South China Sea a Chessboard of the Far East

Adding to yesterday’s piece on Japanese rearmament, the situation in South East Asia develops further as the International Criminal Court has just rejected China’s claims over the South China Sea.

Beijing’s South China Sea Claims Rejected by Hague Tribunal

If Japan has reasons to rearm, a potential conflict in this area would be a prominent one. Control of the South China Sea means control over a vital resource of food in the form of fish, shipping lanes for maritime trade, and an untapped oil field that, by the most optimistic estimates, could be larger than Kuwaiti reserves. China’s commitment to the BRICS system and Russia means that the international oil markets, and therefore currency reserves, are being shaken up. Russia’s economy relies primarily on oil exports, and China has been gaming oil markets by filling its strategic reserves at opportune times. With oil being a crucial component of foreign policy, it would not be illogical for China to slowly take control of the South China Sea.

The tribunal cited interference with fishing and oil exploration, “irreparable” damage to the environment and the construction of a large artificial island in Philippine waters. China has built a military airstrip, naval berths and sports fields on the island, known as Mischief Reef, but the panel said that it was in Philippine waters.

China’s strategy of creating artificial islands as platforms to quickly project military force in the region is just the foundation for a much larger scheme. If the above image from a 2006 report to Congress is accurate, China intends to establish two things with its two barrier-like island chains. The first island chain incorporates all the oil reserves and excludes all other nations south of Japan. The second extends from the east coast of Japan and ends in eastern Indonesia, and effectively cuts off the South China Sea from the Pacific, and the western powers. It’s clear that one purpose of the first island chain is to facilitate Chinese exploitation of the oil reserves, but I believe the purpose of the second chain is to extend Chinese influence, and control over trade, beyond territories like the Philippines and South Korea and to solidify China as the dominant player in an economic union similar to Germany’s position in the European Union. By creating a territorial dispute over undefined maritime boundaries and obfuscating the issue in arbitration, China was expanding its influence without overtly breaking international law similar to Putin’s “slow motion invasion” of the Ukraine. Rulings like the one coming from the Hague today are going to make it harder for China to maintain its innocence.

However, all of this maneuvering and calculating may have come too late as the banking class have recently dumped oil from their portfolios and popular science is all over carbon emissions. Time will tell how many steps the west is ahead of China and Russia. If the Chinese are ultimately successful, don’t be surprised to see an alliance with Japan as Japan has already cooperated with Russia on Siberian oil investments. Having previously demonstrated an understanding of the importance of controlling the trade of a region in their Greater East Asia Co-Prosperity Sphere concept of WWII, the Japanese have seen the writing on the wall and have started to feel a little uncomfortable.