Sina Delenda Est

‘A matter of principle’: Richard Marles says South China Sea exercises about national interest
By PRIMROSE RIORDAN

Richard Marles: Stop Chinese aggressions

Labor shadow defence spokesman Richard Marles has repeated his support for freedom of navigation exercises close to Chinese controlled islands in the South China Sea.
The strong comments from Mr Marles are in contrast to Labor’s pro-China Foreign Affairs Spokeswoman Penny Wong who has said while Australia should support freedom of navigation and international law, the country should focus on de-escalation.
“We would urge de-escalation. We would urge that these issues are resolved diplomatically, are resolved peacefully and that there is not escalation,” Senator Wong told the ABC in March.
The comments come after former Defence Department head Dennis Richardson told Fairfax Media Australia should challenge China’s claims to the islands by carrying out its own “freedom-of-navigation” naval operation in the contested waters.
While Australian forces traverse the region via sea and air, Foreign Minister Julie Bishop has said Australia is yet to commit to sailing within the 12 mile territorial zone around Chinese controlled islands.

Mr Marles was asked whether he still thought Australia should get involved in freedom of navigation exercises in the zone claimed by China close to Chinese controlled islands in the South China Sea.
“Well as a matter of principle my view has not changed,” he told Sky News.
“The construction of the artificial islands in the South China Sea have been found by the court of arbitration internationally have been found to be in breach of the UN Convention of the Law of the Sea.”
“That convention matters to us. Any actions including freedom of navigation operations that support the law of the sea are in our national interest.”
Mr Marles said the decision to undertake such exercises can only be made clearly from office and they can be done in a less provocative way.
But he said it would be wrong to ignore Australia’s national interest in the area.
“To ignore that national interest that we have in the South China Sea is just wrong as well… We clearly have an interest,” he said citing Australian trade flows through the region.
In early May opposition foreign spokeswoman Penny Wong said there would be a mistake not to support Beijing’s Belt and Road Initiative global infrastructure plan.

Mr Marles was more cautious and said Australia should consider its national security interests when looking at the project.

“It’s looking at this on a case-by-case basis. It’s not about rejecting China’s initiative out of hand that makes no sense at all.”
“There are going to be important infrastructure projects and desire from China to invest in them which may well be in our national interest that we should ultimately support.”
“Clearly we should be bearing in mind our national security when we engage in these and we need to be looking at things through that lens.”
The Turnbull government has so far resisted a push to align the Chinese fund and the $5 billion Northern Australia Infrastructure Facility.

Here are 5 maps that show the biggest limitations to China's power

By George Friedman

As we wrote about in “China’s Strategy,” East Asia is split into four parts: The Pacific archipelago, the Chinese mainland, the Korean Peninsula, and Indochina. 

East Asia holds the second and third largest world economies: China and Japan.
The relationship between them and the US define modern East Asian geopolitics.
East Asia is the world’s most dynamic economic region. 

Strong countries surround bodies of water over which there is competition. 

These are some of the world’s most important sea lanes. 

Japan and China (in that order) are the region’s two most significant powers.
But as we wrote about last year, the most powerful country in the Pacific, the US, is far away. 

Its Navy patrols and keeps freedom of movement across the Pacific. 

At the center of this power struggle is China. 

China’s struggle against its domestic and geographic constraints is the key to understanding the future of this region.

China’s Power Can Be Seen from Outer Space

The above map shows the countries of East Asia lit up at night. 

It reveals much about the power dynamics in this region. 

The centers of Chinese wealth and power—including Beijing, Shanghai, and Hong Kong—all hug China’s long coastline. 

Geographic features in the interior divide the country. 

The rest of the country is in darkness.
Japan, South Korea, and Taiwan are major industrial powers that border these waters along China’s coast. 

Much of the rest of East Asia is in darkness. 

North Korea’s darkness is particularly striking.
But relative to the bright lights of China’s coast and Japan, much of Indochina and inner China are also undeveloped.

Western China Is Nearly Uninhabitable

The above map shows population density in China with the 15-inch isohyet overlaid on top.
The area of China from this line to the coast gets enough rain to support a large population. 

North and west of the 15-inch isohyet, China is less populated and undeveloped.

Geography Limits China’s Expansion

The distance from Beijing to Kazakhstan is almost 2,500 miles through desert and mountains. 

The Himalayas box China in on the southwest. 

They also stop conflict between India and China.
Jungles on the border with Myanmar, Vietnam, and Thailand have always limited Chinese growth south.
It is hard for China to grow westward. 

When China’s power is ascendant, it can grow north, south, or east toward the Pacific. 

This is easier said than done. 

Japan continues to be the major regional power. 

China would still face certain defeat against Japan, especially with US support of the Japanese.
So, China is mainly focused on two things. 

Controlling its chaotic domestic political and economic situation as growth rates have slowed. 

And building its military. 

First for resistance and then for offensive action in the region.

The Chinese Navy Is in No Position to Take Action

The Chinese navy is still a decade away from exerting power over the islands, rocks, and shoals that limit China’s freedom to navigate along its coast.

Many countries around China have claims over these islands. 

The region’s other major players—Japan and South Korea—are both key US allies. 

They host large and permanent US military deployments. 

And like we recently mentioned, the Philippines recently welcomed back US forces to their bases.
This situation has created a stalemate. 

The US has no desire for a bad relationship with China. But it also doesn’t want any power to control the region. 

And China still cannot challenge US hegemony in the seas.
As we’ve discussed before, it talks of nationalism in the South China Sea mostly for domestic consumption. 

Japan and the other East Asian countries view China with increasing concern. 

They remain staunch US allies as a result.

North Korea Is China’s Bargaining Chip

When we wrote about the North Korean strategy, we said that North Korea appears dangerous with its nuclear weapons tests and its sly, bigoted strongman regime built around a top leader. 

Kim Jong Un is that leader and he has been consolidating his power.
North Korea happens to also be one of the few areas China is weak. 

The Chinese intervened in the Korean War when US forces neared the Yalu River on the border between North Korea and China.
North Korea’s unpredictable behavior gives China a big bargaining chip in its relations with the US and the region. 

So, China favors keeping the status quo.

Archenemies

The Leading Power In East Asia Will Be Japan -- Not China
By John Mauldin

Honda Motor President, CEO and representative director Takahiro Hachigo.

By 2040, Japan will rise as East Asia’s leading power. 

China will face serious problems in coming years… problems that will strain the Communist Party’s rule.
Japan, though, seems a bridge too far. 

Its population is less than a tenth of China’s size (and it’s not just aging… it’s shrinking). 

Japan also has a debt-to-GDP ratio over 229%.
So, how is it that Japan will emerge in the next 25 years as East Asia’s most powerful country?
A good place to start is a broad comparison of the structure of China and Japan’s economies (the second and third largest economies in the world, respectively).
This analysis will reveal strengths and weaknesses for both and will bring our forecast into sharper relief.

A look at China’s economy by region
The map below divides China into four geographic regions by contribution to national GDP. 

The data come from China’s National Bureau of Statistics. 

China sometimes uses these divisions to understand how the economy is performing at a regional level. (It must be noted that these figures are manipulated for political purposes.)

The data contain notable discrepancies, in spite of which it still reveal much about China’s economic weaknesses.
The coastal Eastern Region accounts for more than half of all economic activity in China. 

The Central and Western regions each produce about 20% of China’s economic wealth. 

But let’s take a closer look.
The Western Region makes up more than half of China’s total land area. 

When compared to other regions, it produces less than half of what the Eastern Region does. 

And it produces the same amount as the Central Region, which is less than half its size.
The Northeastern Region appears to be an outlier. 

It accounts for just 8% of China’s GDP. 

Most of this region’s economic activity is heavy industry and has been under severe pressure as China attempts to increase internal demand and decrease dependence on exports.
What does this mean in practical terms?

Poverty is China’s greatest weakness
China’s biggest economic weakness… and its most potent enemy… is poverty. 

Regional economic disparities exist in many countries in the world. 

But in China, they have always been particularly acute.
China’s sheer size magnifies this problem.
In 1981, roughly 1 billion Chinese people lived on less than $3.10 a day (at 2011 purchasing power parity). 

The World Bank’s latest data (from 2010) show that the number dropped to 360 million that year.
That is a great accomplishment. 

The problem is that it is not enough.
China has been growing at a remarkable rate for the past 30 years, but that growth is slowing down. 360 million people still live in abject poverty.
The map shows us that most of China’s economic success is enjoyed by the coast… not the rest of the country.

China’s double-edged sword
China is the most populous country in the world and the fourth largest in terms of area. 

This is a source of great power, but it is also a double-edged sword.
There are great advantages. 

China can deploy huge armies. 

It is buffered from enemies by vast territory or harsh geography on all sides. 

It can also mobilize human capital like no other country. 

On the other hand, it means that China spends more on internal security than it does on the much-vaunted People’s Liberation Army. 

It also rules over many regions that are not ethnically Han Chinese… regions that want greater autonomy (if not independence). 

And China must maintain a robust capability to guard its borders.
China is a formidable land-based power, but it has never been a global maritime power. 

It has always been susceptible to internal revolution, and at times, external conquest.
Now, let’s look at Japan.

Wealth concentration in Japan
At first glance, this map of Japan (below) seems to imply a similar level of wealth concentration in certain regions. 

Like China, Japan is informally divided into regions and sometimes reports data at the regional level.

Japan is made up of four main islands: Kyūshū, Shikoku, Honshu, and Hokkaido.
Kyūshū, Shikoku, and Hokkaido constitute regions of their own. 

Honshu (the largest and most populous of the Japanese islands) is subdivided into five additional regions.
These five Honshu regions account for 87% of the Japanese economy. (About 43% of that economic activity comes from the Kantō Region’s seven prefectures.)
This map also separates Tokyo prefecture from the others to provide a sense of how much it contributes to Japan’s total GDP. 

Tokyo prefecture (by itself) accounts for just over 18%.
Factoring in the Tokyo greater metropolitan area increases this figure. 

According to the latest available data from the Organisation for Economic Co-operation and Development (from 2012), Tokyo had the largest GDP of any city in the world at $1.48 trillion. (Seoul was second with a GDP of less than half of that.)
That means that greater Tokyo accounts for almost a third of Japan’s total GDP.

Japan’s advantage
Unlike China, Japan’s wealth is spread much more evenly among its population. 

On the simplest level, this is easier to accomplish with a population of 127.3 million than with a population of 1.3 billion.
But this is not strictly about size. 

What holds China back is the diversity that results from its size.
Japan does not have to deal with the type of coastal versus interior diversity that China does.
In the China example, almost every coastal province could be compared with an interior province and a similar gulf would exist. 

In Japan, only Tokyo is significantly above the mean per capita income of 3.1 million yen for the entire country, and that is due, in part, to the higher cost of living in the city.
There is wealth disparity in Japan to be sure, but the disparity is not on the same scale as that which exists at the provincial level in China.

Japan’s greatest challenge
Japan’s great weakness is its dependence on imports for food and raw materials. 

The country’s total food self-sufficiency ratio based on calorie supply was just 39% in 2015. 

Based on production value, it was just 66%.
Japan relies almost entirely on imports for staples like wheat, barley, corn, and soy.
Energy is another example of this dependence on imports. 

One of the main reasons Japan entered World War II was to protect its access to oil.
Today, Japan is still reliant on foreign sources of energy. 

Even before the Fukushima nuclear reactor accident in 2011, Japan relied on foreign sources for close to 80% of its energy supply.
Since 2012, that number has risen to almost 91% (according to the US Energy Information Administration).
Some will argue that Japan’s bigger problem is demographics. 

It is true that Japan has a rapidly aging population. 

But so does China. 

Most European countries also face this issue.

But Japan has options
Japan is one of the top investors in the world in artificial intelligence research, automation, and robotics technology in order to maintain productivity.
And while Japanese society is homogenous and unfriendly to outsiders, desperate circumstances could call for desperate measures and necessitate changing policies on immigration.
The broader Asia-Pacific region also offers opportunities for Japan to find workers to address this problem.

A final comparison
Japan is the 62nd largest country in terms of area. 

It is the 11th largest in terms of population. 

But neither of these facts disqualifies Japan from rising as a regional power.
Unlike China, Japan has no land-based enemies—it is an island nation. 

Unlike China, the Japanese government has no concern about its ability to impose its writ throughout the entire country.
Nor does it have to deal with a huge gulf in wealth disparity between regions. 

Japan has also managed a transition from a high-growth economy to a low-growth economy without revolution.
Japan’s weaknesses have manifested in the development of a strong navy able to guard maritime supply lines. 

It has also cultivated a tight alliance with a country that will guard those supply lines, the United States.
To be clear, China is still a very powerful country relative to most in the world. 

As such, much of our writing remains focused on understanding how economic problems in China are manifesting in political challenges.
For now, Japan is less dynamic and important… though it will become more so… and our writing on Japan will increase as it becomes the leading power in the Asain Pacific.