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The South China Sea: What’s Really at Issue

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The South China Sea is basically China’s export waterway to Africa and to Europe (among other markets), but in order for China’s enemy (aspiring conqueror), America, to harm and weaken China maximally, and to use the United Nations assisting in that aggression, America and its allies have cast this vital trade-waterway as being instead basically just an area to be exploited for oil and gas, and minerals, and fishing. The American Government’s aggression — its effort to strangulate China’s international commerce — thus becomes ignored by the U.N., which is consequently handling the entire issue under its law which pertains to a nation’s (China’s) rights to exploit the natural resources of and under a given waterway. 

The international legal issue, which is being applied, is therefore the 1982 U.N. Convention on Law of the Sea (UNCLOS). This treaty (law) has been ratified, or at least signed, by all countries except the United States, whose hold-out for 12 years had blocked the Convention even from coming into effect. Then, finally (when Guyana, on 16 November 1993, did, after so much delay, become the requisite 60th country to ratify the Convention, so as to bring it into actual effect), the U.S., on 29 July 1994, went through the mere formality of signing the Agreement, because Part XI of the Convention (“to authorize seabed exploration and mining and collect and distribute the seabed mining royalty”) had, by this time, become modified, to the satisfaction of Exxon and other U.S. oil-and-gas corporations, so that U.S. President Bill Clinton had UNCLOS signed by the U.S. — but not sufficiently satisfied to have it ratified by the U.S., which nation therefore still remains the lone holdout amongst the 179 U.N. member nations that had been invited to join it. (Some countries are entirely landlocked.) So, ironically, the lone holdout-nation, U.S., is now militarily threatening China (one of the Convention’s actual member-nations), for its allegedly violating that Convention, in regard to what is, in fact, China’s essential exportation (and importation) waterway, even more important to China than its being a potential Chinese natural-resource asset.

Furthermore, China has long wanted to reduce much of its need to ship through the South China Sea, by means of building what for China would be equivalent to what the Panama Canal is for the U.S., but this new canal would be located in Thailand, which America conquered in its 1948 coup — the CIA’s first. If built, this Thai Canal would significantly reduce China’s costs of importing oil from Iran and Arabia, as well as its costs of exporting goods to India, and to Europe and Africa. Therefore, the U.S. regime is willing to pay whatever the cost might be in order to bribe Thai leaders to continue saying no to that canal-proposal. (But, will China ultimately outbid America? There is a tug-of-war in Thailand about whether to participate in China’s proposal.)

The U.S. thus blocks China, both via the UNCLOS, and via China’s main potential method of avoiding its need to rely so heavily upon its usage of the South China Sea — the Thai Canal.

This is consequently a good example of how the imperialistic U.S. Government, which is uniquely hostile toward the United Nations, nonetheless exploits the U.N., and yet still receives deferential treatment from it — so that the U.S. can actually use the U.N. as a tool to advance its own imperialistic objectives of conquering yet more territory, additional vassal-nations or ‘allies’. 

The U.N. is, furthermore, exceptionally proud of its achievement in having finally passed UNCLOS into international law. As it says, “‘Possibly the most significant legal instrument of this century’ is how the United Nations Secretary-General described the treaty after its signing.”

None of this can be understood outside the context of international law itself, which is tragically corrupt, as a result of the following history, the backstory here:

Though the U.N. was invented and even named by America’s President Franklin Delano Roosevelt (FDR), he died just before it started, and his successor Harry S. Truman shaped it by modifying FDR’s plan, so that the U.N. would gradually fail, and, instead, the U.S. Government would itself emerge effectively as being the global government over all other governments — America’s Government would become a global dictatorship over nations, instead of the U.N. coming into existence as the global democratic republic of nations (FDR’s U.N.) that FDR had aimed for it to be, controlling international relations after World War II, in such a manner as to prevent a WW III. 

We thus live in Truman’s post-WW-II world, definitely not in FDR’s.

After World War II (in which the U.S. and UK were allied with the U.S.S.R. against the fascist powers that had invaded countries which had not even been threatening them), America soon launched a string of coups and invasions — overthrowing and replacing governments that hadn’t even posed any threat, at all, to America’s national security — and the world thereby became increasingly accustomed to the fact that America’s military and CIA are, in fact, the world’s new invading military force, replacing Nazi Germany, Fascist Italy, and the Emperor’s Japan, in that capacity, as international dictators. (That’s something which FDR had been planning to prevent any nation from being.) The first four U.S. coups were against Thailand in 1948, Syria in 1949, Iran in 1953, and Guatemala in 1954; and each American coup replaced a moderate leader with a brutal fascist regime, crushing democracy there. (The U.S. takeover in Syria lasted only a few years.) America also engaged in numerous outright military invasions, many of them using hired proxy forces (U.S.-funded mercenaries), instead of using U.S. soldiers, as being the U.S. regime’s “boots on the ground,” to do the actual killing and dying. America thereby became the invading country throughout the world, which is what the fascist powers had been in World War II. 

The post-WW-II America thus emerged as standing above international law, ever since the 1945 end of WW II. In effect, America’s Government has internationally become the world’s government — by force of arms. Other countries are subject to international law, but the U.S. is not. The U.S. has emerged as the international empire, taking over, and dominating, in more and more countries, until it now openly demands compliance from all countries, and even threatens Iraq’s Government, that if Iraq tries to expel the U.S. occupying forces, the U.S. will permanently destroy Iraq

America’s imperialist fascism has become so bold, for so long, so that news-media don’t even report it. If one lays a WW II ideological template over the world’s nations today, then today’s U.S. and its allies are much more fitting the mold and form of the Axis powers, than of the Allied powers; but, this time, instead of there being Germany and its allies as the imperialistic fascists, we today have America and its allies, as constituting the imperialistic fascist nations. America assumed this role gradually, first as that role was ‘justified’ supposedly as being an ideological contest between democracy versus communism (which, on the U.S. side, was merely an excuse, not an authentic explanation); but, then, increasingly, without any such ideological excuse, as being, simply, America’s alleged ‘superiority’ (such as the recent U.S. President, Barack Obama, repeatedly asserted, that “The United States is and remains the one indispensable nation,” which means that every other nation is “dispensable”; only America is not). It is now as flagrant with America as it had been with Hitler’s Germany (“Deutschland über alles,” etc.). The gloves have finally been taken off, by today’s U.S. imperialist fascist regime. The U.S. even has the world’s highest percentage of its own population being in prisons, a higher imprisonment-rate than that of any other country. This is very appropriate for the world’s most totalitarian country. So, the dictatorship isn’t only international — it is even intranational, inside the U.S. And it very much is in control over the nation’s news media. It’s a two-Party dictatorship.

When U.S. President FDR died as WW II was ending, his dream for the future was that America and its allies in WW II would create a democratic super-nation controlled by all nations, a United Nations that would have the military force throughout the world to enforce international laws, which would be made democratically by the U.N., through its Security Council and General Assembly. But, nowadays, instead, the U.S. and its allies are free to invade anywhere they wish, and — unlike what happened to the fascist leaders during WW II — the U.S.-and-allied leaders get away with it, and they aren’t even charged by the International Court of Justice and the International Criminal Court. They stand above international law: precisely the sort of situation that FDR had aimed to prohibit.

For example, one of America’s allies — and thus immune to international  law — is Israel; and, on September 3rd, the international news site South Front headlined “Israeli Forces Rain Down Missiles on Syria”, and reported that:

The Israeli Air Force conducted a second round of missiles strikes on Syria in less than a week.

Late on September 2, Israeli warplanes launched missiles at the T4 airport in the province of Homs. According to Syria’s state media, the strikes were conducted from the direction of the US-controlled zone of al-Tanf on the Syrian-Iraqi border. Syrian pro-government sources claimed that a large part of the missiles was intercepted. …

The most recent previous Israeli strike on Syria took place on August 31 targeting the countryside of Damascus city and the province of Daraa.

Syria does not invade Israel, but Israel routinely invades Syria, and long has done so — and yet Israel’s leader, Benjamin Netanyahu, is not being strung up and executed by an international criminal court, like the leaders of Germany and Japan were supposed to have been, after WW II. That Judgment at Nuremberg, and similar trials against some of Japan’s leaders, were actually only victors’ ‘justice’ against some of Germany’s and Japan’s leaders, but (at the time) the victorious Allies claimed it to be the start of international justice, and to be the enforcement of international law — even though the trials were held only against Germany’s and Japan’s leaders, but not also against Italy’s. (Italy had signed with the Allies the Armistice of Cassabile surrendering on 8 September 1943, and this was part of that deal — Italy’s Government wasn’t quite as horrific as the other two, which held out till the bitter end.) These trials were prosecuting against “aggressive war”: the charge was that the imperialistic fascists had invaded countries that hadn’t invaded them — exactly what the U.S. and its allies constantly and now routinely do, after WW II (overthrowing and replacing governments that had not even so much as threatened the U.S. and its allies). 

The U.S. and its allies are today’s imperialistic fascists, and the U.N. can do nothing against them. The U.N. can do nothing against the leaders of America and its allies for doing what had been done by the leaders of Germany and Japan during WW II. 

Hitler’s and Hirohito’s spirits thus now rule in the self-styled (but now only formally) ‘democratic’ countries, whose rulers reign with far nicer rhetoric — far more hypocrisy — than their 1930s fascist predecessors had done. And the U.N. is dead, because it became created by Harry S. Truman, instead of by FDR.

Consequently, let’s consider, in more depth here, the example of China:

China is a communist country, but its communism is drastically changed from the time when Mao Tse Tung founded it, and its Marxism is unrecognizable, no longer a “dictatorship by the proletariat,” but instead one-Party rule by a Party that anyone, of any economic class, is invited to join, and which is widely considered by the Chinese people to be a “democracy.” (A far larger percentage of Chinese consider their Government to be a “democracy” than the percentage of Americans who consider America’s Government to be a “democracy.” Chinese don’t consider the number of political parties to be any indication of whether the nation is a democracy as opposed to a dictatorship. They are correct in that. In fact: America’s own Founders had aimed to be creating a nation which would have no parties at all.)

FDR made a clear distinction between a national democracy and an international democracy. He believed that international relations should be an international democracy of independent nations that deal with each other on a cooperative instead of coercive basis, and that international laws should govern this, coming from and being enforced by the United Nations. By contrast, national democracy was to be a choice that only the people within a given nation should determine, and the U.N. should have no relevance to, or control over, that. “Human rights” are individuals’ rights, and are an internal matter within each nation, whereas the rights of nations are very different, and are the purview exclusively of the U.N., as FDR was planning it. This was how he planned for there to be a post-WW-II world which would have no World War III.

By contrast, today’s U.S. regime claims, for example, the authority to dictate what countries should control which international waterways. This is clearly infringing on the U.N.’s area of authority; and, so, Truman’s U.N. has no control over the matter, though it does have vague laws which pertain to it. Today’s U.N.’s laws ignore one cardinal position — a cardinal geostrategic principle, the Westphalian principle — that FDR and the Soviet Union’s dictator, Joseph Stalin, agreed upon and which Winston Churchill opposed: the view that each of the major world powers should be allowed to intervene in the internal affairs of a foreign nation only if that foreign nation is on its borders or at least nearby (which was undefined). This was the Westphalian system, but enhanced so as to be explicitly anti-imperialistic, because both FDR and Stalin believed that both World Wars had resulted from imperialism. Both leaders rejected imperialism but accepted that there exists a distinction between major and minor powers, such that the nearby surrounds of a major power need to be entirely nations that are allied with that major power, or, at least not hostile toward it — not allied with any major power that is hostile toward itself. In other words: both men rejected Churchill’s demand that empires be allowed, which could extend beyond a major world power’s own “neighborhood.” Churchill wanted to continue the British Empire. Truman accepted Churchill’s view, and rejected the view of both FDR and Stalin. Consequently, Truman and Churchill agreed together to move forward toward an all-encompassing U.S.-UK Empire. (Though, nominally, the Westphalian principle had already become a part of the U.N.’s subsequent Charter — because of FDR — as being Chapter 1, Article 2, Paragraph 7, it was ignored from the outset, and the U.N. organization itself became set up so as to hide the entire Charter from the public. The numerous deficiencies in the Charter — such as its failure to include any clause describing a process by which the Charter could be amended — thus have likewise been hidden from the public, and not debated, nor discussed; and, thereby, the U.S. and UK have been able to have their way: the system for future global dictatorship was thus born.)

Consequently, geostrategic issues were prohibited by the U.S. regime from being subjects of international law. Though international law allowed vague references to “aggressive war,” simply because FDR’s U.S. had already established the system to pursue and hang German and Japanese leaders for their having done that, the concept of “aggression” became smudged in international law, instead of defined; and, so, aggression is practically absent as a topic of international law as it currently exists. This is how the South China Sea issue came to be treated only as being an issue of natural-resource rights. The U.N.’s Charter is essentially irrelevant to what is the most important. (Even its Westphalian clause — which is only the original, weaker, empire-accepting, form of Westphalianism — is irrelevant, since it’s ignored.)

China’s ability to ship its products westward via the South China Sea is crucial to China’s economy. Consequently, the imperialist fascist regime and its allies are trying to reduce that ability. Because this is Truman’s, instead of FDR’s, post-WW-II world, the existing relevant international laws lack sufficient clarity, and the U.S. and its allies can, under existing law, gradually choke-off China’s exports.

Katherine Morton’s 20 July 2016 article, “China’s ambition in the South China Sea”, in the journal International Affairs, argues that China’s ambition in the South China Sea is primarily driven by China’s thousands-of-years-old commercial policy, of being a maritime nation, a nation whose economy is based upon international trade. This is not imperialistic, but it instead concerns international rights that every nation ought to have. (Until 1912, China was ruled by imperialistic Emperors, but afterwards it was no longer imperialistic and has instead been defending itself against imperialistic powers.) Morton argues that China’s objective is not any grand design to achieve maritime hegemony — such as the U.S. regime has, and such as England, Holland, Spain, Portugal, France, Italy, Germany, and Japan, previously had done. It’s not imperial rule over countries that aren’t in their own neighborhood. It’s not conquest; it is instead self-defense. America and its allies do the coups, invasions, and international economic sanctions (economic blockades, even), but China does not. That, basically, is Morton’s argument (though she doesn’t put it in those clear terms). She says that China’s “attention is primarily focused upon demonstrating political resolve to defend China’s maritime periphery. Yet conclusive evidence that the Chinese leadership is intent upon dominating the South China Sea for the broader purpose of building a Sino‐centric maritime order in east Asia is difficult to find.” (The obtuseness — if not self-contradictoriness — of her writing might be due to her desire not to offend the U.S. regime’s own imperialistic sensibilities. Such a style is common amongst international-affairs scholars in the U.S.-and-allied world.)

However, the U.S. regime claims that China, instead of America, is the imperialistic power. The U.S. regime, as usual, claims to have the international right to enforce its will in international affairs anywhere on the planet. Sometimes, today’s U.N.-based international laws are in favor of outcomes that the U.S. regime wants. Thus, we have the matter of the South China Sea, where the U.N. body, UNCLOS, ruled on 12 July 2016 that the only relevant question is which nation is the nearest to a given part of a waterway (so as to have the right to explore and exploit there). The international laws by today’s U.N. ignore geostrategic issues, such as both FDR and Stalin wanted to include in them, but Churchill and Truman wanted international laws to ignore such matters so that UK and now U.S. could jointly pursue world-conquest. Since the UNCLOS ruling in 2016 opposed China’s claims, by ignoring its major-power concerns about its self-defense, the U.S., under the hyper-aggressive ruler, Donald Trump, recently came out publicly committed to enforcing that 2016 ruling by the U.N. body. On September 1st, Reuters headlined “Special Report: Pentagon’s latest salvo against China’s growing might — Cold War bombers”, and reported that:

On July 21, two U.S Air Force B-1B bombers took off from Guam and headed west over the Pacific Ocean to the hotly contested South China Sea. The sleek jets made a low-level pass over the aircraft carrier USS Ronald Reagan and its escorting fleet, which was exercising nearby in the Philippines Sea, according to images released by the U.S. military. The operation was part of the Trump administration’s intensifying challenge to China’s ruling Communist Party and its sweeping territorial claims over one of the world’s most important strategic waterways. While senior Trump officials launch diplomatic and rhetorical broadsides at Beijing, the U.S. Defense Department is turning to the firepower of its heavily armed, long-range bombers as it seeks to counter Beijing’s bid to control the seas off the Chinese coast. …

The U.S. Army also intends to spread forces through the first island chain and other outposts in the Western Pacific. It is planning a series of major exercises this year and next where troops would deploy to islands in the region, according to senior commanders and top Pentagon officials.

The U.S. regime is using, as its excuse, its backing the territorial claims of what it claims to be its ‘allies’ against China — such as Vietnam. Meanwhile, the regime is applying diplomacy and other means, in order to encourage those ‘allies’ to insist upon, and not to compromise or weaken, those claims. Vietnam quickly responded to America’s active backing, by “Vietnam Threatens China with Litigation over the South China Sea”.

What’s at issue there is underwater oil-and-gas exploration-and-development rights of the various nations’ corporations. If China truly does not place its corporations’ commercial interests above the Chinese nation’s self-defense interests, then it will sacrifice the former for the latter, and it will cede those other nations’ rights to exploit that oil and gas, and will settle with its neighbors, for an agreement by all of America’s ‘allies’ to support and endorse China’s rights to traverse unimpeded through those waterways.

If the U.S. regime then would continue its heavy military fortifications surrounding China, then China would (in accord with its agreements that it will have reached with Vietnam and those other neighboring nations) be receiving, from those nations’ endorsements of China’s rights in that regard (for China’s self-defense), and from those nations’ public requests for U.S. forces to depart from their region, support for China’s shipping rights, which would be at least as valuable to China as whatever the natural resources there are worth.

In regards to the 12 July 2016 ruling by UNCLOS, it concerned specifically the case between China and the Philippines, and it presented the Philippines’ challenging China’s claims, which claims were/are based on arguments such as (regarding “Scarborough Shoal”) that “Since the Yuan Dynasty, the Chinese people have never stopped developing and exploiting Huangyan Island and its surrounding waters and the Chinese government has exercised effective management and jurisdiction over their activities all these years.” The ruling replied to that assertion by saying, “The Tribunal’s conclusions with respect to” that area are “independent of the question of sovereignty.” But, whatever the ruling was based upon, what’s relevant here is that the U.S. Government has no right to be sending its warships and other weapons into the South China Sea in order to ‘enforce’ UNCLOS’s ruling. And whatever China’s claims are or were in this matter, they cover(ed) a very large area, which encompasses almost all of the South China Sea — it encompasses the area that’s within the “nine-dash line”, which is shown here in green. Although UNCLOS (actually the U.N.-authorized body that administers it, the International Seabed Authority) is legitimately involved in this matter; the U.S. Government is the opposite: it is instead an international-law violator and has no right to be involved, at all, and is illegally throwing its weight around where it doesn’t belong and should be expelled — and would be expelled if this were FDR’s U.N., instead of Truman’s U.N.

Another way that Truman’s U.N. helps the U.S. regime geostrategically against China is the issue of Hong Kong — an internal Chinese matter, which wouldn’t even be a U.N. concern if the U.N. had been created instead by the U.N.’s inventor, FDR. (Even the original, weaker, form of the Westphalian principle — the version that’s in the U.N.’s Charter — would prohibit outside involvement in this matter.) As Reuters headlined on September 3rd, “U.N. experts decry Hong Kong security law in open letter to China”. Any U.N. that gets involved in any nation’s internal affairs, and in such things as ‘human rights’, should be simply dissolved, because it is advancing imperialism, instead of preventing it.

Basically, today’s U.N. is just a talking-forum, a PR vehicle for its member-nations; but, actually, at the deepest level, it’s a propaganda-agency for imperialism. That’s what it was designed for. 

If China can win the support of its neighbors in the region to kick America out, then the sacrifice of such assets as oil and gas there would be a relatively inconsequential price for China to pay. Unfortunately, today’s U.N. must be eliminated and replaced by one that builds upon FDR’s intentions, because today’s U.N. — Truman’s U.N. — is exactly the opposite.

America’s having its weaponry and forces on and near China’s borders is even worse than when in 1962 the Soviet Union placed its forces in Cuba — and nearly precipitated WW III. America has no right to be there. And today’s U.N. has no justification to continue its existence — a replacement of it is direly needed.

Details of the existing U.N.’s deficiency in the present situation will here be summarily stated: UNCLOS asserts: “Every State has the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles.” That’s the outermost limit of any coastal nation’s “sovereignty.” Furthermore: “Non-compliance by warships with the laws and regulations of the coastal State. If any warship does not comply with the laws and regulations of the coastal State concerning passage through the territorial sea and disregards any request for compliance therewith which is made to it, the coastal State may require it to leave the territorial sea immediately.” But Truman’s U.N. possesses no military force of its own and therefore that “coastal State” is provided no protection by today’s U.N. Furthermore: UNCLOS even allows an enemy nation’s naval vessels into that 12-mile limit, but “submarines and other underwater vehicles are required to navigate on the surface and to show their flag.” There is no limit upon how near the shore an enemy’s warships are allowed to come. Yet the U.S. violates UNCLOS routinely. What military force exists against its doing so? What legal tribunal exists that covers this? Furthermore: The agreement by FDR and Stalin, that any major world power needs to have some sort of right to veto or block any nearby nation from coordinating with any other major power that is hostile toward that given major world power, is entirely absent from the existing U.N. — existing international law. Consequently, for example: The U.S., under JFK in 1962, was acting in violation of the subsequent 1982 UNCLOS, when he ordered the Soviet military to depart from Cuba — that was beyond the 12-mile limit. Existing international law has to be replaced. It ignores essential geostrategic concerns to prohibit imperialism and to minimize any likelihood of a WW III. It needs to be replaced.

And that’s not the only reason why the current system of international laws needs to be replaced. The existing international dictatorship, which is the U.S. regime, is even more conservative than is Truman’s U.N. For example: As of October 2019, there are 37 “Treaties Pending in the Senate” (the U.S. Senate). These U.N.-backed treaties all are of a progressive nature, asserting the rights of workers and obligations of employers, etc.; and, in fact, the first three of these treaties deal specifically with workers’ rights. The earliest of them, activated in 1949, is the “International Labor Organization Convention No. 87 Concerning Freedom of Association and Protection of the Right to Organize, adopted by the International Labor Conference at its 31st Session held at San Francisco, June 17 – July 10, 1948 (Treaty Doc.: Ex. S, 81st Cong., 1st Sess.); submitted to Senate August 27, 1949.” President Truman could not get Republicans to back it, because they opposed workers’ rights. They still do, and the Treaty still isn’t joined by the U.S. regime. Indeed, as Roncevert Ganan Almond noted, in his 24 May 2017 article in support of “U.S. Ratification of the Law of the Sea Convention”, “Even treaties that flow from American leadership, in areas like protecting rights for persons with disabilities, are rejected.” They’re always being rejected by Senate Republicans. (Truman, of course, was a Democrat; and, on most issues, the leadership of that Party is less conservative than is the leadership of the Republican Party.) Thus, though Truman’s U.N. is conservative, it isn’t as conservative as is the U.S. regime itself, which is even more conservative than Truman himself was. Physically, Hitler and Hirohito lost WW II; but, spiritually, they turned out to have won it. The reason is that FDR tragically died too early.

Author’s note: first  posted at Strategic Culture

Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010

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East Asia

The complex puzzle of Canberra-Beijing ties, as diplomacy takes a back seat

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Australia and China seems to be engaged in a repulsive tariff war targeting each other’s goods. Canberra is struggling to manage its complex economic relationship with Beijing even as it finds itself in the strategically opposite camp. How did things turn out this way? Here, I analyse.

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There was a time when Australia under the Mandarin-speaking Prime Minister Kevin Rudd, who was in office from 2007 to 2013, had the highest level of warmth in relations with China.

The Labour premier saw a promising prospect of economic partnership with a rising China at that point of time, but gravely under-estimated the geopolitical threat that would be soon posed by Beijing, a mistake later governments would realise and is still striving to rectify.

Quad pullout and comeback

Rudd even pulled Australia out of the four-nation Quad grouping in 2008, a year after it was conceived by former Japanese PM Shinzo Abe, in a move to appease Beijing with which Canberra’s economic partnership was progressively moving upwards. But, nine years later, Malcolm Turnbull’s premiership brought Canberra back to the Quad as regional and global security dynamics witnessed a paradigm shift.

Strategic shift

A decade later since Rudd took office, despite closer economic ties with Beijing, Canberra pushed for a closer alliance with the United States since 2017, the year Quad Security Dialogue was revived during the ASEAN and Related Summits in Manila.

It was a result of changes in security assessments by Canberra with regard to new threats and challenges from an increasingly assertive Beijing in the Indo-Pacific and beyond.

The rift between Australia and China further widened, earlier this year, when the Australian government supported an inquiry into the origins of the novel coronavirus, annoying China where it originated. Australian politicians also became increasingly divided on hawkish and dovish lines.

Huawei and ZTE ban

Tides were turned in 2018 when Australia became the first country in the world to ban Chinese telecom giants Huawei and ZTE from 5G trials and rollout, citing security concerns, as these companies ‘allegedly’ had links to the Chinese ruling establishment which they deny.

Beijing also reciprocated with tit-for-tat measures from time to time. The latest in line of such measures was the imposition of temporary anti-dumping tariffs up to 212.1 per cent on Australian wine imports with effect from November 28, this year.

Ongoing tariff tensions

2020 saw a foray of imposition of tariffs and reciprocal duties from both sides right from the beginning of the pandemic. Attempted mergers and acquisitions by Chinese companies involving companies in Australia were also blocked by Canberra citing security reasons.

Adding oil to the fire, anti-dumping investigations were initiated by both sides against each other, for using its findings as rationale for imposing more tariffs on different sets of goods such as aluminum, steel, paper, coal, copper, sugar, log timber, and barley.

ChAFTA

What will be the fate of the 2015-signed China-Australia Free Trade Agreement (ChAFTA)?

The worsening ties might take a toll on ChAFTA as it readies for a five-year review next month, notwithstanding the other broad-based trade pacts in which both countries are participants such as the recently-signed, 15-nation Regional Comprehensive Economic Partnership (RCEP).

ChAFTA took about a decade to complete and led to zero tariffs on many goods, but RCEP is still in its infancy.The main issue is not whether a review of ChAFTA is possible, but how to prevent the looming prospect of Canberra and Beijing retreating from the current commitments directly or indirectly that would effectively reduce the pact into a state of coma.

As ChAFTA goes for review in December, the most likely outcome could be both countries agreeing to maintain the deal’s status quo. If any of the parties wishes to terminate the pact, there is a six-month notice period after which they can leave, with or without a review.

Still economic partners, but political rivals

Today, China has positioned itself as Australia’s largest trading partner. Moreover, Australia strongly benefits from its close proximity to the vast markets of China and Japan which together represent over 40% of all Australian exports, in which a little over 32% amounting to $89.2 billion, are exclusively to China, as data from 2019 show. Despite this, Canberra and Beijing remain at odds politically.

Exercise Malabar 2020 and beyond

One of the striking questions in the strategic circles of all Quad partner countries is, will Australia continue to take part in the annual Exercise Malabar in the coming years, annoying Beijing further?

While Japan is a strategic partner in the Quad, ties with China are moving on an adversarial path, particularly worsening since Canberra took part in the annual Exercise Malabar in the Indian Ocean this month, after a gap of 13 years since it left the mega naval war games.

The exercise by the four Quad partners of India, United States, Japan, and Australia is apparently a warning to Beijing’s naval ambitions in the waters of the Indo-Pacific.

Supply Chain Resilience Initiative

In fact, all the Quad partners and other democracies in the Indo-Pacific wish to decouple itself from over trade dependency on China. But, domestic economic realities prove otherwise. With a raging pandemic and the unravelling US-China cold war threatening supply chains, Japan has recently put forward an idea – the Supply Chain Resilience Initiative or SCRI.

It is a trilateral approach to trade, with India, Australia, and Japan as the key-partners aimed at diversifying its supply risk across a group of supplying nations instead of being disproportionately dependent on just one, apparently keeping China in mind.

Despite all these measures, the prospect of closing of huge Chinese markets for Australian exports, owing to a disproportionately high level of tariffs is haunting domestic producers in Australia that could potentially make Australian wine largely unmarketable and non-feasible in Chinese markets.

Ineffective diplomatic efforts

Current Australian PM Scott Morrison has been trying to bridge gaps in a reconciliatory tone by stating that his government’s actions are wrongly seen and interpreted by some only through the lens of the strategic competition between China and the US. But, Beijing doesn’t seem satisfied, as evident in the decision to impose the recent set of disproportionate tariffs on wine.

Loss of businesses for Australian domestic producers is already hurting the Australian economy badly as goods remain stalled at ports. But, the behemoth of Chinese economy appears to be largely resilient to adverse impacts, compared to the Australian economy.

Way ahead

Australia’s producers and farmers are largely unhappy and unsatisfied with the way Canberra is dealing with Beijing as it directly threatens their livelihoods.

As things turn out worse, Canberra will have to strategise newer options to effectively balance geostrategic and economic considerations with regard to Beijing, possibly through the diplomatic route, in a way to immediately diffuse the prevalent confrontational approach to come out of this diplomatic impasse.

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East Asia

Is China on the brink of a food crisis?

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It is not a secret that the current COVID-19 pandemic has been affecting people all around the globe. The virus touched almost all spheres of regular life – i.e. it resulted in temporary or permanent closure of businesses, a rise in the unemployment rate, inability to physically spend time with family and friends. Such drastic changes in times of uncertainty significantly impacted the well-being of the world population. Moreover, Food and Agriculture Organization of the United Nations (FAO) warned about the emerging food shortages worldwide. According to FAO statistics, global food prices have been on the rise for four consequent months, hitting their maximum in September 2020. China – the place where the virus originated – is one of the states that have been seriously affected by the disruptions, including production and distribution of food.

In his speech on August, 11 Chinese leader Xi Jinping did not admit any food shortages. However, he promoted food security through the campaign “operation empty plate,” thereby encouraging people to stop wasting food. It is interesting to note that Mao Zedong introduced a similar food campaign before the 1959 Great Chinese Famine. Meanwhile, there has undoubtedly been a significant increase in food prices in China. Many experts claim that China is on the brink of a food crisis that has been manifested as a result of lockdowns, infected livestock, and poor weather conditions. It is difficult to give any predictions or estimations about the future food situation in China because the country does not share enough of its data with the rest of the world, yet it is possible to answer the question why the state faces food difficulties.

Average food prices increase

The National Bureau of Statistics of China reported that, on average, food prices have increased by 11.2% compared to 2019. The price level of vegetables increased by 6.4% in one month; egg prices soared by 11.3% within the same period. Pork prices grew the most, by 52.6% compared to the last year’s statistics. Why is it important?

Firstly, many workers and their families who faced loss or decrease of income or remittances became food insecure. That, in turn, has had social repercussions for the overall level of crime, health concerns among adults and infants, high death rate, different demographic and economic challenges. Furthermore, international trade will also suffer: due to the lack of labor force Chinese imports in foreign countries will seemingly increase in price.

Secondly, China, along with other countries, was in a period of recession earlier this year. Food insecurity will cause difficulties in coming out of this financial downturn.

The impact of lockdowns on food supply chains

One of the main factors contributing to the declining agricultural productivity and spiking food prices in China is the restrictions on personal mobility and transportation of goods. In January Chinese authorities adopted measures to limit mobility within the country; they imposed “city lockdowns, traffic control, and closed management of villages and communities.” Such restrictions impacted food supply chains. For the production part many workers experienced difficulties getting to work that created a shortage of physical labor. That is why some crops were not picked, others were not even planted. As a result, the supply of agricultural goods decreased. On the other hand, at the beginning of the year, the demand for them also fell as restaurants and bars were closed. Thereby, many crops went to waste, while farmers did not make enough profit to purchase the seeds and fertilizers for the next season. It is a problem because businesses continue to open up, raising the demand and prices on crops. Immobility also impacted the distribution of seeds and fertilizers to the farms that disrupted the plantation season. Furthermore, the distribution of agricultural goods to grocery stores became difficult. Particular inconveniences associated with the restrictions on mobility all added up to the spike of prices on crops.

African Swine fever outbreak

Another factor impacting the emerging food crisis in China is the failure to rebuild last year’s loss of pigs due to the infection. Chinese porcine farms were hit by the African swine fever outbreak that infected and killed a large number of pigs (40% of total Chinese pigs’ population), decreasing the supply but increasing the prices on pork in 2019. According to China’s National Bureau of Statistics, pork prices were 52.6% higher in August this year than the year before, while corn prices – the main porcine fodder – increased by 20% compared to last year. Chinese farmers failed to improve the situation in 2020 due to severe flooding. The increased amount of precipitation caused considerable losses of corn and thus the inability to feed pigs. China began to import crops from abroad – particularly, corn from the US. As the United States Department of Agriculture (USDA) stated, China had been importing 195,000 more tonnes of American corn than the year before.

Shuttered diplomatic relations between China and Western states

Some experts claim that Chinese diplomatic relations with such Western countries as Australia, the US and Canada shattered due to the fire of four ballistic missiles on the Indian border on August, 26. These states are China’s major food exporters. If their diplomatic relations with Beijing worsen, then the trade has a high chance of being negatively affected as well. In other words, Chinese imports of crops have the risk of becoming more expensive, meaning that the prices of pork and other goods might rise even more.

Severe flooding and drought

Finally, worsened weather conditions – some parts of China experienced drought, others were hit by flooding – led to a decrease in crops and a significant increase in food prices. Southern, Central and Eastern China underwent a period of heavy rain and the worst flooding in the last hundred years. Excessively high water levels in major Chinese rivers, including the Yangtze River, resulted in the evacuation of 15 million people in July 2020. Moreover, the flooding destroyed 13 million acres of agricultural land, which is estimated to cost at least $29 billion of economic damage. In the meantime Northern (Xinjiang province) and Southwest (Yunnan province) China have gone through a period of severe drought. In April 2020 nearly 1.5 million people in Yunnan province were caught in an emergency situation: shortages of drinking water, damage of hundreds of hectares of crops and livestock. Consequently, the supply of many agricultural goods and pork decreased, which spiked the prices on these goods.

Chinese long-term prospects toward food security

To conclude, immobility, African swine flu, worsened weather and security conditions led to the growing food shortages and increasing food prices in China. This being said, the Chinese government has been working on that problem. It has taken special measures to ensure sufficience of agricultural goods by investing in various disaster relief funds for different crops, particularly rice and wheat. For example, Chinese authorities allocated 1.4 billion yuan to save the agricultural harvest in Hubei province. Due to the substantial loss of agricultural products, China has also increased its imports. General Administration of Customs reported that China’s grain imports rose by 22.7% in July 2020 compared to the previous year. Meanwhile, the Chinese leader took a gentle approach to solve this problem. He did not announce the issues related to the insufficient number of crops; instead, he adopted a program for encouraging people to be more frugal with their eating habits. The Chinese Academy of Social Sciences followed the same path as it denied anticipation of a food crisis in the short-term perspective, yet warned about possible food shortfalls by 2025 if no agricultural reforms take place. As of now, China is not on the break of a food crisis; however, its shuttered prospects for long-term food sustainability are subject to dangerous repercussions.

From our partner RIAC

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East Asia

China and Mongolia: A Comprehensive and Never-Ending Strategic Partnership

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Mongolia is an exceptional country when it comes to Eurasian geopolitics, linking China with Russia, two great countries in terms of military and economic capabilities, geographical area and population. In June 2016, the China-Mongolia-Russia Economic Corridor (CMREC) was announced in order to consolidate friendly relations and promote economic exchanges for the success of the Belt and Road Initiative. Many reports indicate the great position of Mongolia on the Chinese economic map as a pillar of the modern Chinese initiative. Mongolia is a major economic partner of China, and the Chinese administration aspires to forge permanent relations of cooperation and coordination with Mongolia by virtue of its common geography and strategic location, in order to open up through it to Russia and other Mongolia is a key economic partner of China, and the Chinese administration aspires to forge permanent relations of cooperation and coordination with Mongolia by virtue of its common geography and strategic location, in order to open up through it to Russia and other international partners.

Mongolia is rich in natural resources, for example the mining industry provided up to 30% of GDP and almost 90% of exports, but its economy is not as developed compared to China. Some economic reports indicate the great economic benefit to Mongolia from the China-Mongolia-Russia Economic Corridor. Mongolia is expected to witness unparalleled economic growth in terms of international economic cooperation, which will positively affect the national economy. The Mongolian economy depends heavily on China’s investment; data of the two largest ports in Inner Mongolia Autonomous Region in northern China indicates enormous economic benefits. In the chart below, the continued economic progress achieved in Inner Mongolia is shown. In addition, rail trade increased by 16 percent year-on-year to 11.2 million tons in 2017. In the same year, 570 trips were made on the China-Europe railways passing through Ernhot (a county-level city of the XilinGol League, in Inner Mongolia Autonomous Region, located in the Gobi Desert along the Sino-Mongolian border, across from the Mongolian town of Zamyn-Üüd).

The Belt and Road Initiative aims for mutual profit, cooperation and peaceful communication. China shares an ancient cultural history with Mongolia, long common borders, and economic cooperation that has never stopped. The strategic geographic location of Mongolia makes it a priority for China on the new Silk Road, in addition to the richness of natural resources and livestock that China needs.

The Mongolians are a horse-loving people, a country known for its large number of horses. Mongols without horses are like birds without wings. Despite globalization and the great economic progress in the neighbor (China), as well as the cold weather and difficult geography, the Mongolians did not abandon their traditions and the Mongolian way of life still exists today. In Mongolia there are herders of horses, camels and cattle to benefit from milk, meat, wool, etc. During the pandemic in China, for example, President Battulga set up what is known as “Sheep Diplomacy” where Mongolian President donated 30,000 sheep to China. This initiative indicates the Mongolians’ positive intentions towards the Chinese and the desire to open up more. In this context, I would like to point out that China is a big importer of meat and the Chinese demand for meat is constantly increasing, as shown in the chart below. Here is a great opportunity for Mongolia to increase its exports of meat to the Chinese market.

The reading of Mongolian history indicates that this country has passed through periods of prosperity. Mongolia may be a good example of power and rule, as its borders extended to many countries during the rule of Genghis Khan (1162-1227), the man whom the Mongolians consider their historical leader and has turned into a hero and a national symbol. The Mongolians did not abandon their land despite the cold weather and difficult geography, indicating that they are a deeply rooted people with land. Mongolia, with its vast territories and few people, has turned into a meeting place for Russia and China, and a strategic center for Chinese economic expansion. Therefore, it is impossible for the Chinese administration to abandon the partnership with Mongolia.

The Mongolian economy is heavily dependent on livestock, and the number of pastures has increased significantly since the Soviet era because of the transfer of ownership to the people. However, the government is still not able to provide all services to citizens “the government has failed to promote education and health care and veterinary care in pastoral communities, so there is no longer any incentive to stay in rural areas” said Sarol Khuadu, an official at the Institute for Environmental Research in the Mongolian capital. The policy, which no longer places much emphasis on the countryside, has led to the transfer of large numbers of citizens to the capital and to engage in the world of money and business.

Unfortunately, the Mongolian government is not working seriously to support citizens in remote areas. The conditions of life are not good and the loans granted are high interest, in addition to the weather that adversely affects their businesses. In order to help the poor and rural people, in cooperation with national governments, humanitarian, development and scientific partners, FAO has developed an early warning approach by monitoring risk information systems and turning warnings into proactive actions. International organizations contribute to permanent humanitarian and social assistance in Mongolia.

Mongolia’s strategic policy through the “Mongolia Steppe Road Program 蒙古国“草原之路” is largely in line with the belt and road initiative, which is a road connecting Mongolia, China and Russia. Consequently, Mongolia, a country that mainly depends on the agricultural sector, will be a center for economic communication between China and Russia, and thus will witness a great economic development. The Steppe Road Program aims to boost Mongolia’s economic standing and create an advanced network of infrastructure for communication with China and Russia and build an oil and gas pipeline. In 2014, during his historic visit, Chinese President Xi Jinping raised the level of relations between the two countries to “Comprehensive Strategic Partnership Relations”. Since then, bilateral cooperation has begun to move faster.

China has never abandoned Mongolia; it is a country of advanced strategic location as a bridge between Asia and Europe, in addition to the important agricultural sector in Mongolia which benefits China greatly, not to forget to mention the China-Mongolia-Russia Economic Corridor which has become an important part of the belt and road initiative and a key component of Sino-Russian cooperation.

The relationship between China and Mongolia today is an ideal example of the bilateral relationship between two neighboring countries. Cultural, economic, political and tourism communication is in continuous progress between the Chinese and Mongolians, and the Belt and Road Initiative will push this communication forward. The Chinese aspire to increase free trade areas and economic connectivity through a developed infrastructure network.

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