Caucus Brief: The Battle for the S.China Sea is Heating Up

THE BATTLE FOR THE S. CHINA SEA IS HEATING UP.  As the world begins to focus on China's claim to almost the entire South China Sea, Foreign Policy has released a piece that puts this issue into context.  One-third of the world's maritime trade goes through the South China Sea, and it is estimated that untapped stores of oil and natural gas in the region could be immense.  Portions of the South China Sea are claimed by eight nations in the region, but China claims territorial sovereignty over the vast majority of the disputed Sea.  The piece describes the events that have increased tensions since 2009.  http://www.foreignpolicy.com/articles/2011/06/07/crowded_waters

PLA 20 YEARS BEHIND U.S. MILITARY SAYS PRC DEFENSE MINISTER.  Chinese Defense Minister General Liang Guanglie has announced that China is 20 years behind the U.S. military in equipment, weapons and systems.  Minister General Liang Guanglie: "I would call the gap big, main battle equipment of our services…is mainly second-generation weapons."  This assertion of a 20 year gap was used to support the General's position that China does not, and will not, seek international hegemony.  These comments were made at the annual Asia-Pacific forum in Singapore. 

http://www.defensenews.com/story.php?i=6736116&c=ASI&s=LAN

CHINA CONFIRMS AIRCRAFT CARRIER.  The head of the People's Liberation has officially confirmed, for the first time, that China is building and remodeling a Soviet-era aircraft carrier.  The existence of this project has been China's worst kept secret as photos of the carrier have circulated in the media for months.  http://www.bbc.co.uk/news/world-asia-pacific-13692558

CHINESE MEDIA RESPONSE TO FRIEDMAN'S OP-ED.  Over the weekend the NYT ran an op-ed by Thomas Friedman that advised Beijing to allow the gradual liberalization of China so as to avoid "Arab Spring"-like dissent.  Yesterday the state-run newspaper the Global Times published a response.  From the response: "Frankly, it was a mediocre article for a two-time Pulitzer Prize winner although Friedman does not shun from his inclination to be a teacher of Chinese leaders…In fact, the U.S. as a whole has the tendency to teach other countries what is best for them.  Many Americans think they are qualified to do so."  http://opinion.globaltimes.cn/editorial/2011-06/662512.html

KISSINGER IN CHINA: TRIUMPH OR DISASTER?  http://prestowitz.foreignpolicy.com/posts/2011/06/07/kissinger_in_china_triumph_or_disaster

CHINA'S TROUBLED NEIGHBORS.  An op-ed in the NYT argues that the behavior of the Chinese Communist Party over the last six months has "stripped away many illusions about the country's 'peaceful rise.'"  Now the region can no longer assume that Chinese military and economic growth will benefit Asia as a whole.  Instead the region's focus is shifting to "managing conflicts and attempting to allay mutual suspicions."  http://www.nytimes.com/2011/06/08/opinion/08iht-edbowring08.html

CHINA MOVES INTO CUBA.  China's vice-president Xi Jingping has recently spent three days in Cuba in an effort to shore up Chinese-Cuban relations.  China is already Cuba's second largest trading partner, increasing trade between the two nations by four times since 2001.  Additionally, recent news that there may be 20 billion barrels of oil offshore of Cuba has garnered significant Chinese interest.  http://blogs.ft.com/beyond-brics/2011/06/07/the-chinese-are-coming-to-cuba/

CHINESE OFFICIALS WARNS ON DOLLAR ASSETS.  A senior Chinese official recently warned that China is running a major risk in holding so many dollars because the U.S. may be deliberately devaluing its currency.  This comment was made by the head of China's State Administration of Foreign Exchange who argued that the U.S. may find it hard to resist the temptation to weaken the dollar abroad and push up inflation at home.  Despite this official's warning, analysts argue that China has no choice but to recycle its vast foreign currency reserves into dollar-denominated assets.  In an effort to mask the extent of China's holdings in U.S. dollars, Beijing has begun routing investments into U.S. holdings through London and Hong Kong.  http://www.ft.com/intl/cms/s/0/86ddc922-9128-11e0-9668-00144feab49a.html

CONGRESS STEPPING UP PRESSURE IN FAVOR OF F-16 SALE TO TAIWAN.  http://www.washingtontimes.com/news/2011/jun/7/pressure-builds-for-sale-of-f-16-jets-to-taiwan/

The Caucus Brief is a daily publication for Members of Congress and Hill Staffers on China news and information compiled by the office of Congressman Randy Forbes, Founder of the Congressional China Caucus.  Email Reed.Eckhold@mail.house.gov with tips, comments, or to subscribe/unsubscribe.