Posts Tagged ‘Strait of Malacca’

South China Sea: Vietnam’s Submarines Patrol as Deterrent To China’s Navy

January 7, 2016

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Vietnamese Navy Kilo attack submarine HQ-182 Hanoi.

By 

SOUTH-EAST ASIA CORRESPONDENT FOR FAIRFAX MEDIA

Bangkok: The first of Vietnam’s new advanced Kilo-class submarines have begun patrolling disputed waters of the South China Sea, as deterrents to China’s 10 times-bigger navy, Vietnamese officials and diplomatic sources say.

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Vietnam is also expanding use of its strategically important Cam Ranh Bay deep-water harbour, where six of the submarines will be based by 2017.

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A submarine can be seen in the middle pier at Cam Ranh Bay in Vietnam. Photo: Google Maps

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The arrival of the submarines from Russia is a key part of Vietnam’s biggest arms build-up since the height of the Vietnam War, which could significantly change the balance of power in the flashpoint South China Sea, analysts say.

As concern has increased about China’s aggressive claims to almost all of the disputed water, Vietnam has been spending billions of dollars developing a submarine fleet, shore-based artillery and missile systems, multirole jet fighters and fast-attack ships, most of which have being bought from Russia and India.

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Vietnam was also seeking more Russian jet-fighter bombers and was in talks with European and US arms manufacturers to buy fighter and maritime patrol planes and unarmed surveillance drones, Reuters said, quoting unnamed sources.
Cam Ranh Bay has been described as Vietnam’s “ace up its sleeve” against China’s vastly larger and better-equipped navy, air force and army.


Cam Ranh Bay has been described as Vietnam’s “ace up its sleeve” against China’s vastly larger and better-equipped navy, air force and army. Photo: Google Maps

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The country has also recently upgraded and expanded air defences, including obtaining early-warning surveillance radar from Israel and advanced S-300 surface-to-air missile batteries from Russia.

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Vietnam’s military spending had outstripped its south-east Asian neighbours over the past decade, the Stockholm International Peace Research Institute said.

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Carlyle Thayer, a professor from Australia’s Defence Force Academy in Canberra, said when all six of Vietnam’s submarines were operational they would provide a potent strike capability with Vietnam’s anti-ship and land attack cruise missiles, adding greatly to the country’s ability to confront an enemy in its waters.

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“These weapons systems should enable Vietnam to make it extremely costly for China to conduct maritime operations within a 200 to 300-nautical-mile band of water along Vietnam’s coast, from the Vietnam-China border in the north-east to around Da Nang in central Vietnam, if not further south,” Professor Thayer said in a Thayer Consultancy background briefing paper.

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Professor Thayer, an expert on Vietnam’s military and the South China Sea dispute, said Vietnam’s ability to deploy stealthily would be put at risk if China permanently stationed anti-submarine warfare aircraft on Fiery Cross Reef in the Spratly Islands, where China has built a 3000-metre airstrip and some basic infrastructure.

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China landed a civilian plane on the strip on January 2, sparking a furious response from Vietnam, which labelled it a “serious infringement of the sovereignty of Vietnam”.

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Analysts said it was difficult to gauge Vietnam’s actual capabilities and how well they were integrating complex new weapons systems.

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But Professor Thayer said when all of Vietnam’s current and future arms acquisitions were taken into account, “it is evident that Vietnam has taken major steps to develop a robust capacity to resist maritime intervention by a hostile power”.

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The diesel-electric submarines, also known as Varshavyanka-class, are designed for anti-submarine warfare, anti-shipping and anti-surface ship warfare, patrol and reconnaissance, and for the defence of naval bases and coastlines.

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They can operate in the South China’s Sea’s shallow water.

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Analysts said Cam Ranh Bay was Vietnam’s “ace up its sleeve” against China’s vastly larger and better-equipped navy, air force and army, against which it fought a bloody war in 1979.

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Vietnam has signalled it will invite non-Chinese navies such as Russia, the United States and Japan to send ships and submarines to the harbour for maintenance and logistics support.

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The harbour, which was the US’s centre of naval operations during the Vietnam War, provides ships easy access to the disputed water and the Indian Ocean through the Strait of Malacca.

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The International Crisis Group has warned that the South China Sea risks becoming a theatre of big-power competition in 2016, as the US challenges China’s large-scale land reclamation and construction on disputed reefs, which has set Beijing on a collision course with several south-east Asian nations.

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A tribunal in The Hague is expected to announce its verdict in a landmark case filed by the Philippines accusing China of violating international law in the South China Sea, further raising tensions.
Malaysia, Brunei, Taiwan, Vietnam, the Philippines and China have overlapping claims to the territory.

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More than $US5 trillion ($7 trillion) of trade passes every year through the South China Sea, which is also believed to hold huge deposits of oil and gas.

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The Kilo-class submarines are considered one of the quietest and have been upgraded constantly since the 1980s. Analysts say they are more technologically advanced than other Russian-made submarines in China’s fleet.

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– with Reuters

Read more: http://www.smh.com.au/world/vietnamese-subs-deployed-to-south-china-sea-20160107-gm0z6a.html#ixzz3wWq4BX3f
Follow us: @smh on Twitter | sydneymorningherald on Facebook

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A Vietnamese fishing boat Dna 90152 sinking May 2014 after being rammed intentionally by a Chinese Coast Guard vessel. Vietnam and the Philippines have reported numerous acts of violence against them at the hands of Chinese nationals during 2013- 2015. On January 1, 2016, Vietnam accused China again of intentionally ramming (twice) a Vietnamese fishing boat that sank but was salvaged.

The fishing boat QNg 98459 (R) of Huynh Van Thach is pictured being towed ashore after it was rammed by a Chinese vessel (twice) and salvaged. The boat seen here one the left towed the damage craft into port.
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Chinese-led group to build Indian Ocean port, industrial park, on the Bay of Bengal

January 6, 2016

MOTOKAZU MATSUI, Nikkei staff writer

The Kyaukphyu economic zone has an oil and gas pipeline to China.

YANGON — Myanmar has chosen a consortium of mostly Chinese companies to develop a special economic zone sitting near plentiful offshore natural gas reserves.

The Kyaukphyu zone, in the western state of Rakhine, already has an oil and gas pipeline connecting it to China, whose influence over southern neighbor Myanmar could grow as a result of the new investments.

Situated on the Indian Ocean coast, roughly 1,700-hectare site was one of three special economic zones designated in 2014. Companies investing there can qualify for tax incentives.
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To speed up the zone’s development, Myanmar’s government in 2014 decided to hold tenders for an industrial park and a deep-water port to be built and operated as public-private partnerships.

The Chinese-led consortium beat 10 or so other bidders to win the development rights late last year. The six companies in the group include state-owned conglomerate Citic, China Harbour Engineering and the Charoen Pokphand group, a Thai conglomerate.

By 2025, the consortium plans to build a roughly 1,000-hectare industrial park and Myanmar’s highest-capacity port, with facilities able to handle 7 million 20-foot-equivalent-units of cargo a year. Total project costs are seen running to a few billion dollars. The projects are expected to lead to the creation of some 100,000 jobs.

Kyaukphyu holds strategic importance for Chinese energy security. China National Petroleum Corp. completed a pipeline linking the coast there with the Chinese inland city of Chongqing in January 2015. Middle Eastern crude and gas drilled offshore flow through it to China, slashing transport time compared with the heavily plied Strait of Malacca shipping route. The Citic-led consortium’s bid thus accords with China’s desire to solidify its foothold in Kyaukphyu.

China sidled up to Myanmar during the Southeast Asian nation’s long years of international isolation under military rule, providing investment in pipelines, hydropower plants and other infrastructure. But Chinese influence over Myanmar has waned in relative terms since the latter embraced civilian government in 2011 and renewed relations with the international community.

This shift could accelerate with the opposition National League for Democracy’s landslide in this past November’s parliamentary elections. The NLD will form a new government this spring, and its leader, Western-leaning democracy activist Aung San Suu Kyi, is expected to seek to move the country out of China’s orbit. For China, Kyaukphyu represents a way to stay connected after the change in government.

Work is underway on Myanmar’s two other special economic zones. The Thilawa zone sits near Yangon, the country’s most populous city, while Dawei is in the southeast, near the Thai border. Japan’s public and private sectors are cooperating in industrial park development and other aspects of these projects.

http://asia.nikkei.com/Politics-Economy/International-Relations/Chinese-led-group-to-build-Indian-Ocean-port-industrial-park

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Xi Jinping in Royal Carriage, London, UK, October 20, 2015

Why Is the South China Sea So Important?

December 25, 2015

map-malaysia

The South China Sea region

Located in the center of the South China Sea is a small, innocuous group of uninhabited island atolls named the Spratly Islands.

From first observation, this island group would be deemed worthless and uninhabitable. This observation would be grossly in error…

Exactly why is the South China Sea important?

These islands sit on the edge of the most lucrative fishing area in the South China Sea. They are also on the edge of one of the most oil- and gas-rich areas yet discovered.

And the Spratlys are claimed by no fewer than six different countries.

“This is definitely a situation you want to watch closely,” Money Morning Executive Editor Bill Patalon told readers on Dec. 8. “Any kind of a major ‘incident’ there will clearly have a big – and negative – impact on the world financial markets.”

Here’s a look at the irresistible treasures that make ownership of the South China Sea crucial…

Why Is the South China Sea Important? It’s a Vital Shipping Route

china-sea

Louisa Reef, in the southern reaches of the Spratly Islands

The South China Sea region includes more than 200 small islands, rocks, and reefs, with the majority located in the Paracel and Spratly Island chains. Many of these islands are partially submerged islets, rocks, and reefs that are little more than shipping hazards not suitable for habitation; the total land area of the Spratly Islands is less than 3 square miles.

The islands are important, however, for strategic and political reasons. Ownership claims to them are used to bolster claims to the surrounding sea and its resources.

To that end, the region is the world’s second-busiest international sea lane – more than half of the world’s supertanker traffic and 30% of all global maritime trade passes through its waters. Tanker traffic through the Strait of Malacca leading into the South China Sea is more than three times greater than Suez Canal traffic, and well over five times more than the Panama Canal.

Virtually all shipping that passes through the Malacca and Sunda Straits must pass near the Spratlys. The large volume of shipping in the South China Sea/Strait of Malacca littoral has created opportunities for attacks on merchant shipping. With the exception of 2007 to 2012, when piracy in East Africa spiked, the South China Sea has been the most piracy-prone region in the world, with up to 150 attacks annually, according to the Center for International Maritime Security on Sept. 6, 2014.

Shipping (by tonnage) in the South China Sea is dominated by raw materials en route to East Asian countries. Tonnage via Malacca and the Spratly Islands is dominated by liquid bulk such as crude oil and liquefied natural gas (LNG), with dry bulk (mostly coal and iron ore) in second place. LNG shipments through the South China Sea constitute two-thirds of the world’s overall LNG trade. Nearly two-thirds of the tonnage passing through the Strait of Malacca, and half of the volume passing the Spratly Islands, is crude oil from the Persian Gulf. Rising Asian oil demand could result in a doubling of these flows over the next two decades.

Additionally, the Spratly’s themselves contain oil and gas resources strategically located near some of the world’s largest energy-consuming countries, such as China, India, and Japan.

In its World Oil Outlook released on Dec. 23, 2015, OPEC estimated that global energy demand will increase 50% by 2040, with gas and oil expected to supply roughly 53% of energy demands.

The Asian region accounted for much of that total demand. In 2015, total global oil demand reached 94.6 million barrels per day (BPD). Nearly a third of total demand went to the Asian-Pacific and Americas regions, according to Statista.

Imports to sate Asia’s growing energy needs will largely pass through the strategic Strait of Malacca into the South China Sea. As it is, over half of the world’s merchant fleet (by tonnage) sails through the South China Sea every year.

Read the rest:

http://moneymorning.com/2015/12/23/why-is-the-south-china-sea-important/

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South China Sea: China offers economic perks to Malaysia as it tries to ease tensions

November 24, 2015

China offers to pay Malaysia for support of Silk Road, South China Sea projects

Premier Li Keqiang shakes hands with Malaysian Prime Minister Najib Razak during their talks in Kuala Lumpur on Monday. Photo: Xinhua

By Kristine Kwok in Kuala Lumpur
South China Morning Post

Premier Li Keqiang offered Malaysia a string of economic perks as he wrapped up a four-day trip to smooth tensions in the South China Sea on Monday.

China would buy more of Malaysia’s treasury bonds, give it a 50 billion yuan (HK$60.6 billion) quota to invest in the Chinese capital market, and help build cheaper infrastructure, Li told business elites in Kuala Lumpur.

“Uncertainties in international financial markets are emerging, some countries … have seen sluggish or negative growth, high inflation rates and sharp depreciation of their currency,” the premier said.

“To ensure steady growth in trade relations between China and Malaysia, it is imperative to stabilise the financial market.”

Read more: PLA Navy gains use of port in Malaysia close to Spratly islands

Malaysia’s economy has suffered from a sinking currency and a slump in exports, and a corruption scandal surrounding Malaysian Prime Minister Najib Razak has dimmed investors’ confidence in the country’s leadership.

Over in China, the mainland stock market underwent a few waves of turbulence in the summer as many questioned Beijing’s ability to manage the country’s economy.

The 50 billion yuan quota will be granted under the Qualified Foreign Institutional Investor scheme, one of the key channels for foreign investment in China.

“The central bank of Malaysia had been looking forward to this, and we are surprised by the huge size of the quota,” said Ong Ka Ting, Malaysia’s economic envoy to China.

Li also called for greater cooperation in infrastructure, stressing that China could cut construction costs by providing cheaper materials. Beijing has been pushing to build infrastructure across the region as part of efforts to extend the country’s economic clout. Prior to his official visit yesterday, Li was in the Southeast Asian country to attend a series of regional meetings with the Association of Southeast Asian Nations over the weekend.

Tensions flared during the summits as Beijing and Washington traded barbs over China’s island reclamation projects in the South China Sea.

Chinese dredging vessels are purportedly seen in the waters around Mischief Reef in the disputed Spratly Islands in the South China Sea in an image provided by the US Navy in May. Photo: Reuters

Li said during the summits that China upheld peace and stability in the busy waterways, and that countries outside the region – an indirect reference to the United States – should avoid stirring tensions in the sea. Malaysia has recently been more vocal about China’s encroachment in the oil-rich region.

To drive home his message, Li visited Malacca, a port city next to the strategically important Strait of Malacca, on Sunday. The narrow strip of water connected to the South China Sea serves as a vital nexus in shipping China’s oil supply and manufacture exports. It was also Ming dynasty seafarer Zheng He’s docking place during his expeditions centuries ago.

At Monday’s business forum, Li called Zheng an “envoy of peace” as his missions were “for resolving differences”.

Meanwhile, Asean leaders released a statement expressing concern over the possibility of Beijing’s further militarisation in the South China Sea.

Li also said China was ready to cooperate with Malaysia and other countries to counter terrorism in order to “provide a secure environment for business”.

Malaysia has been a popular transit point for Chinese Uygurs fleeing Xinjiang to Turkey. Rights groups and exiles say they left China to escape its repressive policies, but Beijing says many are on their way to join the Islamic State in Syria. Malaysia has been accused to deporting Uygurs back to China.

Oh Ei-sun, a senior fellow with the S. Rajaratnam School of International Studies in Singapore, said the recent Paris attacks and the execution of a Chinese hostage by Isis gave Malaysia more excuse to deport Uygurs.

http://www.scmp.com/news/china/diplomacy-defence/article/1882474/china-offers-economic-perks-malaysia-it-tries-ease

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From July 2012:

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South China Sea: How China’s military buildup threatens the US

October 13, 2015

By Clay Dillow, special to CNBC.com

As China continues to pour billions into its massive military buildup, a pressing concern is its territorial ambitions in the South China Sea. Within the next two weeks the Pentagon is expected to send U.S. Navy warships to the area that will steam past China’s artificial South China Sea islands in the first direct challenge to China’s claims in the region.

The stakes are high, and the U.S. naval action could drive them higher still. Trillions in global seaborne trade transit the South China Sea each year (including roughly $1.2 trillion in goods bound for U.S. ports), but the vast majority of East Asia’s energy resources pass through the Strait of Malacca and South China Sea as well.

The sea itself could also be a source of vast mineral wealth. The U.S. Energy Information Administration estimates that there could be 11 billion barrels of oil and 190 trillion cubic feet of natural gas lurking in the seabed there.

If the naval maneuvers are approved, they would mark a material escalation in what, up to this point, has been largely a war of words between U.S. and Chinese officials.

During a state visit to the White House last month, Chinese President Xi Jinping and President Obama could not find common ground on this issue.

Xi was defiant in his defense of China’s activities in the South China Sea, which include using a fleet of dredging ships to build a string of artificial islands atop various reefs in the region. Those islands have since become home to airstrips, helipads and other infrastructure. Beijing has also claimed the islands and a 12-nautical-mile radius surrounding each one as sovereign Chinese territory.

“We have the right to uphold our own territorial sovereignty and lawful and legitimate maritime rights and interests,” Xi said during remarks in the Rose Garden, defiantly defending its territorial claims in the South China Sea and its building of artificial islands there with military buildings, ports and airstrips to support air and sea patrols of the area. Xi went on to add that China’s activities in the strategically important waterway “do not target or impact any country, and China does not intend to pursue militarization.”

Read MoreUS, China clash over dispute in the South China Sea

China's People's Liberation Army Navy (PLAN) soldiers roll on their armored vehicles to Tiananmen Square during the military parade marking the 70th anniversary of the end of World War II, in Beijing, Sept. 3, 2015.

China’s People’s Liberation Army Navy (PLAN) soldiers roll on their armored vehicles to Tiananmen Square during the military parade marking the 70th anniversary of the end of World War II, in Beijing, Sept. 3, 2015.

Exactly how this latest escalation plays out will say a lot about how China’s massive two-decade military buildup has altered the strategic landscape in the region.

It also heightens the risk of miscommunication, military accidents or other incidents that could have potentially volatile consequences in a waterway through which more than $5 trillion in global seaborne commerce passes annually.

“The likelihood of increasing tensions is high, in part because neither side has demonstrated a willingness to back down,” said Roy Kamphausen, senior vice president for research at the Washington, D.C., offices of the National Bureau of Asian Research. “So the conditions for military accidents, the conditions under which that might occur, are increasing.”

Read MoreChina’s president says China military is defensive

China’s territorial ambitions in the South China Sea have long been a geopolitical sticking point for nations in the region. Several neighboring countries — including Vietnam, Malaysia, the Philippines and others — have made competing claims in the South China Sea, both for sovereignty over far-flung island chains and overlapping zones of economic control.

“There should be no doubt that the United States Pacific Fleet remains as committed to freedom of the seas as ever.”-Admiral Scott Swift, commander of the U.S. Navy’s Pacific Fleet

As China’s economy has expanded, its security interests have ballooned as well, making the South China Sea a simultaneous source of financial, energy and security anxiety for Beijing. And while the U.S. has for decades asserted that it maintains the right to operate its navy anywhere in the world outside the explicit sovereign territory of another nation, Kamphausen says, China sees a range of national security vulnerabilities along its lengthy maritime borders.

“China is uncomfortable with the idea that the U.S. has freedom of movement inside the first island chain,” says Mira Rapp-Hooper, a senior fellow with the Asia-Pacific Security Program at the Center for a New American Security, referring to the most immediate string of major islands off the east coast of the Asian mainland, including Japan, Taiwan and the northern Philippines. “The U.S. sees its security in the Pacific tied to having that access. The idea that China would be able to impede access to the U.S. Navy is what has U.S. military planners riled up.”

Military buildup by the numbers

China’s military has spent the last two decades developing a military that can do exactly that.

Over the past 20 years China has increased its military budget by double digits almost every year. While that rate of growth appears to be shrinking alongside China’s larger economic slowdown, analysts at security watchdog IHS Jane’s predict that Chinese defense budget growth will continue to increase roughly 7 percent annually through the end of the decade.

By 2020, Beijing will be spending $260 billion on its military (compared with $145 billion in 2015). While the $612 billion 2016 U.S. defense budget working its way through Congress this week dwarfs China’s own defense spending, that sustained growth means China will double its defense spending over the course of this decade.

Read MoreEyes on China, the Philippines may invite US back to Subic Bay

Much of that spending has gone to Chinese naval assets and other standoff weapons designed to keep foreign navies — and especially the U.S. Navy — at bay. The People’s Liberation Army Navy (PLAN) has added dozens of modern destroyers, frigates and submarines to its fleet and begun construction of its own indigenous aircraft carrier.

More worrisome to U.S. naval planners and their allies in the region are a range of new land-based ballistic missiles designed to sink naval ships or destroy airfields. One such missile, the DF-21D, is commonly known as the carrier killer. Security analysts believe another, the secretive DF-26C, has enough range to reach U.S. airbases on the Central Pacific island of Guam, thousands of kilometers away.

China displayed a host of military hardware including Dong Feng DF-21D ballistic missiles in a military parade celebrating the 70th anniversary of the end of World War II. The DF-21D is called the “carrier killer.” Xinhua photo

While China’s growing military capability has not erupted into a regional arms race, it has impacted priorities in the region. This year Japan passed measures allowing it to take a greater military role in overseas conflicts, while proposing its largest national defense budget ever — largely to augment its naval and island defense capabilities. The U.S. is easing a longstanding arms embargo on Vietnam, sending new naval patrol vessels to the Philippines and considering reopening air and naval bases there.

A shooter signals to the pilot of a U.S. Navy F/A-18 aircraft on the runway of the U.S. Navy aircraft carrier USS George Washington during a tour of the ship in the South China Sea. (File photo)

A shooter signals to the pilot of a U.S. Navy F/A-18 aircraft on the runway of the U.S. Navy aircraft carrier USS George Washington during a tour of the ship in the South China Sea. (File photo)

How the U.S. Navy and others in the region choose to address China’s ongoing island-building and other activities in the South China Sea will lend some insight into how much China’s new arsenal has tipped the balance of military power in the region.

Two decades ago, in the aftermath of Chinese ballistic missile tests aimed at intimidating Taiwan, the U.S. registered its disapproval by parking two aircraft-carrier strike groups off the Chinese mainland. Following China’s two-decade military buildup, such brazen displays of deterrent power are less likely.

The sending of U.S. warships through Chinese-claimed waters would send a similar if not so demonstrative message. “There should be no doubt that the United States Pacific Fleet remains as committed to freedom of the seas as ever,” Admiral Scott Swift, commander of the U.S. Navy’s Pacific Fleet, told an audience last Tuesday at a maritime conference in Sydney. He added: “We will continue to defend and protect it through routine presence, exercises with allies and partners, and freedom of navigation operations.”

—By Clay Dillow, special to CNBC.com

http://www.cnbc.com/2015/10/12/chinas-military-and-naval-buildup-in-south-china-sea-threatens-the-us.html

China sees the South China Sea as the necessary launching point of the New Silk Road — and the China Dream.

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In this Sept. 14, 2014 photo, a Chinese navy frigate cruise near the paracel islands of Sansha prefecture of China’s Hainan province. A cheer erupted on board at the sight of the distant land, and the other passengers scurried to take pictures of each other at the railing holding Chinaís bright red flag. A few miles away, a Chinese navy frigate cruised by silently, part of the countryís continuing watch over the tiny islands it has long claimed as part of its territory. (AP Photo/Peng Peng)

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An April photo released by the Asia Maritime Transparency Initiative department at the Center for Strategic and International Studies think tank shows a satellite image of what is claimed to be an airstrip under construction at Fiery Cross Reef in the disputed South China Sea.
An April photo released by the Asia Maritime Transparency Initiative department at the Center for Strategic and International Studies think tank shows a satellite image of what is claimed to be an airstrip under construction at Fiery Cross Reef in the disputed South China Sea. It is not at all clear that China had a valid claim to this sea area when it started work. Photo:digitalglobe/Agence France-Presse/Getty Images

A Chinese vessel (L) is pictured ramming Vietnamese fisheries surveillance ship KN-951 in Vietnam’s waters on June 24, 2014. Tuoi Tre photo

Screen Grab of a China Coast Guard vessel ramming a Vietnamese sip during May, 2014

China dredger Tian Jing Hao, “The Reef Eater”: The Philippines has said China’s huge dredgers are demolishing square miles of coral reefs in the South China Sea for island building. The Philippines, Vietnam and others contest China’s claims of ownership of the several South China Sea reefs, islets and shoals. China doesn’t care one bit that environmentalists object to their coal reef destruction. The end justifies the means.

India’s Incremental Balancing in the South China Sea

September 29, 2015

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INS Kochi.

By David Scott

Despite not being geographically in the South China Sea, India is increasingly being recognised as an actor in the balance of power in the South China Sea (Muni 2011; Puri and Sahgal 2011; Sakhuja 2011; Kaushiva 2012; Salil 2013; Majumdar 2013; Chaturvedy 2014; Baruah 2014; Chaturvedy 2015). The reasons for India’s involvement remain twofold – entwined geopolitical China concerns and geoeconomic energy security concerns (Das 2013; Scott 2013).

India’s Strategic Interest

At the government level the South China Sea has been classified as within India’s extended neighborhood for over a decade, for the first time in February 2004 by Yashwant Sinha the then External Affairs Minister. When formulated in the mid-1990s, India’s Look East Policy originally focused on economic cooperation in Southeast Asia channeled through ASEAN. However, a Look East-2 focus in the 2000s cast India’s horizons more widely across the South China Sea into the Western Pacific/East Asia, with more overt security consideration. Accordingly, the Indian Navy’s 2007 doctrine statement India’s Maritime Military Strategy defined the South China Sea as an area of “strategic interest” to India. This leaves India with interests to be gained, maintained and if necessary defended – primarily through the Indian navy’s unilateral presence and bilateral security arrangements. India’s Chief of Naval Staff Admiral Joshi made that clear in December 2012 when he announced that the Indian navy could and would be deployed to the South China Sea to defend Indian energy security interests there. By 2013, the increasing adoption of the Indo-Pacific as a strategic framework for India gave the South China Sea closer geopolitical relevance for India. Narendra Modi’s arrival in power in May 2014 saw his Act East readiness to strengthen India’s military and economic position in the South China Sea cutting across China’s own drive across the South China Sea (Chang 2015).

India’s “Balancing”

In international relations (IR) terms, India is hedging towards China; simultaneously pursuing economic engagement together with military balancing. A further two-level analysis is in play whereby there is some global China-India political cooperation with regard to restraining US unipolarity and replacing it with a more multipolar system, and with regard to restructuring some international economic institutions. However, at the regional level security competition between India and China is far more apparent. The South China Sea is an acute example of this regional level friction now being seen between these two Asian giants (Baruah 2015). Indian unease with Chinese assertiveness in the South China is why India has started to raise the South China issue at various regional settings like the India-ASEAN Delhi Dialogue in 2014 and 2015, the ASEAN Regional Forum in 2014, and the East Asia Summit in 2013 and 2014. Chinese actions in the South China Sea continued to attract Indian criticism in 2015; especially China’s Great Wall of Sand atolls to islands reclamation-militarisation project (Chaudhury 2015a), and China’s rejection of the Philippines taking the South China Sea issue to the UNCLOS tribunal (Valente 2015).

India’s balancing partly consists of internal balancing whereby India is building up its own military strength. This has been most effective in the maritime sphere with the creation of a blue water navy increasingly able to operate at a distance, beyond the Indian Ocean into the South China Sea. India’s projection of maritime power into the South China Sea is further underpinned by its build up of the Andaman and Nicobar Command, which functions as a Far East Naval Command (FENC) looking down the Strait of Malacca into the South China Sea. The inauguration in July 2012 of the air marine station at INS Baaz, the most southerly point of the Andaman islands, enables India to conduct surveillance operations into the South China Sea.

Admittedly, India is not really able to block China from appearing in the Indian Ocean, but it can respond by going into China’s backyard of the South China Sea, as an example of lateral pressure theory (Weimar 2013). The Indian navy has been deploying through the South China since 2000, generally twice a year, which has involved its own unilateral practicing, as well as bilateral port calls and exercises with local actors, particularly Vietnam. Such deployments attract Chinese criticism, as with the so-called INS Shardul incident of July 2011, where the Indian ship was supposedly radioed from nearby Chinese vessels to vacate these “Chinese” waters. India though continues to deploy into such disputed waters, and China continues to warn India about such appearances (Patranobis 2015).

India’s balancing also consists of external balancing whereby India has been strengthening security links with other countries who are similarly concerned about China. Such balancing is already noticeable in the South China Sea, primarily through strengthened military and maritime arrangements with Vietnam, and secondarily through strengthened military and maritime links with the Philippines. This China-centric balancing is also noticeable outside the South China Sea where India has established security partnerships with the US, Australia and Japan – with such wider partnerships starting to be applied to the South China Sea.

This range of external balancing is not classic Cold War hard explicit containment alliances, but rather represent new post-Cold War soft implicit balancing partnerships. Nevertheless, India’s strategic-military arrangements with Vietnam, the US, Japan and Australia are implicitly China-centric, with an unstated but nevertheless apparent China-focus, and with increasing significance for the balance of power in the South China Sea.

India’s Partners for the South China Sea

With Vietnam, India’s “diamond on the South China Sea” (Brewster 2009), India’s Cooperation Framework agreement of 2003 and strategic partnership proclaimed in 2007 has become strengthened in its military side, in the wake of China’s growing strength in the South China Sea. This partnership has been given teeth in recent years through military supplies, especially maritime, from India to Vietnam, which has attracted Chinese criticism (Bagchi 2014). Port facilities have also been extended by Vietnam to India at Cam Ranh Bay. The pace of India-Vietnam relations have quickened under the Modi administration (Thayer 2014), with a “pivot” (Karnad 2014) to Vietnam on the part of India, leaving an “axis” (Patil 2014) that is now implicitly China-centric. A significant development under the Modi administration is how the South China Sea has featured in their Joint Statements drawn up in President Mukherjee’s trip to Vietnam in September 2014 and the visit by Vietnam’s Prime Minister to India in October 2014. These Joint Statements’ formulaic reiteration of freedom of navigation in the South China Sea, and adherence to international law, are an implicit criticism of China. The October 2014 visit also saw a slew of increased military assistance programmes by India to the Vietnamese navy.

Geopolitically, Vietnam serves as a barrier to Chinese domination of the South China Sea, from where Beijing would be able to project power up through the Strait of Malacca into the Indian Ocean. From India’s point of view, Vietnam can put pressure on China’s southern flanks, and give China a two-front challenge. India’s “Vietnam card” against China in the South China Sea serves as some counterpart to China’s “Pakistan Card” against India in the Indian Ocean.

Geoeconomically, India seeks access to oil fields in Vietnamese-controlled waters. The problem has been that some of these exploration plots have been in waters claimed by China. India says it is not taking sides on sovereignty issues in the South China Sea, but yet its decision to sign deals with Vietnam in disputed waters thereby implicitly support Vietnam’s claimed position against China. This generated heated Chinese comments during 2011, with further fields in these disputed waters allocated to Indian exploration during the visit of the Vietnamese Prime Minister to India in October 2014. India’s energy involvement, via Vietnam, in the South China Sea continues to rankle China (Parashar 2015b).

In turn, India has moved into closer bilateral security links with the US, Japan and Australia. Of particular significance is how the South China Sea was a feature of India-US defence discussions in June 2015, when the Secretary of Defense Ashton Carter visited India and further India-US defence agreements were initialled (Chaudhury 2015). It is also significant that the US Pacific Command (PACOM) is now openly egging on India to maintain its presence in the South China Sea, “the South China seas are international waters and India should be able to operate freely wherever India wants to operate. If that means the South China Sea, then get in there and do that” (Harris cited in Som 2015). India has also embraced closer security links with Japan, including bilateral JIMEX Japan-India Maritime exercises in the Western Pacific (in 2012 and 2014) and in the Bay of Bengal (in 2013 and 2015). Finally, India has embraced closer security links with Australia, including naval exercises in the Bay of Bengal in September 2015.

In turn, India has been moving into these Indo-Pacific trilaterals. The India-Japan-US (IJUS) trilateral was formally set up in December 2011, and has been “revitalised” (Kapila 2014) in the wake of Chinese assertiveness in the South China Sea. That mechanism already involving India in trilateral exercises with the US and Japanese navies in the Western Pacific (2007, 2009, 2013) and Bay of Bengal (2007, 2015). As part of its wider activism, the Modi administration also complemented its IJUS involvement with the India-Japan-Australia (IJA) trilateral set up at Foreign Secretary level in June 2015. This first IJA meeting was dominated by questions of maritime security, the South China Sea and desirability of holding trilateral naval exercises in the future. From an international relations point of view these Indo-Pacific trilaterals are further examples of what can be styled minilateralism, which is in-between bilateralism and multilateralism.

Conclusions

Certain developments would affect India’s role in the balance of power in the South China Sea, and which China would not welcome. A small but significant development would be if and when India starts carrying out such bilateral and trilateral exercises in the South China Sea with the US, Japan and Australia. Precedents for this are the exercise formats with them that India is already involved with in the Indian Ocean and the Western Pacific, and which those other three states have already conducted between themselves in the South China Sea in July 2011. Greater use of Cam Ranh deep water bay by the Indian navy would also be significant. A further development would be if and when India starts conducting fuller military exercises in the South China Sea with Vietnam. Precedents for India-Vietnam naval exercises are India’s SIMBEX military exercises with Singapore in the South China Sea that have been a regular biannual feature since 2005 (Collin 2013), and Vietnam’s participation in the 2010 MILAN exercises held by India in the Bay of Bengal. Finally, a further China-centric trilateral permutation with immediate relevance for the South China Sea would be the India-Japan-Vietnam format suggested by Panda (2014).

Admittedly, elements of engagement between India and China might develop some further momentum under the naval dialogue mechanism that was haltingly mooted in 2015. South China Sea matters would be an obvious agenda item for it, but there are little signs of that dialogue mechanism developing much impetus. Instead what is more likely is that India will increasingly impact on the South China Sea balance of power through its own increased presence and range of strategic security partnerships in the region. This is what IR realism would predict; exemplified in John Mearsheimer’s speech in Sydney where he forecast future balancing behaviour as being “certain” (Mearsheimer 2010: 390) between India, Vietnam, the US, Japan and Australia in the face of China’s regional rise. Five years on and this strategic geometry is coming to pass in the South China Sea, and in which India is doing its bit.

http://www.indrastra.com/2015/09/OPINION-India-Balancing-in-South-China-Sea-by-David-Scott-263.html

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About The Author:

David Scott, is an ongoing consultant-analyst and prolific writer on India and China foreign policy, and on the geopolitics and international relations of the Indo-Pacific and Asia-Pacific, having retired from teaching at Brunel University in 2015.

This article was first published at E-International Relations Website on July 26, 2015 and it has been reproduced under Creative Commons License 3.0

 

References: 

Bagchi, Indrani. (2014) ‘India ignores China’s frown, offers defence boost to Vietnam’, Times of India, October 29.

Baruah, Darshana. (2014) ‘South China Sea: Time for India to mark its presence’,

RSIS Commentary, 225, November 17.

Baruah, Darshana. (2015) ‘Asia’s Nightmare: Could India and China Clash over the South China Sea?’, July 14, National Interest.

Brewster, David. ‘India’s strategic partnership with Vietnam: The search for a diamond on the South China Sea?’, Asian Security, 5(1): 24-44.

Chang, Gordon. (2015) ‘Clash of titans: India’s “Act East” Policy meets China’s “Maritime Silk Road” in the South China Sea’, Journal of Political Risk, 3(7), June.

Chaturvedy, Rajeev. (2014) ‘Is India making waves in South China Sea?’, ISAS Working Paper, 185, March 26.

Chaturvedy, Rajeev. (2015) ‘South China Sea: India’s maritime gateway to the Pacific’, Strategic Analysis, 39(4): 360-377.

Chaudhury, Dipanjan (2015a) “Chinese Military Bases in South China Sea Worries India,” Economic Times (Mumbai), March 26, 2015.

Chaudhury, Dipanjan. (2015b) ‘India, US discuss measures for South China Sea stability amid Chinese aggression’, Economic Times, June 4.

Collin, Koh. (2013)  ‘ASEAN perspectives on naval cooperation with India: Singapore and Vietnam’, India Review, 12(3): 186-202.

Das, Rup. (2013) ‘India in the South China Sea: Commercial motives, strategic implications’, China Brief, 13(20):14-17.

Kapila, Subhash. (2014) ‘South China Sea and the US-India-Japan trilateral revitalisation’, SAAG Papers, 5811, October 27.

Karnad, Bharat. (2014) ‘Vietnam as India’s pivot’, New Indian Express, October 31

Kaushiva, Pradeep. (2012) ‘India’s maritime interests and future engagement in South China Sea’, September 20.

Majumdar, Munmun. (2013) ‘India’s stakes in the South China Sea’, International Journal of Humanities and Social Science, 3(13): 242-247.

Mearsheimer, John. (2010) ‘The gathering storm: China’s challenge to US power in Asia’, Chinese Journal of International Politics, 3(4): 381-396.

Muni, S.D.  (2011) ‘The Turbulent South China Sea waters: India, Vietnam and China’, ISAS Insights, 140, October 11.

Panda, Rajaram. (2014) ‘Proposal for an India-Japan-Vietnam trilateral initiative’, C3S Paper, 2079, March 11.

Parashar, Sachin. (2015a) China in South China Sea and Indian Ocean: A quest for pre-eminence in Asia, Times of India, May 24.

Parashar, Sachin. (2015b) ‘No oil hunt in South China Sea without nod: Beijing to Delhi’, Times of India, May 31.

Patil, Kapil. (2014) ‘India-Vietnam Axis: energy and geopolitical imperatives’, NAPSNet Policy Forum, December 8.

Patranobis, Sutirtho. (2015) ‘Beijing tells India to lay off South China Sea’, Hindustan Times, June 05.

Puri, Raman and Sahgal, Arun. (2011) ‘The South China Sea Dispute: Implications for India’, Indian Foreign Affairs Journal, 6(4): 437-448.

Sakhuja, Vijay. (2011) Developments in South China Sea and its impact on India, Sakhuja (ed.), India-Vietnam strategic partnership, New Delhi: Pentagon Press, 89-103.

Saloni, Salil. (2013) ‘India, to the South China Sea and beyond’, Journal of Defence Studies, 7(1): 239–46.

Scott, D. (2013) ‘India’s role in the South China Sea: Geopolitics and geoeconomics in play’, India Review, 12(2): 51-66.

Som, Vishnu. (2015) ‘In South China Sea row, top US Commander roots for India’, NDTV, March 4.

Thayer, Carl. (2014) ‘India and Vietnam advance their strategic partnership’, The Diplomat, December 11.

Valente, Catherine (2015) ‘India backs PH in China Sea row’, Manila Times, March 11.

 

Weimar, Niclas. (2013) ‘Sino-Indian power preponderance in maritime Asia: A re-source of conflict in the Indian Ocean and South China Sea’, Global Change, Peace & Security, 25(1): 5-26.

China conducts air, sea drills in East China Sea

August 27, 2015

Reuters

Photo: PLA helicopters fly over Beijing during parade rehearsal this week

China conducted large-scale air and sea exercises in the East China Sea on Thursday, state news agency Xinhua said, the third time in the last two months it has carried out such live-fire maritime drills.

The training involved more than 100 ships, dozens of aircraft, information warfare units as well the firing of close to 100 missiles, Xinhua said.

It did not specify where exactly the exercises took place.

China and Japan are involved in an increasingly bitter dispute over ownership of a group of uninhabited islets in the East China Sea, called the Senkaku by Tokyo and Diaoyu by Beijing.

China has in the last two months held similar exercises in the Yellow Sea, and also the disputed waters of the South China Sea.

China claims most of the potentially energy-rich South China Sea, through which $5 trillion in ship-borne trade passes every year, and rejects the rival claims of Vietnam, the Philippines, Brunei, Malaysia and Taiwan.

Photo: Chinese and Russian warships conduct live firing exercises during 2014

Separately, China’s Defence Ministry said China will hold joint military drills next month with Malaysia in the strategic Strait of Malacca, and will also hold training exercises, with Australia and the United States in Australia.

China’s rapidly modernising armed forces have been increasing their global reach and carrying out exercises in ever more distant locations, as the government seeks to protect its interests around the world.

But China has jangled nerves, especially in its territorial disputes in the South and East China Seas with a growing assertiveness.

(Reporting By Megha Rajagopalan; Editing by Robert Birsel)

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China’s South China Sea claims are not supported by its own historical records — Beijing needs a history lesson

June 29, 2015

Philip Bowring says China’s own written records show that, long before its vessels became active, seafaring merchants from Southeast Asia and elsewhere ruled the South China Sea

By Philip Bowring
South China Sea

Is China starting down a path similar to that followed by Japan and Germany before 1945, when nationalism backed by new economic clout led to overconfidence and adventures which eventually proved disastrous?

The question needs asking in the context of China’s latest moves ultimately aimed at making the South China Sea into a Chinese lake. Beijing has been railing against a US overfight of a China-controlled islet being expanded with a massive dredging operation.

Mainland-based academics have rushed to condemn this “dangerous provocation”. Yet the brutal fact is that no international body or significant state recognises China’s claim that the sea and its islets and shoals are its territory; least of all neighbouring states.

The artificial expansion of the islets may be more for show than to provide any significant strategic advantage. They may even prove impermanent, should they be hit by monster typhoons. But they are part of a pattern which in 2013 saw Chinese vessels occupy the Scarborough Shoal and drive out Philippine fishermen. The shoal lies well within the Philippines’ exclusive economic zone and had long been fished by boats from nearby Luzon. The seizure was an act of imperialism.

The US, like any other country, has a right to overfly territory which is not officially acknowledged as part of this or that nation. The same applies to features occupied by Vietnam, the Philippines and Malaysia. China’s claim that its reclamations are to improve security are viewed with derision by its neighbours. But those people do not count. They do not exist in the version of history by which Beijing claims the whole sea, stretching to the coast of Borneo, as defined by its nine-dash line, on the basis that the Chinese had always been in command of the sea.

Given that Hong Kong last week celebrated the Buddha’s birthday, it is worth recalling the relevance of China’s experience with Buddhism to the question of the sea. Far from showing Chinese maritime command, China’s own records show clearly that long before Chinese vessels first became active – during the Song dynasty – shipping between China and the Strait of Malacca, and even to southern India, was the preserve of mariners from Sumatra, Java, Borneo and south and central Vietnam, with Tamils and Arabs later becoming major players.

The leading centre of Buddhism in Southeast Asia was the Srivijayan capital, Palembang, in Sumatra, to which Chinese Buddhist monks travelled on Srivijayan ships to study, sometimes proceeding from there to Sri Lanka or India.

A 7th-century Chinese monk wrote of it: “There are more than 1,000 Buddhist monks whose spirit is turned only to study and good actions. They study all possible subjects like in India.” A Chinese wanting to study in India needed to go there “to learn how to behave properly”.

Chinese texts from as early as the 3rd century refer in detail to ships from Sumatra more than 50 metres in length and able to carry 600 people plus cargo. By the 6th century, trade between Srivijaya and ports around the South China Sea was very regular, with the journey to Canton usually taking 30 to 40 days. Other links included routes from Butuan in northeastern Mindanao to the Cham ports, such as Nha Trang. Javanese traders had a settlement near Manila in the 9th century, long before Chinese settled there.

The single largest driver of trade was Chinese demand for and supply of luxury goods, buying aromatics, ivory, spices and tropical forest products and selling silk and porcelain and other goods. For a thousand years, the traders were primarily the people of island and coastal Southeast Asia – the Austronesians whose seamanship enabled them to colonise the island world from the eastern Pacific to Madagascar. It was also an era where India was the main outside cultural influence on the region, spreading Buddhism, Hinduism, writing systems and kingship ideas.

Yes, this was a long time ago, but Chinese claims today are best refuted by China’s own written records, be they of Buddhist monks or in dynastic annals reporting trade missions and accounts of travellers to the southern lands. Chinese documents are the single most important source for the early history of maritime Southeast Asia and conform to evidence in more fragmentary Tamil, Javanese, Malay and Arab records.

Even though Chinese merchants and settlers in the region’s ports came to play a major role in commerce, they always shared these roles, whether with the Arabs, the Muslim sultanates and later the Europeans. China only twice briefly attempted to use force to impose its will on the maritime region, during the Mongol period when an invasion of Java failed, and briefly during the Zheng He voyages of the early Ming.

Zheng He

Communist party governments everywhere, not just in China, are notorious for rewriting history. But if Beijing wants to know why it feels surrounded by enemies, it should ask itself the reason: riding roughshod over the interests and identities of its neighbours, raising issues of “unequal treaty” borders and engaging in colonialism in Xinjiang and Tibet, by fostering Han settlement to undermine the ethnic identity of those once-independent nations.

Philip Bowring is a Hong Kong-based journalist and commentator

South China Sea: China’s Pathway and The Starting Point of The Maritime Silk Road

June 20, 2015

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In this series, Rudyard Griffiths, chair of the Munk Debates, Canada’s leading public-affairs forum, talks to renowned analysts and policy-makers about issues and trends that are just over the horizon

Robert D. Kaplan: ‘The South China Sea is to China what the Greater Caribbean was to the United States’

Why do you consider the South China Sea one of the world’s more important pieces of geo-political real estate?

The South China Sea is to China what the Greater Caribbean was to the United States in the 19th and early 20th centuries. The United States became a great power, geopolitically, by dominating the Caribbean. Once it could do that, it could dominate the Western Hemisphere, and once dominating the Western Hemisphere, it could affect the balance of power in the Eastern Hemisphere, which was what the world wars and Cold War were all about.

The South China Sea is no less important for China. If China can gain dominance, it then can have access to the wider Pacific and, through the Strait of Malacca, into the greater Indian Ocean, which is the global energy interstate, bringing all the oil and natural gas from the Middle East to the population zones of Asia. So this is really big stuff. Also, if China can dominate the South China Sea, then it will, effectively, “Finlandize” countries like Vietnam and the Philippines, which would affect the entire balance of power in Asia.

Talk about this idea of Finlandization. Is this China’s grand strategy?

During the Cold War, Finlandization was a successful Soviet imperial strategy. Essentially, it allowed Finland to be democratic, free, but constrained its foreign policy, so that Finland could not join NATO and/or do other things that would undermine Russian interests. It was a cheap form of colonialism, in a way – unlike the expensive form, which was the Warsaw Pact from Poland south to Bulgaria, which ultimately failed. Finlandization, in the case of Vietnam, the Philippines and Malaysia would mean that these countries would remain nominally independent, but the parameters of their foreign policies would essentially be written in Beijing. This strategy would also bring China two or three giant steps forward to dominating Taiwan.

Why is China suddenly escalating tensions with its neighbours?

After the Second World War and during the Cold War, the nations of the South China Sea were internally focused. Japan, China and Vietnam all had their wars, Malaysia had its insurgencies. For decades these countries could not project power outward. That has all changed. They are now building large navies and air forces and, lo and behold, they now have active conflicts in terms of who owns what in the South China Sea. The other thing that’s driving this is that China, as we know, is no longer experiencing double-digit economic growth rates year after year. As a result, China’s going to face a more restive population at home, and one of the ways you deal with economic and political discontent is you dial up nationalism, and that is what they’re doing. So a more aggressive posture gives Chinese leaders more of a political cushion. Even autocrats are dependent on public opinion, in the 21st century.

Given its interdependence with China, isn’t it inevitable that America will back down?

Yes. What American policy has to do is steer between two extremes. One extreme is to try to prevent the Finlandization of the nations of the South China Sea, but the other extreme is to avoid a shooting war with China, because the U.S.-China relationship is the most important bilateral relationship in the world, and will be for the foreseeable future. So the U.S. has to defend a treaty ally, like the Philippines, but it cannot allow a country like the Philippines to lure the United States into a military conflict with China. It’s a very tricky passage, so to speak, to navigate your way through, but that is the challenge right now, especially for the U.S. Defence Department.

Is there a strategy here for the United States to marshal the nations of the South China Sea basin into an anti-China bloc?

The United States has to show that its navy is not going to withdraw, and may even ratchet up its presence in the South and East China Sea. This is not the time for any kind of a pullback in terms of our military presence in the region, because anything like that would indicate weakness. We have to show that we are prepared to push back against China, to a degree, without getting into a military conflict. The real challenge for the Pentagon is slowing down China’s transformation into the dominant military power in South Asia. Simply because you cannot prevent something from happening does not mean you cannot delay it for 10 years or 15 years. In a decade or a decade and a half, the whole world may shift. China may have an internal rebellion due to an economic crisis, or the nature of the Chinese system itself could change.

Is there a risk that future tensions could be Vietnam-China as opposed to U.S.-China?

It could. Vietnam is the most serious challenger to China in the South China Sea. The Philippines may be a treaty ally of the U.S., like Japan and South Korea, but the Philippines is a very weak institutionally and has little in the way of real military power. Vietnam, on the other hand, is a much stronger actor. Vietnam has a long tradition, going back hundreds of years, of conflicts with China. What Vietnam is trying to do is ensnare the United States in its power play with China by providing American warships with resupply capabilities along its South China Sea coast. Vietnam needs the United States as a de facto balancer against China.

Viet Nam General Secretary of the Communist Party Nguyen Phu Trong and Xi Jinping April 7, 2015 in Beijing. Vietnam News Agency

Most people think of naval power as some 18th- and 19th-century concept. You think it’s still the key to geopolitical influence?

Absolutely. In 2007, when everyone was engaged in counterinsurgency discussions and dirty land wars in Iraq and Afghanistan, I published a long piece in The Atlantic Monthly talking about the importance of naval power. Remember, we are in an age of globalization – and an age of globalization is an age of container shipping and an age where navies are very important to protect the sea lines of communication and commerce. Most human beings, the overwhelming majority, live near coastlines, so we know navies will be key to the future. Also navies and air forces, used as a combined force, can project power over large swathes of the globe. Ground forces, like armies or marine corps, are there really for unpredictable contingencies. It’s really your navy and your air force that make you a great power. The U.S. Navy is America’s primary strategic instrument, much more so than its nuclear-weapons arsenal.

This interview has been edited and condensed.

 http://www.theglobeandmail.com/globe-debate/munk-debates/robert-d-kaplan-the-south-china-sea-is-to-china-what-the-greater-caribbean-was-to-the-united-states/article25039063/

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Crude prices plunge on diminishing Chinese imports — After Iran nuclear deal, Iran will double output in six months

June 9, 2015

Investing.com –

Investing.com — Crude futures fell sharply on Monday as energy traders continued to react to the long-term ramifications of OPEC’s decision last Friday to keep its production ceiling above 30 million barrels per day.

On the New York Mercantile Exchange, WTI crude for July delivery fell 1.00 or 1.70% to 58.12, extending a recent skid over the last week. U.S. crude futures traded between 57.88 and 59.12 on a light day of trading.

On the Intercontinental Exchange (ICE), brent crude for July delivery dipped 0.69 or 1.07% to 62.62, falling for the fourth time in five sessions. The spread between the international and U.S. benchmarks of crude rose to $4.50, above Friday’s level of $4.23.

At a semi-annual meeting of its members on Friday in Vienna, OPEC decided to maintain production at its current level – a move which caused crude to spike roughly 1.5% on the session. While in Vienna, Iran oil minister Bijan Namdar Zanganeh said he is optimistic that his nation could double production from its current level of 3 million bpd within the next five years if it can increase its crude exports exponentially.

Moving forward, energy traders will focus intently on Iranian exports as the nation works toward completing a comprehensive nuclear deal with Western powers later this month. Once a deal is reached, Iranian officials said at the meeting that it could double exports with six months of the removal of longstanding economic sanctions. An outflow of Iranian oil into the global markets is considered to be bearish for crude prices, which has been weighed down by a glut of oversupply in recent months.

Iran oil minister BijanNamdarZanganeh

Traders will also monitor a bid by Indonesia to return to OPEC. Indonesia, which suspended OPEC membership in 2008 when its import level exceeded its amount of crude exports, announced its intention to pursue full membership in the cartel at the meeting. The inclusion of the Southeast Asian emerging nation could help level the global supply-demand balance. Indonesia consumes around 1.5 million barrels of crude per day and is seeking supply agreements with OPEC members in order to import more oil, according to reports.

Also on Monday, crude prices slid amid disappointing import and export data in China. In May, the Asian nation’s trade surplus widened to $59.5 billion, up from $34.2 billion a month earlier. Exports fell by 2.5% on a year-over-year basis, while imports declined by more than 17%. In terms of crude, Chinese imports fell to 5.47 million bpd a decline of 26% on a year-over-year basis. In April, China became the world’s largest importer of crude. Chinese imports fell sharply last month, as the nation’s state-owned oil company drew from its enormous stockpiles while its tankers off the Strait of Malacca continued to horde cheaper crude.

Energy traders await the release of weekly U.S. crude stockpiles at the middle of this week for further indications on current supply levels. Last Friday, oil services firm Baker Hughes (NYSE:BHI) said that the number of oil rigs nationwide fell by four on the week to 642, the lowest level since August, 2010. It marked the 26th consecutive week of weekly rig declines. Though U.S. shale producers have been forced to slash drilling due to the lower price of crude, they have still maintained high production levels by keeping their more efficient rigs online.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, plummeted 1.09% to 95.34.

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