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China Reform Monitor - No. 1340

China's "cold war" against America;
Empty promises to Manila

Edited by Joshua Eisenman
September 5, 2018

July 19:

Chen Ming-tong, Taiwan's minister of the Mainland Affairs Council, told a crowd in Washington, DC that China is using military and diplomatic tactics to integrate Taiwan,
the South China Morning Post (SCMP) reports. "By these carrot-and-stick strategies, Beijing has been undermining the status quo across the Taiwan Strait with ever greater speed in an attempt to lead to an irreversible outcome. We will not degrade ourselves because of belittlement by others," Chen said. A week prior, during a meeting with Lien Chan, the former chairman of the opposition Kuomintang, President Xi Jinping said: "We have the confidence and ability to keep a firm hold on the correct direction, work for the peaceful development of cross-strait relations and advance the process toward the peaceful reunification of China." Xi called on the two sides to uphold the 1992 Consensus and the One-China Principle, and oppose Taiwan independence, the official Xinhua reports.

July 21:

The goal of China's influence operations is to replace the U.S. as the world's leading superpower,
CNN reports Michael Collins, deputy assistant director of the CIA's East Asia Mission Center, as saying at the Aspen Security Forum. Beijing is waging a "cold war" against the U.S., he said: "What they're waging against us is fundamentally a cold war, a cold war not like we saw during the Cold War, but a cold war by definition. A country that exploits all avenues of power licit and illicit, public and private, economic and military, to undermine the standing of your rival relative to your own standing without resorting to conflict. The Chinese do not want conflict. At the end of the day they want every country around the world, when it's deciding its interests on policy issues, to first and foremost side with China and not the United States, because the Chinese are increasingly defining a conflict with the United States and what we stand behind as a systems conflict. It sets up a competition with us and what we stand behind far more significantly by any extreme than what the Russians could put forward."

Collins' comments echoed those of FBI Director Christopher Wray and Director of National Intelligence Dan Coats, who both pointed to China as the most significant danger for the U.S. "I think China, from a counterintelligence perspective, in many ways represents the broadest, most challenging, most significant threat we face as a country. And I say that because for them it is a whole of state effort. It is economic espionage as well as traditional espionage; it is nontraditional collectors as well as traditional intelligence operatives; it's human sources as well as cyber means," Wray said. Coats also criticized Chinese state efforts to steal business secrets and academic research: "I think that's where we begin to draw the line," he said.

July 25:

Almost two years after China pledged to finance $24 billion in projects in the Philippines, only one loan agreement worth $73 million to fund an irrigation project north of Manila has been completed,
Bloomberg reports. During his October 2016 visit to Beijing, President Rodrigo Duterte signed 27 deals including $9 billion in soft loans, a $3 billion credit line with the Bank of China, and $15 billion in financing for railroads, ports, energy and mining projects. Since then, however, an agreement with China's Baiyin Nonferrous Group to build a stainless-steel plant in the Philippines for $700 million has been halted, as has an agreement with Power China to develop a $1 billion, 300-megawatt hydropower plant, and a $780 million deal to raise three islands from a waterlogged area of Davao, Duterte's hometown. The latter project was canceled last July, after the city reviewed the project. "We have been used by China," said Richard Heydarian at the ADR-Stratbase Institute in Manila.

[EDITOR'S NOTE: China's popularity has suffered in the Philippines, with public trust in Beijing plummeting to its lowest since April 2016, the month before Duterte was elected president. According to a survey of 1200 Philippine voters conducted in late June, roughly nine in 10 said they wanted the Philippines to reassert its territorial claims in the South China Sea.]

July 27:

South Korea scrambled F-15K fighter jets to intercept a PLA aircraft that entered the Korean air defense identification zone (ADIZ) and warned it to leave. The aircraft spent more than four hours in the ADIZ after flying near a submerged rock controlled by Seoul but claimed by Beijing. China's own ADIZ includes the rock, named Suyan in Chinese or Ieodo in Korean, where Seoul has built a research station. It is likely that the Chinese plane was gathering military intelligence on South Korea's defenses, including the U.S.-backed Terminal High Altitude Area Defense (THAAD) system. Chinese aircraft made similar flights in February and April 2018 and at least two similar instances were observed last year. In February, Beijing said its aircraft was conducting a "training flight" in line with international law and practice,
SCMP reports.

[EDITOR'S NOTE: China has long criticized U.S. surveillance aircraft flying off its coast. On April 1, 2001, PLA J-8 fighter jets incepted and collided with a U.S. EP-3 military reconnaissance aircraft resulting in the death of the Chinese piolet and forcing the EP-3 to make an emergency landing on Hainan, thus precipitating a diplomatic crisis in U.S.-China relations.]

July 28:

China is preparing to test its new Russian-made S-400 Triumph missile defense system. The S-400, which was delivered last week, is a surface-to-air missile system that will complement China's existing defense capabilities. It is capable of downing various tactical and strategic aircraft, ballistic missiles and hypersonic jets, including the U.S.' 5th generation F-35 stealth fighter. A People's Liberation Army unit trained in Russia will carry out a test firing against a simulated ballistic target in China. Because the PLA has used the S-300 since the 1990s, it will be easier for them to use the S-400 than it will be for India and Turkey, which are also planning to buy the new system. With a range of 2400km, the S-400 can engage up to 36 targets simultaneously with up to 72 missiles. Beijing has also purchased 24 Su-35 fighter jets from Moscow and took delivery of 14 of them at the end of 2017,
SCMP reports