Philippines Lifts Open Pit Mining Ban

Back in November, I posted on St. Augustine. The Philippines was reviewing their open pit mining ban. I wrote then,

I think a lot of projects similar to this one are worth another look. Ones where the government or locals have opposed it for environmental reasons and importantly, this opposition is more general than specific, where the mine itself isn't clearly an environmentally destructive project but fell victim to the more generalized "green" sentiment, these projects will get second look in a weak economy.

The government followed through: PH lifts ban on open-pit mining

Clearing the horizontal at 14 cents is important because that is where the stock traded when the ban was initiated. More important is to see 20 cents cleared because that will open up a much larger move. With the price of copper higher than where it was when the ban was initiated, the stock should move to a new multi-year high. Should. The market sentiment is not bullish for mining shares right now.

Logic of Strategy: New Crisis as U.S. Identifies China as #1 Threat

Zaobao: 学者李晓：中华民族到了新危险时候

Dark clouds are forming over Sino-US trade, Li Xiao, dean of the School of Economics and Finance at Jilin University, said that for today's China, the biggest crisis is not a trade conflict, but the world's most powerful hegemonic state has made public that it thinks of China as its main opponent, "The Chinese nation is in a new and dangerous time."

According to the WeChat public number of Jilin University School of Economics released on June 30, Li Xiao gave a speech entitled "National Destiny and Personal Destiny" at the 2018 graduation ceremony of the Institute. What is the essence of China-US trade war and what China should learn? Kind of lessons to present views. He said that the trade war launched by the United States is the most humiliating behavior of the United States against China. "But there is nothing we can do because we are too dependent on the US market."

He goes on to explain the Logic of Strategy and why those focused on GDP are seeing only a part of the picture:

Li Xiao pointed out that the more important national strategic interest of the United States is to contain China's rise. He believes that the purpose of Trump's trade war is probably not only in the trade field, but also in "Made in China 2025", more likely to force China to make greater concessions through trade wars, and it is likely to force China to be more open in monetary finance.

Li Xiao said that for the average country, they will lose a trade war on economics. "But for big countries, the key is who can afford to lose."

He pointed out that historical experience has proved that the contest between big powers, especially the "boss" and "number two", is so much an economic act, not for economic benefit, but an international political act for national benefit. International political competition is not a "positive game", but a "zero-sum game." The political logic is "as long as I win, defeat the opponent, sacrifice no matter how much, do not hesitate."

This is the Logic of Strategy as explained by Luttwak. I laid out my brief review of his book and combined it with my expectation of yuan devaluation, political change in the U.S. that would favor manufacturers and a retreat on free trade, back in 2014: The Logic of Strategy: Yuan Devaluation and the Road to Trade War.

China's expansion (and claims of territory) into the South China Sea is driving the logic of strategy. China is pushing many nations towards the United States. Australia, for example, has been more proactive than the U.S. when it comes to regional security. Many economists correctly criticize President Trump for poorly implementing tariffs, offending long-term allies such as Canada and the United Kingdom. (#AnglosphereNow) However, they miss the question of sovereignty for nations such as Australia, Vietnam and the South China Sea nations. The Logic of Strategy argues they should voluntarily slow their GDP growth by reducing trade ties with China, thus also slowing China's growth and its military modernization. The greater goal is protecting national sovereignty.

Trade is no longer a purely economic issue beholden to free trade ideology, but one component of an overall national security strategy. On the one hand, by blowing up the TPP and shifting U.S. policy, President Trump has made as Pacific alliance less likely, but on the other hand, his direct confrontation with China has advanced the issue. Using Europe as a counterpoint, many NATO allies are upset at President Trump's demand that they increase their military and monetary contributions to NATO. They don't want to increase military spending and don't like that the United States will either reduce its military presence or find other means of extracting monetary support. However, in the Pacific there is a desire for greater security cooperation. The best way for Pacific nations to reduce trade tensions with the United States will be through greater military and financial support for joint security.

All that said, I think the scholar and many others assume far more planning than really exists. The Logic of Strategy isn't planned. It is emergent order based on strategic goals and the desire to avoid a war between great powers. It is based on interest groups, shifting social mood, and regulatory capture. A switch wasn't flipped in 2016, rather it was a tipping point when emerging trends converged. Previously, China policy was mainly decided by the Treasury and Commerce Department, which had been wholly captured by Wall Street. The 2008 financial crisis was the peak of Wall Street's political power as it extracted trillions of dollars from U.S. taxpayers through the federal budget and Federal Reserve. In short, Capital drove China policy. It wanted access to new markets and cheap labor. Losing in the debate were manufacturers, Labor and national security.

Manufacturers and labor unions have opposed free trade (or at least demanded concessions) for decades. American workers reached the breaking point after the 2008 crisis as opioid addiction burned through hollowed out communities. The Defense Department had long identified China as a threat, but other concerns such as Russia and jihadists gained the most attention. Economists such as Steve Keen exposed the flaws in free trade ideology. Falling social mood was the final piece of the puzzle that created the impetus for action. The United States had its own internal Logic of Strategy as manufacturers, labor unions, American workers in Middle America, the defense department, anti-Wall Street activists on Left and Right, foreign policy and economic dissidents converged.

Overseas, the same logic will play out. Nations such as Vietnam can experience faster economic growth at the cost of falling into China's sphere of influence, or they can accept slower economic growth in exchange for greater sovereignty, particularly if a more self-interested United States continues shifting foreign policy in a pragmatic direction.

Back to Li, he sees a Cold War unfolding:

Li Xiao pointed out that the biggest crisis facing China is not a trade conflict, but the United States, the most powerful hegemonic country in the world, and has publicly regarded China as its main opponent. "In the peaceful period, using economic means to launch China. The comprehensive containment and attack, while also using its superior global military strength, is increasingly deterring China, creating peripheral conflicts and even crises to interfere with our peaceful development process."

Li Xiao believes that the Sino-US trade war is "essentially a national war" and will not be resolved in the short term. Taking the US-Japan trade dispute as an example, he pointed out that from the 1960s until the end of the 1980s, the long trade dispute between the United States and Japan played for 30 years. As a result, the Japanese bubble economy collapsed and fell into a "lost 20 years," and the conflict between China and the United States A big country game, I am afraid it will take at least 50 years or even longer. "Everything today is just the opening of a historical drama."

He mentioned that some Chinese media are "extremely irresponsible and unprofessional, and often use a narrow nationalist sentiment to fool people's feelings."

Li Xiao analyzed that when China is full of blind arrogance, the Sino-US trade war, especially the "ZTE event", is a strong clearing agent. In addition to exposing the huge technological gap between China and the United States, "it makes us even more I am soberly aware that China’s economic growth model has been unsustainable so far, and we must carry out more profound reforms in terms of economic structure and economic operation mechanism."

Li Xiao’s speech sparked a heated discussion on the Internet, which was called “the most sharp speech of the year” and “a public speech that was shocking.” Many netizens said that Li Xiao’s point of view is “pertinent” and “in-depth”, and that “this is definitely not an alarmist, the Chinese must be vigilant”.

However, some netizens do not agree with Li Xiao’s point of view, saying that this is “risk-talking” and that “the analysis is incomplete and the economic resilience is not considered”.

Philippines a Chinese Suzerainty?

"Possession is 9/10s of the law."

Inquirer.net: EXCLUSIVE: New photos show China is nearly done with its militarization of South China Sea

If the Philippines does not assert its legal victory, it stands to lose 80 percent of its EEZ in the South China Sea, covering 381,000 square kilometers of maritime space, including the entire Recto Bank, or Reed Bank, and part of the Malampaya gas field off Palawan, as well as all of the fishery, oil and gas and mineral resources there, Carpio said.

“My estimate is 40 percent of water in the Philippines is in the West Philippine Sea, so that’s 40 percent of the fish that we can catch and we will lose that as a food source,” he said.

“Malampaya supplies 40 percent of the energy requirement of Luzon. If Malampaya runs out of gas in 10 years or less . . . we will have 10 to 12 hours of daily brownouts in Luzon. It will devastate the economy,” he added.

The Philippine government is watching its territory be absorbed into China:

Supreme Court Senior Associate Justice Antonio Carpio, a member of the legal team that argued the Philippine case against China’s claim to almost the entire South China Sea in the Hague arbitral court, slammed Roque’s position, comparing it to trusting a thief.

“You don’t rely on the good faith of the thief [who’s trying to break] into your house. If you have that mindset, you rely on the good faith of someone who’s trying to break into your house, that means you’re out [of touch] with reality. You’re in a fantasyland. That’s not how the world is put together. That’s not realpolitik,” Carpio said.

The Philippines is battling communist rebels, terrorists loyal to the Islamic State jihadi group, and Abu Sayyaf bandits but the country is facing a much bigger security threat, Carpio said.

“The biggest [security] problem is China. If we lose [our maritime space in the West Philippine Sea], we lose it forever,” Carpio told the Inquirer in a recent interview, using the local name of the waters within the Philippines’ EEZ in the South China Sea.

“And the area we will lose is huge, as big as the land area of the Philippines, about 300,000 square kilometers,” Carpio said.

China will never return the territory it grabs, he added. “We cannot go to the [International Court of Justice] because China has to agree and China will never agree to submit to arbitration.”

Kicking the U.S. Navy out of Subic Bay was a strategic blunder if the Philippines continues on this course.

Carpio said the Philippines could have generated support from the international community if it asserted its victory over China in the arbitration case.

“If we are not aggressive, if we are sitting on the ruling and we are not enforcing it, the others will not support us,” he said.

The military, for its part, cannot do anything but follow the government’s foreign policy.

“We still navigate in those waters. But we are instruments of national policy so we just follow whatever our national leaders and policymakers decide,” said a ranking military official who requested anonymity.

“Were there challenges [from China]? Yes, but we also challenged them, that’s part of the rules of the road. But the policies of the government are not only military, there’s also political, economic and diplomatic. You can’t confine it to the military,” the official said.

Coup Threat Pushes Philippines into Russia-China Camp

Less than a month ago: US mood hardens as leader of ally Philippines stokes outrage

"I think it would be a serious mistake in a democratic country like the Philippines to underestimate the power of the public's affinity for the U.S. That's people power," Assistant Secretary of State Daniel Russel told The Associated Press.

Russel did not draw a direct comparison, but past Philippine presidents have been toppled by popular protests dubbed "people power," including former dictator Ferdinand Marcos, who was ousted in 1986.

Now: In China, Duterte announces split with US: 'America has lost'

In a state visit aimed at cozying up to Beijing as he pushes away from Washington, the Philippine President announced his military and economic "separation" from the United States.

"America has lost now. I've realigned myself in your ideological flow," he told business leaders in Beijing on Thursday. "And maybe I will also go to Russia to talk to Putin and tell him that there are three of us against the world: China, Philippines and Russia. It's the only way."

A de-Americanized world is coming. America doesn't know how to deal with it yet. At the moment it faces a choice between an anti-globalist who will shore up American power through strategic retreat, or a globalist who will accelerate American military, political and economic decline.

There Is No International Law for Sovereign States

International law is American power. China is an independent nation, as are Russia and the United States (the U.S. does not follow international law, it has sovereign immunity).

One can believe China's claims in the South China Sea are weak, but property exists because it is defended. The nations with claims in the South China Sea can take actions to defend them militarily or diplomatically. Otherwise they will be muscled out by China. The creation of artificial islands is the creation of property and the initiation of a claim. The historical claims are a fig leaf: China is asserting sovereignty and aggressively staking claims.

In a time of positive mood, the nations would all get together in order to discuss their claims. They would reach an agreement and all would profit. Any nation would have an incentive to seize territory in order to tilt the negotiations in its favor. In a time of negative mood, these actions generate conflict and reduce the odds of a peaceful settlement.

The most powerful non-military weapon available to these smaller states is economic sanctions. As discussed in The Logic of Strategy: Yuan Devaluation and the Road to Trade War, slowing China's economy will impair its ability to project military power. Here's the SCMP on the Philippines' next move: How will Philippines and China move on after South China Sea ruling?

The Philippines is likely to opt for a “soft landing” following Tuesday’s rulings by an international tribunal on a territorial row in the South China Sea, analysts say, adding the country’s new president, Rodrigo Duterte, could seek economic concessions from China in order to resolve it.

Eventually, the states involved in the SCS dispute will figure out they need to lead with economic sanctions or their own aggressive action in order to reach a settlement. International courts will be useless, unless it serves to bring outside nations into the conflict, giving nations such as the United States, Japan, India, and European powers the pretext to intervene.

ZeroHedge has a good roundup of the UN Tribunal decision: China Has No Legal Claim to Most of South China Sea, UN Tribunal Finds

In a second blow for Beijing, the tribunal decided that China wasn't entitled to an exclusive economic zone, or EEZ, extending up to 200 nautical miles from one island in the Spratlys archipelago, Itu Aba, which is claimed by China and currently controlled by Taiwan. The clearly politically-motivated decision, based on a U.N. convention on maritime law, comes after several years of escalating tension in the region as China has alarmed the U.S. and its allies by using its rapidly expanding naval and air power to assert territorial claims and challenge U.S. military supremacy in Asia.

The Philippines case is seen as a test of China’s commitment to a rules-based international order which the U.S. and its allies say has been undermined by Beijing’s recent military activities, including construction of seven fortified artificial islands in the South China Sea. The ruling on Itu Aba is important because the U.N. maritime convention allows countries to build artificial islands in their own EEZs, and all of the seven structures China has built lie within 200 nautical miles of Itu Aba, which Taiwan calls Taiping Island. It also means that China has no legal claim to an EEZ overlapping that of the Philippines.

In a statement published on a verified social media feed just before the ruling, China’s Ministry of Defense said the decision wouldn't affect its approach in the South China Sea.

“No matter what the result of the arbitration, the Chinese military will unswervingly protect the nation’s sovereignty, security and maritime rights, resolutely protect the safety and stability of the region, and face down all manner of threats and challenges,” it said. After the ruling, the ministry referred to the comment as its official statement.

SCMP: China’s Xi Jinping rejects any action based on international court’s South China Sea ruling

China will not accept any proposition or action based on an international tribunal’s ruling over the disputed South China Sea, President Xi Jinping said on Tuesday.
In a Xinhua report released after the Permanent Court of Arbitration at The Hague ruled against Beijing’s claims over the much-contested region, Xi said China’s territorial sovereignty and maritime interests in the waters would not, under any circumstances, be affected by the verdict.

China Daily: S. China Sea arbitration: A US-led conspiracy behind the farce

So, we can tell that Washington has taken sides from the very beginning. What has it done before and behind the curtain then? Generally, it took four kinds of actions.

First, colluding with its allies to rubbish China.

Regarding the South China Sea arbitration, U.S. government officials and media have expressed many negative opinions of China, so as to portray Beijing as a "violator" of international order. U.S. Secretary of Defense Ash Carter used to say in public that China's activity in the South China Sea could lead to a "great wall of self-isolation." Japan, as an ally of Washington, was also active and enthusiastic in helping the U.S. to suppress China.

Second, showing off military force and putting pressure on China.

The U.S. has been stepping up military actions in the South China Sea recently. Particularly, in the middle of June, two U.S. aircraft carriers, the USS John C. Stennis and USS Ronald Reagan, launched joint operations in the South China Sea, staging a show of force aimed at China.

In the meantime, Japan also launched joint military exercises with the Philippines and conducted arms sales with the latter, which is meant to put pressure on China. On July 8, Washington and Seoul jointly announced the deployment of the THAAD (Terminal High Altitude Area Defense) systems in South Korea, and the ulterior motive behind it was obvious enough.

Third, playing China and ASEAN countries off each other.

Chu Yin, a research fellow at the Center for China and Globalization said that "the U.S. escalates the tensions in the South China Sea with an essential purpose of containing China." For the U.S., sabotaging the relations between China and ASEAN countries is an effective way to hinder China's development, apart from being a best solution with low cost and high efficiency to increase Southeast Asian countries' dependence on it.

Fourth, manipulating the international arbitration tribunal and complicating the South China Sea issues into a "dead knot."

Once the arbitration tribunal makes a verdict against China, it will amount to fulfilling the U.S. purpose, putting an end to the tranquility in the South China Sea. In that case, the prospects for China-Philippine disputes to get resolved peacefully will be reduced.

In addition, the United States has been calculating the timing and progress of the arbitration. Initially, the U.S. had the press leak the message that the arbitration result would be announced on July 7, making all involved parties tense. Later on June 29, the secretariat of arbitration tribunal said July 12 would be the date when the verdict on the concrete issues of the Philippine-led arbitration on the South China Sea would be made public.

The timing of the announcement totally reflected the U.S. calculations as June 30 was the date that the new Philippine President Rodrigo Duterte was to be sworn in. Picking this date to announce the verdict represents no more than a backing up of the new Philippine government, a move that the U.S. hopes will minimize the possible improvement between China-Philippine relations.

China May Use Offshore Banking to Secure South China Seas

China considers killing two birds with one stone, turning Yongxing Island (Woody Island) into an offshore financial center. Aside from the economic benefits, it would secure China's political claim on the South China Sea.

21st CBH: 南海岛礁能成为百慕大式离岸注册地吗?

Two of the country this year, the South China Sea once again become the focus of the parties. NPC press conference, spokesman Fu Ying was asked three times to the South China Sea. There are also proposals for motions involving the South China Sea. Two of the most notable of the CPPCC National Committee, deputy director of the Foreign Affairs Committee, submitted Han Fangming "Yongxing Island will build a Bermuda registered offshore" proposal.

Registered offshore, through low-tax policy or tax-free, loose financial regulation and open management program, set up to attract foreign companies registered offshore companies. Proposal suggested that the central and Hainan through policy and legal support, allowing the Xisha Yongxing Island, the development of offshore financial services, and thus promote the development of the South China Sea and the central economic zone in the South China Sea strategic layout.

I believe that, and regardless of the specific content of proposals, one on its own logic - the economic development of the island as a means of distribution of the South China Sea should be able to provide new ideas for breaking the increasing complexity of the South China Sea game.

In fact, economic development has become the main means to safeguard the sovereignty of the South China Sea. From the initial joint development of South China Sea oil and fishery resources initiatives, to the exploration of deepwater oil and gas fields, economic instruments are to highlight its significance. The difference is that the role of fisheries and oil and gas development is mainly reflected in the sovereign sea waters especially controversial declaration, and the development of offshore financial sector would help to strengthen the management of the actual controlled islands.

Although China has already realized over the Paracel Islands and administrative development, its economic function has often been watered down. A real problem is that China's legitimate military and civilian deployment in these reefs, likely to cause unnecessary tension in neighboring countries, and become some of the United States, Japan and other countries outside the South China Sea issue of multilateral excuse. In this context, clearly some of the reefs controlled economic development function, can also be regarded as reducing misjudgment, an effective means of reducing external intervention.

I doubt outside parties will be mollified by China securing its interests, but it undoubtedly strengthens China's claims.

There are drawbacks though. Foreign investors will be wary of China's claim on the islands and China's legal system is unable to deal with offshore banking at this time:

Security Capital is also an important factor. The vast majority of offshore centers away from geopolitical disputes, and maintaining political stability through effective government. In contrast, the South China Sea tensions in the South China Sea islands and reefs will hinder the development of the financial industry has brought. This is why a lot of people are not optimistic about Yongxing Island Offshore Financial reasons development. Of course, this view underestimates the Chinese South China Sea as a "real master" determination to maintain peace and stability on the South China Sea. However, for Yongxing Island as an international financial capital registration, we also need to make some effort to highlight Yongxing Island demilitarization of use and so on.

In addition, the legal system, now known global offshore centers use the Law Department. This system was considered for a higher degree of financial innovation tolerance, and ease of integration with Western multinationals legal system. And China, as in civil law countries, the ability to "compatible" an offshore centers?

In short, the Yongxing Island, the reality limited by a variety of conditions, even if the island's offshore area can be entered substantive stage of development, it is difficult to attract transnational capital in the short term. However, we could have based on their own business, and then through a series of innovative laws, the financial system, reducing barriers on legal convergence.

Of course, both can develop from the Yongxing Island offshore financial business, the South China Sea policies are ultimately in order to safeguard China's sovereignty and territorial integrity. Under this theme, we might open my mind, bold innovation, and explore more effective path of development and rehabilitation of the South China Sea.

South China Sea Naval Arms Race Underway

Strategy Page: Background to Asia's Expensive Naval Arms Race

Using land reclamation techniques, China has constructed "territorial facts" in the South China Sea by turning uninhabitable "features" like rocks, shoals and reefs into islands. From these fabrications, China projects economic claims and military power.

...Hence, the warship binge. StrategyPage provided very approximate but illustrative numbers. In the next 20 years, Asian nations will buy some 400 major warships and 1,000 small patrol vessels and support ships. At least 80 (perhaps 100) of the major vessels are submarines. China loves subs. Chinese subs trail U.S. ships. But worried neighbors know that their diesel subs can ambush Chinese ships trying to protect, well, Fiery Cross.

U.S. Derides China's Sandcastles

US warns China over provocative ‘sandcastles’ in South China Sea

Recent satellite images suggest that China has made rapid progress in filling in land in contested territory in the Spratly Islands and in building an airstrip suitable for military use and that it may be planning another.

“As China seeks to make sovereign land out of sandcastles and redraw maritime boundaries, it is eroding regional trust and undermining investor confidence,” Blinken said on Wednesday.

“Its behavior threatens to set a new precedent, whereby larger countries are free to intimidate smaller ones, and that provokes tensions, instability and can even lead to conflict.”

China should invite the seasteading people to go live there. They'll have far more productive use of the land, foreign civilians on their soil and a stronger claim of sovereignty over the man made islands.

Is the Seasteading Dream Really Dead?

U.S. May Scuttle Free Trade Deal And Send Ships To South China Sea

The failure of the TPP may mark the high water mark in this era of globalization. The next step will be an anti-China economic policies designed to cut China's military expansion. Community and identity have supplanted economics in most domestic Western politics. Sovereignty will rise above economics in international relations, as laid out in The Rise of China vs. the Logic of Strategy.

U.S. Military Proposes Challenge to China Sea Claims

The U.S. military is considering using aircraft and Navy ships to directly contest Chinese territorial claims to a chain of rapidly expanding artificial islands, U.S. officials said, in a move that would raise the stakes in a regional showdown over who controls disputed waters in the South China Sea.

Senate Democrats gang up to delay fast-track trade bill

U.S. Senate Democrats delivered a major blow to President Barack Obama's trade agenda on Tuesday, blocking debate on a bill that would have smoothed the path for a Pacific trade pact.

...The failure to garner the necessary votes came after pro-trade Democrats, including Senator Ron Wyden of Oregon, insisted that fast track be bundled together with three other trade bills, including one that would impose import duties on countries that manipulate their currencies for unfair trade advantage.

Who's that?

Logic of Strategy: Vietnam Seeks Philippine Alliance to Stop Chinese Aggression

Vietnam asked Philippines to form pact to counter China, Aquino reveals

A new “strategic partnership” being negotiated between two states fending off China’s maritime claims in the South China Sea was suggested by Vietnam, Philippine President Benigno Aquino has revealed.

It had been widely assumed that the proposed pact between Vietnam and the Philippines was initiated by Manila, which has taken a high-profile stand against China.

In an exclusive interview with the South China Morning Post, the Philippine president said China’s moves in the South China Sea were even more alarming than a year ago, when he likened global inaction to China’s push to appeasing Hitler – comments that angered China.

In the interview last Thursday, Aquino stood by his remarks. Pulling out a map of the South China Sea, he said: “Perhaps it’s even worse today.”

...Asked to assess China’s possible reclamation of more reefs and shoals in the disputed waters, Aquino said: “I will tend to sound like a rabble rouser. Can I just say, I hope not.”

“I don’t see the logic of their move. Therefore I hope that logic and rationality prevail. Since there is no gain, why embark on something like that?”

He said the world was watching China.

...“Perhaps, we should also focus on the fact that, to a large degree, this is the only contentious issue between our relations. And removing that is really, I think, a worthwhile goal.”

It may be the only contentious issue, but it is a big enough issue to blow up everything else should social mood take a turn for the worse.

China Will Register the Spratly Islands

There is English coverage here:

China’s new real estate registration system will cover disputed waters and islands in the South China Sea, according to an exclusive report from the Beijing-based Economic Observer.

Citing sources from the newly established Real Estate Registration Office of China’s Ministry of Land and Resources, the report said all territory regarded as part of China will be subjected to the new land rights system, with real estate owned by enterprises and residents living on seas and islands within Chinese territory afforded legal protection.

Specifically, the new land registration regulations stipulate that “real estate” refers to “land, sea and subsidiaries houses and other buildings, structures and forests, trees and other fixed objects.”

The rules also provide that anyone seeking to register real estate rights in the sea for the first time will need to submit a sea boundary map and project approvals, as well as relevant contracts, grants and certificates.

It has been confirmed that Sansha, a prefecture of China’s southernmost Hainan province established in 2012, will be included in the new scheme. Sansha administers, either actually or nominally, several island groups and undersea atolls in the South China Sea, comprising the Paracel (Xisha) Islands, Macclesfield Bank (Zhongsha) and Spratly (Nansha) Islands.

独家：南沙群岛等海岛将启动不动产登记

June 16, reporters from the Ministry of Land Resources (hereinafter referred to as "Homeland") Real Estate Registration Bureau: Department of Homeland way through the data exchange interface to achieve approval of real estate registration, real-time exchange trading and registration information sharing As an important part of real sea island will also be involved in the registration of real estate construction. By then, businesses and residents in the waters of the island's private estate will be protected by law. As China's most southern location, the maximum total area (including the sea area), the smallest and least populated land area three Shashi Real Estate Registration will also work. Shashi is a prefecture-level city of Hainan Province, one of three (the other two of Haikou, Sanya), has jurisdiction over the Paracel Islands, the Dongsha Islands, the Nansha reefs and waters.

The first Chapter 2, "Real Estate Registration Ordinance" Show: "real estate of this Ordinance, including land, sea and its subsidiaries houses and other buildings, structures and forests, trees and other fixed objects.

"Real Estate Registration Ordinance" Chapter V Section 42 Show: "The parties apply for the right to use the waters of the initial registration shall submit cases of sea boundary map, necessary items approved by the sea or sea use rights grant contract and pay using gold certificates and other waters . "

The two started the registration of real estate registration content of marine areas, "shot", Hainan Province Land and Resources Department, said the environment, to achieve registration approval Sea islands, trading and registration information is shared in real time interoperability work.

Reporters noted that the current registration of real estate rights registration mode will use the German model, complex patterns Australia Torrens registration mode and France deed registration mode. Specifically, land registration authority to review the documents of land registrant applications submitted upon registration enters compulsory registration status, will be awarded the right credentials, cadastral maps, and finally issued a "real estate registration book", such a step, once executed in three Shashi , real estate registration Paracel Islands in the sand, the Nansha reefs and waters will be fully integrated real estate registration information platform.

June 12, from land and resources, government and university housing construction land registration researcher, agriculture, forestry, marine and other common information platform focusing top-level design of real estate registration, property registration and registration information management platform for query-based system will be completely in 2018 achieved. Registration of real estate property will protect the waters of the island's sea island residents, property rights and laid a solid foundation for the development and construction of the waters of the island.

Meanwhile, reporters learned, registration requires careful study of marine waters, so they need from the administrative area of ​​real estate registration fees, registration information to extract the appropriate use of income funds, real estate registration establish a compensation fund to be used to advance the registration errors for damages caused to others compensation. Specific extraction ratio compensation fund of real estate registration, use and management by the financial department of the State in conjunction with the competent departments of land and resources separately, but such a move would keep the waters of the island's real estate registration accuracy.

China Ramps Up Military Spending; Move Will Strengthen Anti-China Alliance

In The Logic of Strategy: Yuan Devaluation and the Road to Trade War, I look at the economic angle and Edward Luttwak's book, The Rise of China and the Logic of Strategy. One of his points was that a major military buildup by China is alarming to its neighbors and sending them into the arms of the United States, to the point where they are prodding the U.S. to play a role in the region.

This latest news means there will be no easing of tensions.

China's Xi ramps up military spending in face of worried region

The government said it would increase the defense budget by 12.2 percent this year to 808.23 billion yuan ($131.57 billion), as China seeks to develop more high-tech weapons and to beef up coastal and air defenses.

Will the United States eventually decide that the way to slow Chinese military spending is to slow the Chinese economy? As I mentioned in the prior post, there are growing economic arguments against free trade. Trade deficit nations such as the U.S. also benefit in the short-run from trade restrictions because it means the domestic economy must supply more goods and services. The odds are certainly above zero that a politician will see a way to boost the economy and appeal to nationalism with one policy.

The Logic of Strategy: Yuan Devaluation and the Road to Trade War

There's an excellent post for anyone interested in China: Review of “The Rise of China vs. The Logic of Strategy” by Edward Luttwak. I just finished the book and I don't think I can add much to that complete and thorough review. Read through it to get an idea of the arguments put forth in Luttwak's book, plus a summary of all the players.

If you're lazy, the quick and dirty summary can best be given by a comparison with Germany and England prior to WWI, with China as Germany and the USA as England. Germany was the up and coming power and had surpassed England economically, culturally and academically. What got Britain very nervous was Germany's decision to build a large navy. England responded with a new ship, the dreadnought, and with a diplomatic flurry to move enemies into the neutral or friendly category. The result is well-known: although eclipsed in many areas, British superiority in diplomacy and war defeated Germany twice.

China's rise was similarly peaceful, but China's aggressive military buildup and claims to South China Sea territory have all of the surrounding nations on alert. Due to the advent of nuclear weapons, logic dictates that total war will be avoided in Asia. However, the U.S. and a group of allies could effectively deter Chinese aggression in the Pacific, and even though the U.S. has not sought out a coalition, Chinese aggression has pushed Southeast Asian nations (and even Mongolia) into the arms of the U.S. Finally, due to its size and the desire to avoid an outright conflict, the United States has a very powerful weapon if it can overcome the free trade ideology: economic policies designed to slow China's economic growth. Using economic policy, the U.S. could deliver an effective blow to Chinese growth that will keep its military from exceeding U.S. capabilities without requiring a massive buildup in military spending, a policy which would further slow GDP growth in China. If the U.S. and regional economies prefer U.S. influence in the region to that of Chinese influence (and putting aside all ideology, the distant hegemon remains more attractive than the near), they can choose a path of slower economic growth designed to keep China from becoming the dominant power.

The reason for this policy is not a U.S. desire to keep China from rising. Instead, it is China's increasingly aggressive policies in the region that make neighbors nervous. China makes claims to territory based on very loose evidence, such as a map from hundreds of years ago. Using the same logic, Italy could claim all the land formerly held by the Roman Empire or Sri Lanka can claim India (one example given by Luttwak). No one would fear a claim by Italy or Sri Lanka, but imagine Italy was among the fastest growing economies in the world, rapidly building up its military capabilities and it was openly making bold claims to territory. Everyone in Europe, North Africa and the Middle East would be nervous.

There's a talk by Luttwak on the topic of his book:



The "logic of strategy" coincides with social mood and current events. Protectionism is on the rise due to economic factors tied to declining social mood, but Luttwak's book adds a geostrategic grounding for protectionism as part of an economic cold war in the Pacific designed to restrain China's ambitions. Luttwak doesn't delve into economics in his book, but it is very easy for me to imagine the path to protectionism.

There are three U.S. China policies according to Luttwak. The first is the Pro-China Treasury Department. This wing also represents the capture of American government by Wall Street and the financial industry: Treasury doesn't care about manufacturing and pursues a China policy solely almost aimed at profits for Wall Street. The Treasury also represents the idea of free-trade as ideology. Manufacturers have almost no voice in American policy these days.

Next is the State Department, which confronts China in Asia. The State Department is mainly concerned with the "Asia Pivot." It was not U.S. policy to encircle China by forging closer alliances with Southeast Asian nations, rather China's own aggressive posturing pushed these nations into proactive efforts to attract the United States. There are areas where the U.S. was proactive though, such as working to strengthen ties with India.

Finally, there is the national defense establishment. They view China as potentially the main enemy of the future, though this is as of yet undecided. China is a cyber threat and potential military threat. The Defense Department is involved with strengthening regional military ties, such as the naval visits to Vietnam.

Prediction

The protectionists are ever so slowly gaining the upper hand thanks in part to negative social mood. 2008-2009 will probably mark the peak moment for Wall Street and the Treasury Department, even though there is as yet no sign of it in Washington. Changes can be seen in the form of issues such as immigration, which has turned the grassroots of the conservative movement against the Chamber of Commerce and large corporations (due to an attack initiated by the latter against the former). This has pushed the Overton window of acceptable debate among conservatives who can now take shots at big business. There is also the growing libertarian faction pulled together by Ron Paul that supports his son, Rand Paul, that consistently attacks the Federal Reserve and Wall Street. Put it together and it is not hard to envision an anti-Wall Street, pro-manufacturing political consensus emerging. This will cut across party lines, with manufacturing unions pulling in Democratic support if there are specific bills to vote on.

There are also the academic attacks on free trade. Australian economist Steve Keen discusses the work of Dani Rodrick in 1,000,000 economists can be wrong: the free trade fallacies - See more at: http://www.debtdeflation.com/blogs/2011/09/30/1000000-economists-can-be-wrong-the-free-trade-fallacies/.

But there is an obvious fallacy to this neat and plausible argument: To effect specialisation, England has to shift labour and capital from wine to cloth (and Portugal has to do the opposite). Arguably labour can be retrained—a vigneron can become a machinist—but how do you convert wine press into a spinning jenny?

The obvious answer is that you don't. Instead, you sell the wine press and buy a spinning jenny with the proceeds. But because of the introduction of trade, the price of wine in England would have fallen, so that the sale price of the wine press will also fall (economists have modified Ricardo's model to introduce curves where Ricardo had straight lines, so that total specialisation is no longer required and there would still be some wine production in England under the "new" model of Free Trade), while the price of spinning jennies will have risen, given the new export market to Portugal. Some capital is necessarily destroyed by the opening up of trade and it applies in reverse in Portugal as well.

Since capital is destroyed when trade is liberalised, the watertight argument that trade necessarily improves material welfare springs a leak. If economics were a real science, this real-world complication to Ricardo's argument would be considered, but it has never been seriously addressed.

Ricardo also assumed that British businessmen wouldn't uproot their life and open a factory in Portugal. As the real life modern example of free trade has shown, thanks in part to modern travel and telecommunications, that is exactly what happens. Not only does the factory close in America, but the capital follows it to China. Instead of building a new industry in the United States, the entire manufacturing sector is hollowed out. There are small diverse benefits to lower consumer goods prices, but the vast bulk of the gains go to two groups: workers in the destination country such as China, and to the holders of capital, which are mainly the nation's wealthiest citizens. The nation's capital base is sold off or relocated, with the profits going to the top. The median male income is flat since the 1970s in the U.S., with trade playing a huge role (along with the increase in labor supply from immigration and feminism, both of which also benefit the wealthiest Americans who own most of the capital).

With a growing economic case against free trade, a shift in social mood making anti-free trade opinion more popular, plus the loss of political support for the financial sector, free trade will become a centerpiece issue in American politics. The trigger will be one of two factors. One is economic. China's credit bubble isn't going to slowly ride off into the sunset. There will be pain, it is only a matter of where it lands. The path of least resistance is devaluation of the yuan, something I have been looking for here for several years now due to the growth in credit. A target of ￥8 to $1 is a reasonable ballpark figure, with ￥10 to 1 not unbelievable given the rise of the shadow banking sector. The actual number isn't as important as the size of the devaluation: it will likely be large and set off the anti-China arguments that have been growing in the United States. The left and right have their beef with China's economic policies and the right has provided the main rhetorical cover for business. When that goes, there will be a bipartisan push for policies that counteract China's "predatory" currency policies. A Chinese devaluation could be the trigger.

The second factor is geopolitical. Do take the time to read the lengthy review linked above, and/or watch the video. Luttwak's main point is that China cannot simultaneously build up its economy and influence at the same time it builds up its military, and not run into resistance from surrounding states. He cites the Chinese policy on the island disputes as the case in point: instead of increasing China's power in the region, it has pushed Vietnam, the Philippines, Japan and Indonesia into the arms of the United States. An anti-China coalition is building up due to each nation following the logic of China's inevitable rise in power along with the perception of an increasingly aggressive China. China has "tipped its hand" so to speak and these nations are moving preemptively. Due to the nuclear arsenal of the United States and China (to say nothing of Russia's interest in the region), there isn't going to be a major war for survival. This reduces the options for confrontation, with one of the most powerful being economic. If there is a minor military confrontation that is too large to be ignored, the most politically acceptable response will be economic.

Either the economic or the geopolitical event can happen first then, but in time, the two will be seen as inseparable. Once events move in this direction, the logic to continue down the path is compelling.

Anyone can run GDP numbers for the U.S. and China. One simple calculator is here: Catching the eagle. The default is 7.1% GDP growth, 4% inflation and 2.9% yuan appreciation for China. For the U.S., 2.4% GDP growth and 1.4% inflation. With these numbers, China's economy overtakes the U.S. in 2019. If growth is more like the 4% that Marc Faber believes (and the debt growth/gdp growth ratio suggests is correct), China overtakes the U.S. in 2022. Lowering that GDP growth to the 3% low end forecast of Michael Pettis adds one year, to 2023. However, take down the inflation number (due to credit deflation) or factor in a devaluation of the yuan, and China quickly falls behind the U.S. and can "never" catch up. See: China may not overtake America this century after all.

The ultimate containment strategy for the U.S. and regional partners (who all have access to U.S. markets) then, is an economic strategy. Yes, these nations will suffer slower growth, but they will retain their sovereignty. For East Asian nations, a distant hegemon is better than the near one with an appetite for your territory.

Whichever path is chosen, the economic and geostrategic paths will line up. An economic crisis in China will add the economic component to the emerging geostrategic China policy. A geostrategic decision to confront China economically would set in motion an economic crisis that would propel the strategy forward since China would respond in kind. The decision to halt rare earth exports to Japan and the widespread anti-Japanese riots of recent years already show how China will respond. A major confrontation from the U.S. would require an even larger policy response. Luttwak lays out some possible policy choices, starting with small ones such as banning technology transfers in a limited area such a military or telecom. I fully expect that were a Chinese crisis and devaluation to accompany another recession in the United States, the push for tariffs would find a bipartisan majority in the House and Senate.

Yuan devaluation is inevitable as soon as China enters a serious financial crisis. If the government refused to devalue, the nation would go through a 1930s style deflationary Great Depression. China is unlikely to allow the market to take the yuan lower in a panic collapse like a replay of 1997. At some point, it would announce a large devaluation designed to end the selling and the crisis. This will be called a political act in the United States (those who understand the economics will nonetheless spot the political opportunity) and the political push for protectionist policies will be too attractive to be ignored. The United States will retaliate with sanctions and the world will follow. This will put even more pressure on the Chinese economy and lead to a massive rise in nationalist sentiment (either that or anti-CCP sentiment, so expect the CCP to redirect it into nationalism). A chill wind will blow across the Pacific that will last a generation or more.

China's Nervous Neighbors

China rejects Indian politician’s expansionism charge

China on Monday rejected remarks by Indian opposition leader Narendra Modi that it has an “expansionist mindset”, saying it has never grabbed the territory of another nation.

“I believe all of you can see that China has never waged a war of aggression to occupy any inch of land of other countries,” foreign ministry spokeswoman Hua Chunying said at a regular briefing.

Modi, the prime ministerial candidate of the Hindu nationalist Bharatiya Janata Party (BJP) and favourite to win this year's polls, was speaking during an election rally on Saturday.

He warned China to shed its “expansionist mindset” as he toured the remote northeast Indian state of Arunachal Pradesh, an eastern stretch of the Himalayas that China claims as its own.

“The world has changed. An expansionist mindset will not be accepted. China will also have to do away with such a mindset,” Modi said.

“Arunachal Pradesh is an integral part of India and will always remain so.

No power can snatch it away from us.”

Philippines says China 'fired water cannon' on Filipino fishermen

A Chinese vessel has fired a water cannon at Filipino fishermen near a disputed shoal in the South China Sea, a top Philippine official says.

Military chief Gen Emmanuel Bautista said the incident happened at the Scarborough Shoal on 27 January.

Chinese officials did not comment on the incident when questioned during a routine briefing, but re-asserted China's claim to the waters.

It is just the latest dispute over an area believed to be rich in resources.

War Returns to Asia?

I noticed this at ZeroHedge:

Relying on US support, the Philippines is so arrogant as to announce in the New Year that it will increase its navy and air force deployment at Zhongye Island, a Chinese island that it has illegally occupied for years.

It will be an intolerable insult to China

According to experts, the Chinese navy has drawn a detailed combat plan to seize the island and the battle will be restricted within the South China Sea.

The battle is aimed at recovery of the island stolen by the Philippines from China.

There will be no invasion into Filipino territories.

A report in the Philippines Star confirmed the Philippines military buildup on the island.

ZeroHedge has is the headline that a battle will be restricted to the island itself, but that doesn't mean the political or economic response by the Philippines, Japan or U.S. will be similarly restricted.

The original article is below, followed by two others on the same topic. All Google Translated.

PLA South China Sea emergent big moves this year will force the industry to recover the island

The Philippines has relied on U.S. support, often to China to launch an attack on the South China Sea issue, the arrogance, had to intolerable proportions. South China Sea sovereignty dispute dragged on for too long, resulting in problems Humpty trouble. Territory was invaded, plundered resources, China is several small countries wanton bullying, really ruined face of international prestige is greatly compromised. When off constantly, will be troubled. Ancestral homeland, an inch nor from the loss of our hands, otherwise the Chinese nation ages.

Recently, the People's Liberation Army officially fired the first shot in the South China Sea activist. 2014 New Year, the Philippines announced plans to increase the naval and air forces deployed in the illegal occupation of the Nansha islands in the industry in an attempt to permanently occupy our territory, territorial waters. Experts said that this is a good opportunity for China to use force to give the Philippines, China should take the opportunity to force the industry to recover the island!

Experts said that the current PLA Navy has developed a detailed operational plan carefully, and the whole theater is limited to the scope of the South China Sea, but the Philippines is not the only aspect of the battle plan for the Philippines, local attack, because this war is for the purpose of regaining the Philippines The illegal occupation of the Chinese Nansha islands, while the PLA troops to be stationed on the island, so the Chinese side is bound to respond in accordance with the Philippine side to peer level attacks.

Philippines despite the Chinese government's repeated protests and warnings, in the South China Sea issue jump the highest, most downtown Huan, pounded the most vicious. 2014 New Year, the Philippines announced plans to increase the naval and air forces deployed in the illegal occupation of the Nansha islands in the industry. Deed goes unpunished, of course, would be the first to pack the Philippines. Philippine naval and air forces that point worth mentioning, only enough to deal with the South China Sea Fleet.

I occupy the island in the Philippines nearly 43 years of

Of the year, and then in the South China Sea, the Philippine military launched the "big action": its occupation of seven islands two massive sandbar send more troops; invested heavily in upgrading the local Navy and Air Force facilities; intends to reinforce its reefs depends on China Charity The old landing ship; secretly installed the new US-made warship gun system ...... many military observers believe that the Philippine government and the military is likely in 2014 in the South China Sea to further exacerbate tensions, the United States and Japan seem to be willing to Philippines " Site cheer. "

Cobble island in the Philippines Armed Forces industry

In November last year due to strong typhoon "Swallow" attacks delays in the Philippine Army Fangzeng Bing sector Island plans to restart this month.

Philippines' Kalayaan City, "Mayor Eugenio than Tony Austrian farmers confirmed that the new troops had arrived in the island this month, the 6th industry, including the Army and Navy personnel. Austrian farmers, said: "Before adding the Army stationed on the island, the island's armed forces complete the industry." Western Command, the Philippines has also confirmed that the day stationed in the island's industry Airmen are transported by naval aircraft. The command said in a statement: "As sea conditions remained poor, can only use aircraft to transport Airmen and residents in the island's industry and therefore have the opportunity to fly to Palawan Province to visit work."

Earlier, the Philippine troops in the industry on the island has a contingent of the Army and Navy, and the Air Force because the runway is completely destroyed, the high cost of the garrison evacuated years ago. However, on December 4 last year, the Philippine Department of Defense announced that the Philippines plans to invest 480 million pesos (about 66.1 million yuan) earmarked for the disputed Spratly islands in the industry to upgrade the island's airport runway and naval facilities.

Islands in the industry is the second largest island in China after the Spratly relay Taiping Island, since 1971 has been illegally occupied by the Philippines. In the administrative divisions of the Philippines, the islands in the industry under the "Kalayaan city", owned by Palawan province "jurisdiction." For the Philippine Army troops in the industry once again recently Island, a Philippine official said: "Although Petrel to the Philippines typhoon reconstruction caused huge human and property losses, Tacloban and other places are also needed, including China International social assistance, but to strengthen the industry's island capital infrastructure already in place, this cost is based on the "1995 Army Modernization Act" allocated. "

Attempt to create "Monitoring the South China Sea fortress"

Although the Philippine government and the military were unwilling to disclose the specific building programs in the industry of the island, but according to local media reports, the Philippine military in the industry on the island ready to upgrade first piece of 1300 m long runway for landing large military transport aircraft. In addition, the Navy facility, the armed forces barracks, town hall, hospitals and soldiers family wings, also has begun construction. Its support of the province of Palawan still facing the South China Sea Oyster Bay Naval Base. The base about 160 kilometers from China Nansha Islands, including military dock, deep water port and garrison facilities. After a new round of facility upgrades and troops stationed in the island of the Philippines military industry is expected to include 100 sailors, 36 army officers and 42 Air Force flying reconnaissance and intelligence officers. "When necessary, a battalion of Philippine Marines also fly landing operations." Revealed that a Filipino soldier.

In addition to strengthening the military deployment, the Philippines also consider increasing the number of inhabitants in the industry of the island. "Kalayaan City," Mayor Eugenio than Tony Austrian farmers revealed that: "As long as China ocean surveillance ship a return to the Nansha waters, our fishermen will promptly report to the government and the military because the military aircraft ...... and patrol boats can only guarantee the existence of a certain time period, while fishermen in relevant waters throughout the year, which is common in the industry, the fishermen's island effect, and we need more people. "

For the Philippine military move, Philippines ABS-CBN News quoted a security official word comment, said:. "In the industry on the island is the South China Sea island chain in the Philippines main military outpost which means the Philippine military to better the South China Sea to monitor the situation. "

US-Japan happy to little brother "Platform"

For the Philippines beginning in 2014 will be "eager" to mobilize troops towards the South China Sea islands and reefs, the Russian independent military observers Semenov said that the possibility of the Philippine government and the military in 2014 reignite Nansha dispute is very large. His analysis:. "Philippines move both their own needs, more support behind the U.S. and Japan factor"

Late last year, the Chinese navy "Liaoning" aircraft carrier with the United States warship "occasional" incident in the South China Sea during the training, the Philippine media have interpreted the move was related to the sea in the U.S. Navy intends to display the presence of cashing in on the Philippines' allies support. " Meanwhile, Japan since the end of last year, continue to send senior government officials and military personnel access to the Philippines, but also to honor previous commitments to aid the Philippine military equipment. It is said that in addition to the new Mini maritime patrol outside the Philippines, Japan will dispatch Self-Defense Forces since March this year, the Philippine military officers trained soldiers to the Philippines, to help them improve the combat capability of the ocean. Meanwhile, the Philippines continues to play the "China threat", the Philippine military and political leaders repeatedly claimed that China since last year performance was "increasingly aggressive" and continuing to send warships and ocean surveillance ship to Nansha Islands cruise, which makes the Philippines. " deeply disturbing. "

Some analysts have pointed out that the Philippines play a clown jumped on Taiwan, "performance", the U.S. and Japan to come forward its "Platform cheers", seemingly interactive "understanding", in fact, behind each play each abacus.


From the U.S. perspective, the current U.S. military is actively adjusting the Asia-Pacific and China's military deployment around the key objective is to curb the fortress East China Sea, South China Sea, Okinawa, pressed Chinese naval activities in the region, in this process, Japan and the Philippines are just their strategies pawn in a chess board, where to put, how to put it all depends on U.S. strategic needs.

From the Japanese perspective, Abe insisted ghosts, the Sino-Japanese relations have been bruised and then poke a knife, so that tensions in East Asia upgrade again. At this time, implied or support dispute with China reefs Philippines to China to launch an attack, Abe has become an important option for the implementation of its policies, and thus, the Philippine military have recently shouted Japanese maritime cooperation would strengthen rather "heating" meaning.

United States and Japan playing a major strategic thinking, Philippines naturally want to muddy the waters, to benefit from it. To send more troops to islands in the industry, for example, the Philippines made ​​up his mind that Japan's recent tough markedly effective, may be too busy South China Gu, this firm or its opportunity to take advantage of the heel in the South China Sea. Currently, the Philippines has usurped my nearly 43 years in the industry, the island if another strong surge through rely on this island for seven years, then it will be able to order the "actual control for 50 years" as an excuse, advocates from the level of international law get full sovereignty, and thus anchored, occupation wider Nansha waters, and then pushed forward to the South China Sea, in order to reap more benefits, its ambition is quite substantial.

This article discusses the rearming of SE Asian nations, including Vietnam and Indonesia.

South China Sea will be something big happens: Southeast Asian countries are rushing to mass troops

Late last year, the Chinese navy "Liaoning" aircraft carrier and the South China Sea during a training American warships after the occurrence of "occasional" event, the Philippine media have interpreted the move was related to the sea in the U.S. Navy intends to display the presence of cashing in on the Philippines' allies support. " Meanwhile, Japan since the end of last year, continue to send senior government officials and military personnel access to the Philippines, but also to aid the Philippines to honor previous military commitments equipment.

It is said that in addition to the new Mini maritime patrol outside the Philippines, Japan will dispatch Self-Defense Forces since March this year, the Philippine military officers trained soldiers to the Philippines, to help them improve the combat capability of the ocean. Meanwhile, the Philippines continues to play the "China threat", the Philippine military and political leaders repeatedly claimed that China since last year performance was "increasingly aggressive" and continuing to send warships and ocean surveillance ship to Nansha Islands cruise, which makes the Philippines. " deeply disturbing. "

Of the year, and then in the South China Sea, the Philippine military launched the "big action": its occupation of seven islands two massive sandbar send more troops; invested heavily in upgrading the local Navy and Air Force facilities; intends to reinforce its reefs depends on China Charity The old landing ship; secretly installed the new US-made warship gun system ...... many military observers believe that the Philippine government and the military is likely in 2014 in the South China Sea to further exacerbate tensions, the United States and Japan seem to be willing to Philippines " Site cheer. "

For the beginning of 2014, the Philippines will be "eager" to mobilize troops towards the South China Sea islands and reefs, the Russian independent military observers Semenov said that the possibility of the Philippine government and the military in 2014 reignite Nansha dispute is very large. His analysis:. "Philippines move both their own needs, more support behind the U.S. and Japan factor"

Some analysts have pointed out that the Philippines play a clown jumped on Taiwan, "performance", the U.S. and Japan to come forward its "Platform cheers", seemingly interactive "understanding", in fact, behind each play each abacus.

From the U.S. perspective, the current U.S. military is actively adjusting the Asia-Pacific and China's military deployment around the key objective is to curb the fortress East China Sea, South China Sea, Okinawa, pressed Chinese naval activities in the region, in this process, Japan and the Philippines are just their strategies pawn in a chess board, where to put, how to put it all depends on U.S. strategic needs.

Cam Ranh Bay in Vietnam, Russia delivered the Vietnam procurement 6 "Kilo" class conventional submarines type 636 in the first one. The submarine is from St. Petersburg harbor crane transport comes with. With the submarine from the shipyard in St. Petersburg Admiral experts, they will do the finishing touches before the official handover ceremony. The submarine will be named HQ182 "Hanoi" sign. The remaining five "Kilo" class submarines are expected to be delivered in 2016.

Reported that, as early as the 1960s, Indonesia becoming the first Southeast Asian country underwater combat capabilities, when it receives a number of Soviet-built W-class submarines. Later, in 1978, Indonesia has purchased two West German diesel-electric submarines. In 2012, the Indonesian Ministry of Defense announced that it plans by 2020 to expand its submarine fleet to 12. Because you want to overwrite the strategic choke points or entry into the channel islands offshore, requires a minimum of 12 submarines.

Currently Daewoo Shipbuilding and Maritime Engineering Company is working with the Indonesian Pal military cooperation company in Korea to build three U-209 submarines to Indonesia. The U-209 submarine is expected to be delivered between 2015 to 2016.

In addition, Indonesia is considering two options. The first option is to purchase and refit Russian "Kilo" class submarines. The second option is to buy new submarines from South Korea. This option is attractive because of the new submarine port compatible with existing infrastructure.

The report also said that by the end of November 2013, Singapore announced that it has signed a contract from the German Thyssen - the purchase of two new submarines 218SG Krupp Marine Systems. The terms of the sales contract, including maintenance and crew training in Germany. Singapore submarines will be equipped with air-independent propulsion system, is expected to be delivered in 2020.

Malaysia signed a contract with France in 2002, bought two "Scorpene" class submarines from the latter there. The two submarines were in 2007 and 2009 in service. May 2012, Malaysia said that any further submarine procurement plan will depend on the funds. That same year, Malaysia signed a contract to buy the boat submarine escape and rescue services, which will be built in Singapore.

In the Philippines, the Aquino administration took office early, according to the Department of Defense and the Armed Forces modernization project procurement "wish list" are said to include submarines. But now the country seems to have quietly abandon plans to buy a submarine.

Reported that in the next 5-10 years, the waters of Southeast Asia - especially in the South China Sea - the witness to the number of countries in the region to deploy conventional submarines increased significantly. This will make the South China Sea more crowded. Submarine force combat capability will enable the region to four dimensions - air, land, sea and underwater. Submarines will be able to engage in reconnaissance and intelligence gathering, mine, ship and long-range strike missions.