[Sampanviking]

Nobody could ever doubt that the sale of advanced weaponry by the US to Taiwan was bound to have repercussions. Are however the statements issuing from Beijing stronger than anticipated and indicative of this being a red line, which; in conjunction with the other disputes currently raging, could tip relations into a new de facto cold war?

http://news.xinhuanet.com/english2010/chin.../c_13157168.htm

Quote

"Such a move is gravely against the three joint communiques between China and the United States, especially the 'Aug. 17' communique signed in 1982," Huang said.

The U.S. side states in the Communique that "it does not seek to carry out a long-term policy of arms sales to Taiwan" and "intends to reduce gradually its sales of arms to Taiwan, leading over a period of time to a final resolution."

The U.S. move of arms sales also constitutes severe violation of the agreements reached by the top leaders of both sides on the China-U.S. relations in the new situation, he said.

"It runs counter to the principles of the joint statement issued during U.S. President Barack Obama's visit to China in November last year," said Huang.

"The U.S. decision seriously endangers China's national security and harms China's core interests," the statement quoted Huang as saying.

"The U.S. plan will definitely seriously disturb the relations between the two countries and the two militaries, and bring about serious harm to the general situation of the China-U.S. cooperation and to the peace and stability across the Taiwan Straits," the spokesman said.

The Chinese armed forces expressed strong indignation and firm opposition to such a faithless move of the United States, which grossly interfered into China's internal affairs and harmed China's national security interests, Huang said.

Faithless is a very strong word in diplomatic circles and not banded about lightly.

http://news.bbc.co.u...cas/8488765.stm

Quote

Beijing said it would suspend military exchanges with the US, impose sanctions on companies selling arms, and review co-operation on major issues.

It looks as though China is going to use the situation to create a significant degree of diplomatic space for itself, most probably in relation to policy on South Asia generally and North Korea.

The sanctions issue could be interesting if the target is not jsut the companies themselves but the Directors and Shareholders as well. This would mean having to unpick the Gordion knot of Corporate ownership and blind trusts etc, and see which major administration or otherwise establishment figures in the US have direct or indirect financial interests in the companies making the supply. This is especially true if they own assets in the PRC itself.

[Red Fox Ace]

The arms sales are nothing but the holdovers from the Bush administration - weapons that were approved by Bush but didn't make it through the system before Bush left office - Obama has actually approved almost nothing of his own. Overall, the Obama administration looks to be a very Beijing-friendly one.

[Sampanviking]

That was my original expectation, but the line coming out of Beijing is way, way harder than the ritual condemnation. This time it sounds as if they mean it.

Also to repeat, its not as if this were the only cloud in an otherwise clear blue sky, there are other spats raging as well, so I think there is a policy to bring things to a head sooner rather than later.

The message of "we are prepared to be pushed around like this" and "if you want our help on issues of core national interest to you, then you must start to respect the issues of core national interest to us" have been bandied around quite a bit recently and I think they intend to ram the message home this time.

[Red Fox Ace]

I think the main reason for this unusually stiff response from Beijing is that the PRC wants to test the Obama administration. A liberal Democrat president, freshly scrubbed around his ears, only 1 year into his term, and who's promised "change" in almost every speech or proposal, might give the PRC something different than what they've seen for decades.



A hard shove to test someone's mettle, and also a shove to get things going one's way.




The PRC didn't try this with Bush and it's because they probably already knew what would happen.

[Sampanviking]

I think we are seeing a new strategy from the PRC to assert real leverage against US Corporate Interests and to use that as leverage against the US Government.

If so it shows a sophisticated understanding of how the US Political system works and an even more sophisticated appreciation of the fact that the Chinese economy is now large enough to influence it as a player.

It will be interesting to note stock movements and values over the next month as Senators about to vote on the bill work out what the financial consequences are likely to be to them.

Everybody has assumed that Chinese CyberAttacks on US Companies have all been about technology, I doubt this and would suggest that uncovering the details of Corporate Governance and Ownership are seen in Beijing as far, far more valuable.

[Roger604]

^ You would also need records from Cayman and BVI to untangle that web.


Anyway, Fox you have a nagging feeling that there should be nothing wrong with US sale of arms to the Nationalist government since this has been going on since the founding of ROC and Sun Yat-Sen. I agree with that notion, but clearly PRC is reacting really strongly here.... why?

You concluded that PRC is just being aggressive because Obama isn't GW Bush. I disagree with that -- the real issue is that US wants to bring ROC military into its military data network, and this is the first step toward having US take command of ROC military in the same way it commands Japan and South Korea.

In other words, while mere arms sale to Taiwan per se can be done within the framework of the Taiwan Relations Act and the understanding between Nixon and Mao, the PRC has learned that the Obama administration's newly formulated foreign policy is inclined to pursue greater contact with ROC military -- breaking away from the TRA framework -- as a way to pressure China on other issues like Iran, Pakistan and North Korea. This is why "military contact" was the first to be broken off.


We have seen a large uptick in the intensity of global hot spots in Middle East and South Asia, and they are all related -- pressure for Iran sanctions, Israel's need to contain Iran, increase of troops in Afghanistan, breakdown of negotiation with Taliban, Pakistan's stronger resistance against US pressure, the US giving more assurances to India, and India's conflict with Islamists and Maoists.

Because China is not willing to let the US and its allies take full control of the Middle East (Iran) and South Asia (Af-Pak), the US wants to apply pressure by threatening to integrate Taiwan's military command, taking military action against North Korea, encouraging Indian attack on Pakistan, helping India achieve nuclear deterrence, adopting protectionist measures, or embarrassing China on Tibet, Xinjiang and internet content control issues.

China's ABM test and Russia's (rushed) unveiling of its stealth fighter are all intended to push back against the new US strategic policy under the Obama administration. Obama himself may be pretty lefty but US presidents are bound by forces beyond their control -- the new US strategic policy differs from the GW Bush one only by relatively greater emphasis on diplomacy, arms sales and media campaigns instead of direct military action.


The cold conflict between China and US will deepen as the intensity of conflicts in Middle East and South Asia increase. With the recent unveiling of Russia's stealth fighter, intended to woo India away from the US camp, Russia has shown that it also intends to contain US influence and power in South Asia, as well as the Middle East, the Caucasus and Eastern Europe.

[Sampanviking]

This is a guy with not dissimilar thoughts to myself only he is suggesting that it might be the US banks servicing the deal that are the other main targets of the sanctions.

http://www.world-check.com/articles/2010/0...gainst-us-defe/

Quote

This is not to say that these events will necessarily occur; rather, senior bank management should be made aware*,on a risk management basis, that they are certainly within the realm of possibility. Given the current strained relationship between the US and China, they are certainly possible. Watch for these:

* Governmental blocking of other international wire transfers to China, originating in those financial institutions known to bank the defence companies who manufacture, ship, service, or maintain the weapons systems and equipment sent to Taiwan.

* The publication of an official "blacklist" of US companies involved in the Taiwan arms sales and deliveries.

* The termination of existing work visas for bank staff tasked with operating a branch, agency, or representative office in China.

* The closure of your bank's branch, agency, or representative office in China, denial of operating license for a proposed office or facility within China, or the loss of a correspondent relationship.

* The levy of fines and penalties upon the defence contractors and/or their banks.


Will there be sanctions field against the manufacturers of dual-purpose goods to Taiwan? these are items that can have both civilian as well as military applications.

Given the delicate position of banks and the obvious links with powerful establishment figures, this does make a lot of sense to be a major and headline part of the package.

[Red Fox Ace]

Here's an unexpected shocker - the first European arms sale to Taiwan in nearly 20 years.










Defense News

02/03/2010

Singapore Airshow: Eurocopter Secures Sale to Taiwan

By Wendell Minnick

SINGAPORE - Taiwan's air force has selected the Eurocopter EC225 helicopter against a Sikorsky bid for the S-92 for a medium-lift helicopter requirement for search and rescue missions.

The contract for three helicopters was awarded to Eurocopter in December for $111 million. The deal includes an option for a total of 20 helicopters. The contract will be signed in the next few days, said a Taiwan defense source.

The deal comes as a surprise since European defense companies have shied away from arms sales to Taiwan in favor of lucrative commercial sales to China. There has not been a European arms deal with Taiwan since the early 1990s when France sold La Fayette-class frigates and Mirage 2000 fighters to Taiwan.

The sale comes on the heels of a $6 billion U.S. arms deal that included Sikorsky UH-60 Black Hawk helicopters, Patriot missiles, navy mine sweepers and Harpoon training missiles.

What is equally odd about the contract award is China has remained silent on the issue after it threatened to sanction U.S. companies selling arms to Taiwan, and occurs at the same time European leaders have been pushing for a lifting of arms exports to China.

[wdl76]

Red Fox Ace, on Feb 4 2010, 04:50 PM, said:

Here's an unexpected shocker - the first European arms sale to Taiwan in nearly 20 years.










Defense News

02/03/2010

Singapore Airshow: Eurocopter Secures Sale to Taiwan

By Wendell Minnick

SINGAPORE - Taiwan's air force has selected the Eurocopter EC225 helicopter against a Sikorsky bid for the S-92 for a medium-lift helicopter requirement for search and rescue missions.

The contract for three helicopters was awarded to Eurocopter in December for $111 million. The deal includes an option for a total of 20 helicopters. The contract will be signed in the next few days, said a Taiwan defense source.

The deal comes as a surprise since European defense companies have shied away from arms sales to Taiwan in favor of lucrative commercial sales to China. There has not been a European arms deal with Taiwan since the early 1990s when France sold La Fayette-class frigates and Mirage 2000 fighters to Taiwan.

The sale comes on the heels of a $6 billion U.S. arms deal that included Sikorsky UH-60 Black Hawk helicopters, Patriot missiles, navy mine sweepers and Harpoon training missiles.

What is equally odd about the contract award is China has remained silent on the issue after it threatened to sanction U.S. companies selling arms to Taiwan, and occurs at the same time European leaders have been pushing for a lifting of arms exports to China.

A whole load of bullshit to discredit the PRC government.

The magic word is :

"Medium-lift helicopter requirement for search and rescue missions"

Of course there will be no protest.

Hold on hold on I know where you are going, but this purchase can be used for military purpose and carry troops instead of a SAR team.

Yeah even a shovel can be a military tool if you look at it like that.

Well there is a different between a shovel and a gun.
A transport helicopter and a fighter plane.

D'oh

On a separate subject:

I read an article on Financial Times.

http://uk.update.ft....x9Mt1Mn3qsp7jl2

Seemed the nationalist elements are not happy as well.

Would you think a democratic China would actually be more aggresive or benign towards Taiwan?

I have a feeling a democratic China would actually be more aggresive than the current regime.


Good topic to discuss

[Red Fox Ace]

wdl76, on Feb 4 2010, 02:16 AM, said:

A whole load of bullshit to discredit the PRC government.

The magic word is :

"Medium-lift helicopter requirement for search and rescue missions"

Of course there will be no protest.

Hold on hold on I know where you are going, but this purchase can be used for military purpose and carry troops instead of a SAR team.

Yeah even a shovel can be a military tool if you look at it like that.

Well there is a different between a shovel and a gun.
A transport helicopter and a fighter plane.

Yes, but the PRC has been raising a diplomatic row over the sale of UH-60 transport helicopters from the United States to Taiwan, which are essentially the same thing.

[Roger604]

We are moving up the ladder of escalation as the world powers prepare to play their closely held cards. The US has been leading a full court press to blackmail China into complying with sanctions on Iran.

First was getting Google to try to embarrass China. Now Google has announced that it's partnering with the NSA to "protect web security" Clearly, the Chinese Ministry of Security figured out what they were doing and confronted Google, causing it to threaten to "leave China."

Second is preparing to erect missile defense sites in a Great Wall stretching from Japan to South Korea to Taiwan. The arms sale is the first step in this plan because it involve not only the sale of hardware, but also linking up Taiwan's military to the US network. That is why China was alarmed.

Now Obama is moving into economic countermeasures by declaring China a currency manipulator (which is totally ridiculous since it is every country's right to decide at what rate it wishes to buy or sell other countries' currencies). Tariffs is very likely be the next step.

Obama will also meet with the DL around February 16 to embarrass China and support separatism. China has something up its sleeve, but it is not revealed yet.


The most assertive move would be for China to stop buying any more US debt and let the current bonds mature. This would gradually draw down its oversized foreign exchange reserves. Of course, China would need to float its currency. It's time for the cheap labor export sector to be sacrificed.


Meanwhile, India has been quiet lately...... too quiet. It's almost like the dramatis personae previously played by India is now being played by US.

Actually, when Gates visited India, the two had already come up with a plan. Now that the US is dramatically mobilizing in Afghanistan and taking action against China left and right, India is also preparing for a small to medium sized border conflict.

The first step for India is the testing of Agni-III in a few days!

http://beta.thehindu...ticle100217.ece

[wdl76]

Red Fox Ace, on Feb 5 2010, 12:33 AM, said:

Yes, but the PRC has been raising a diplomatic row over the sale of UH-60 transport helicopters from the United States to Taiwan, which are essentially the same thing.

Of course it is not the same thing.

Protesting over a medium lift helicopter for rescue mission is just plain dumb and a diplomatic suicide.

How would you justify such thing?

Both country knows the effect of natural disaster and how vital these things are to the rescue operations?

China is reasonable, a patriot missile cannot be use for humanitarian purposes, a fighter jet plane cannot be used for humanitarian reasons.

A transport plane can, equipment for engineering company can and a helicopter definitely is vital.

If tomorrow Taiwan got hit by an earthquake like in the Haiti, China would be criticised for blocking the purchase of this helicopter, hell even the people of PRC may think their leaders are crazy.

The only nation that I can think of that would interpret everything as military and a threat is Americans

Roger604, on Feb 5 2010, 02:28 AM, said:

Now Obama is moving into economic countermeasures by declaring China a currency manipulator (which is totally ridiculous since it is every country's right to decide at what rate it wishes to buy or sell other countries' currencies). Tariffs is very likely be the next step.

Obama will also meet with the DL around February 16 to embarrass China and support separatism. China has something up its sleeve, but it is not revealed yet.



http://beta.thehindu...ticle100217.ece

They are shooting themselves in the foot.

Now China can really justify stop buying US bonds, any punitive action against China product would be countered by stop purchase under a very simple reason. China needs the money because their earnings is under threat. And I don't mean in a confrontative way but more to logical common sense way. You lost your earnings, you eat your savings.

US is starting to lose the plot really.

It will cause domestic problem in the US caused by inflation in absence of cheap goods they will have to resort to a more expensive goods which still needs to be imported and probably at a lower quality. Oh yes believe it or not Chinese product quality can be said to better compared to other 3rd world country.

Coupled with high unemployment and rising domestic costs (healt care, military maintenance) something needs to give.

I've done a little thinking and in my opinions:
1. Be more open and democratic - with a little manipulation China as a country may become more aggresive esp if the nationalist element holds the majority of the parliament. E.g. Imagine Roger as a premiere
2. Free floating currency - Inflation in many countries will soar hence a Global Economic Crisis may hit.
3. US decided to boycott China product - China stops buying US bonds and relocate their investments somewhere or use the savings to develop other markets. Logically if they keep buying US bonds China simply loses money from the devaluation of $US. Not to mention domestic costs, the retail corporation will go crazy over lost earnings and growth. This is where I love the American system, there will be a lobby group war and with a little bit of luck destabilise the US government.
4. As important US economy is to the world and China, many countries has been burned by US throwing their military, political and economical weight around. Trust is waning. These serves as precedents to all developing country, put too much dependency on the US at your own peril.
5. The democratic model is extremely short sighted and populist, un-sustainable in the long term unless the people are well educated and critical of government policy. Issue such as environmental costs and sustainable growth are not top in the list of the people of a democratic country.

[Red Fox Ace]

wdl76, on Feb 4 2010, 05:08 PM, said:

China is reasonable, a patriot missile cannot be use for humanitarian purposes

A Patriot missile can only be used to intercept incoming enemy missiles or attack aircraft.



For China to protest sales of Patriot to Taiwan is, inferentially, "We're protesting the fact that our missiles can't strike you as effectively as before in the event of a conflict."

[Renmin]

Red Fox Ace, on Feb 5 2010, 03:38 PM, said:

A Patriot missile can only be used to intercept incoming enemy missiles or attack aircraft.



For China to protest sales of Patriot to Taiwan is, quite inferentially, "We're protesting the fact that our missiles can't strike you anymore and kill your people."

No, Taiwan purchasing patriot missiles is saying, "Haha, we have better defenses to counter you so now we can declare independence". Thats not exactly what China needs. At the current stage, china is staying away from military force and will only use it as a last resort. To see Taiwan disrespect this fact and continuely buy weapons for its military is more of an insult.

[Red Fox Ace]

Renmin, on Feb 5 2010, 05:19 PM, said:

No, Taiwan purchasing patriot missiles is saying, "Haha, we have better defenses to counter you so now we can declare independence"

The past few times Taiwan's bought Patriot missiles, it's been under KMT governments (in 1992 and 2010.) KMT doesn't sound like a government that wants to declare independence to me.

Renmin, on Feb 5 2010, 05:19 PM, said:

At the current stage, china is staying away from military force and will only use it as a last resort. To see Taiwan disrespect this fact and continuely buy weapons for its military is more of an insult.

Which side has military spending increasing by double digits in percentage every year?


By this same logic, you could say that Taiwan has been respecting the status quo, in fact, even electing a KMT presidency and legislature - but China disrespects this fact and continues to build up weapons directed at Taiwan (for instance, 1,400 ballistic missiles pointed at Taiwan and increasing every year.)

[Renmin]

Red Fox Ace, on Feb 6 2010, 10:04 AM, said:

The past few times Taiwan's bought Patriot missiles, it's been under KMT governments (in 1992 and 2010.) KMT doesn't sound like a government that wants to declare independence to me.





Which side has military spending increasing by double digits in percentage every year?


By this same logic, you could say that Taiwan has been respecting the status quo, in fact, even electing a KMT presidency and legislature - but China disrespects this fact and continues to build up weapons directed at Taiwan (for instance, 1,400 ballistic missiles pointed at Taiwan and increasing every year.)

Very funny, the last time I checked China has pulled out a relativly good number of SRBMs and MRBMs from pointing at taiwan. Ofcourse you can't expect them to pull all out unless this stupid idea of declaring independence is gone. That act however was after several historical exchanges with the KMT government. Btw, double percentage every year??? China's military spending is at most in the 15 to 20% region. Compare that to the USA whom spends 50% on the military every year. China is alot more concerned about its infrastructure and economic development right now then becoming a military behemoth. And what kind of nation doesn't develop its military especially when you have threats facing you from all sides? Taiwan is the least of China's concerns militarily. With India and other countries building up its military and ofcourse the constant threat from the US which might not be militarily but is constantly trying to trash China in the political and economical field, it is no wonder China needs a strong military. You are being too focused on one subject when the concept of military buildup covers a wide range of needs. You think about it, those without a strong millitary were always trampled by the arrogance of western powers. Just look back into the opium wars. We were abused beyond our imagination and then the nightmare happens all over again when the japanese invaded. Dont you think the Chinese had ENOUGH? Without the PLA of today, China could have become nothign more than a harmless of puppet of the US just like Taiwan.

[Red Fox Ace]

Renmin, on Feb 6 2010, 10:28 AM, said:

Compare that to the USA whom spends 50% on the military every year.

50% of what? If I recall correctly, American defense spending is about 22% of the national budget and about 3.7% of GDP. I think China's is similar - maybe a bit more in terms of proportion. Either way, the defense spending for both nations is within reasonable ranges.

Renmin, on Feb 6 2010, 10:28 AM, said:

constantly trying to trash China in the political and economical field, it is no wonder China needs a strong military. You are being too focused on one subject when the concept of military buildup covers a wide range of needs. You think about it, those without a strong millitary were always trampled by the arrogance of western powers. Just look back into the opium wars. We were abused beyond our imagination and then the nightmare happens all over again when the japanese invaded. Dont you think the Chinese had ENOUGH? Without the PLA of today, China could have become nothign more than a harmless of puppet of the US just like Taiwan.

Just so you know, I fully agree that China needs a strong military - if I were in the CCP's position, I'd be doing exactly what they're doing right now, in fact, probably even more aggressively so. I'm not saying that China's military spending isn't justified - it is.



But you do have to figure that from Taiwan's perspective, it's in a similar boat, too. It is facing a nation with a military 10 times larger, a GDP 10 times larger, population 50 times larger, and a military budget 8-12 times larger.



China is well justified in its military expansion. But so is Taiwan, and it would be foolish of Taiwan not to modernize its military likewise.



You have to realize that Taiwan's defense spending, for the most part, isn't for the sake of declaring independence. It's for maintaining a stronger negotiation stance with China. In order for Taiwan to be able to bargain effectively with Beijing, it needs to be able to "take the invasion option off the table" for China. If Taiwan didn't have the capacity to ward off a Chinese attack, it would greatly reduce the leverage that Taipei would have in negotiations.

[Renmin]

Red Fox Ace, on Feb 6 2010, 02:06 PM, said:

50% of what? If I recall correctly, American defense spending is about 22% of the national budget and about 3.7% of GDP. I think China's is similar - maybe a bit more in terms of proportion. Either way, the defense spending for both nations is within reasonable ranges.





Just so you know, I fully agree that China needs a strong military - if I were in the CCP's position, I'd be doing exactly what they're doing right now, in fact, probably even more aggressively so. I'm not saying that China's military spending isn't justified - it is.



But you do have to figure that from Taiwan's perspective, it's in a similar boat, too. It is facing a nation with a military 10 times larger, a GDP 10 times larger, population 50 times larger, and a military budget 8-12 times larger.



China is well justified in its military expansion. But so is Taiwan, and it would be foolish of Taiwan not to modernize its military likewise.



You have to realize that Taiwan's defense spending, for the most part, isn't for the sake of declaring independence. It's for maintaining a stronger negotiation stance with China. In order for Taiwan to be able to bargain effectively with Beijing, it needs to be able to "take the invasion option off the table" for China. If Taiwan didn't have the capacity to ward off a Chinese attack, it would greatly reduce the leverage that Taipei would have in negotiations.

America has a huge percent budget directly linked to the pentagon in military research, and funding. You actually think that the USA can be working on new VTOL stealth fighters, stealth destroyers equipped with rail guns, airborne laser capable of blasting missiles out of the sky, and trucks mounted with anti-ground laser batteries with a puny defense budget like China's? If you ask me, China isnt nearly spending enough on its military, but that is more towards government policy as I said as they got plenty of economic issues to worry about.
Your pointing a double edged sword. Yes, Taiwan taking the "invasion" off the table could mean better negotiations on their part but do you think politics works that way? You honestly think that once they have the military potential against China that they even still think about negotiations? By then the option would be independence if not anything else due to the clear fact they can fend off an invasion. China does not put an invasion on the top of its list but without it, there is no last resort for china. China will be left there to watch as a part of the nation drifts the way with possibilties of other unstable regions leaving as well. Politics is dirty, once you have a card, you play it. Taiwan is not going to sit idly by once it has a strong military and still call itself part of China. China has no choice but to contain Taiwan's buildup. In other words, the problem does not lie in whos building up whos military. It lies in the very idea of independence itself. As long as the idea of seceding from China exists politically, the thoughts of an invasion can never be removed. Until these can come to terms, it is stupid for China to even consider completely removing the idea of military action on Taiwan.

[wdl76]

Red Fox Ace, on Feb 6 2010, 07:38 AM, said:

A Patriot missile can only be used to intercept incoming enemy missiles or attack aircraft.



For China to protest sales of Patriot to Taiwan is, inferentially, "We're protesting the fact that our missiles can't strike you as effectively as before in the event of a conflict."

Lo I thought you are talking about medium transport helicopter and a missile. Not what a missile is for?

China is protesting, hey we have this separatists arming themselves up and they are protesting hey this 3rd power is trying to interfere by selling missiles to our separatists.

In short there are more legitimacy for China selling arms to Iran then US selling to Taiwan.

A good comparison maybe if China sells arms to the Taliban in afghanistan and pakistan, selling arms to ilegitimate separatist movement.

And no again medium helicopter is not part of it, the purchase for medium helicopter is for humanitarian reason.

[Red Fox Ace]

wdl76, on Feb 6 2010, 04:47 PM, said:

China is protesting, hey we have this separatists arming themselves up

The Ma administration hardly sounds like "separatists" to me.



Neither does the 1992 KMT administration; the one that purchased over $10 billion in weaponry from the US and France.