One Belt, One Road

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TIME: 18:00 – 19:00, 8th May 2017

VENUE: The Henry Jackson Society, Millbank Tower, 21-24 Millbank, London, SW1P 4QP

SPEAKER: Wu Shichun, President, National Institute for South China Sea Studies

CHAIR: Timothy Stafford, Henry Jackson Society

Timothy: Good evening Ladies and gentlemen, welcome to the Henry Jackson Society. My name is Timothy Stafford, I am director of research here and we are very pleased this evening to have Wu Shichun from the national institute for South China Sea studies with us. I’ve just been informed that he…when he got here that he’s only in the country for a couple of days. So we are very very grateful to him for joining us here this evening. He is an expert in the South China Sea and related issues but he is also going to talk a little bit about the “one belt one road initiative” which the Chinese government is pioneering at the moment to try to open up all of Eurasia to economic development. We’re just having problems with the microphones…is that better? My apologies, I see people waving at me at the back and I didn’t want to shout at you. So I’d like to first of all extend our welcome to our distinguished visitor and ask him to speak maybe for about 20,25, 30 minutes, something of that kind, and then there’ll be plenty of time for questions afterword so hopefully everybody who has a question will have time to ask it. So witout further ado, sir, thank you very much for joining us and we look forward for your insights this evening.

Wu: OK, thank you Timothy. Ladies and gentlemen, dear friends, good evening. It’s my great pleasure to be invited by the Henry Jackson Society to deliver a speech on relevant issues that we are interested in. in my presentation I am going to look at two important issues. One is about, as Timothy just mentioned, the one belt one road initiative. The second issue is about South China Sea issues, since South China Sea [7.59]. My presentation will be no more than 30 minutes so just to let time for Q & A session. During the Q & A session I will try my best to your questions. If your questions are complicated and sensitive I will address your questions in Chinese and my colleague will shepherd me through and translate.

Now I am going to talk about…I am going to unload the initiative issue. As we know, in October 2013, Chinese president Xi Jinping put forward what is initiative for Silk Road economic Belt and 21st century Maritime Silk Road, when he visited [8.56] and Indonesia respectively. In order to realize the rejuvenation of China while building a common society with a shared future through a [9.12] approach to the countries [9.15-9.17] in this initiative. Actually the belt is an overland network designed to bring together China, central Asia, Russia and Europe through South Asia, South East Asia and the Indian Ocean road. And the root is a maritime network designed to link china’s coast with Europe through the South China Sea and the Indian Ocean in one road. And link China’s coast with the South Pacific as well [10.00-10.02]. since then…the One belt one Road initiative, OBOR for short,  has received positive response from the entire international community. Up to the present, more than 100 countries and international organisations have expressed their support for, and their willingness to participate in this initiative. About 40 countries and international organisations have signed a cooperation agreement with China under the framework of OBOR and now an important event…it was just announced recently by the Chinese foreign ministry that 28 heads of states and governments and over 80 leaders of international organisations and over 100 ministerial level officials as well as 1200 delegates from various countries and regions will participate and build a forum for international cooperation in may…mid may, just a several days away from now, which will be headed in Beijing. For this upcoming event, china is expecting to sign cooperative documents with nearly 20 countries and more than 20 international organisations concerning infrastructure, energy, resources, production capacity and trade and investment, which will mean great economic growth  and job opportunities for those countries along the Belt and Road, especially for developing countries. So, against the rising chant of de-globalization and [12.32] protectionism, so this initiative and this upcoming event – one belt one road forum for international cooperation – is pretty significant. So that is the first issue about the one belt one road to address.

The second part is about the South China Sea issue where I am going to look at 3 aspects of the South China Sea issue, about the current situation of the South China Sea and the future evolution of the South China Sea issue. The second aspect is about what kind of forces that drive the ups and downs of the South China Sea issue. And the third aspect is about China’s current South China Sea policy.

The first one, about the current situation of the South China Sea and the future evolution; generally speaking, the South China Sea situation is now relatively peaceful, quiet and stable compared with last year, during the period of arbitration initiated by the Philippines since [13.59] 2013 and mid-last year, the 12th of July when the arbitration tribunal issued its decision on this case. So now, the whole situation of the South China Sea is relatively peaceful and quiet. However there are still uncertainties and possibly [14.25-14.27] that would categorize the South China Sea situation given that the South China Sea has become prominently [14.34] of China-U.S. competition in the Asia Pacific region. How those uncertainties and active features will affect the South China Sea is also closely related to the United States want to do, and how China-U.S. dynamics will be in this region. Here, I have 5 points to address.

Point 1: the main dispute of the South China Sea between China and among parties directly concerned has evolved from controversies territorial sovereignty over islands and reefs into complex competition over maritime space, space, resources and development and the power to dominate formulations of the laws. Why I would say so is because the South China Sea originally it’s a problem related to sovereignty issue, in several [15.56] features only in the Spratly area. But now if we look at the whole situation in the South China Sea we will find that the South China Sea actually extended from Spratly to Paracel, you know because Vietnam since 1975 changed its stance on the South China Sea, and there rests the dispute between China and Vietnam over the Paracel Island’s sovereignty. And also expanded it to the Scarborough Shoal. The Scarborough shoal is part of Macclesfield Bank from china’s perspective. And also the parties, concerning [16.44-16.46] for instance Vietnam, the Philippines, Malaysia, Brunei, but also stakeholders the U.S. and Japan and maybe in the future also other countries would like to interfere in the South China Sea affairs.

Point 2: the second reason is because arbitration award has changed the laws of the game. Since the South China Sea arbitration award changed the laws of the game, the disputed countries that I just mentioned, particularly the Philippines, Vietnam, and even Malaysia may shift their focus to effective control and the jurisdiction over maritime zones by improving their maritime presence either by military or civilians means, strengthening maritime law enforcement and [17.55] exploring natural resources in the disputed waters.

Point 3: the point 3 is that the [18.04] states are going to maximise their geopolitical interests and consolidate their vested interests before the C.O.C (Code of Conduct) is in place. Now china and other ASEAN members and as a process of the C.O.C negotiations and consultation but those [18.34] states now seek about, you know, how to effective control over the disputed waters in the Spratly area before the C.O.C is in place.

Point 2, which is how we got to the situation of the South China Sea and the future evolution: japan and Taiwan’s readjustment of their South China Sea policy may become new [19.06] for Japan. It is likely that Japan, you know, will readjust its South China Sea policy. If we look at the behaviour and the policies Japan has been conducting with regards to South China Sea since the year 2012, you know, Japan readjusts neutral South China Sea policy to current interference in South China Sea issue. Because from Japanese perspective the unstable South China Sea situation is conducive for Japan to interfere in the South China Sea affairs and are conducive for Japan to reduce strategic pressure, you know, from China in the East China Sea area. So that’s why Japan recently announced it will dispatch Izumo destroyer to manoeuvre in the South China Sea and the Indian Ocean from this May to August. So my concern is with regards to this issue whether Japanese maritime safety will be…presence in the South China Sea area…whether it will be normalized or institutionalized in the future. For Taiwan, and the approach of Taiwan’s independence under the new South [21.02] policy, Taiwanese leader Tsai Ing-Wen’s South China Sea policy may go backward and further away from that of the Chinese mainland from my perspective. Yet, similar to Japan, Taiwan’s South China Sea policy, to a large extent, would be shaped by the influence of the United States. In this regard, my concerns, or from Chinese mainland, Taiwan’s South China Sea policy in bottom line is that Taiwan should not abandon the U-shaped line [21.48]. If we look at, Ma Ying-Jeou authority has done when Ma Ying-Jeou was in power he claimed the U-shaped line…claims Taiwan’s interests and claims based on the U-shaped line. The second one is Taiwan should not provide Diaoyu Island for military use by the United States or even Japan in the future. The third one is that Taiwan should insist that legal status of the Taiping island…it is an island you know…not a rock…as you know, mentioned by the whole world, issued by the tribunal in the Philippines arbitration case. So those are three bottom lines, made by myself, academically. The third point is the South China Sea arbitration case that has [23.09-23.10], yet as an award from my perspective may be locked up from time to time in the future.  Why? Because [23.22-23.23] states are unwilling to not mention the award when they need, when it comes to for instance a C.O.C consultations and negotiations, when it comes to those countries who would like to conduct a [unilateral natural resources consultation into special waters 23.44-23.49], when it comes to law enforcement activities in disputed areas within [23.59]. So it’s hard for China to [24.03-23.04] those countries, not to mention the arbitration award. And also for the United States or Japan when they are conducting the so-called freedom of navigation operations or FONOPS, they might use South China Sea arbitration award to conduct such activities which aim to challenge China’s sovereign claim, or mentally, interests particularly in the nearby waters. These are the features which China has [24.51] now.

Point 4: the fourth point is about the competition between China and the United States will continue to be a [25.03] in the future in the South China Sea. From Chinese perspective the South China Sea is significant for China in terms of its natural defence, for china’s national security. And also it carries such significance, as the South China Sea provides a strategic access to the ocean for China and also South China Sea should be viewed as a potential natural resources base. For the United States, the South China Sea is important. It is indispensable for the U.S. as a major maritime power to maintain its supremacy in the Asia-Pacific region, particularly the West Pacific region. So in this sense the competition between China and the U.S. in the South China Sea is in a strategic structure and to somewhat it is ill-[26.23].

 

Point 5: there are three things that will drive the ups and downs in the South China Sea this year. Those three things are 1) FONOPS 2) the so called Chinese militarization on the islands….the strategy…under Chinese jurisdiction. Number three is the C.O.C negotiations between China and the ASEAN members. From China’s perspective the U.S. will continue its Freedom of navigation operations despite now the frequencies not so high compared with last year – 2015-2016. But you know still will continue to do so. But now, because the U.S. pays more attention to the DPRK, the peninsula…the Korean peninsula, the nuclear issues, less than South China Sea. But in the future I guess, the United States will continue to do so, to challenge Chinese maritime strategy of [26.06-26.07] in the South China Sea area. The second is the so-called militarization. Yes on the surface, the U.S. concerns are about freedom of navigation but actually it concerns Chinese deployment, particularly the military facilities on those islands. China [28.35] during the last three years despite China announcing to the international community that China will build civilian facilities on those islands in order to provide goods to the international community but the U.S. don’t care about the civilian functions, the U.S. concern is what kind of military facility China is planning, going to deploy. How much from my point of view of those facilities will be civilian functions, how much of those facilities will be military functions? It depends on the security assessment and evaluation. If China feels secure, from my perspective, those facilities will be more civilian. If china feels insecure, those facilities may be much more military functions, particularly defensive weapons.

The C.O.C: because the whole international community holds a high expectation of the C.O.C consultation, if we, both China and ASEAN member states cannot deliver the framework of the C.O.C to meet such a high end of an expectation, the international community will shuffle the responsibility to China, so in that case, the South China Sea issue will be heated up once again. So lose [30.39- 30.42] the future South China Sea situation or influence, the ups and downs of such a situation.

The second one is about what kind of forces that will influence the future developments of the South China Sea issue. And in this regard I’ll just say three relationships will influence the South China Sea situation. First of which is the relationship between China and the United States, because I just mentioned that the competition between China is of geopolitical interests, sea power, and the dominance over the future regional security architecture between China and the United States. The problem, or challenge between China and the United States is to build a mechanism to avoid potential conflicts and crisis from happening. The second relationship is between China and ASEAN. The concerns of ASEAN about the South China Sea issue is to maintain peace and stability. It is the greater concern for ASEAN. Second, ASEAN would like to avoid choosing sides between China and the United States over the South China Sea issue. The third concern that ASEAN has is endeavours to promote developments of laws and mechanisms to prevent a future crisis and potential conflict from happening. So far, those are the concerns of ASEAN, but have not been addressed fundamentally, which is another problem we are facing. The third relationship is between china and other [33.0] states, you know, for instance, the Philippines, Malaysia, Vietnam, even Brunei, it is, related to controversies over reefs and islands in the Spratly area and overlapping maritime [33.19] claims.

Finally I am going to read on China…South China Sea policy. Here I have five points to touch upon.

One is peace and stability. Peace and stability is not only the interests of china, but also of the whole international community that is why China, you know, puts peace and stability as the top of all priorities in its South China Sea policy. Second: to resolve the disputes in terms of territorial sovereignty and maritime delimitation based on a bilateral approach and by peaceful means. So that is the Chinese official consistent position on the South China Sea, by peaceful means and based on bilateral, diplomatic approach. Third point is putting aside our differences to conduct joint development because South China Sea dispute is unique in the world. Located vast numbers of [34.55] features and enormous areas of disputed waters, and there is a number of countries involved, so it is impossible to solve such complicated issues in the foreseeable future. So the only way to go forward is to put aside the difference, focus on joint development between China and other [35.24] states in the disputed area. A possible case…a positive case is that we use to have a joint development project between China, the Philippines and Vietnam – the trilateral agreement was signed in 2005 between those 3 countries. And this trilateral agreement was last enforced 3 years…2008, when the agreement expired. The main reason is that the Philippines lacked the further cooperation [36.08].

Point 4 is to safeguard the safety and freedom of navigation enjoyed by the whole international community in accordance with international law and international norms. So, so far, both China and committed] countries in the South China Sea region have committed…you know, the safety and the freedom of navigation will not be affected by the disputes, sovereign disputes and maritime disputes.

Point 5 is the so called [36.51] approach initiated by Chinese government in October 2014 when Chinese Premier Li Keqiang attended a China-ASEAN summit meeting. The [37.03] approach means that [37.08-37.09] should safeguard by China and ASEAN, while disputes should be resolved by parties directly concerned. So with that I would like to stop here and be happy to hear your comments and questions.

Thank you very much.

Timothy: Sir thank you very much for those opening comments, perhaps I could ask the very first question. You talked about the level of competition between China and the United States, you called it irreconcilable structural competition and yet you also talked about the importance of building mechanism to avoid crisis so my question is, are you optimistic or are you pessimistic? In 10 or 15 or 20 years’ time, will the South China Sea peaceful, quiet and stable like this year or will it be tense and anxious like last year?

Wu: Good question, good question. I cannot explain by two words, optimistic or pessimistic. It depends what the U.S. will do in the future. if the U.S. honours its commitment of taking no sides between China and other committed states, if the U.S. takes considerations of Chinese interests in the South China Sea, if the U.S. restrains from conducting you know, intelligence gathering activities which comes to [39.12] to China’s coast, I am a little bit optimistic about the future. but another problem now is Japan’s behaviour because since the second half of last year, the U.S has paid less attention to the South China Sea issue because of the presidential election and also the power transition between two administrations, the South China Sea has been a little quiet and peaceful. That is what Japan is unwilling to see so if japan you know, replace the U.S. to show its military presence in the South China Sea area or conduct Freedom of navigation, or FONOPS like the U.S. did in the past few years it will be a big problem given the fact of our sovereignty dispute over the East China sea between China and Japan and the historical problems between China and Japan. So in this sense I am a little bit optimistic about South China Sea situation. But with regard to relationship between china and ASEAN and between China and other committed states I am positive that we will focus our attention on the C.O.C consultations and negotiations which should be viewed as a crisis management mechanism to deal with the absence of a mechanism…crisis management mechanism so in this regard I am optimistic about the future interactions between China and ASEAN.

Timothy: thank you. I have more questions but now it’s time for you the audience. Yes you sir.

Question 1: Yes Nicholas McLane, I wondered before we go back to the South China Sea discussion if I could ask you a couple of questions on the maritime Silk Road. First, could you explain how you see the growing importance of Chinese investment in Pakistan, at the border of [41.52] and second, with continuing climate change, that there could be interest for China in the North-East passage, going over the top of Russia to Europe?

Wu: that’s amazing, such a complicated issue, I would like to address it in Chinese, may I? Ok, Hono, would you like to? Ok.

Wu (answers through translator): Well first of all for your first question, in regards to Pakistan. I think here it is more about commercial value in terms of comparing strategy intention so I think he actually emphasised a more commercial value and also due to the fact than when Mr Xi Jinping visited Pakistan in 2015 and also put forward a proposal for a China-Pakistan economic corridor. And the port that you’re just mentioned is certainly something that would be something that hopefully both countries would get a better venture out of by adopting the one Belt on Road initiative, through commercial cooperation; and also on the bi-lateral level. And you second question I think you’re asking about the North East passage, yes, so the notion in Russia and also a little bit in China, and also Canada’s northwest passage applies to the same question, and certainly China, especially since 2013 when we became observers of the Artic Council with other countries like India, Singapore and also Japan and South Korea, now surely China has a lot of interest in shipping through the arctic when technology allows it to do so. I think back in 2015 we had one experiment from Qingdao on the East coast to Rotterdam port in the Netherlands. I think commercially, economically, [46.23] days, compared to the traditional sea route so for sure in the future China will have interests in that. And we are also advancing our technology in order to overcome our difficulties and it is worth noting that a lot of countries have interest in sailing through the arctic but we have to also acknowledge that we have a lot of technical difficulties in terms of harsh weather, and a lot of issues, in terms of safety of shipping through the area. So hopefully in the future, we will be putting more cooperation through arctic states and non-arctic states in that region so we can actually contribute to future shipping through the area.

Timothy: we’re very grateful. The one at the back.

Question 2: yes, thank you very much, I have two questions. First, I liked you comment about why China did not formalize its territorial claims, but why they didn’t enter into the tribunal as an effective body? [47.38-47.45]. so my second question is [47.47-48.37]?

Wu (Answers through translator): first of all, it would be unfair to say China has not formalized its territorial claims. If we go back to all the statements and documents from the government it’s very clear, which we also emphasised in July last year when the Hague tribunal released [50.10] on July the 12th. On the same day china issued a statement and we emphasised claims again. So first of all the testament you will understand that we are trying to base our claim on customary  international law [50.24] acquisition that China will claim sovereignty over the four archipelagos in the South China Sea within the [50.31] line. In addition to that because China ratified [50.34] in 1996. So china will use those concepts in the Law of the Sea [50.41] to claim for instance the exclusive economic zone and also continental shelf. And also in addition to the territorial and maritime jurisdiction, China will also claim traditional fishing rights…traditional historic rights which also include fishing rights. So I think it’s quite clear that China’s position on the territory, or the maritime jurisdiction is very clear. To answer the second question, [53.19] is beautiful but the reality is not because it is….well, if we look at history, nobody claimed territory in the arctic or Antarctic, so it’s not that difficult or complex compared with the South China Sea where we actually involve so many claimants, China, Taiwan, Philippines, and Malaysia, so it’s more complicated than Antarctic where nobody actually claimed the territory. Although all these countries claims are different. Like china claim discovery and effective occupation and also effective jurisdiction and other concerned states have their own historic reasons although we have to compare the different evidence so Dr [54.14] is arguing that that moto which applies in the Antarctic will not be able to be applied in the South China Sea. So what is this more practical or more realistic is the proposal of [54.31] so putting aside the [54.33]. So everyone knows that it is not easy to solve the disputes…why don’t we put it aside, without mentioning that it is something similar to the [54.43] but without mentioning the sovereignties. We do have a lot of fears [54.49-49.55] which are based on natural resources especially oil and gas and other resources but also in other areas like he mentioned earlier in his presentation. For instance, search & rescue, and also in a lot of areas by fishing cooperation, scientific research, environmental protection. But there are a lot of issues in many areas that all these regional countries can actually work together to achieve the goal of a peaceful settlement and peaceful conflict management.

Timothy: Thank you. Yes sir?

Question 3: having referred to Taiwan, assuming that that present situation will not change, now it seems to me that the Trump administration in the United States may have a very different attitude on the issue of two different sovereignties within Taiwan. Do you believe it is possible for China to cement its position in the South China Sea whilst a similar ethnic sovereignty exists only 100 miles away from the mainland? Do you believe that the issue of the two Chinas will be resolved within the not too distant future?

Wu (answers through translator): so to clarify your questions you are asking to clarify the one China policy and if the Taiwan islands might create some obstacles to the South China Sea dispute in the future and also given Trump’s position on that issue, is that what you are asking?

Question 3: Yes

Wu (answers through translator): I think to answer your question it all depends on what kind of policy Taiwan may take, especially with the current Chinese administration, what kind of policy will they take on the South China Sea? Because it was the [59.30] former I.O.C government who actually declared on the issue [59.35-59.50]. So I think in the past few years, especially from 2008 to 2016 when President Ma Ying-Jeou was in power that many of the Taiwanese policies were [1.00.01-1.00.03] and if you look at the arbitration case throughout the last three years of the Ma Ying-Jeou administration, I think he has done a lot to protect Taiwanese interests in the South China Sea, especially for instance the island status of [1.00.21] which is occupied by Taiwan, the largest island in Spratly. I think that Taiwan has, either from government or an academic perspective, there are a lot, to make sure their interest in the South China Sea will not be jeopardized, but you know, resisting South China Sea competition, not only from the region but also from the international community. Back to Madame Tsai’s current government it’s hard to tell. A lot of people are actually trying to predict Madame Tsai’s future policy on the South China Sea, so there are three factors that the Doctor mentioned that might happen in the future. the first one is [1.01.23], to distant Taiwan from mainland China, so it actually wants to depreciate the position from mainland China, that is something that China’s government will be very cautious and very prudent about, because, as we said before, through the future administration in Taiwan, they are trying to balance very carefully to protect Taiwan’s interest in the South China Sea. There is a symptom that we might see in the future in Taiwan’s policy is trying to differentiate its position from China mainland and the second one is to maybe cooperate with Japan and the United States who certainly have legitimate interests in the South China Sea but they do also have this strategy intention in the area. And the third element of Miss Tsai’s policies might be “going to the South”, which means they might want to expand cooperation and reach out to south east Asian countries as some counter measure against China mainland. So there are some factors that actually that China has to be very cautious about. And also back to your earlier part of the question about Trump. We don’t think Trump might actually have to play a card in the South China Sea in the near future. even though he had a phone call with Miss Tsai, it is very interesting how China reacts, which is very calmly. And then I think we had a discussion earlier today, and we discussed whether Mr Trump is in fact being very serious when he talks about U.S. personnel need to abide by the one China policy. So you can see the later comments from his senior officials….specially like Tillerson and General Mattis and their position in the South China sea has gradually changed so in the current situation especially when our President Mr Xi Jinping paid a visit to Florida in April, they had a very good discussion. I think they reached a consensus on the future [1.03.59] maintain the China-U.S. in a positive way in which it will suit both countries’ interests so in that perspective, especially…and China has on many occasions emphasised that we respect the United States’ interest and freedom of navigation in the South China Sea, which is also China’s national and core interest as well, so we don’t think in the future that Trump will play the card of the South China Sea.

Timothy: I am very sorry to say that is unfortunately all that we have time for. I would like to say a very very big thank you to Mr Wu Shichun for being here but I think we also owe a huge debt of gratitude to the excellent translation that we had which enabled us to answer a few questions, thank you so much.

HJS



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