Senators Warn China That Escalations In South China Seas Threaten US "National Interests", China Likely To Retaliate

Tyler Durden's picture

Just because China was already delighted with Obama's reception of the Dalai Lama, here come John McCain and John Kerry warning China to mind it territorial waters, because apparently US national interests are threatened. Per the FT: “We are concerned that a series of naval incidents in recent months has raised tensions in the region,” said John Kerry, the Democratic chairman of the Senate foreign relations committee, and John McCain, the former Republican presidential candidate. “If appropriate steps are not taken to calm the situation, future incidents could escalate, jeopardising the vital national interests of the United States.” The logical follow up is glairngly obvious but here it is: "China is likely to see the comments as a provocation as they echo remarks by Hillary Clinton, US secretary of state, last year that infuriated Beijing. Speaking at the Asean Regional Forum (ARF) in Hanoi last July, Mrs Clinton angered Beijing by saying the US had “a national interest in freedom of navigation . . . in the South China Sea." What is surprising is that the US is dumb enough to bait China with such provocations as the US Treasury market is now, more than at any other point in the past 3 years, reliant on Chinese bond purchases. And for all those who claim that China has no other alternative where to recycle its trade surplus dollars, we bring you exhibit i) the EURUSD, where China sells dollars and buys euros, and ii) Eurozone bonds over the past months, which it has been gobbling up ravenously. So yes: it does have alternatives, and it may very well make a rather forceful statement to that extent.

From the FT:

The South China Sea includes vital sea lanes for most of north-east Asia’s oil imports and other trade with Europe, the Middle East, Africa, India and south-east Asia. China, Vietnam, the Philippines, Malaysia, Brunei and Taiwan claim all or parts of the area, but China’s claims are the most extensive.

The comments from the US senators follow a period when the Obama administration has publicly toned down criticism of China’s increasingly aggressive behaviour in the contested energy-rich waters.

At the Shangri-La Dialogue regional defence summit in Singapore in June, Robert Gates, then US defence secretary, disappointed some south-east Asian officials by taking a relatively soft public line on China, which partly reflected a desire not to harm improved military relations between the powers. However, Mr Gates reassured US allies in the region that Washington would maintain a “robust military engagement” in the region.

China is already not too happy with the latest developments:

Underscoring the mounting tensions, five Filipino lawmakers on Wednesday plan to fly to an island claimed by Manila in the disputed Spratlys archipelago, prompting the immediate ire of China.

China said on Tuesday that the mission “serves no purpose but to undermine peace and stability in the region and sabotage the China-Philippines relationship”, according to Agence France Presse.

Both the Philippine government and the leadership of the country’s House of Representatives distanced themselves from the visit. A government spokesman said the move was unofficial and a private initiative of the lawmakers.

However, the politicians who organised the visit said they had secured the permission of the Philippine military commander in the area to fly a private aircraft to the island.

Then again, since the source of this consternation are US politicians, these days better known as the best diversionary actors outside of Hollywood, we won't take it far too seriously until such time as China gives an indication such a stance is wrong.

Full letter:

Letter to China