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Geo-Strategic Trend

Duowei: Why Beijing Reversed Its Plan to Set Up an Environmental Monitoring Station at Scarborough Shoal

On March 11, Xiao Jie, the Party Secretary of Sansha City in Hainan Province revealed that, in 2017, Sansha City will start an early operation to set up an Environmental Monitoring Station at Scarborough Shoal. However, at her regular press conference on March 22, Chinese Foreign Ministry spokesperson Hua Chunying denied the news, saying that the report regarding the monitoring station at the Scarborough Shoal was false and there is no such a plan.

What caused China’s sudden change of plans for Scarborough Shoal?

First of all, a breakthrough is expected soon on the negotiations on the South China Sea code of conduct. China’s aggressive actions at Scarborough Shoal at this time would surely raise concerns among ASEAN countries.

Second is the Philippines factor. After Duterte took office, Sino-Philippine diplomatic relations began to warm up. If China were to take action at Scarborough Shoal at this time, it would inevitably affect the development of bilateral relations.

Third is the U.S. factor. Scholars of Sino-U.S. strategic relations have a saying, “The day when China works on Scarborough Shoal is the day that China and the United States have a showdown in the South China Sea.” The current tension in the South China Sea dispute has led both China and the United States to strengthen military deployment in the South China Sea. So far, China’s island expansion and the United States’ military patrols to maintain freedom of navigation are controlled below the limit of any direct conflict. Scarborough Shoal seems to have become a red line in the South China Sea.

In addition, Chinese President Xi Jinping will visit the United States next month. Any move at Scarborough Shoal at this time would destroy the friendly atmosphere of the Sino-U.S. meeting.

Source: Duowei News, March 24, 2017
http://global.dwnews.com/news/2017-03-24/59807107.html

Taiwan Military Developed Jammer against the Beidou Satellite Positioning System

Based on Taiwanese media reports, well-known Chinese news site Sina recently reported that the Taiwanese military revealed its anti-Beidou system, which is a suite of jammers to fight against the Mainland’s satellite position system. The Mainland Beidou system is China’s replica of the U.S. GPS system, with some improvements. The Beidou system can significantly improve the precision of China’s missiles that are aimed at Taiwan. It is expected that the Mainland military will complete the next phase by the year 2020. The Taiwanese anti-Beidou equipment includes a jammer for individual soldiers, a satellite jammer for vehicles, and a radar-based anti-satellite system. The new equipment can also send “bail” signals that are designed to fool enemy missiles with fake targets. These new systems have been deployed to various military locations across the island to improve the success rate.

Source: Sina, March 13, 2017
http://dailynews.sina.com/bg/news/int/int/chinesedaily/20170313/07097769746.html

FT Chinese: SWIFT Cut off All Ties between North Korea and the Global Financial System

Financial Times Chinese recently reported that the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the world’s core settlement network for inter-bank transactions, announced it will remove the membership of the last four North Korean banks that remained in its network. A recent United Nations report indicated that SWIFT had been allowing the four banks not under UN sanction to use its network. The UN report described how North Korea bypassed the international sanctions with help from organizations like SWIFT. SWIFT, headquartered in Brussels, explained that its latest decision had nothing to do with UN sanctions. It was merely the result of the four banks missing the qualifications required for their SWIFT membership. The Belgium authorities withdrew the permission necessary to maintain the four banks’ membership. However, some experts expressed their belief that this new development will only force North Korea to explore other “creative” ways to get into the international financial system via underground ties. The UN report mentioned that some Chinese global companies and organizations provided most of the financial connections North Korea has been using to its advantage.

Source: FT Chinese, March 17, 2017
http://www.ftchinese.com/story/001071819

BBC Chinese: China Plans to Build Monitoring Station on Huangyan Island (Scarborough Shoal)

BBC Chinese recently reported that China announced a plan to start the preparation work for constructing an environmental monitoring station on Huangyan Island, also known as Scarborough Shoal. China occupied Huangyan Island in 2012 and prohibited the Philippines’ fishermen from entering the region. However, China started to allow fishing after the Philippine President Rodrigo Duterte’s visit to China last year. China’s new announcement indicated the intent to start the construction in 2017. The Philippines Ministry of Foreign Affairs refused to comment on this latest announcement. Last month one of the Philippines’ ministers said that Chinese President XI Jinping promised not to do construction work on the island, but China later said that the comment was “confusing.” In the meantime, two U.S. senators, namely Marco Rubio and Ben Cardin, proposed a new sanction to ban the issuance of U.S. visas to the Chinese citizens who are related to island construction. China expressed its “anger” and described the two senators as “arrogant and ignorant.”

Source: BBC Chinese, March 17, 2017
http://www.bbc.com/zhongwen/simp/chinese-news-39305610

VOA: U.S. Fines China’s ZTE $1.19 Billion for Breaching Sanctions

On March 8, Voice of America (VOA) reported that ZTE Corporation, China’s No. 2 telecom equipment company with extensive overseas operations, agreed to plead guilty and pay a fine of $892 million, as part of the settlement for breaking sanctions and selling electronics to Iran and North Korea. {Editor’s note: In addition to the $892 million ZTE agreed to a penalty of $300 million that will be suspended provided it complies with the agreement.}

VOA cited U.S. Attorney General Jeff Sessions in a Justice Department news release, “This plea agreement holds them accountable, and makes clear that our government will use every tool we have to punish companies that violate our laws, obstruct justice, and jeopardize our national security.”

On March 7, VOA quoted Zhao Xianming, chairman and chief executive of ZTE, as saying, “ZTE acknowledges the mistakes it made, takes responsibility for them and remains committed to positive change in the company.”

China’s Securities Times reported on its website that, at a press conference on March 9, Sun Jiwen, a spokesperson from China’s Ministry of Commerce, urged the U.S. to act properly for the healthy development of bilateral trade relations.

In response to ZTE’s having reached a settlement with U.S. authorities over U.S. export controls and sanctions charges, Sun remarked, “China has always resolutely opposed U.S. sanctions on Chinese companies using its domestic laws, and, in overseas markets,  has required Chinese companies to operate in compliance with local laws and regulations.”

Xinhua News Agency mentioned in a dispatch that the U.S. Commerce Department added ZTE on the Entity List under the Export Administration Regulations of March 2016. This has made it difficult for ZTE to acquire U.S. products such as chips and software.

VOA noted that when it was denied US chips and software, ZTE could have faced bankruptcy.

Sources:
Voice of America, March 8, 2017
http://www.voachinese.com/a/chinese-company-20170307/3754038.html
Xinhua News Agency, March 8, 2017
http://news.xinhuanet.com/world/2017-03/08/c_129503736.htm
Securities Times website, March 9, 2017
http://kuaixun.stcn.com/2017/0309/13100764.shtml

U.S. Aircraft Carrier Shows Its Muscle with Allies in the East China Sea

Well-known Chinese news site Sina recently reported that several frigates from the Japanese Maritime Self-Defense Force joined the U.S. Carl Vinson aircraft carrier battle group, which has been conducting the U.S.-South Korean military exercises. The Japanese participation lasted four days. It is very rare for Japanese military vessels to join forces with U.S. aircraft in the East China Sea. Apparently, Japan is gaming its luck to threaten China again. According to Japanese media, this joint exercise was a temporary arrangement instead of a planned event. Japan just completed a joint exercise with the U.S. Navy near Guam. The Japanese Ground Self-Defense Force also had a joint exercise with the U.S. Marines at the same time. To add to the picture, the U.S. invited the Philippine Defense Secretary on-board the Carl Vinson aircraft carrier a few days back. All these happened a week before the new U.S. Secretary of State Rex Tillerson will start his trip to visit China, Japan, and South Korea.

Source: Sina, March 11, 2017
http://dailynews.sina.com/bg/news/int/int/chinesedaily/20170311/09597767293.html

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