Tuesday, 6 June 2017

South China Sea Row at Boiling Point: US Warns Beijing Over 'Unacceptable' Military Action

Speaking at a security conference in Singapore, Defence Secretary James Mattis said such moves undermined regional stability and would not be tolerated.

China's territorial claims in the South China Sea - through which about £3.9trillion in ship-borne trade passes each year - are contested by Brunei, Malaysia, the Philippines, Taiwan and Vietnam.

In his speech at the annual Shangri-La Dialogue forum, General Mattis said: "We oppose countries militarising artificial islands and enforcing excessive maritime claims.

"We cannot and will not accept unilateral, coercive changes to the status quo."

President Donald Trump and other senior US officials have repeatedly stated that they would protect its interests in the South China Sea - a key shipping route.

During his nomination hearing earlier this year, Secretary of State Rex Tillerson warned that the US was "going to have to send China a clear signal that first the island-building stops, and second your access to those islands also is not going to be allowed."

In response, the Chinese foreign ministry said Beijing would "remain firm to defend its rights in the region".

If Trump wants to return US industry to China a good way is to have a huge diplomatic row which will lead to either tariffs or sanctions. An international incident would go a long way in splitting the US dependency on Chinese manufacturing. For a while there will be upheavals in both countries. This might include an attack on the US dollar. Both sides will suffer. The Chinese Government, that wants to maintain stability, will try to avoid this outcome and might make concessions.

In terms of the global economic system, it's time that each country develop and maintain industry to serve their domestic needs rather than have manufacturing centred in a few low wage areas of the world. Such systems cause a wealth and jobs imbalance.

[Posted at the SpookyWeather blog, June 6th, 2017.]

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