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China Reform Monitor - No. 1329

China strengthens its hold on Philippine territory;
Beijing, Tokyo work to normalize ties

Edited by Joshua Eisenman
May 29, 2018

May 5:

Personnel at China's military base in Djibouti have been aiming lasers at American aircraft that operate in the country,
the New York Times reports. In April, the Federal Aviation Administration warned pilots about multiple instances of ''a high-power laser'' originating from China’s base in the African nation. The lasers, which can be used to target aircraft, caused minor eye injuries to two American pilots, said a Pentagon spokesperson. Just a few miles from China’s base is the only permanent American base in Africa, home to some 4,000 U.S. personnel. The Pentagon asked China to investigate, but Beijing responded that Washington’s accusations were ''completely inconsistent with fact.'' The official Global Times published an English article calling the accusations phony; then another article in Chinese that gave explanations for the lasers and asked why were the Americans flying so close to the Chinese base? "The Americans seem to be shouting 'thief' to get away with their own crimes," it said.

May 6:

China had deployed anti-ship missiles and surface-to-air missile system on Fiery Cross Reef (Kagitingan), Subi Reef (Zamora) and Mischief Reef (Panganiban) – three of seven Philippine-claimed reefs that China had previously seized and transformed into artificial islands. "We urge the administration to take immediate and appropriate actions, including the filing of a diplomatic protest, to protect what is rightfully owned by the Filipino people, in line with the ruling of the United Nations Arbitral Tribunal," Philippine Vice President Leni Robredo said,
reported the

[EDITOR'S NOTE: On July 12, 2016, the Permanent Court of Arbitration based in The Hague, Netherlands issued a landmark ruling invalidating China's nine-dash line claim over the disputed waters. But China has ignored the ruling. and the Philippines has opted to focus on trade and investments from China instead of pressing its arbitral victory.]

May 7:

In a letter dated April 25th, the Civil Aviation Administration of China threatened to punish foreign airlines if they refuse to comply with Beijing’s demands to refer to Taiwan as a part of China and show Hong Kong and Macau as Chinese territories on their websites and other materials,
reported the Washington Post. U.S. airlines were among 36 international carriers told to amend their websites to reflect China's sovereignty claims, the Wall Street Journal reports.. United Airlines, for example, refers to "Taipei, TW" while Delta uses "Taiwan, TW." In response to Beijing's pressure, British Airways and Deutsche Lufthansa AG now refer to "Taiwan, China" and "Hong Kong, China" on their websites.

Airlines that do not comply within 30 days will face severe disruption to their operations in China. Airlines "violating the laws of China," the letter said, would be liable for punishment under a trial aviation industry credit program introduced this year and persistent offenders could face frequent inspections or have licenses revoked. White House press secretary Sarah Sanders called the threat "Orwellian nonsense and part of a growing trend by the CPC to impose its political views on American citizens and private companies.” She also criticized China's "internet repression," and said the U.S. would resist Chinese attempts "to export its censorship and political correctness to Americans."

May 9:

China and Japan will open a long-sought maritime and aerial "hotline" between defense officials on June 8th. The communication mechanism is aimed at averting unintended clashes between their militaries in and above nearby waters. Meeting in Tokyo, Prime Minister Shinzo Abe and Premier Li Keqiang signed cooperation agreements on investment, infrastructure-building and social security, the
Japan Times reports. Li said China will accelerate discussions with Japan on the signing of a bilateral currency swap agreement, which expired in 2013, and grant Japanese investors a quota of Renminbi Qualified Foreign Institutional Investors (RQFII) to facilitate investment in China’s securities. "Momentum for improvement in the Japan-China relationship, which has kicked off a new start, has been increasing quickly," Abe said. Beijing is also trying to improve ties with India. Last month, Xi held an informal summit with Indian Prime Minister Narendra Modi in Wuhan.

May 12:

China Three Gorges Corp. (CTG) has made a $10.8 billion offer to acquire the 77% it doesn't already own of Portugal's largest electricity producer, Energias de Portugal SA (EDP), the Wall Street Journal reports. The state-owned energy company would gain EDP's power operations in Spain, France, Italy and the UK, Brazil, Mexico and the U.S., where it operates wind farms. The pending deal must be approved by regulators in the Portuguese government, the European Commission, and the U.S. It is one of the largest foreign acquisitions by a Chinese company since China National Chemical Corp. took over Swiss agro-giant Syngenta AG for $43 billion last year. China Investment Corp. owns a stake in the UK gas-distributor National Grid PLC, and China General Nuclear Power Corp. is financing the Hinkley Point nuclear power station.

Related Categories: Democracy & Governance; China; China and East Asia Program

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