The South China Sea from over 30,000 feet up
SUMMARY
At the recent Shangri-La Dialogue in the first week of June, United States Secretary of Defense, James Mattis, accused the Chinese occupation in the South China Sea to be a militarization tactic aimed at intimidating and imposing its power in the region. Further, the Pentagon rescinded its invitation to China for the 2018 Rim of the Pacific exercise (RIMPAC), an international military exercise administered by the US in order to seek interoperability of the Pacific rim countries. Chinese officials claim their presence in the South China Sea is misconceived and misinterpreted by US military. This follows new US policy from December 2017 in which US National Security Strategy deemed China a competitor and a revisionist of international order.
FAO GLOBAL ASSESSMENT
As instability threatens the Sino-American relationship now both militarily and economically, the waters are especially rough for American businesses looking to operate in China. If security issues continue to arise between the two countries, it could potentially worsen the trade disagreement currently underway. American firms currently involved in the Chinese market should pay close attention to not only new tariff announcements, but also any military developments. However, it is unlikely that there will be military conflict between the US and China in the foreseeable future. With tensions on the Korea peninsula simmering down, US firms should focus their efforts on the looming trade was, but stay cognizant of the potential impacts from military disputes in the region, however unlikely.
Related Links
- South China Morning Post – South China Sea tensions: does the US have an endgame, beyond war?
- VOA News – Rising China-US Tensions Affect Southeast Asia
- New York Times – U.S. Disinvites China From Military Exercise Amid Rising Tensions
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