Posts Tagged ‘Thaad’

US approves possible $15 billion THAAD anti-missile system sale to Saudi Arabia

October 7, 2017

Saudi Arabia has agreed to buy the Terminal High Altitude Area Defense (THAAD) missile defense system for $15 billion from the US. Long in the works, the agreement comes a day after King Salman signed a deal with Moscow.

Saudi Arabia said it would buy from US contracters 44 Terminal High Altitude Area Defense (THAAD) launchers and 360 missiles, as well as fire control stations and radars. The sale can go ahead if the US Congress does not object within 30 days.

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THAAD Launcher

It is part of a $110 billion (€95 billion) arms package that President Donald Trump agreed with the Saudi kingdom during a visit in May.

“This sale furthers US national security and foreign policy interests and supports the long-term security of Saudi Arabia and the Gulf region in the face of Iranian and other regional threats,” the State Department said on Friday in a statement.

Pentagon officials reportedly said they didn’t think the Russian deal would impact the longstanding defense relationship between the US and Saudi Arabia.

Riyadh bulking up

The State Department approval has come a day after Saudi Arabia agreed to buy S-400 surface-to-air missiles from Russia, reportedly irking Washington. It also follows a similar recent sale by Moscow of the S-400 to Turkey, a NATO ally.

The memorandum of understanding the Saudi king signed with Russian President Vladimir Putin covers the production in Saudi Arabia of Russian anti-tank missiles, rocket launchers and Kalashnikov rifles.

Saudi Arabia is planning a major overhaul of its military and plans to develop a strong domestic defense industry.

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It announced earlier this year the formation of Saudi Arabian Military Industries, a state-owned company that will build and repair aircraft, drones, ground vehicles, missiles and radar systems.

The plan is to make the company one of the world’s top defense companies by 2030 and employ 40,000 people.

Balance of power

The State Department said it would advise Congress that the THAAD system would stabilize the situation in the Gulf and help defend US forces in the region from growing Iranian missile capability.

“This potential sale will substantially increase Saudi Arabia’s capability to defend itself against the growing ballistic missile threat in the region,” a statement said.

Iran has one of the biggest ballistic missile programs in the Middle East, viewing it as an essential defense against the US and others, primarily Gulf Arab states and Israel.

What is THAAD?

THAAD is one of the most capable defensive missile batteries in the US arsenal and was recently deployed by the US military in South Korea to protect against a possible North Korean strike. It has already been supplied to Saudi Arabia’s neighbors Qatar and the United Arab Emirates.

The main US contractors who will profit from the sale are aerospace giant Lockheed Martin’s space systems division and defense contractor Raytheon.

Reuters, AFP


South Korea Expects More North Korea Provocations Mid-October — China’s Communist Party Congress — “South Korea can’t go through war again.”

September 28, 2017

SEOUL — South Korea expects North Korea to engage in more provocative action next month to coincide with the anniversary of the founding of its communist party and China’s all-important Communist Party Congress.

In a meeting with President Moon Jae-in on Thursday, national security adviser Chung Eui-yong said he expected Pyongyang to act around Oct. 10 and 18, but gave no details.

“(Chung’s report) also said there are worries over military conflict being sparked by accidental incidents,” said Park Wan-ju, lawmaker and head spokesman of the ruling Democratic Party.

“The president said the United States speaks of military and diplomatic options, but South Korea can’t go through war again.”

Tensions on the Korean peninsula have escalated in recent weeks as North Korea’s leader Kim Jong Un and U.S. President Donald Trump exchange bellicose threats and insults over the North’s nuclear and missile development program.

Kim Jong-un and Donald TrumpEPA photos

The North has accused Trump of declaring war after he warned Kim’s regime would not last if he persisted in threatening the United States and its allies, having earlier warned North Korea would be totally destroyed in such an event.

Pyongyang conducted its sixth and largest nuclear test on Sept. 3 and has launched dozens of missiles this year as it accelerates a program aimed at enabling it to target the United States with a nuclear-tipped missile.

The United States and South Korea are technically still at war with North Korea because the 1950-53 Korean conflict ended with a truce and not a peace treaty.

China, North Korea’s main ally, would likely be extremely unhappy if Pyongyang tested a missile or carried out some other act during its Communist Party Congress, held once every five years.

Park said President Moon told the meeting that Washington and Seoul agreed that pressure needed to be applied to North Korea, with the door to talks still open.

In a separate speech on Thursday, Moon said cooperation with the international community to curb the North’s nuclear ambitions was at its highest level ever and called for the strengthening of South Korea-U.S. defenses to rein in the North.

Since the North’s latest nuclear test, countries have taken measures against the reclusive state like expelling North Korean diplomats.

Malaysia said on Thursday all its citizens are banned from traveling to North Korea until further notice due to escalating tensions on the Korean Peninsula.


Chung said the United States and South Korea had agreed on the rotational deployment of U.S. strategic assets to South Korea, possibly as soon as year-end, said lawmakers at the meeting.

What kind of assets would be rotated was not specified.

Moon added it was inappropriate to discuss the deployment of nuclear weapons in South Korea, the lawmakers said.

The president said he had personally been against the deployment of U.S. Terminal High Altitude Area Defense (THAAD) system in South Korea, but the decision was made as North Korea’s missile capabilities were quickly improving.

Regarding China’s vehement opposition to the deployment of THAAD, Moon said “visible achievements” were to be expected soon as “the issue was reaching the end”, quoted by the lawmakers.

Beijing opposes THAAD because it believes its powerful radar could be used to look inside its territory. South Korea and the United States have said it is only to curb North Korea’s missile threats.

(Reporting by Christine Kim; Editing by Michael Perry and Joseph Radford)

Nato chief: world is at its most dangerous point in a generation

September 9, 2017

Jens Stoltenberg warns of converging threats as Russia mobilises estimated 100,000 troops on EU’s borders

By  in Tapa
The Guardian

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Secretary general Jens Stoltenberg visits Nato battle group soldiers at Tapa military base in Estonia. Photograph: Raigo Pajula/AFP/Getty Images

The world is more dangerous today than it has been in a generation, the head of Nato has said, days before the mobilisation of an estimated 100,000 Russian troops on the EU’s eastern borders, and as a nuclear crisis grows on the Korean peninsula.

Jens Stoltenberg, secretary general of the military alliance, said the sheer number of converging threats was making the world increasingly perilous.

Asked in a Guardian interview whether he had known a more dangerous time in his 30-year career, Stoltenberg said: “It is more unpredictable, and it’s more difficult because we have so many challenges at the same time.

“We have proliferation of weapons of mass destruction in North Korea, we have terrorists, instability, and we have a more assertive Russia,” Stoltenberg said during a break from visiting British troops stationed in Estonia. “It is a more dangerous world.”

From next Thursday, over six days, Russian and Belarusian troops will take part in what is likely to be Moscow’s largest military exercise since the cold war. An estimated 100,000 soldiers, security personnel and civilian officials, will be active around the Baltic Sea, western Russia, Belarus and the Russian exclave of Kaliningrad, without the supervision required under international agreement.

On the other side of the world, in the face of local protests, the South Korean government has deployed the controversial US Thaad missile defence system as it looked to counter potential future attacks from North Korea, which recently launched a ballistic missile over Japan, threatened the US Pacific territory of Guam and tested a possible thermonuclear device.

Donald Trump has threatened to unleash “fire and fury” on the North Koreans should further threats be made against the US, and kept up the threat on Thursday, saying he is building up US military power.

“It’s been tens of billions of dollars more in investment. And each day new equipment is delivered – new and beautiful equipment, the best in the world, the best anywhere in the world, by far,” Trump said. “Hopefully we’re not going to have to use it on North Korea. If we do use it on North Korea, it will be a very sad day for North Korea.”

Trump has ruled out talks with Pyongyang for the time being and Washington’s diplomatic focus is now on efforts to secure agreement at the United Nations for much tighter economic measures, including an oil embargo and possibly a naval blockade.

A South Korean marine participating in an exercise this week.
 A South Korean marine participating in an exercise this week. Photograph: Handout/South Korean Defense Ministry vi

Speaking during his visit to the Estonian military base in Tapa, a former Soviet Union airstrip about 75 miles (120km) from the border with Russia, Stoltenberg was coy when asked if he backed the US president’s bellicose threats to Pyongyang, blamed by some for exacerbating the current situation in south-east Asia.

“If I started to speculate about potential military options I would only add to the uncertainty and difficulty of the situation so I think my task is not to be contribute to that. I will support efforts to find a political, negotiated solution,” he said.

Pushed on whether he could even envision a military solution to the crisis in Korea, Stoltenberg said: “I think the important thing now is to look into how we can create a situation where we can find a political solution to the crisis.

“At the same time I fully understand and support the military message that has been implemented in the region by South Korea and to some extent Japan, as they have the right to defend themselves. They have a right to respond when they see these very aggressive actions. I also support the presence of US troops and capabilities in Korea.”

Stoltenberg, a former Norwegian prime minister whose 10 years in power were marked for his success in improving Norway’s environmental footprint, took over the role of Nato secretary general in 2014, forming a close working relationship with Barack Obama.

Soon after Trump’s election last year, however, in response to suggestions that the White House might back away from Nato, Stoltenberg made a pointed intervention highlighting the lives lost by the alliance’s members coming to the aid of the US after the 9/11 attacks. Trump had described Nato as obsolete during his election campaign.

In May, Stoltenberg took on the role of placater-in-chief after the US president used the occasion of the opening of Nato’s new building in Brussels, and the unveiling of a memorial to 9/11, to castigate 23 of the 29 Nato members for not spending enough on defence. A number of leaders were visibly startled by the nature and timing of the speech.

Asked this week whether Trump was the ideal person to unpick the current fraught security situation, Stoltenberg insisted the 29 Nato members were united within the alliance. “Donald Trump is the elected president of the United States,” he said. “And Nato is a collective alliance of 29 democracies. And that’s part of democracy, that different political leaders are elected.”

Donald Trump after pushing the Montenegrin prime minister, Dusko Markovic, aside as they walked through the Nato headquarters in Brussels in May.
 Donald Trump at the Nato headquarters in Brussels in May. He had just shoved the Montenegrin prime minister aside. Photograph: Etienne Laurent/EPA

He said he did not believe there was an imminent threat to Nato members, and that an increase in defence spending had strengthened the alliance in recent years.

Stoltenberg has completed a tour of the four battle groups stationed in Estonia, Latvia, Lithuania and Poland, forming the Nato advanced forces defending the eastern borders.

Stoltenberg said the troops’ “defensive” mobilisation was a message to Russia that an attack on one Nato ally was an attack on all, and that he remained confident of the security of eastern Europe. But he expressed concern at Moscow’s imminent failure to live up to its international obligations for exercises involving more than 13,000 troops to be open to observers, including overflights. Some Baltic states estimate that about 100,000 Russian troops will be involved in this year’s exercise and Poland claims the Kremlin has requisitioned more than 4,000 train carriages to move military personnel west.

“Russia has said it is below 13,000. They briefed that on the Nato-Russia council a few weeks ago,” Stoltenberg said. “That was useful but at the same time we have seen when Russia says that an exercise has less than 13,000 troops that’s not always the case. We have seen that in Zapad 2009 and 2013 – the two previous Zapad exercises. There were many more troops participating.”

Stoltenberg said Nato had always offered up its exercises to scrutiny, “while Russia has not opened any exercise to open observation since the end of the cold war”.


North Korea makes call for ‘cutting edge Juche weapons’

September 9, 2017

North Korea has marked its founding day with calls for more nuclear and ballistic weapons of mass destruction. The US will call a vote Monday on a draft UN resolution for more sanctions.

North Korea founding day

North Korea celebrated its founding day on Saturday with calls from state media for a buildup of nuclear weapons and ballistic missiles, just as the United States is pushing for a new round of international sanctions on the regime.

In a front-page editorial, the North’s state-run media said the country “must make cutting-edge Juche weapons in greater quantities.” Juche is the country’s Marxist and nationalist ideology of self-reliance.

“No matter how the US and its puppets kick up a ruckus, our republic, which has a strong military and the most powerful Juche bombs and weapons, and whose territory has all turned into fortresses, and all its people armed to the teeth, will remain an eternal iron-clad citadel,” it said.

South Korean officials have warned that the North could test-launch a ballistic missile or conduct another nuclear explosion to mark Foundation Day, which is usually celebrated with pageantry and military parades. Last year, the North conducted its fifth nuclear test on September 9.

Read: North Korea’s war of words with the world

US mulling strategy

Tensions on the Korean Peninsula rose again this week after North Korea tested its sixth nuclear device, saying it was a hydrogen bomb capable of being loaded onto a ballistic missile.

On July 28, it tested an intercontinental ballistic missile that experts said could reach the continental United States. This was followed by the test of another ballistic missile, which flew over Japan and landed in the Pacific Ocean.

US President Donald Trump has said all options, including military action, are on the table to deal with the threat.

Experts warn that hundreds of thousands of people could potentially be killed in a conflagaration on the Korean Peninsula.

Read: North Korea: From war to nuclear weapons

New UN sanctions on the table

The United States plans to call a vote on Monday on a draft UN Security Resolution to slap tougher sanctions on North Korea, including an oil import embargo, a ban on textile exports and restrictions on the hiring of North Korean laborers abroad.

It is unclear whether China and Russia would support the US proposal, either in full or in part. Both veto-wielding UN Security Council members have said sanctions are unlikely to change the North’s behavior and might actually be counterproductive.

Trump has been highly critical of China, which accounts for more that 90 percent of the North’s trade, for not taking tougher action on Pyongyang. China worries about instability on its doorstep and the United States expanding its military imprint in the region.

Read: A closer look at which countries trade with North Korea 

Both China and Russia have called for dialogue and a reduction of tensions, including a halt of US military exercises in the region in exchange for a halt of North Korean ballistic and nuclear tests.

Beijing is critical of South Korea’s plan to deploy the advanced US Terminal High Altitude Area Defense (THAAD) anti-missile system, which it says could be used for other purposes against China.

North Korea says it needs ballistic and nuclear weapons to defend itself and regularly threatens the United States, including recently by saying it would conduct ballistic missile tests near Guam, the location of a major US military base.

cw/rc (AFP, AP, Reuters)

South Korea braces for possible new missile test to mark North’s founding day

September 9, 2017

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South Korean marines take part in a military exercise on South Korea¡¯s Baengnyeong Island, near the disputed sea border with the north, September 7, 2017. Choi Jae-gu/Yonhap via REUTERS Reuters

By Christine Kim

SEOUL (Reuters) – South Korea braced for a possible further missile test by North Korea as it marked its founding anniversary on Saturday, just days after its sixth and largest nuclear test rattled global financial markets and further escalated tensions in the region.

Throughout the week, South Korean officials have warned the North could launch another intercontinental ballistic missile, in defiance of U.N. sanctions and amid an escalating standoff with the United States.

Pyongyang marks its founding anniversary each year with a big display of pageantry and military hardware. Last year, North Korea conducted its fifth nuclear test on the Sept. 9 anniversary.

Tension on the Korean peninsula has escalated as North Korea’s young leader, Kim Jong Un, has stepped up the development of weapons, testing a string of missiles this year, including one flying over Japan, and conducting its sixth nuclear test on Sunday.

Experts believe the isolated regime is close to its goal of developing a powerful nuclear weapon capable of reaching the United States, something U.S. President Donald Trump has vowed to prevent.

Celebrating its founding anniversary, a front-page editorial of the Saturday edition of North Korea’s official Rodong Sinmun said the country should make “more high-tech Juche weapons to continuously bring about big historical events such as a miraculous victory of July 28.”. The July date refers to the intercontinental ballistic missile test.

Juche is North Korea’s homegrown ideology of self-reliance that is a mix of Marxism and extreme nationalism preached by state founder Kim Il Sung, the current leader’s grandfather.

South Korean nuclear experts, checking for contamination, said on Friday they had found minute traces of radioactive xenon gas but that it was too early to link it to Sunday’s explosion.

The Nuclear Safety and Security Commission (NSSC) said it had been conducting tests on land, air and water samples since shortly after the North Korean nuclear test on Sunday.

Xenon is a naturally occurring, colourless gas that is used in manufacturing of some sorts of lights. But the NSSC said it had detected xenon-133, a radioactive isotope that does not occur naturally and which has in the past been linked to North Korea’s nuclear tests.

There was no chance the xenon “will have an impact on South Korea’s territory or population”, the agency said.

Trump has repeatedly said all options are on the table in dealing with North Korea and on Thursday said he would prefer not to use military action, but if he did, it would be a “very sad day” for North Korea.

“Military action would certainly be an option. Is it inevitable? Nothing is inevitable,” Trump told reporters. “If we do use it on North Korea, it will be a very sad day for North Korea.”

Even as Trump has insisted that now is not the time to talk, senior members of his administration have made clear that the door to a diplomatic solution is open, especially given the U.S. assessment that any pre-emptive strike would unleash massive North Korean retaliation.

North Korea says it needs its weapons to protect itself from U.S. aggression and regularly threatens to destroy the United States.

South Korea and the United States are technically still at war with North Korea after the 1950-53 Korean conflict ended with a truce, not a peace treaty.


The USS Ronald Reagan, a nuclear-powered carrier, left its home port in Japan for a routine autumn patrol of the Western Pacific, a Navy spokeswoman said. That area included waters between Japan and the Korean peninsula, she added, without giving any further details.

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USS Ronald Reagan

The Ronald Reagan was out on routine patrol from May until August, and was sent to the Sea of Japan with the another carrier, the USS Carl Vinson, to take part in drills with Japan’s Self Defense Forces as well as the South Korean military.

North Korea vehemently objects to military exercises on or near the peninsula, and China and Russia have suggested the United States and South Korea halt their exercises to lower tension.

While Trump talked tough on North Korea, China agreed on Thursday that the United Nations should take more action against it, but it also pushed for dialogue.

The U.N. Security Council is expected to vote on a new set of sanctions soon. Russian Foreign Minister Sergei Lavrov said that it was too early to draw conclusions about the final form of the U.N. resolution, Russia’s Interfax news agency quoted Lavrov as saying at a news conference on Friday.

The United States on Friday told the U.N. Security Council that it intends to call a meeting on Monday to vote on a draft resolution establishing additional sanctions on North Korea for its missile and nuclear program, the U.S. Mission to the United Nations said in a statement.

U.S. ambassador to the United Nations Nikki Haley said last Monday that she intended to call for a vote on Sept. 11 and then the United States circulated a draft resolution to the 15-member council on Wednesday.

The United States wants the Security Council to impose an oil embargo on North Korea, ban its exports of textiles and the hiring of North Korean laborers abroad, and to subject Kim Jong Un to an asset freeze and travel ban, according to a draft resolution seen by Reuters on Wednesday.

It was not immediately clear how North Korean allies China and Russia would vote, but a senior U.S. official on Friday night expressed scepticism that either nation would accept anything more stringent than a ban on imports of North Korean textiles.

Chinese officials have privately expressed fears that imposing an oil embargo could risk triggering massive instability in its neighbor.

North Korea offered fresh vitriol against the pending sanctions, specifically targeting Haley, who this week accused Kim of “begging for war”.

“There is nothing more foolish than thinking we, a strong nuclear state, will endure this evil pressure aimed at overthrowing our state,” the North’s official news agency said in a commentary.

“Even if Nikki Haley is blind, she must use her mouth correctly. The United States administration will pay for not being able to control the mouth of their U.N. representative.”

China is by far North Korea’s biggest trading partner, accounting for 92 percent of two-way trade last year. It also provides hundreds of thousands of tonnes of oil and fuel to the impoverished regime.

China’s economic influence has been felt by South Korea as well. The two countries have been at loggerheads over South Korea’s decision to deploy a U.S. anti-missile system, the Terminal High Altitude Area Defense, which has a powerful radar that can probe deep into China.

Shares in South Korean automaker Hyundai Motor  and key suppliers slid on Friday on worries over its position in China after highly critical Chinese state newspaper comments.

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THAAD missile launcher for ballistic missile defense

The military section of China’s Global Times newspaper on Thursday referred to THAAD as “a malignant tumor”.

(Additional reporting by Nobuhiro Kubo in TOKYO, Hyunjoo Jin and Ju-min Park in SEOUL, Christian Lowe in MOSCOW; and Michelle Nichols in UNITED NATIONS; Writing by Nick Macfie; Editing by Robert Birsel, Mary Milliken & Shri Navaratnam)

How Democrats left us vulnerable to North Korea’s nukes

September 8, 2017
  September 6

With last weekend’s surprise nuclear test, North Korea has reached final stage of its crash course to develop thermonuclear weapons that can reach and destroy U.S. cities. So why are we not on a crash course to protect our cities from North Korean nuclear missiles?

Answer: Because for more than three decades, Democrats have done everything in their power to prevent, obstruct or delay the deployment of ballistic missile defense.

Opposition to missile defense has been an article of faith for Democrats since President Ronald Reagan announced the Strategic Defense Initiative in 1983. Sen. Edward M.Kennedy led the early opposition to what Democrats derisively labeled “Star Wars,” denouncing missile defense as a “mirage” and “a certain prescription for an arms race in outer space.” Running against Reagan in 1984, Walter Mondale called it a “dangerously destabilizing” and unworkable “hoax.”

Reagan nonetheless moved forward with research and development, and his successor, George H. W. Bush, put missile defense on track for deployment with the Global Protection Against Limited Strikes (GPALS) program. But as soon as President Bill Clinton took office in 1993, he terminated GPALS and cut national missile defense funding by 80 percent, while downgrading it from an acquisition program to a technology demonstration program. Clinton also signed an agreement to revive the moribund Anti-Ballistic Missile Treaty, which banned deployment of missile defense and whose status had come into question with the 1991 collapse of our treaty partner, the Soviet Union.

Then Republicans took over Congress, and passed a defense authorization bill in 1996 that required deployment. Clinton vetoed it on the grounds that there was no threat. Secretary of Defense William Perry declared “we do not need a national missile defense system because . . . no rogue nation has [intercontinental ballistic missiles] . . . and if these powers should ever pose a threat, our ability to retaliate with an overwhelming nuclear response will serve as a deterrent.” In other words, national missile defense would never be needed — even to protect against a regime such as North Korea.

When President George W. Bush came to office, he revitalized missile defense efforts and withdrew from the ABM Treaty. Democrats were more upset than the Russians. Sen. Joseph Biden declared “The thing we remain the least vulnerable to is an ICBM attack from another nation” adding “This premise that one day Kim Jong Il or someone will wake up one morning and say, ‘Aha, San Francisco’ is specious.”

Bush deployed the first ground-based interceptors in California and Alaska, and put in place a plan to deploy 44 interceptors by 2009. He reached a historic agreement with Poland and the Czech Republic to deploy defenses. And he dramatically increased funding for three critical programs: The first two — the Airborne Laser and the Kinetic Energy Interceptor — would take out a ballistic missile in the “boost phase” of flight, the most vulnerable eight minutes when a missile is still over enemy territory and presents a large, slower-moving target because the small nuclear warhead at the top has not yet separated from the large rocket filled with highly explosive fuel. The third — the Multiple Kill Vehicle — would place multiple warheads on our ground-based interceptors, so that instead of hitting a “bullet with a bullet” we could fire five or 10 bullets at each target, dramatically increasing chances of success.

If we had continued the Bush program over the past eight years, we would now have a robust array of defenses against any North Korean ICBM. We would be able to target a North Korean missile in the boost phase, and if that failed we would have 44 ground-based interceptors armed with hundreds of warheads that could be fired to take it out in mid-course.

But we did not continue the Bush program. President Barack Obama slashed funding for ballistic missile defense by 25 percent. As part of his failed “reset” with Russia, he scrapped Bush’s agreement with Poland and the Czech Republic. He reduced Bush’s plan from 44 ground-based interceptors to just 30. (He belatedly changed course in 2012 after North Korea tested the Taepodong missile, but the United States still has not recovered from the delay.) And he cancelled the Airborne Laser, Kinetic Energy Interceptor and Multiple Kill Vehicle programs. As a result, North Korean now has eight minutes of unchallenged flight during which their missiles are most vulnerable, and we have dramatically reduced the chances of hitting a North Korean missile as it descends on a U.S. city.

Amazingly, on taking office, President Trump’s budget continued Obama’s missile defense cuts, reducing funding by another $300 million . Trump has since recognized his mistake, promising “We are going to be increasing the anti-missiles by a substantial amount of billions of dollars.” Time to do so is short. He should immediately deliver Congress an emergency supplemental spending bill to speed the deployment of ground-based interceptors, and he should revive the Multiple Kill Vehicle, the Airborne Laser and Kinetic Energy Interceptor — and then work with Congress on a long-term plan to build and deploy space-based interceptors.

In 1983, Reagan asked “Isn’t it worth every investment necessary to free the world from the threat of nuclear war?” For the Democrats, the answer was no. No one is happier about that today than Kim Jong Un.

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Southeast Asian economies get a lift from China. Later, they may get the bill

September 8, 2017

By Marius Zaharia

HONG KONG (Reuters) – Southeast Asia appears to be on a roll.

The Philippines is boasting the second-fastest growing economy in Asia, Malaysia has posted its best growth figures in more than two years and Thailand in more than four.

The growth is being fuelled by China, whose expanding economic presence is propping up fundamental weaknesses around Southeast Asia. It also underlines China’s dominance in a region that will be under increasing pressure to follow Beijing’s lead.

Even as the rest of the world feels the pinch of Beijing’s clampdown on outbound capital, China is ploughing money into Southeast Asia – much of it into infrastructure projects related to President Xi Jinping’s signature Belt and Road initiative.

Chinese tourists are also flocking to beaches, temples and shopping malls around the region. And trade is surging.

Exports to China from Indonesia and Malaysia grew more than 40 percent in the first half of the year; from Thailand and Singapore it was almost 30 percent, and more than 20 percent from the Philippines, according to Reuters calculations.

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Malaysia — China’s Forest City development is the biggest by a Chinese property developer

China has been investing heavily in infrastructure and property in the region and buying commodities such as rice, palm oil, rubber and coal. It is also buying electronic components and equipment from countries like Malaysia, Thailand and Singapore.

Going the other way is everything from cheap T-shirts to high-end telecommunications systems.

Welcome as all this economic activity is to the region, it could also present political problems, as countries confront China over issues such as its claims in the South China Sea, as both Vietnam and the Philippines have found.

And it raises the risk that China could apply economic pressure to get its way.

“The large rise in ASEAN’s exports to China have increased potential vulnerabilities to geopolitical risks,” said Rajiv Biswas, Asia Pacific chief economist for IHS Markit.


For a glimpse of how that feels, Southeast Asian countries could look at South Korea’s experience.

The deployment in South Korea of a U.S. anti-missile defence system that China opposed resulted in a sharp decline in Chinese tourists. South Korean companies doing business in China, like Lotte Group and Hyundai have also been hit in the diplomatic fallout.

“The South Korea example is a highlight of how the geopolitical vulnerability to China can increase as the bilateral economic relationship expands,” Biswas said.

The Philippines found itself subject to a Chinese ban on its fruit in 2012 after challenging China’s maritime claims. The ban was only lifted last year as President Rodrigo Duterte adopted a friendlier stance towards Beijing.

“Any sector that you have with a big exposure – tourism inbound like Thailand, bananas outbound like the Philippines, coal from Indonesia – is vulnerable,” said Dane Chamorro, senior partner and head of South East Asia at Control Risks, a global risk consultancy. “You can imagine how that would be pretty easy for China to stop or hinder.”

Leaders of Malaysia’s ruling party last year voiced concerns after Prime Minister Najib Razak secured deals worth $34 billion on a trip to Beijing, saying it opened the door for a more direct Chinese influence on Malaysia’s affairs, besides saddling the country with billions of dollars in debt.

A planned $5.5 billion rail link through Thailand to southern China also hit resistance, with Thai critics targeting what they said were Beijing’s excessive demands and unfavourable financing. However, Thailand’s cabinet in July approved construction of the first phase of the project.

Image result for chinese tourists in Thailand, Photos

Chinese tourists pose for photos as they visit Thailand


There has also been popular opposition to such deals around the region, raising the stakes for leaders.

In Myanmar, a $10 billion Chinese oil pipeline linked to the Belt and Road project sparked angry protests in May. Three years ago, the deployment of a Chinese oil rig in disputed waters in the South China Sea triggered anti-Chinese riots in Vietnam.

“The next level from here is you can see more social outcry,” said Sanchita Basu Das, lead researcher for economic affairs at the ASEAN Studies Center at ISEAS-Yusof Ishak Institute in Singapore.

“These are the checks and balances for some of these countries, especially those where leaders are elected for a specific number of years,” she said. “China will be mindful of that as well.”

GROWING DEPENDENCE The growing economic dependence on China is another concern for countries in the region with underlying vulnerabilities.

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Singapore’s skyline is seen June 17, 2017. REUTERS/Thomas White/Files

Consumption growth has been lagging in countries like Indonesia and Philippines, which are dependent on domestic demand, even as they posted growth figures of 5 percent and 6.5 percent in the second quarter. And investment from sources other than China is slowing, as are portfolio inflows.

Indonesia, which has been lagging its regional peers, cut interest rates last month.

In Thailand, where the economy grew 3.7 percent in the second quarter, the baht THB= has been surging in recent months, putting pressure on exporters, while the Philippine peso PHP= has been weakening on concerns over the country’s shrinking current account surplus.

If there was a downturn in China, it could have serious ripple effects in export-reliant countries like Thailand and Malaysia. Malaysia grew 5.8 percent in April-June.

“Southeast Asian countries are becoming more dependent on China,” said Jean-Charles Sambor, deputy head of EM fixed income, BNP Paribas Asset Management. An event like a sharp slowdown in China could have “a very significant spillover,” he said, citing exports, financing and investment.

For the moment, the Chinese economy remains strong and it appears that Southeast Asia is weathering a crackdown by Beijing on overseas acquisitions.

Data from China’s Ministry of Commerce shows outbound direct investment globally nearly halved in the first half of the year. But data from the American Enterprise Institute shows Chinese investments and construction contracts of $13.46 billion in the period, almost unchanged from a year earlier.

The initial stages of a rail line on Malaysia’s east coast, in which China Communications Construction Company has already invested $2 billion, according to the data, is one of the most high-profile investments.

Other investments, many of which are tied to the Belt and Road initiative, include energy projects in Laos, Cambodia and Philippines, another large railway investment in Indonesia and real estate purchases across the region.

This week, Thailand signed contracts worth 5.2 billion baht ($157 million) with Chinese state enterprises for a high-speed rail project with China.

“Notwithstanding the recent introduction of restrictions on outbound investment, Chinese investment in Southeast Asia is likely to remain strong over the coming years,” said Stephen Smith, lead partner at Deloitte Access Economics.

“Chinese authorities appear to remain strongly committed to investment in projects tied to the Belt and Road Initiative.”

Graphic – Southeast Asia’s export growth in key markets:

Additional reporting by Joseph Sipalan in Kuala Lumpur; Editing by Philip McClellan

See also:


Latest on North Korea — Russia and Japan ‘decisively condemn’ weapons tests

September 7, 2017
Money Control

South Korea has said it may have detected activity related to an intercontinental ballistic missile launch. Live updates.

  • Sep 06, 06:43 PM (IST)
  • Sep 07, 09:47 PM (IST)

    Russian President Vladimir Putin said on Thursday after talks with Japanese Prime Minister Shinzo Abe that the two leaders “decisively condemned” North Korean weapons tests.

    “We decisively condemned North Korea’s launch of a medium-range ballistic missile that flew over Japan’s territory on August 28, as well as the new nuclear tests conducted on September 3,” Putin said in a statement.

    Putin reiterated that the crisis around North Korea should be resolved only by political means, and that it posed a threat to peace and stability in the region.

    He called for it to be resolved through a road map proposed by Moscow and Beijing.

  • Sep 07, 09:11 PM (IST)

    Everyone is waiting for Kim Jong-un’s next move, but in South Korea, some people are more worried about Donald Trump.

  • Sep 07, 09:07 PM (IST)

    Everyone is waiting for Kim Jong-un’s next move, but in South Korea, some people are more worried about Donald Trump.

  • Sep 07, 07:58 PM (IST)

    It is not even a week since North Korea fired its sixth nuclear test. Now, South Korea says that its neighbor may fire an intercontinental ballistic missile this weekend. South Korean Prime Minister Lee Nak-yon suggested that Kim Jong Un could order a launch on Saturday, which is the 64th anniversary of the totalitarian regime’s founding. Read it here.

  • Sep 07, 06:59 PM (IST)

    So, what did North Koreans do after testing their hydrogen bomb? They celebrated by filling hte streets of Pyongyang on Wednesday, reports Newsweek.

  • Sep 07, 05:52 PM (IST)

    North Korea breaks its silence. It has vowed to take the fight to US if more sanctions are placed over its missile programme. It has called Washington a war-monger. Read it here.

  • Sep 07, 05:20 PM (IST)

    Russian President Vladimir Putin has been vocal about the North Korean crisis. He predicted a ‘global catastrophe’ if North Korea didn’t respond to diplomacy. Later, a more despairing Putin said it may be ‘impossible’ to solve the situation. And now, Putin has said that the US could be adding fuel to Pyongyang’s fire, if it keeps its pressure on North Korea. Read it here on CNN.

  • Sep 07, 04:49 PM (IST)

    An opinion piece in written by Nic Robertson says that making North Korea fall to its knees will be harder with broken diplomacy. Read it in full here.

  • Sep 07, 03:40 PM (IST)

    As both US and North Korea seem to be on collision course, many people have started asking what this means for them. Wall Street, however, has chosen to ignore the elephant in the room. MarketWatch has published an interesting read on how investors are living in denial about the risk of war with North Korea. Read it here.

  • Sep 07, 03:31 PM (IST)

    15.30 The Russian President’s comment comes after North Korea’s Minister of External Economic Relations Kim Yong-jae said earlier today that his country will introduce strong countermeasures against the United States’ attempts to exert pressure through sanctions.

    “Attempts to use unprecedented aggressive sanctions and pressure to intimidate us and make us reverse our course, are a huge mistake,” Kim had said. “The United States should by all means keep in mind the nuclear status of our country, who owns nuclear and hydrogen bombs, and intercontinental ballistic missiles.”

  • Sep 07, 03:26 PM (IST)

    Russian President Vladimir Putin once again urged the US to find a diplomatic solution to the crisis in the Korean Peninsula and said that by increasing pressure through sanctions, US could be playing right into North Korea’s hands. “It’s a provocation from North Korea, it’s obvious. They count on a specific reaction from the partners and they get it. Why are you playing along with it? Have ever you thought about it?” Putin said.

  • Sep 07, 02:55 PM (IST)

    North Korea’s Minister of External Economic Relations and head of the delegation at the Eastern Economic Forum in Vladivostok, Kim Yong-jae, has said that the country will introduce strong countermeasures against the United States’ attempts to exert pressure through strong sanctions.

  • Sep 07, 02:12 PM (IST)

    UN Secretary General Antonio Guterres has said that the unity among certain members of the UN Security Council was paramount for resolving the ongoing North Korea issue. Guterres said that unity between China, the United States and Russia was essential if North Korea’s nuclear ambitions were to be put to an end.

  • Sep 07, 02:05 PM (IST)

    “Given the new developments on the Korean peninsula, China agrees that the UN Security Council should respond further by taking necessary measures,” Wang told reporters in Beijing. “We believe that sanctions and pressure are only half of the key to resolving the issue. The other half is dialogue and negotiation,” he added.

  • Sep 07, 02:05 PM (IST)

    China seems to have finally given in to the idea of imposing stronger sanctions on North Korea. Chinese foreign minister Wang Yi has said that China would support the United Nations taking further measures against North Korea.

  • Sep 07, 01:32 PM (IST)

    European foreign policy chief Federica Mogherini has called for the European Union to impose additional sanctions on North Korea as a part of the international pressure being exerted at the moment on the rogue nation.

  • Sep 07, 01:26 PM (IST)

    Russian President Vladimir Putin has said that he hopes the situation in the Korean Peninsula does not descend to a conflict involving the use of weapons of mass destruction.

  • Sep 07, 01:02 PM (IST)

    The price of automobile fuel has reportedly skyrocketed in North Korea, possibly because of developments related to the sanctions being imposed on the country. Last month, gasoline prices had risen to nearly USD 30 for 15 kilograms and they have risen substantially once again. Drivers in Pyongyang have had to visit multiple gas stations to get their tanks full as gas supply has been significantly reduced. Some stations are secretly charging extra too, according to some media reports.

  • Sep 07, 12:54 PM (IST)

    This rare aerial footage of North Korean capital Pyongyang shows a city full of skyscrapers and other modern structures but devoid of pedestrians and cars.

  • Sep 07, 12:51 PM (IST)

    Pyongyang from above: Singaporean given rare access to film North Korean capital    

    Pyongyang from above

    Pyongyang from above: Singaporean given rare access to film North Korean capital

    SINGAPORE: Singaporean photographer Aram Pan has taken rare footage of the North Korean capital Pyongyang after he was given access to film while flying over the city. Pan flew in a Piper Matrix…

  • Sep 07, 12:31 PM (IST)

    “There are possibilities to achieve the settlement of Pyongyang’s problem by diplomatic means. This is possible and must be done. We are telling them that we will not impose sanctions, which means you will live better, you will have more good and tasty food on the table, you will dress better. But the next step, they think, is an invitation to the cemetery. And they will never agree with this,” Putin said in his address at Vladivostok.

  • Sep 07, 12:27 PM (IST)

    Criticizing the United States’ demand for stronger sanctions on North Korea, Russia’s Vladimir Putin said that if that happens, it could push North Korea into starting an armed conflict.

  • Sep 07, 12:24 PM (IST)

    Speaking at the same forum in Vladivostok, Japanese Prime Minister Shinzo Abe said that the issue surrounding North Korea needs quick action and that all major world powers must push Pyongyang to meet its obligations to the United Nations and put an end to its nuclear weapons and missile programs.

  • Sep 07, 12:19 PM (IST)

    Russian President Vladimir Putin has said he believes that US President Donald Trump’s administration is willing to defuse tensions in the Korean Peninsula, but reiterated Russia’s opposition to imposing stronger sanctions on North Korea. Putin was speaking at an economic forum being held in Vladivostok.

  • Sep 07, 12:09 PM (IST)

    In a phone conversation with US President Donald Trump, Chinese President Xi Jinping reiterated China’s commitment towards denuclearising North Korea, after Trump warned that any threat from the rogue nation will be met with an “overwhelming” response.

  • Sep 07, 11:54 AM (IST)

    According to a report by The Times, UK, South Korean commandos will be working with the team of US Navy Seals who killed Al-Qaeda chief Osama bin Laden to create a special squad to assassinate North Korean leader Kim Jong-un.

  • Sep 07, 11:50 AM (IST)

    According to media reports, dozens of South Korean protestors have been injured in clashes between them and the South Korean police as the US military added more launchers to their THAAD missile defence systems deployed across the country. The police officers also reportedly smashed windows of cars that were being used to block roads.

  • Sep 07, 11:48 AM (IST)

    Suki Kim, a South Korean-born American writer who worked undercover in North Korea for over 6 months, has said that an uprising by the people of North Korea against the Kim Jong-un regime is the only way of dealing with the issue. “Literally the only way to approach it is a regime change, North Korea as a regime will not cooperate, you cannot actually come to any conclusion dealing with [their] great leader system,” she said.

  • Sep 07, 11:40 AM (IST)

    South Korean citizens took to the streets today, protesting the deployment of THAAD missile defence systems by the US military. South Koreans have been opposing the THAAD systems for quite some time as they believe the system’s presence will impact the environment and health of people in an adverse way. Some maintain that deploying these systems is only going to result in an escalation of tensions in the Korean Peninsula, not help calm them down.

South Korea deploys anti-missile system as U.S. seeks tough North Korea sanctions — Trump says, “I believe that President Xi agrees with me 100 percent.”

September 7, 2017

Image may contain: outdoor

Terminal High Altitude Area Defense (THAAD) interceptors are seen as they arrive at Seongju, South Korea, September 7, 2017. Lee Jong-hyeon – News1 via REUTERS


By Christine Kim and Michelle Nichols

SEOUL/UNITED NATIONS (Reuters) – South Korean protesters clashed with thousands of police over the deployment of a defense system aimed at countering North Korean missile attacks, while China and the United States discussed options to rein in Pyongyang.

The United States wants the U.N. Security Council to impose an oil embargo on North Korea, ban its exports of textiles and the hiring of North Korean laborers abroad, and subject leader Kim Jong Un to an asset freeze and travel ban, according to a draft resolution seen by Reuters on Wednesday.

Pressure from Washington has ratcheted up since North Korea conducted its sixth and largest nuclear test on Sunday. That test, along with a series of missile launches, showed Pyongyang was close to achieving its goal of developing a powerful nuclear weapon that could reach the United States.

Amid the rising tensions, Seoul installed the four remaining launchers of the U.S. anti-missile Terminal High Altitude Area Defense (THAAD) system on a former golf course in the south early on Thursday. Two launchers had already been deployed.

More than 30 people were wounded when around 8,000 South Korean police broke up a blockade of about 300 villagers and civic groups opposed to the THAAD system deployment, fire officials said.

The decision to deploy the THAAD system has drawn strong objections from China, which believes its radar could be used to look deeply into its territory and will upset the regional security balance.


U.S. President Donald Trump has urged China, North Korea’s biggest ally and trading partner, to do more to rein in its neighbor which has pursued its missile and nuclear weapons programs in defiance of U.N. sanctions and international condemnation.

U.S. Treasury Secretary Steve Mnuchin said he had an executive order ready for Trump to sign that would impose sanctions on any country that trades with Pyongyang if the United Nations does not put additional sanctions on North Korea.

Trump and Chinese President Xi Jinping committed on a phone call on Wednesday to “take further action with the goal of achieving the denuclearization of the Korean peninsula”, the White House said.

“President Xi would like to do something. We’ll see whether or not he can do it. But we will not be putting up with what’s happening in North Korea,” Trump told reporters, although he offered no specifics.

“I believe that President Xi agrees with me 100 percent,” he said.

Parts of a Terminal High Altitude Area Defense (THAAD) system arrive at Seongju, South Korea, September 7, 2017. Min Gyeong-seok/News1 via REUTERS

Asked whether he was considering a military response to North Korea, Trump said: “Certainly, that’s not our first choice, but we will see what happens.”

Xi told the U.S. president during their 45-minute call that the North Korean issue must be resolved through “dialogue and consultation”.

The United States had set aside for now plans to end a U.S. trade agreement with South Korea, a senior administration official said on Wednesday. The trade issue is unrelated to North Korea but has been a source of tension between the two allies.


Image may contain: 2 people, people smiling, people standing

 South Korean President Moon Jae In (right) shakes hands with Japanese Prime Minister Shinzo Abe before their summit talks in Vladivostok, Russia, on Sept 7, 2017. PHOTO by EPA

Japanese Prime Minister Shinzo Abe and South Korean President Moon Jae-in spoke at a regional meeting in the eastern Russian city of Vladivostok and agreed to try to persuade China and Russia to cut off oil to North Korea as much as possible, according to South Korean officials.

The European Union’s foreign and defense ministers will discuss further sanctions for North Korea on Thursday, the bloc’s top diplomat said ahead of a EU ministers’ meeting in the Estonian capital.

However, sanctions have so far done little to stop North Korea boosting its nuclear and missile capacity as it faces off with Trump.

China and Russia have advocated a “freeze for freeze” plan, where the United States and South Korea would stop major military exercises in exchange for North Korea halting its weapons programs, but neither side appears willing to budge.

South Korean Marines wrapped up a three-day firing drill on Thursday aimed at protecting its islands just south of the border with North Korea, while the air force will finish up a week-long drill on Friday.

North Korea says it needs to develop its weapons to defend itself against what it sees as U.S. aggression.

South Korea and the United States are technically still at war with North Korea after the 1950-53 Korean conflict ended with a truce, not a peace treaty.

For a graphic on nuclear North Korea, click: here

Additional reporting by Soyoung Kim in SEOUL, Michael Martina in BEIJING, Steve Holland, Eric Walsh, Jeff Mason and Jim Oliphant in WASHINGTON and Gabriela Baczynska, Robin Emmott and David Mardiste in TALLINN; Writing by Lincoln Feast; Editing by Paul Tait and Nick Macfie


 (Contains links to previous articles)

Trump says U.S. not ‘putting up with’ North Korea’s actions — “Trump considering a military response to North Korea”

September 6, 2017

By Jeff MasonMichael Martina


Washington /BEIJING (Reuters) – President Donald Trump warned on Wednesday that the United States would no longer tolerate North Korea’s actions but said the use of military force against Pyongyang will not be his “first choice.”

In a flurry of phone calls with world leaders days after North Korea’s sixth and most powerful nuclear test, Trump and Chinese President Xi Jinping committed to ”take further action with the goal of achieving the denuclearization of the Korean peninsula,” the White House said.

”President Xi would like to do something. We’ll see whether or not he can do it. But we will not be putting up with what’s happening in North Korea,” Trump told reporters, though he offered no specifics.

“I believe that President Xi agrees with me 100 percent,” he added.

Asked whether he was considering a military response to North Korea, Trump said: ”Certainly, that’s not our first choice, but we will see what happens.”

Xi, who has been under pressure from Trump to do more to help curb North Korea’s nuclear and missile programs, told the U.S. president during their 45-minute call that the North Korean issue must be resolved through “dialogue and consultation.”

The focus on negotiations by China, North Korea’s main trading partner, contrasted with Trump’s assertions over the last few days that now was not the time for talks with North Korea while pressing instead for increased international pressure on Pyongyang.

The United States and South Korea have asked the United Nations to consider tough new sanctions on North Korea after its nuclear test on Sunday that Pyongyang said was an advanced hydrogen bomb.

Russian President Vladimir Putin insisted on Wednesday that resolving the North Korean nuclear crisis was impossible with sanctions and pressure alone.

Putin met South Korea’s Moon Jae-in on the sidelines of an economic summit in the eastern Russian city of Vladivostok amid mounting international concern that their neighbor plans more weapons tests, including possibly a long-range missile launch before a weekend anniversary.

Putin echoed other world leaders in denouncing North Korea’s latest nuclear bomb test on Sunday, saying Russia did not recognize its nuclear status.

“Pyongyang’s missile and nuclear program is a crude violation of U.N. Security Council resolutions, undermines the non-proliferation regime and creates a threat to the security of northeastern Asia,” Putin said at a news conference.

“At the same time, it is clear that it is impossible to resolve the problem of the Korean peninsula only by sanctions and pressure,” he said.

No headway could be made without political and diplomatic tools, Putin said.


Moon, who took office this year advocating a policy of pursuing engagement with North Korea, has come under increasing pressure to take a harder line.

Russian President Vladimir Putin and his South Korean counterpart Moon Jae-in shake hands during a meeting at the Eastern Economic Forum in Vladivostok, Russia September 6, 2017. Sputnik/Mikhail Klimentyev/Kremlin via REUTERS

He has asked the United Nations to consider tough new sanctions after North Korea’s latest nuclear test.

The United States wants the Security Council to impose an oil embargo on North Korea, ban the country’s exports of textiles and the hiring of North Korean laborers abroad and subject leader Kim Jong Un to an asset freeze and travel ban, according to a draft resolution seen by Reuters on Wednesday.

Diplomats say the U.N. Security Council could also consider barring its airline.

“I ask Russia to actively cooperate as this time it is inevitable that North Korea’s oil supply should be cut at the least,” Moon told Putin, according to a readout from a South Korean official.

Putin said North Korea would not give up its nuclear program no matter how tough the sanctions.

Slideshow (9 Images)

“We too, are against North Korea developing its nuclear capabilities and condemn it, but it is worrying cutting the oil pipeline will harm the regular people, like in hospitals,” Putin said, according to the South Korean presidential official.

Russia’s exports of crude oil to North Korea were tiny at about 40,000 tonnes a year, Putin said. By comparison, China provides it with about 520,000 tonnes of crude a year, according to industry sources.

Last year, China shipped just over 96,000 tonnes of gasoline and almost 45,000 tonnes of diesel to North Korea, where it is used across the economy, from fishermen and farmers to truckers and the military.

Trump and British Prime Minister Theresa May agreed in a telephone call on Tuesday that China must do more to persuade North Korea to cease its missile tests, a spokesman for May said.


Sanctions have done little to stop North Korea boosting its nuclear and missile capacity as it faces off with Trump, who has vowed to stop it from being able to hit the U.S. mainland with a nuclear weapon.

China and Russia have advocated a “freeze for freeze” plan, where the United States and South Korea stop major military exercises in exchange for North Korea halting its weapons programs, but neither side is willing to budge.

North Korea says it needs to develop its weapons to defend itself against what it sees as U.S. aggression.

South Korea and the United States are technically still at war with North Korea after the 1950-53 Korean conflict ended with a truce, not a peace treaty.

China objects to both the military drills and the deployment in South Korea of an advanced U.S. missile defense system that has a radar that can see deep into Chinese territory.

South Korea’s Defence Ministry said the four remaining batteries of the Terminal High Altitude Area Defense (THAAD) system would be deployed on a golf course in the south of the country on Thursday. Two THAAD batteries have already been installed.

Additional reporting by Denis Pinchuk in VLADIVOSTOK, Soyoung Kim in SEOUL, Stephanie Nebehay in GENEVA, William Mallard and Kaori Kaneko in TOKYO, Christian Shepherd and Michael Martina in BEIJING, and Jim Oliphant in Washington; Writing by Matt Spetalnick and Lincoln Feast; Editing by Chizu Nomiyama and James Dalgleish