“It Was A Deer In Headlights Moment”: Japan Dumps Most US Treasuries Since May 2013

 

With the December monthly TIC data due out this week, bond traders will be closely watching if the selling of US Treasuries by foreign accounts, and especially central banks, which as we have repeatedly shown for the past several months has hit record levels…

However, this time the surprise may not be China, but its nemesis across the East China Sea, Japan. Continue reading

China ‘steps up preparedness for possible military conflict with US’

A file picture of China’s sole aircraft carrier Liaoning taking part in a drill last month in the South China Sea. Photo: Reuters

 

Donald Trump’s election as US president has increased the risk of hostilities breaking out, according to Chinese state media and analysts

China is stepping up preparedness for a possible military conflict with the US as the Donald Trump presidency has increased the risk of hostilities breaking out, state media and military observers said.

Beijing is bracing itself for a possible deterioration in Sino-US ties, with a particular emphasis on maritime security. Continue reading

One China, three foreign policy faces

China has a changing attitude to the thornier diplomatic and security crises now afflicting the Asian continent. Depending on the amount of national interest at play and the power it can reasonably project in the relevant geopolitical chessboards, Beijing can put on the face of peace facilitator in Syria, peace broker in Afghanistan and would-be boss in the Western Pacific.

While the main driver for the Chinese diplomacy in the Middle East is the protection of economic interests, the assertion of national sovereignty, combined with the aspiration to become the driving force in East Asia, mostly explains China’s moves in the East and South China seas. The rationale for Beijing’s posturing in Central Asia is instead more nuanced. The region is in fact a crossroads for many stakeholders; here China is committed to safeguarding precious economic assets and, at the same time, exerting some form of power.

In an osmotic way, all of these three approaches are conditioned by China’s interaction with the other great powers – the United States and Russia. Continue reading

Taiwan scrambles fighter jets as China carrier enters strait

China’s Liaoning aircraft carrier with accompanying fleet conducts a drill in an area of the South China Sea. /Reuters

 

Taiwan’s military was on placed on high alert as a group of Chinese ships, led by the Liaoning aircraft carrier, transited the Taiwan Strait on Jan. 11.

According to Taiwan’s Defense Ministry, Beijing’s Soviet-built aircraft carrier, returning from exercises in the South China Sea, had not entered Taiwan’s territorial waters but did enter its air defense identification zone in the southwest.

Taiwan sent its aircraft and ships to “surveil and control” the passage of the Chinese ships north through the body of water separating Taiwan and China, Taiwan defense ministry spokesman Chen Chung-chi said. Continue reading

PLA air force vows to continue training and patrols over East and South China seas

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File pictures released by the Chinese air force on Sunday show a PLA H-6K bomber and two J-11 fighter jets on an unspecified training mission. Photo: Chinese air force.

 

The mainland Chinese air force said on Thursday it would continue training and patrols in the air space over the East and South China seas, following recently intensified drills that have rattled Taiwan and Japan.

The People’s Liberation Army air force would keep training and patrolling the air space in accordance with its schedule, spokesman Shen Jinke said.

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Murphy’s Law: The Empire Prepares For War Once More

Since the end of the Cold War in 1991 there has been growing pressure from many Japanese and Japanese allies for revisions of the Japanese constitution to allow weapons exports and more cooperation on military matters with allies that Japan depends on for much of its military defense. This is because of post-World War II reforms (and reaction to the military government that got the Japanese Empire into World War II, with disastrous results) that severely restricted Japanese defense policies. The post war constitution forbade Japan from possessing offensive military forces. Thus the Japanese armed forces are called the “Self Defense Forces.” It was decades before Japan could even bring itself to build major weapons for its self-defense forces. By the late 1980s Japanese companies found that they were quite good at building quality high tech weapons. At that point, an international marketing survey indicated that, if Japan were allowed to export weapons, they would eventually capture up to 45 percent of the world tank and self-propelled artillery market, 40 percent of military electronic sales, and 60 percent of warship construction. That seemed optimistic, but there was no doubt that the Japanese could produce world class weapons. Throughout the 1990s, Japanese manufacturers produced nearly $7 billion worth of weapons a military equipment a year, just for the self-defense force. Continue reading

China flexing its military muscle

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A Chinese WZ-10 military helicopter is seen before the China International Aviation and Aerospace Exhibition in Zhuhai, Guangdong province, October 25, 2016. Photo: REUTERS

 

The Chinese military is developing ships, submarines, aircraft, intelligence systems and foreign bases in a bid to be a global military power: report

China’s military is developing ships, submarines, aircraft, intelligence systems and foreign bases in a bid to become a global military power, according to a forthcoming congressional China commission report.

The late draft of the annual report by the US-China Economic and Security Review Commission contains a chapter on Beijing’s power projection development and warns that once fully developed, the weapons and forces could contribute to a regional conflict in places like the South China and East China seas. Continue reading

Pax China: Manila’s capitulation sets ominous precedent for U.S. allies in Far East

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Philippine President Rodrigo Duterte, left, with Chinese President Xi Jinping after a signing ceremony in Beijing on Oct. 20. / Ng Han Guan / AP

 

Rodrigo Duterte was reputed as a killer long before his election as president of the Philippines five months ago. He countenanced the slaughter of hundreds of drug addicts and dealers while mayor of Davao, the major port city on the rebel-infested southern island of Mindanao, and has applauded the arbitrary killing of upwards of 2,000 more druggies as president.

Duterte’s brutality, though, doesn’t mean he’s interested in battling China on behalf of his country in the South China Sea. In fact, he’s confounded strategists in Washington by appearing to disavow the historic Philippine-American alliance, aligning with the Chinese while tossing out agreements with the U.S. He’s saying, in effect, “Yankee Go Home.” Continue reading

Japan wary of Philippine pivot to China

TOKYO — The Philippines’ newly found affection for China has sparked concern in Japan that it would embolden the Asian giant to expand more aggressively in the South China Sea.

Japan has worked with the U.S. and others to pressure China to accept an international arbitration ruling in July that rejected Beijing’s claims in the South China Sea. The ruling involved a case brought by the Philippines, but Manila has downplayed the decision in its favor.

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China’s massive Pacific air force drill just the start of even bigger shows of might against US, experts predict

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A state media photo shows a Chinese Su-30 fighter (right) flying with a H-6K bomber as they take part in a drill near the East China Sea on Sunday. Photo: Xinhua

 

Long-range drills and patrols the Chinese military held in the Western Pacific on Sunday demonstrated the nation’s ability to counter US interference in the South China Sea issues, Chinese military experts have said.

The unprecedented exercise involved more than 40 aircraft from different aviation teams, indicating the air force would join with the navy, rocket forces or other military arms to conduct additional large joint operational exercises in the region in the future, they added.

Air force spokesman Shen Jinke said H-6K bombers, Su-30 fighters and air tankers conducted reconnaissance and early warning drills, simulated attacks on sea targets, and carried out in-flight refuelling. Continue reading

Chinese Air Force announces ‘regular’ exercises flying through key entryway into western Pacific

A Chinese H-6K bomber patrols islands and reefs in the South China Sea in this undated photo. | XINHUA NEWS AGENCY / AP

 

China’s People’s Liberation Army Air Force has announced that it will be organizing “regular” exercises that fly past the so-called first island chain — a key entryway into the western Pacific that includes Japan’s Ryukyu Islands and Taiwan.

In the latest exercise, air force spokesman Shen Jinke said China had sent a fleet of aircraft that included H-6K bombers, Su-30 fighters and air tankers over the Bashi Strait and into the western Pacific for a “routine” combat simulation drill Monday, state media reported. Continue reading

Japan’s military seeks record spending to counter N Korea, China moves

Japan’s defense ministry on Wednesday asked for a hike in spending to record levels, as it juggles its responses to a growing ballistic missile threat from North Korea and China’s assertive moves in the East China Sea.

If approved, the hike of 2.3% will take the defense budget to 5.17 trillion yen ($51.47 billion) in the year starting April 1, for a fifth consecutive increase as Prime Minister Shinzo Abe bolsters Japan’s military. Continue reading

Japan tells China to stop violating territory in East China Sea

Japan told China on Wednesday its ships must stop violating Japanese territory in the East China Sea after a long-standing maritime row intensified this month.

The admonition came in a meeting between Japanese Foreign Minister Fumio Kishida and his Chinese counterpart Wang Yi. Continue reading

China threatens to impose air defence zone on disputed area of South China Sea

China raised tensions in the South China Sea on Wednesday by threatening to declare an air defence identification zone (ADIZ) over disputed waters where a tribunal has quashed its legal claim.

The Permanent Court of Arbitration in The Hague ruled on Tuesday that China had “no legal basis” for its “nine-dash line”, which lays claim to almost all of the South China Sea. After considering a case brought by the Philippines, the court ruled against China on virtually every substantive point.

President Xi Jinping responded by saying that China would “refuse to accept” the decision.

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Passivity in the Face of Big-Power Aggression

  • The West has developed reasonable-sounding rationales for not acting in the face of what is clearly aggression by big powers. That inaction has bought peace, but the peace has never been more than temporary.
  • Officials in Beijing and Moscow believe their countries should be bigger than they are today. Faced with little or no resistance, China and Russia are succeeding in redrawing their borders by force.
  • Should we be concerned by a nuclear-armed, hostile state falling apart? Of course, but we should be more worried by a hostile state launching nuclear attacks on the Baltics, as the Kremlin has repeatedly threatened to do.
  • The Chinese and Russians may be villains, but it is we, through inaction, who have permitted them to be villainous. The choice is no longer risk versus no risk. The choice is which awful risk to assume.

Speaking in April at the Aspen Security Forum in London, Douglas Lute, Washington’s permanent representative to NATO, said:

“So essentially there is a sense that, yes, there is a new more assertive, maybe even more aggressive Russia, but that fundamentally Russia is a state in decline. We have conversations in NATO headquarters about states in decline and arrive at two fundamental models: states in rapid decline which typically lead to chaos and breakdown, and states in gradual decline. Then we ask ourselves: Which of these two tracks would we rather have our nearest, most militarily capable neighbor, with thousands of nuclear weapons, move along? To many, trying to manage Russia’s decline seems more attractive than a failed state of that size and magnitude right on the border of NATO.”

Continue reading