Sea Change: Trump Gets Tough On South China Sea

American Secretary of State Mike Pompeo said the United States would treat Beijing's pursuit of resources in the dispute-rife South China Sea as illegal.

"We are making clear: Beijing's claims to offshore resources across most of the South China Sea are completely unlawful, as is its campaign of bullying to control them," Pompeo said in a statement.

"The world will not allow Beijing to treat the South China Sea as its maritime empire.”

Previously, the U.S. has been somewhat canny in how it treated China’s claim to the South China Sea, which is both home to valuable oil and gas deposits and a vital waterway for the world's commerce. The U.S. only asserted its right to travel through the area, but did not take a formal position on China’s aggressive claims.

Beijing claims a “historic right” to majority of the South China Sea through the so-called nine-dash line, a vague delineation based on maps from the 1940s to an area stretching down the entire coast of Vietnam and reaching almost to Borneo.

Four years ago, the Permanent Court of Arbitration, an international tribunal in the Hague, called that claim ridiculous when it sided with the Philippines. Manilla brought the case in 2013, after China had grabbed control of a reef, called Scarborough Shoal, about 120 nautical miles west of the Philippine island of Luzon.

The court agreed with the Philippines that China’s claim has no standing in international law, “There was no legal basis for China to claim historic rights to resources within the sea areas falling within the nine dash line.” The judges added, “To the extent China had historic rights to resources in the waters of the South China Sea, such rights were extinguished because they were incompatible with UNCLOS.”

While China signed UNCLOS in 1982, it rejected the ruling. The People’s Republic continues to assert the nine-dash line claim, and harass its neighbors in the South China Sea.

What does this all mean?

China has a few goals. Militarily, China knows that for now it’s outmatched by conventional U.S. power. So one of the strategies it pursues is anti-access/area-denial (A2/AD). The idea is to push back the range of U.S. aircraft carrier groups by making it too dangerous for them to enter areas near the Chinese coast.

Superficial media focus only on the carriers. As platforms for aircraft, they matter greatly; but those carriers must be re-supplied with missiles, parts, food, etc. Chinese A2/AD presents a bigger threat to those supply convoys. The further the distance carriers must stay away, the more time China has to react to aircraft and missile operations launched from them, and the longer the U.S. resupply/refueling logistics.

China would do this with advanced land-attack ballistic and cruise missiles fielded by warships, submarines, and aircraft that patrol the waters along the country’s coastline. The more places it has to put those weapons, the harder it is for the U.S. to take them out. South China Sea islands are places China can put missile systems. For example, it has already put anti-ship cruise missiles and surface-to-air missile systems on outposts it built in the Spratley Islands.

China is also a major maritime trading nation; second-largest economy in the world with over 60 percent of its trade in value traveling by sea. An estimated $3.4 trillion in trade passed through the South China Sea in 2016. In fact, that was 21 percent of all international trade and over 64 percent of China’s maritime trade. Note that nearly 42 percent of Japan’s maritime trade also passes through the South China Sea. China would like to be able to cut-off Japan’s trade in a conflict.

The Strait of Malacca, near the bottom of the nine-dash line, is a key global strategic chokepoint. Nearly 80 percent of China’s crude oil imports pass through it from the Middle East and Africa. At its narrowest point in the Phillips Channel near Singapore, it’s only 1.7 miles (2.7 km) wide, creating a natural bottleneck for a blockade. Singapore is a U.S. ally and the U.S. Navy has naval rights at bases there. Until China can bypass the Strait (say through Pakistan) the oil from the Middle East and minerals from Africa it needs can be stopped there.

The South China Sea is also estimated to have proven oil reserves of around 7.7 billion barrels, and a potential of 28 billion barrels total (extraction technology is always improving). Natural gas reserves are estimated at 266 trillion cubic feet. The more oil China can source domestically, the less it has to source from the Middle East. Natural gas is important because 66% of Chinese electricity is still generated by coal. That creates the infamous choking pollution in Shanghai and Beijing that is an explosive political problem in China. Natural gas burns much cleaner than coal, and is relatively cheap.

Vietnam and Malaysia have undertaken oil and gas exploration in the area — which China has harassed. If nothing else, China wants to force those countries to work with its companies like CNOOC rather than Exxon.

China’s ultimate goal is to create an authoritarian empire that dominates the world with itself at the center. It can’t control places that are far away, if it doesn’t control places near like the South China Sea. As Americans believe their country is a “shining light on a hill,” Chinese believe a world with Beijing at the center of a new tribute system is the natural order of things. The education system in China explicitly teaches this. In our Foreign Policy primer, we discuss how history creates national expectations. Foreigners kow-towing is China’s national expectation. China is trying to use it’s growing maritime power to make its neighbors kow-tow.

That’s why one of the key American goals here is to make China look weak. Given China’s massive military build-up, it’s also trying to contain China with a coalition of as many of its neighbors as possible.

To counter this growing Chinese power, for about 15 years, the U.S. has been trying to form the Quad — a proposed alliance of itself, America, Japan and Australia to deal with Chinese ambitions.

Historically dubious of alliances generally and America specifically, India had been the most reluctant partner in the Quad. Yet, it’s the critical one because India is best positioned to cut off China from its Middle East oil and African resources. If the other three members don’t have to do that in a conflict, it gives them many more assets to use against China in the Pacific. And forces China to deploy many more of its own to the Indian Ocean.

New Delhi had been slowly overcoming its reluctance as China gets more assertive (and tries to surround it in the Indian Ocean with its so called “String of Pearls” naval outposts. See right.) Then China launched its self-defeating offensive in the Himalayas this spring which culminated in a clash where 20 India and an estimated 40 Chinese troops died. India is now all in on the Quad.

To the Quad, the US would love to add a stronger Philippines, Vietnam, Indonesia and possibly even Malaysia. The goal would be to surround China as the Kasier’s Germany surrounded itself with blundering diplomacy in World War I.

The military challenge is coordinating such a large and unwieldy alliance. For example, Vietnam uses Russian weapons systems that are not operable with American systems. So does India. There’s also the challenge of getting countries like the Philippines, Indonesia and Taiwan to use their limited resources effectively. They have their own domestic problems and the U.S. often doesn’t help, encouraging countries to buy expensive top-of-the-line American weapons like F-35 jet fighters when that money might be more effectively spent on anti-ship missiles and developing underwater drones.

The other big American conundrum: how do you stiffen the spine of China’s much smaller neighbors without buying a stake in every dispute over a rock or fishing bed with nuclear armed China? The U.S. will have to delineate very quickly what it’s willing to do so Pompeo’s declaration is not just more empty rhetoric like the Obama Administration pivot to Asia.

Reality is by declaring so much of China’s maritime activities illegal, the administration has provided a justification for potential sanctions against Chinese companies and entities that conduct them.

The other American problem is by calling China’s claim “illegal” it has endorsed a ruling by UNCLOS, and yet the U.S. is lone major power that has not ratified UNCLOS. The Americans have not signed over concerns about potential environmental lawsuits over deep-sea oil drilling and sea bed mining and “Boltonism” — the belief any international treaty impedes US sovereignty and is bad. No one understands better than me that multilateralism for the sake of multilateralism is the Holy Grail of our failed Western elites.

But frankly, the American position on UNCLOS is untenable. How do you uphold laws you yourself refuse to be a party to? The American strength has been its only global power in history to say the international order should be based on laws, not great power politics. You can’t be an isolationist alliance leader.

Then there’s what happens if Trump isn’t re-elected in November? Joe Biden is the poster boy for America’s political elite that Beijing bought.

In May, Biden mocked Trump’s trade war with China by downplaying the threat. “China is going to eat our lunch? Come on, man… they’re not bad folks, folks. They’re not competition for us.”

Like two thieves in a pod …

That despite the fact Chinese competition directly cost 3.7 million Americans their jobs. Why does Biden not see China as a threat? Because he sees them as his business partners.

In 2013, then-Vice President Joe Biden and his son Hunter Biden flew aboard Air Force Two to China. Less than two weeks later, Hunter Biden’s firm inked a $1 billion private equity deal with a subsidiary of the Chinese government’s Bank of China. The deal was later expanded to $1.5 billion.

Hunter Biden and his partners created a series of businesses involved in multibillion-dollar private equity deals with companies owned by the Chinese government. This all started in 2009, the very year Joe Biden become Vice-President.

That Hunter Biden and is partners had no experience in China, and little in private equity, didn’t dissuade the Chinese government from giving his company a business opportunities in place of established global financial brands like Morgan Stanley or Goldman Sachs. In fact, according to “Secret Empires: How the American Political Class Hides Corruption and Enriches Family and Friends“ by Peter Schweizker one of the few respected journalists still working in America — Biden and his family have done about $5 billion in deals with China.

Even so, Xi’s hyper-nationalism keeps uniting China’s neighbors with the one thing they have in common: dislike of the People’s Republic.