China
Beijing’s self-sabotage in the South China Sea
Author: Gregory Poling, CSIS
The situation in the South China Sea continues to deteriorate — military tensions are rising, Southeast Asian states are losing space to exercise their rights, fisheries are sliding closer to collapse and China is undermining its goal of regional and global leadership. Facing regular coercion, China’s neighbours are growing increasingly disillusioned about its long-term intentions and, alongside international partners, are strengthening their objections to Beijing’s claims.
China significantly increased its coast guard patrols and military exercises in disputed waters from 2020, and dangerous harassment of Southeast Asian oil and gas operations by Chinese law enforcement and retaliatory seabed surveys became the new normal. Then in January 2021, Beijing passed a law strengthening the China Coast Guard’s (CCG) authority to enforce maritime claims, by force if necessary. The law may be ambiguous, but its tough language and vast scope raised anxieties.
In March, the Philippines reported more than 220 Chinese maritime militia vessels gathered at Whitsun Reef in the disputed Union Banks. The Philippine Coast Guard conducted several patrols to the reef and the government released photos and video of the militia flotilla. Vietnam soon did the same. The embarrassment and diplomatic tension got Beijing’s attention and it temporarily dispersed the fleet to other nearby reefs. But the militia boats returnedand by October their numbers were approaching 200.
The oil and gas standoffs that have been routine since 2019 also continue. In June 2021, CCG vessels began patrolling around Malaysian drilling operations in the Kasawari gas field off Sarawak, targeting offshore supply vessels. Chinese military planes simultaneously patrolled near Malaysian air space, prompting Kuala Lumpur to scramble jets and issue a diplomatic protest. In September, China seemed to retaliate against a drilling operation by conducting a seabed survey on Malaysia’s continental shelf.
In July, China and Indonesia got into their first real spat over hydrocarbons when an Indonesian-licensed rig began drilling two appraisal wells in the country’s Tuna block at the southern edge of the South China Sea. CCG vessels patrolled around the rig for the next four months. China also deployed a survey ship with a CCG escort to conduct a seabed survey of Indonesia’s continental shelf — carefully tracing the edge of China’s ‘nine-dash line’ — as Indonesian Navy vessels shadowed it.
A dangerous incident took place in November when China turned high-pressure water cannons on a civilian ship resupplying Philippine troops on Second Thomas Shoal. The outcry from Manila — and US and European officials — was swift. China didn’t interfere with a second resupply attempt a week later. This occurred just as candidates for the 2022 Philippine presidential elections were being finalised. Predictably, most hurriedly promised a tough stance on China.
This steady stream of bad behaviour is galvanising the region. For the first time since 2016, most Southeast Asian claimants and a chorus of international partners agree that China’s behaviour is destabilising and are voicing those concerns. They are also increasingly open to greater cooperation to strengthen their positions and push back.
This shift is most evident in the Philippines.
In July, Philippine President Rodrigo Duterte decided to cease abrogating the US–Philippines Visiting Forces Agreement. Both countries subsequently agreed to develop a ‘bilateral maritime framework’ and resume construction projects under the long-stalled 2014 Enhanced Defense Cooperation Agreement (EDCA) which allows the US to access and upgrade select Philippine military bases. In November, they held their first Bilateral Strategic Dialogue in two years and announced plans to develop bilateral defence guidelines and conclude a General Security of Military Information Agreement. The Philippines has also stepped up patrols in the South China Sea and intends to deploy Coast Guard vessels to Thitu Island in the Spratlys.
The most important question for the South China Sea in 2022 is whether the turnaround in Philippine foreign policy will continue after the mid-year presidential transition. The US and Philippine defence establishments will try to lock in the recent alliance gains, with the United States already rapidly dispersing construction funds for the EDCA sites. Further high-level visits are likely as Washington seeks to prove that it is serious about forging a more robust and…
China
Navigating Turbulent Waters: Trust Between China and the Philippines
Despite a July 2024 deal ensuring Philippine resupply missions at Second Thomas Shoal, tensions with China persist, marked by confrontations and deep distrust, indicating potential for future conflict escalation.
Ongoing Tensions in the South China Sea
Despite a July 2024 agreement facilitating uninterrupted resupply missions to the contentious Second Thomas Shoal, tensions between China and the Philippines remain significantly high. Increased aerial and naval confrontations in August, compounded by longstanding mutual mistrust, hint at a precarious situation. Both nations are employing legal strategies alongside military maneuvers, while China’s recent maritime regulations and the Philippines’ military modernization efforts suggest a future marked by conflict.
Rising Provocations and Distrust
The situation deteriorated further in June 2024, when Manila accused Chinese forces of intercepting its boats and injuring a sailor. Although the July deal allowed for a resupply mission without incident, broader tensions persisted as China reportedly fired flares dangerously close to Philippine aircraft in August. The incidents at Second Thomas Shoal illustrate the deepening security crisis that has persisted since 2021, as China continues to challenge Philippine resupply efforts.
Potential for Escalation
While the recent agreement may offer temporary relief, it is unlikely to resolve the long-standing maritime disputes in the region comprehensively. The continuing misinterpretations of the deal and the profound distrust between the two nations suggest an ongoing trajectory of escalating tensions. As disputes over competing claims in the South China Sea intensify, the situation at Second Thomas Shoal serves as a volatile flashpoint for future conflicts.
China
Is life getting better for China’s tech billionaires?
Pony Ma, Tencent co-founder, is China’s richest person with over A$65 billion. Despite past crackdowns, his wealth indicates a potential market recovery, while maintaining state control over the economy.
According to the latest Bloomberg Billionaires Index, Pony Ma, co-founder of Tencent Holdings, is once again China’s richest person, now with a net worth of more than A$65 billion, placing him 27th globally.
Close behind him in the rankings are bottled water tycoon Zhong Shanshan, and Zhang Yiming, the main co-founder of tech giant ByteDance, which owns TikTok.
Only a few years ago, China’s ruling Communist Party launched a crackdown on billionaires and other business leaders. Some were publicly jailed. Others simply disappeared from public view.
Ma’s resurgence might seem like a positive signal of a more permissive market environment. But as we watch China’s private sector grow, we should remember it follows China’s unique playbook.
The ascent of Tencent
Ma’s wealth primarily comes from his stake in Tencent, which he co-founded in 1998 with its headquarters in Shenzhen. As China’s economy grew, Tencent became a world-leading internet and technology company.
Tech billionaire Pony Ma at a government meeting in 2018.
Song Fan/AP
Tencent is well-known for QQ and WeChat, which quickly became two of the most popular instant messaging apps in China and connect more than a billion people.
Tencent is also the largest video game vendor in China, with popular games such as “Honour of Kings” and “League of Legends”.
Last month, Tencent released “Black Myth: Wukong”, China’s first-ever “AAA” video game. AAA is a globally recognised gaming industry buzzword that refers to major, high-budget, standalone productions.
The much-hyped game surpassed 10 million sales across platforms within three days of its release, becoming one of China’s most successful games of all time.
The game itself draws on a 16th century Chinese novel called “Journey to the West” and features various Chinese landscapes. Its popularity aligns with Beijing’s ongoing efforts to boost China’s international cultural appeal.
China’s state-owned media outlet Xinhua highly praised the game for “telling Chinese stories with world-class quality” and offering a new way for global players to understand Chinese culture.
Ma’s fortunes reflect his company’s
This official appraisal means a lot. In previous years, Tencent has had a challenging time coping with Beijing’s strict gaming regulations.
In August 2021, China’s video game regulator announced policies to limit online gamers under the age of 18 to only one hour of play on Fridays, weekends and holidays. This was a major blow to China’s gaming industry, including Tencent.
In December 2023, Beijing introduced more legislation aimed at further capping the amount of money and time that could be spent on video games. The announcement resulted in a 12.4% drop in Tencent’s share price. But the company still promised to strictly implement any new regulatory requirements.
The success of ‘Black Myth: Wukong’ reflects an improving outlook for Tencent.
Andy Wong/AP
A cautionary tale
In China, complying with state regulations is important. Another Chinese tech billionaire, Jack Ma, faced the consequences of publicly challenging them.
In 2020, Jack Ma was poised to launch what was set to be the world’s largest initial public offering (IPO), raising about A$50 billion for his financial technology giant, Ant Group.
However, after he gave a speech in Shanghai harshly criticising Chinese financial regulators for outdated rules and excessive intervention, regulators halted the Ant Group IPO.
Citing concerns that Ant Group’s e-finance products encouraged unrestrained borrowing and investment, China ultimately suspended the IPO in late 2020.
Over the following years, Ant and its affiliate company Alibaba were slapped with billions in fines for alleged breaches of financial regulations.
Getting on the front foot
This phase marked a much stricter regulatory posture from China. The tech tycoons had to adapt to a new reality.
In 2021, Pony Ma publicly stressed the importance of tightly regulating internet businesses, including his own. He also proactively volunteered to meet with antitrust authorities.
Tencent downsized by divesting stakes in various sectors, and the government demanded a restructuring of its financial business.
Many of China’s other billionaires heeded lessons from Jack Ma’s troubles at Ant Group.
Alex Plavevski/EPA
The party remains the ultimate authority
China’s economy is a “socialist market economy”. That is, China’s government thinks of the market as a useful tool to achieve socialist objectives.
That doesn’t mean the private sector doesn’t play a huge role, but the government has long been cautious about the emerging market power of oligarchs as a potential threat to the party’s authorities.
Over past decades of reform and opening up, Beijing has been committed to unleashing market forces, encouraging private sector development and modernising its financial institutions. The precondition is that the state should maintain the ultimate authority to regulate and mobilise market resources.
However, its economy has been stubbornly sluggish post-COVID. The clampdown on the private sector has undermined the confidence of many investors and entrepreneurs, which is crucial for restoring China’s economic vitality.
Last year, Beijing introduced a 31-point action plan in response, aiming to make the private economy “bigger, better and stronger”. Hours after its release, Pony Ma publicly praised the government’s move as “encouraging and inspiring”.
Could spring now be coming for China’s private sector? Perhaps, but only on China’s terms.
Remember, market development is always a means for the state to achieve its own ends. This will never be a story of the market growing while the state steps back.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
China
Zhejiang Province Increases Marriage Leave to 13 Days
On September 27, Zhejiang Province expanded marriage leave from 3 to 13 days for legally married employees. The new regulations ensure continued pay and benefits during leave and address demographic challenges by encouraging population growth. Businesses must update internal policies accordingly.
On September 27, the 12th meeting of the Standing Committee of the 14th Zhejiang Provincial People’s Congress approved the Zhejiang Province Marriage Leave Regulations (hereinafter referred to as the “Regulations”), extending the marriage leave to 13 days from three days.
According to the Regulations, employees who legally register their marriage are entitled to 13 days of marriage leave, excluding national statutory holidays and rest days. During the marriage leave, employees’ wages, bonuses, and other benefits will continue to be paid by their employers.
Notably, to ensure a smooth transition between the old and new leave regulations and to minimize disputes following the implementation of the new rules, the Regulations state that employees who registered their marriage within one year before the implementation of the new regulations and have not yet taken their marriage leave will be entitled to the new 13-day leave. Those who have already taken their marriage leave can supplement it according to the new regulations.
Businesses with operations in Zhejiang province are advised to amend their internal leave policies and employee handbook as soon as possible.
The extension of marriage leave in Zhejiang Province is part of a broader effort to support population growth and address demographic challenges. The province has seen some positive effects from its initial fertility support policies, which have helped to slow the sharp decline in birth rates.
*Granted to those who take pre-marital checkups, which involve being checked for any health conditions that will affect childbirth.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
Read the rest of the original article.
- Navigating Turbulent Waters: Trust Between China and the Philippines
- Is life getting better for China’s tech billionaires?
- Zhejiang Province Increases Marriage Leave to 13 Days
- China ETFs Celebrate Beijing’s Stimulus Initiative
- From Bubble Tea to Business Partnerships: Exploring China-ASEAN Trade Integration
- With China seeking AI dominance, Taiwan’s efforts to slow neighbor’s access to advanced chips needs support from the West
