China and the United States are all set for a high-stakes rivalry as Secretary of the State John Kerry visits Beijing this weekend. Washington is rattled by China’s growing territorial claims in the South China Sea. Recent satellite data show Beijing is constructing at least seven artificial islands in the disputed Spratly Islands region. The construction includes port facilities and runways that could accommodate warships and military planes.
US determined to assert freedom of navigation in contested waters
Last week, the U.S. Navy sent its USS Fort Worth combat ship on its first patrol in the disputed waters to ensure freedom of navigation and flight in the region. According to Reuters, the USS Fort Worth was accompanied by a Seahawk helicopter and a reconnaissance drone to patrol the airspace. The actions were clearly aimed at demonstrating U.S. capabilities in case China declares an Air Defense Identification Zone (ADIZ) in the area.
Yarra Square Partners returned 19.5% net in 2020, outperforming its benchmark, the S&P 500, which returned 18.4% throughout the year. According to a copy of the firm's fourth-quarter and full-year letter to investors, which ValueWalk has been able to review, 2020 was a year of two halves for the investment manager. Q1 2021 hedge fund Read More
ADIZs require civilian and military planes to identify themselves or face military interception. The U.S. military officials believe Beijing is highly likely to declare ADIZ over the contested South China Sea. China claims sovereignty over most of the South China Sea, through which about $5 trillion of trade passes every year. Vietnam, Taiwan, the Philippines, Malaysia and Brunei also have overlapping claims.
Washington is concerned that China might impose air and water restrictions in the South China Sea once it completes work on the seven artificial islands. Earlier this week, the State Department refused to recognize artificial islands as “maritime zones controlled by a nation.” The State Department said the U.S. was determined to preserve the freedom of navigation in the region, as is allowed under international conventions.
China responds to the U.S. ‘military plans’
The Pentagon is considering sending military ships and planes within 12 miles of the territory claimed by China to show its resolve towards freedom of navigation and flight. Immediately after reports of the Pentagon’s plans surfaced, the Chinese government issued a stern warning.
An angry China said on Wednesday that it would take resolute measures to safeguard its sovereignty and safety. Beijing will keep an eye on the situation and respond to “any violation of China’s sovereignty and threat to China’s national security,” said Hua Chunying, a spokeswoman for the Chinese foreign ministry.