South China Sea and China

South China Sea is a part of the Pacific Ocean, comprises area from the Karimata and Malacca straits to the strait of Taiwan. The sea has a great significance geographically and economically. Almost 35% of the world’s shipping passes through this sea carrying $5.1 billing dollars each year. Further, sea has a vast amount of natural resources, including gas and oil reserves and remunerative fisheries.

Cartographically, China is located on South, Vietnam on East, Philippines on West, East of Malay peninsula up to the strait of Singapore in the East and North of the Bangka Islands and Borneo.

In fact, many countries have made their claims over the territorial of South China Sea. People’s Republic of China (PRC) and the Republic of China (Taiwan) claim over the entire area as their own. Besides, China and Taiwan, several other countries including Philippine, Vietnam, Malaysia and Singapore also claim on territory of South China Sea. It is being said; China is making and furnishing several archipelagos in the region to augment its influence.

Actually, China vows to curb the South China Sea entirely. She doesn’t want to share this sumptuous region with anyone else. It’s the beginning of China’s maritime Silk Road.

Another reason is that China sees the South China Sea as its own property. Historically, China has always viewed the South China Sea as its own. All of it, and the resources that are hidden beneath, which China wants to exploit. That’s why it is building artificial islands.

And that feeds Chinese nationalism, needed to support and reinforce the political status quo.

What about the overlapping claims from neighboring countries?  China does not see any of the other overlapping claims from the neighboring countries to the South China Sea as a threat.

And it uses intimidation to make sure that this won’t happen. When China lost a United Nations linked tribunal international arbitration to the Philippines on the South China Sea disputes a year and a half ago, Beijing took a couple of steps to make sure that Duterte wouldn’t do anything with it.

The first step was to threaten Duterte with war should he dare to enforce the ruling. The second step was to promise a generous investment to help the Philippines deal with its many problems.

And it worked. Duterte quickly flip-flopped, and forgot all about the ruling, as was written in previous pieces here.

More recently, China applied Dutertes model to intimidate Vietnam. Last July Vietnam announced that it will stop its oil exploration efforts, following a stark warning by Beijing that it will attack Vietnamese oil and gas bases.

Still, there are multiple navies that are prepared to challenge China’s ambitious mission. It is the potential Western influence, i.e. the US, France and the UK and their navies, which are having more of an impact on Chinese policy in the region.

Is China prepared to fend off this challenge? It’s hard to say.

What isn’t hard to say is that countries that play a game against all end up losing.

That’s what happened in neighboring Japan in the past, and it could happen to China in the future.

Meanwhile, investors in the financial markets of the region should closely watch any developments that will bring China closer to an open confrontation with America and its allies.

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