ValueWalk is not interested in fear mongering nor war mongering, but each week we do like to take a look at different regions where superpowers could potentially start exchanging shots with each other either deliberately or accidentally. This week let’s have a look at the South China Sea.
One bad day and World War 3
Wars have started over less than than the downing of an airplane or the sinking of a boat. The world has a number of potential flash points: the Korean Peninsula, Syria, the Arctic Circle, Taiwan Straight among others and then of course there is the South China Sea.
China has essentially said, “Yeah, those islands are ours,” not just in the China Sea but seemingly anywhere near the mainland (or not). This includes disputes with a number of U.S. allies like Japan, South Korea, and the Philippines.
David Einhorn's Greenlight Capital funds were up 11.9% for 2021, compared to the S&P 500's 28.7% return. Since its inception in May 1996, Greenlight has returned 1,882.6% cumulatively and 12.3% net on an annualized basis. Q4 2021 hedge fund letters, conferences and more The fund was up 18.6% for the fourth quarter, with almost all Read More
With over $5 trillion in goods being shipped through the China Sea each year it’s little wonder why China has been keen to show other countries its potential dominance in the region. This includes the building of artificial islands in the South China Sea which can then serve as bases for Chinese navy vessels as well as aircraft.
China sends fighters to disputed island
According to a report from Reuters today, China has sent fighter jets to Woody Island a month after it it deployed surface-to-air missiles to the same island according to government sources.
This is not to say that China is the only country in the region that is responsible for this “escalatory cycle.” When Secretary of Defense, John Kerry, spoke of this cycle he also mentioned Thailand, Vietnam, and the Philippines by name. Sec. Kerry also spoke of U.S. involvement in the region.
“We don’t hope to see any more close-up military reconnaissance, or the dispatch of missile destroyers or strategic bombers to the South China Sea.”
“What we are trying to do it break that cycle,” he said. “Regrettably there are missiles and fighter aircraft and guns and other things that have been placed into the South China Sea and this if of great concern to everyone who transits and relies on the South China Sea for peaceful trade,” he added.
The United States will not be abandoning its right to “freedom of navigation” and will likely continue sending patrols through the South China Sea. This includes getting within twelve nautical miles of islands claimed by China in something that Beijing has repeatedly called “provocations.”
It’s this type of behavior that in many military strategists’ minds provide that trigger for World War 3, if China were to respond militarily.
U.S. To Send Artillery to the South China Sea?
According to an unnamed U.S defense official, “The Express” is reporting that President Obama is debating the merits of sending artillery units to the South China Sea (Likely to Philippine Islands that China also has made territorial claims).
“A Howitzer can go where it has to go. It is a way of changing an offensive weapon and using it in dual capacity,” said the unnamed source.
“This opens the door to opportunities and options we have not had before with mobile defensive platforms and offensive capabilities.”
I don’t give this report much credence personally, but this is just another way that a shooting war could erupt between the United State and China. The United States would simply put artillery batteries on an island and leave them there; this means putting maintenance and offensive troops on the island as well.