing. But he also vowed to raise the matter if and when China starts extracting mineral resources like oil or uranium in disputed areas.

“Now, if China starts getting oil or uranium or whatever that’s inside the bowels of the sea, I will do something and tell them, ‘We own it. You claim it by historical right, by judgment I won and it’s mine,’” he said.

Duterte also stressed he would not send forces to confront the Chinese in disputed areas to avoid bloodshed.

“First hour, they are finished already. We are not in a position to declare war,” he said.

“But I said to China that someday during my term as President, I will have to confront you about the arbitral ruling and that would be maybe, during the time when you begin to extract minerals and the riches of what is inside the bowels of the earth,” Duterte added.

Not defenseless

Meanwhile, the lawmaker who filed an impeachment complaint against Duterte has asked the President not to portray the country as defenseless against China’s maritime incursion.

“His statement that we cannot do anything is not true. In fact, we have a lot of non-military and non-confrontational options. He just doesn’t want to do them,” Rep. Gary Alejano of party-list group Magdalo said.

During the campaign, then candidate Duterte said if the Chinese intruded into Panatag, he would rush there in a jet ski to confront the intruders.

Alejano has described as “treason” the President’s admission that he had allowed a Chinese research ship to survey Benham Rise, which is part of the country’s territory.

He said Duterte’s statement on China’s building plan at Panatag Shoal “is a defeatist narrative fitting squarely to what China wants us to feel.”

The lawmaker advised the President to listen to Carpio and revisit various recommendations proposed in the past by national leaders and security officials to address Chinese intrusions into Philippine waters.

“He can consult his national security team and other leaders,” he added.

Alejano lamented the Duterte administration is speaking with discordant voices in dealing with China.

He noted that while Defense Secretary Delfin Lorenzana has denounced the presence of China’s research ship in Benham Rise, the President admitted he had allowed it without informing his defense chief.

Alejano urged the President to send the Coast Guard or even the Navy to patrol the Panatag Shoal area.

“The shoal is located 230 kilometers from Luzon, while it is 2,659 kilometers away from the Chinese mainland. Logistically, the replenishing of supplies such as food and fuel will be a challenge for China, not so for our troops since it is closer to our shores,” he said.

“We can strategically deploy and train our fishermen to utilize the natural resources in the area. We could provide them with study vessels and advanced communication system so that we could aid or defend them should they be threatened by Chinese ships,” he said.

He said Duterte should learn a lesson or two from Vietnam in protecting the country’s interest.

Alejano recalled that in one confrontation with China near the disputed Paracels, Vietnam lost several troops.

The former Marine captain said the country could also invoke its security alliance with the United States, Japan and Australia.

In case of a shooting war, he said he would be “more than willing to fight for our country.”

The military, for its part, said it is ready to deploy a navy ship – recently acquired from the US – to conduct oceanographic survey of Benham Rise.

Col. Edgard Arevalo, Armed Forces of the Philippines Public Affairs Office chief, said they are just awaiting a written order from Lorenzana or from the President for the deployment of BRP Gregorio Velasquez (AGR-702) to Benham Rise.

“We have one survey vessel and the Philippine Navy has the capability to do maritime research, but so far we don’t have the instructions,” Arevalo said. The other survey vessel acquired from the US was BRP Andres Bonifacio.  – With Christina Mendez, Jaime Laude


 (Contains links to several previos articles on the South China Sea)

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On July 12, 2016 a ruling of the Permanent Court of Arbitration in the Hague said China’s nine-dash line claim (shown above) was invalid and not recognized in international law.

Rodrigo Duterte And Kim Jong-un Save Peace In South China Sea, But For How Much Longer?

March 21, 2017

I cover global markets, business and investment strategy

Duterte said. Photographer: Veejay Villafranca/Bloomberg

Philippines President Rodrigo Duterte’s flip-flops and North Korea’s leader Kim Jongun’s missile tests have saved South China Sea peace, for now, as both major players in the disputes China and the US have been softening their tone lately.

That’s good news for investors in the equities of the region, as it lowers geopolitical risks. And that may sound paradoxical to some. How is it that Duterte’s flip-flops and Kim Jong-un’s missile firings can advance peace in South China Sea?

By changing the parameters of the game for China and the US.

ETF/Fund 3-month Performance (%) 12-month Performance (%)
iShares MSCI iShares China  (FXI) 4.58 17.64
VanEck Vectors Vietnam ETF (VNM) 9.34 -2.81
iShares MSCI Philippines (EPHE) -7.28 -5.14
iShares MSCI Emerging Markets 14.08 17.47

Source:  3/20/2017

Last July Philippines and its close ally, the U.S., won an international arbitration ruling that China has no historic title over the waters of the South China Sea. Yet Philippines’ President Rodrigo Duterte shocked the global community and financial markets by siding with China on the dispute, and seeking a “divorce” from the U.S. Duterte’s flip-flop left the US without a key ally to advance its cause in South China Sea, and therefore, no choice but to soften its tone.

Never mind that China continues its activities around the Scarborough Shoal. “So what do you want me to do? Declare war against China?” Duterte quoted in Chinatopix asking reporters. “I can but we’ll lose all our military and policemen tomorrow, and we are a destroyed nation. And we cannot assert even a single sentence of any provision that we signed.”  

Then came Kim Jongun’s missile tests to change America’s foreign policy priorities placing the Korean Peninsula and the containment of North Korea ahead of South China Sea; and China can make the difference as to whether America achieves this objective. This means that Washington must appease rather than antagonize Beijing at this point.

While Duterte’s flip flops and Kim Jongun’s missile tests have saved peace for the time being, it’s hard to see how they will save peace in the future, as both leaders are unpredictable.  

That’s why investors should constantly keep an eye on the geopolitical risks in the South China Sea region markets.


Philippines: Supreme Court Judge says the President is constitutionally mandated to defend the national territory — As China lurks in the West Philippine Sea

March 20, 2017
By: – Reporter / @MRamosINQ
/ 12:20 AM March 21, 2017
Supreme court Snr. Associate Justice Antonio Carpio (CDN PHOTO/JUNJIE MENDOZA)

Supreme court Snr. Associate Justice Antonio Carpio (CDN FILE PHOTO/JUNJIE MENDOZA)

President Duterte should file a strong protest to block China’s plan to build on Panatag Shoal, Supreme Court Senior Associate Justice Antonio Carpio said on Monday.

Carpio, a member of the legal team that successfully argued the Philippines’ challenge to China’s claim to nearly all of the South China Sea before the UN-backed Permanent Court of Arbitration in The Hague last year, offered an unsolicited advice to Mr. Duterte after the President said he could not stop Beijing from building permanent structures on Panatag Shoal.

Carpio said the President had at least five options in dealing with China’s provocative actions and incursions into Philippine territory in the South China Sea.

As Commander in Chief of the military, the President is constitutionally mandated to defend the national territory, Carpio said.

“Under RA (Republic Act) No. 9522, Scarborough Shoal is part of [the] Philippine national territory,” he said, referring to the law enacted by Congress in 2008 that established the country’s archipelagic baseline.

The same law declared Panatag Shoal and the Kalayaan Group of Islands in the Spratlys group parts of the Philippines’ territory as defined under Article 121 of the United Nations Convention on the Law of the Sea.

Panatag Shoal, internationally known as Scarborough Shoal, is a rich fishing ground located 230 kilometers west of the coast of Zambales province, well within the 370-km exclusive economic zone (EEZ) of the Philippines known as the West Philippine Sea.

Monitoring station

Xiao Jie, the top Communist Party official in Sansha City that has administered China’s South China Sea claims since 2012, was quoted in the official Hainan Daily on Friday as saying that preparations were under way to build an environmental monitoring station on Panatag Shoal.

The preparatory work on the station and others on five other islands in the South China Sea is among the top priorities of China for 2017, Xiao said.

On Sunday, Mr. Duterte said he could not stop China from building on Panatag Shoal because it was too powerful. “We cannot stop China from doing [these] things,” he told a news conference in Davao City before leaving for Burma (Myanmar).

“What do you want me to do, declare war against China? I can’t. We will lose all our military and policemen tomorrow and we [will be] a destroyed nation,” he said.

Strong protest

“Any statement that the Philippines cannot stop China from building on Scarborough Shoal actually encourages China to build on Scarborough Shoal,” Carpio warned.

He said “the least” Mr. Duterte could do was to lodge a “strong formal protest” against Beijing’s planned construction of an environmental monitoring station on Panatag.

He said Vietnam protested after a Chinese-registered private cruise ship set sail for the Paracels, a group of islands claimed by Hanoi that China, Vietnam and Taiwan also claim as their own.

Carpio said Mr. Duterte could also deploy a Philippine Navy ship to patrol Panatag Shoal and solicit the help of the United States, the Philippines’ oldest military ally, to generate military muscle.

“If the Chinese attack Philippine Navy vessels, then invoke the Philippines-US Mutual Defense Treaty (MDT), which covers any armed attack on Philippine Navy vessels operating in the South China Sea,” Carpio said.

Regarded as the “mother” of all military deals between the two countries, the August 1951 agreement stipulates that “an armed attack on either of the parties is deemed to include an armed attack on the metropolitan territory of either of the parties, or on the island territories under its jurisdiction in the Pacific Ocean, its armed forces, public vessels or aircraft in the Pacific.”

Carpio said the Philippines may follow the lead of Japan and ask the United States to recognize Panatag Shoal as “part of Philippine territory for purposes” of invoking the MDT.

He pointed out that Tokyo had asked the United States to declare the Senkaku Islands in the East China Sea “as part of Japanese territory for purposes of the US-Japan mutual defense treaty.”

“[Panatag Shoal] has been part of Philippine territory even during the American colonial period,” Carpio said.

Mr. Duterte, he said, may opt to consider the Americans’ invitation for the United States and the Philippines to conduct joint naval patrols in the South China Sea.

“This will demonstrate joint Philippine and US determination to prevent China from building on Scarborough Shoal,” Carpio said.

Carpio said Mr. Duterte should “avoid any act, statement or declaration that expressly or impliedly waives Philippine sovereignty to any Philippine territory in the West Philippine Sea.”

“This will preserve for future generations of Filipinos their national patrimony in the West Philippine Sea,” he added.

Mr. Duterte, however, is unlikely to take the US option, having adopted an “independent foreign policy” to steer the Philippines away from US influence and called then US President Barack Obama a “son of a bitch” for criticizing his brutal war on drugs.

He has also scaled back military cooperation between the Philippines and the United States and threatened to scrap the Enhanced Defense Cooperation Agreement that allows US forces increased access to Philippine military bases.

Carpio had earlier warned that China’s reported construction project on Panatag Shoal was a prelude to its plan to limit air travel in the region by declaring an air defense identification zone.

“These developments call for a national debate, and consensus, on how the nation should proceed with its bilateral relations with China,” he said.

The Hague ruling

China seized Panatag Shoal after a two-month standoff with Philippine vessels in 2012, but The Hague court declared in July last year that China’s claim to almost the entire South China Sea had no legal basis and that it had violated the Philippines’ sovereignty and right to explore for resources in waters within its EEZ.

China rejected the ruling, insisting that it had “undisputed sovereignty” over the South China Sea but offered to settle rival claims through bilateral negotiations.

Besides China and the Philippines, Vietnam, Malaysia, Brunei and Taiwan claim parts of the South China Sea, through which $5 trillion in global trade passes every year and where islets, reefs and atolls are believed to be sitting atop vast energy reserves.

Mr. Duterte, a self-styled socialist, upended Philippine foreign policy after winning presidential election last year by deferring assertion of The Hague ruling and making friendly overtures to China and Russia and distancing himself from the United States. —WITH REPORTS FROM AFP AND AP

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Japan-U.S. Ties key in Asia for President-elect Donald Trump — “Expect the Relationship To Change Some”

January 10, 2017


U.S. President-elect Donald Trump on December 3, 2016. REUTERS/Mark Kauzlarich


With U.S. President-elect Donald Trump set to take office on Jan 20, Japan and other Asian countries are closely watching whether he will modify his stance on alliances and give U.S. allies an early and unequivocal reassurance of Washington’s security commitments.

While Trump may request that Japan increase its share for the cost of stationing U.S. forces in the country, as he pledged during the presidential campaign, Trump and Japanese Prime Minister Shinzo Abe are expected to affirm the importance of the Japan-U.S. alliance for peace and prosperity of the Asia-Pacific region.

After meeting with Michael Flynn, the incoming U.S. national security adviser, on Jan 6 in Washington, Katsuyuki Kawai, a special adviser to Abe, said the two sides agreed to “deepen and expand” the alliance under the new U.S. administration.

Kawai and Flynn also affirmed Abe and Trump should meet as early as possible after Trump is sworn in, following recent news reports that Abe plans to visit Washington in late January for talks with Trump.

However, there are uncertainties in Japan about Trump’s commitment to the alliance, given his suggestion during the campaign that he would withdraw U.S. troops from Japan, South Korea and other allies if they do not pay more of the cost of stationing U.S. forces there.

Japan’s Prime Minister Shinzo Abe meets with U.S. President-elect Donald Trump (R) at Trump Tower in Manhattan, New York, U.S., November 17, 2016. Cabinet Public Relations Office/Handout via Reuters

“We defend Japan, we defend Germany, we defend South Korea, we defend Saudi Arabia…they do not pay us,” the Republican businessman said during presidential debate with Democratic nominee Hillary Clinton last year. “We can’t defend Japan, a behemoth, selling us cars by the million.”

Such rhetoric led some experts to suspect that Trump may possess the view that allies are more of a liability than an asset to U.S. interests.

In contrast, outgoing President Barack Obama has valued alliances. He said last month the Japan-U.S. alliance “stands as the cornerstone of peace and stability in the Asia-Pacific and a force for progress around the globe.”

American experts suggest Trump reassure Japan of U.S. commitments under the bilateral security treaty soon after his inauguration, especially as the regional security situation has become tense amid China’s military buildup and assertive territorial claims in the East and South China seas, as well as perceived progress in North Korea’s missile and nuclear weapons development.

More specifically, they urged Trump to affirm, as Obama did unequivocally, that the Senkaku Islands, a group of East China Sea islets administered by Japan but claimed by China and Taiwan, fall under Article 5 of the treaty.

The affirmation means the United States will defend Japan in the event of emergencies over the islands.

“It will be looked at very closely, I think, not just by Japan but by other players in the region including China as whether or not there is continuity in U.S. commitment toward Japan,” said Rust Deming, an adjunct professor of Japan studies at Johns Hopkins School of Advanced International Studies.

Deming, a former deputy chief of mission of the United States to Japan, said that to underscore such continuity, he hopes new secretaries of state and defense will visit Japan at an early date after the launch of a Trump administration.

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President-elect Donald Trump stands with Alibaba Executive Chairman Jack Ma as they walk to speak with reporters after a meeting at Trump Tower. Evan Vucci/AP Images
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As for Trump’s repeated calls for Japan and other U.S. allies to contribute more to deployment costs for the U.S. military, or else defend themselves, Abe is expected to explain to Trump that Japan regards its sharing of about 75 percent of the cost of stationing U.S. troops in the country as an appropriate level.

“We should think that both Japan and the United States benefit from the role played by U.S. forces stationed in Japan,” Abe said at a parliamentary session in November. “U.S. forces in Japan are the key to Washington’s forward deployment strategy and serve to protect various U.S. interests.”

As if to bolster the prime minister’s view, a telephone poll conducted in Japan by Kyodo News in late November showed that 86.1 percent of respondents said they do not think Japan should pay more for hosting U.S. troops in the country.

Bruce Klingner, the senior research fellow for Northeast Asia at the Heritage Foundation, a Washington think tank, stressed merits for the United States, as a Pacific nation, to maintain military presence in Japan and other parts of the economically dynamic region.

“It’s not only cheaper to have, in many cases, troops over there rather than here. But far more important than the dollar cost, they are there for our interest including maintaining peace and stability in Asia,” Klingner said.

“And you can’t put a cost on the deterrence that they have—wars they deter, provocative actions they deter.”


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North Korea tests a long range ballistic missile

Trump Navy will be biggest fleet expansion since the Cold War

Donald Trump is demanding an even larger naval fleet than what he had promoted on the campaign trail. The 355-ship proposal could require an additional $5bn to $5.5bn in annual spending in the Navy’s 30-year projection. The Navy currently has 274 deployable ships, still fewer than it’s old goal of 308 ships.