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China’s Defense Ministry: Underwater Drone Handed over to U.S.

According to a terse statement that the News Bureau of China’s Ministry of National Defense issued, at noon on December 20 in related waters of the South China Sea, and after friendly consultation between the Chinese and U.S. sides, the handover of a U.S. underwater drone was carried out smoothly.

A New York Times report on its Chinese website noted that China did not mention that the presence of the U.S. Navy in the South China Sea had caused the tension between the two countries. BBC Chinese also reported the expectation that China would take the opportunity of returning the underwater drone to demand that the U.S. reduce its reconnaissance activities in the South China Sea.

There was no such expression in the Defense Ministry’s one sentence statement issued within hours of the hand over.

On December 17, a spokesperson from China’s Defense Ministry issued a statement confirming that, on the afternoon of December 15, a Chinese naval lifeboat located an unidentified device in the waters of the South China Sea. In order to prevent the device from causing harm to the safety of navigation and personnel of passing vessels, the Chinese naval lifeboat verified and examined the device in a professional and responsible manner.

Upon examination, the spokesperson noted, the device was identified as an underwater drone of the United States. The Chinese side decided to hand it over it to the U.S. in an appropriate manner. Both sides maintained communication on the issue. The spokesperson added, “We regret that,” after commenting, the U.S. side’s unilateral move to dramatize the issue in the process was inappropriate and not conductive to its settlement.

The spokesperson also emphasized that for a long time, the U.S. military has frequently dispatched vessels and aircraft to carry out close-in reconnaissance and military surveys within Chinese waters. According to a statement that the spokesperson published on the Defense Department’s website on December 17, “China resolutely opposes these activities and demands that the U.S. side stop such activities. China will continue to be vigilant against the relevant activities on the U.S. side and will take necessary measures in response.”

Sources:
China’s Defense Ministry website, December 20, 2016,
http://www.mod.gov.cn/topnews/2016-12/20/content_4767292.htm
New York Times Chinese website, December 20, 2016,
http://cn.nytimes.com/china/20161220/china-returns-us-drone/
BBC Chinese, December 18, 2016,
http://www.bbc.com/zhongwen/simp/chinese-news-38359622
Xinhua News Agency, December 18, 2016,
http://news.xinhuanet.com/politics/2016-12/18/c_1120137584.htm

Briefings | | |   Defense/Military US-China Relations

Global Times: U.S. Demands the Return of the UUV; Major General Says We Will Collect What Should Be Collected

Following the incident in which the Chinese Navy captured the U.S. unmanned underwater vehicle in the South China Sea on December 15, China’s state media Global Times reported on an interview of some Chinese military officers about the incident. Below is an excerpt from their report:

Wu Shicun, President of the China South Sea Research Institute, said that the issue of the foreign media’s so-called international waters [where the incident happened] represents only one side of the opinion from the United States. There is no (such explanation) in the Convention on the Law of the Sea.

Wu believes that the calm in the South China Sea is only temporary. Because the core problem has not been resolved (including Sino-U.S. competition in the South China Sea, geopolitical competition, and a power struggle over sea rights), the United States is back. Therefore, this may represent a trend in the South China Sea — the conflict is heating up as the U.S. returns again with deep intervention.

In answering the question “whether China is getting stronger and stronger in the ability to control the South China Sea issue, and will not let the United States do whatever it wants,” Wu answered that “it is very obvious” and added that the Chinese military will be very confident in dealing with the issue. The strategic situation of the South China Sea will gradually change with China’s Nansha reef-related facilities being in place.

He said that China’s capturing the U.S. unmanned underwater vehicle sends the following signal: The United States performs close reconnaissance, threatening our country’s security. China has counter-measures. In the 2001 the plane crash incident and the 2009 “USNS Impeccable” event, China had “no choice but to suffer in silence” in many regards. That era may be gone forever.

Yang Yi, Major General and former director of the Strategic Research Institute of the National Defense University, claimed that China should “capture whatever should be captured,” and now they (the United States) “can stop us.”

Yang Yi also believes that, when Trump comes to power, the Sino-US conflict around the South China Sea may become more intense.

Yang said that [since] Americans “sent this thing to our door,” it could not be more natural for us to take it home and study it. If the United States becomes even noisier, it only indicates that it is that much more guilty.

Source: Global Times (Huanqiu), December 17, 2016
http://mil.huanqiu.com/observation/2016-12/9825473.html

Briefings | | |   Defense/Military US-China Relations

Xinhua Published Six Commentaries on U.S. Federal Reserve Interest Rate Hike

Immediately after the U.S. Federal Reserve announced the interest rate increase, Xinhua published a series of six commentaries on the matter. The commentaries generally indicated that the Fed’s interest rate hike will trigger major global financial market adjustments. Xinhua pointed out that the U.S. economy holds a 22 percent weight in the global economy and the U.S dollar is used in 60 to 80 percent of the global trade. Thus, the United States has been benefiting a lot from the dollar’s reserve currency position. The U.S. should not forget where those extra profits came from. One of the commentaries suggested that some countries, especially some emerging economies, may suffer financial turmoil due to their high debt ratio. Xinhua also questioned whether the U.S. economy is capable of sustaining the rapid future interest rate increase plan that the Fed laid out. Some commentaries concluded that the projected increases next year may “disrupt global markets.” The Chinese stock, bond, and foreign exchange markets all suffered significant declines after the Fed’s announcement.

The Xinhua commentaries (December 15, 2016):

The Global Economy Should Be Concerned about the Risks from the Pace of the Fed’s Rate Hikes
http://news.xinhuanet.com/finance/2016-12/15/c_1120126522.htm

The U.S. Should Bear Its Global Responsibilities as the World’s Primary Reserve Currency Issuer
http://news.xinhuanet.com/fortune/2016-12/15/c_1120126610.htm

The RMB Exchange Rate Has Its Own Rhythm to Maintain Long-term Stability
http://news.xinhuanet.com/fortune/2016-12/15/c_1120126810.htm#cj_test

Will the U.S. Fed Rate Hike Affect the Chinese People’s Pocketbook?
http://news.xinhuanet.com/finance/2016-12/15/c_1120126634.htm

We Need to Take Good Care of Ourselves with or without A U.S. Interest Rate Hike
http://news.xinhuanet.com/comments/2016-12/15/c_1120126798.htm

China’s Macroeconomic Policy Needs to Balance among Multiple Objectives after the U.S. Interest Rate Hike
http://news.xinhuanet.com/finance/2016-12/15/c_1120126859.htm

Briefings | | |   Economy/Resources US-China Relations

People’s Daily: U.S. Debt Threatens the World’s Economic Security

People’s Daily published a commentary article criticizing the U.S.’ debt problems. The article said that the U.S. government’s debt has become so high that it is nearly impossible to eliminate it. It is expected that, during Obama’s term, U.S. Treasury bonds will exceed 20 trillion dollars in value. The high level of debt will not only hinder U.S. economic growth, but will also have an adverse impact on world economic development.

The article said the U.S. debt problem is due to defects in the U.S. system, in addition to war expenses and the economic crisis.

The article concluded that the huge national debt of the United States has cast a shadow over the prospects for the U.S. economy. At the same time, it has become a threat to the stability of the world economy. If the amount of the U.S. Treasury bonds continues to grow without restriction, and the United States cannot take effective measures to alleviate the debt situation, the credibility of the U.S. dollar will become a big concern in the international community.

Source: People’s Daily, December 11, 2016
http://world.people.com.cn/n1/2016/1211/c1002-28940056.html

Briefings | | |   US-China Relations

Global Times: Breaking the Deadlock on the North Korea Nuclear Issue Does Not Depend on China

On November 30, following North Korea’s fifth nuclear test, the UN Security Council passed new sanctions against North Korea. China’s state media Global Times (Huanqiu) then published an editorial to point out that whether the sanctions succeed or not is not up to China.

The article said, “Since China is the largest target for North Korea’s coal exports, the West and South Korea are of the opinion that China’s attitude is the key to whether the new Security Council resolution can be implemented and achieve its objectives. We have to say that this kind of thinking is problematic.”

“Regarding the sanctions against North Korea, China has suffered the most in terms of economic and diplomatic losses. China and North Korea maintained normal trade in the past, while the West and South Korea had almost zero contact with North Korea. China’s difficulty in controlling the long border between China and North Korea is not as simple as signing a name [on the resolution] in the same manner as the other countries that do not have trade relations with North Korea.”

“Time has proved that imposing severe sanctions will not work alone. The United States and South Korea need to take the initiative to improve North Korea’s security environment. Pyongyang feels the pressure of facing the risk of foreign subversion at any time. The United States and South Korea must try to seek a breakthrough in security and mutual trust with North Korea. Otherwise it will not work no matter what kind of sanctions are applied against North Korea. Do not expect North Korea to yield even if it becomes the world’s poorest country.”

“The fundamental reason for the deadlock on the North Korea nuclear issue is that the United States and South Korea cannot dialogue with North Korea. There is no mutual trust in each other. The more North Korea is rebellious, the more military exercises the U.S. and South Korea conduct and the more stringent are the sanctions that apply. In turn, North Korea responds with a more intense nuclear test. The two sides have dragged all of Northeast Asia into this conflict. The United States and South Korea always want China to increase the pressure on North Korea, or, even better, to have China and North Korea fight against each other so that they can wait and stand by to enjoy the results.”

“Now, the international community has reached an agreement on the new sanctions against North Korea, but all the parties still have very different ways of thinking [about how it may work], or even totally opposite ways. China proposes comprehensive management to resolve the nuclear issue, and all the parties involved assume their respective due responsibilities. Such a complex problem cannot be that one party is all wrong, while the others all seek a higher justice than God.”

“Sanctions have been so severe. If does not work again, the United States and South Korea should not complain about others actions. They should consider a good reflection of their own.”

Source: Global Times, November 30, 2016
http://opinion.huanqiu.com/editorial/2016-11/9753906.html

Briefings | | |   US-China Relations

People’s Daily: What Does Trump’s Exit from the TPP Mean for China and the United States?

In a recent People’s Daily report, several Chinese scholars gave their opinions on the following question: The TPP agreement was originally seen as the United States’ Asian rebalancing strategy to contain China. Trump decided to change the U.S. policy and withdraw from the TPP. What effect will this have on the two sides?

According to Yuan Zheng, Director of the American Foreign Affairs Department at the American Studies Institute of the Chinese Academy of Social Sciences, “The United States’ retreat from the TPP and the resulting policy adjustments greatly disappointed its allies. In fact, it damaged the United States’ political reputation and shattered the emotional balance of member countries.” Yuan cited the responses of leaders from a number of TPP member countries to support his observation; he said Japan was the most prominent one.

According to Wang Wen, Executive Director of the Finance Institute of Renmin University of China, “The U.S. exit from the TPP is not entirely a good thing for China. The future will present many challenges.” He did not think that the withdrawal of the United States from the TPP would entirely benefit China’s interests. Wang thought that the U.S. withdrawal would have two major effects. One is that it would change the expectation of a global trend in international trade. The expectation of the two major trade competitions between the U.S.-led regional trade liberalism and the China-led free trade zone would change. First, Trump may introduce new policies for future global trade. Therefore, global trade may become more uncertain. Second, China is in a critical period with both opportunities and challenges in development. It is very challenging for China to deal with the uncertainty of the international situation in the new era of unwinding the TPP. The original TPP member countries will continue to increase demands on China. It may enhance China’s trade discourse, but it will also increase China’s responsibilities and the burden on the global trade system.

Zhang Tengjun, a researcher at the American Studies Section of the International Studies Institute of China, also believed that the United States withdrawal from the TPP would relieve some pressure on China. However, what measures Trump will introduce to safeguard the interests of the United States in the Asia Pacific and even in international society remains to be seen.

Source: People’s Daily, November 29, 2016
http://world.people.com.cn/n1/2016/1129/c1002-28906034.html

Briefings | | |   US-China Relations

Xinhua: Why Is Trump So Determined to Cancel TPP and What Is the Alternative?

Xinhua recently published a commentary analyzing the drivers behind the U.S. President-elect Donald Trump’s decisive cancellation of the Trans-Pacific Partnership (TPP) agreement, which excludes China and was a major agenda item for President Obama. The commentator expressed the belief that, overall, Trump is not a big fan of free trade, especially for “unfair” trade deals that will cost American jobs. He has called TPP a “potential disaster.” Another reason identified in the commentary was Trump’s campaign promises, since he would like to appear to keep the promises made to his voters in the “Rust Belt” states, who were the forces that defined this past election. However, the whole world is now taking a wait-and-see attitude on Trump’s proposed alternative – bilateral trade agreements. Many analysts have expressed a concern over the potential loss of U.S. leadership in the Pacific region as an outcome of the new policy, which brings a lot of uncertainty.

Source: Xinhua, November 22, 2016
http://news.xinhuanet.com/world/2016-11/22/c_129374046.htm

Briefings | | |   US-China Relations

People’s Daily: Why Does the U.S. Face So Much Trouble?

On November 27, People’s Daily devoted an entire page to the publication of a series of articles on the overall issue of the fundamental problems the Unites States currently faces. Given the shocking outcome of the recent U.S. presidential election, Chinese political analysts identified some “in-depth” causes of today’s social problems in the United States. The top observation was the split in U.S. mainstream values. The so-called “founding values” such as democracy, freedom, and human rights were all challenged and were all questioned in the past election. The “game of the elite class” ignored the American people and even freedom of the press turned pale. Chinese analysts also found a significant lack of quality talent that could run the country efficiently. The government leadership as well as the mid-level teams can be described as “mediocre” at best. The analysts expressed their belief that the U.S. government demonstrated poor capabilities of execution, which included decision making, managing the economy, and even waging war. Most of Obama’s policies, both domestic and international, failed after spending trillions. One article in the series suggested that today’s U.S. is actually a combination of “two Americas,” which referred to one America which had realized the “American Dream”  and another America composed of people still struggling for life. Another author concluded that the entire Western social structure, which includes a democratic government, a free market, the rule of law, and civilized social relations, is falling apart.

Source: People’s Daily, November 27, 2016
http://paper.people.com.cn/rmrb/html/2016-11/27/nw.D110000renmrb_20161127_1-05.htm

Briefings | | |   Government/Politics US-China Relations