U.S., China, others tentatively agree to multilateral air encounter code

U.S. Secretary of Defense James Mattis and Singapore Defence Minister Ng Eng Hen meet ASEAN defence ministers during a lunch meeting at the ASEAN Defence Ministers’ Meeting in Singapore October 19, 2018. REUTERS/Edgar Su

October 20, 2018

SINGAPORE (Reuters) – Several countries including the United States and China agreed “in principle” on Saturday to multilateral guidelines to manage unexpected encounters between their military aircraft, joining 10 Southeast Asian nations already in the pact.

The world’s two biggest economies as well as Australia, India, Japan, New Zealand, Russia, South Korea tentatively joined the agreement, which was initially adopted on Friday by the Association of Southeast Asian Nations (ASEAN), according to a joint statement issued after a meeting of defense ministers from the 18 countries in Singapore.

The voluntary, non-binding guidelines build on an existing code to manage sea encounters adopted by all 18 countries last year, which was designed to mitigate risks following a boom in the region’s maritime and air traffic in recent years.

“We all know that if there is a physical incident it changes the name of the game…it creates a cascade of activities that you cannot control,” Singapore defense minister Ng Eng Hen, the host, said at a press briefing following the meeting.

The air code has been hailed as the first multilateral deal of its kind, although such arrangements exist at bilateral levels. The U.S. and China, for instance, in 2015 signed a pact on a military hotline and rules governing air-to-air encounters.

U.S. Defense Secretary Jim Mattis told his Chinese counterpart, Wei Fenghe, on Thursday that their countries needed to deepen high-level ties so as to navigate tension and rein in the risk of inadvertent conflict.

The U.S. military flew B-52 bombers across the South China Sea in September. Earlier this month, a U.S. Navy destroyer sailed near islands China claims, drawing the ire of Beijing.

Reporting by John Geddie; Editing by Sam Holmes

Source: Reuters “U.S., China, others tentatively agree to multilateral air encounter code”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Exclusive: U.S. weighs new warship passage through Taiwan Strait

Phil Stewart, Idrees Ali October 20, 2018

SINGAPORE/WASHINGTON (Reuters) – The United States is considering a new operation to send warships through the Taiwan Strait, U.S. officials tell Reuters, a mission aimed at ensuring free passage through the strategic waterway but which risks heightening tensions with China.

The U.S. Navy conducted a similar mission in the strait’s international waters in July and any repeat would be seen in self-ruled Taiwan as a fresh expression of support by President Donald Trump’s government.

The U.S. military declined comment and U.S. officials who discussed the deliberations, which have not been previously reported, did so on condition of anonymity. They did not discuss the potential timing for any fresh passage through the strait.

China views Taiwan as a wayward province and has been ramping up pressure to assert its sovereignty over the island. It raised concerns over U.S. policy toward Taiwan in talks this week with U.S. Defense Secretary Jim Mattis in Singapore.

Even as Washington mulls ordering a fresh passage through the strait, it has been trying to explain to Beijing that its policies toward Taiwan are unchanged.

Mattis delivered that message to China’s Defense Minister Wei Fenghe personally on Thursday, on the sidelines of an Asian security forum.

“Minister Wei raised Taiwan and concerns about our policy. The Secretary reassured Minister Wei that we haven’t changed our Taiwan policy, our one China policy,” said Randall Schriver, a U.S. assistant secretary of defense who helps guide Pentagon policy in Asia.

“So it was, I think, a familiar exchange.”

Washington has no formal ties with Taiwan but is bound by law to help it defend itself and is the island’s main source of arms. The Pentagon says Washington has sold Taiwan more than $15 billion in weaponry since 2010.


Taiwan is only one of a growing number of flashpoints in the U.S.-China relationship, which also include a bitter trade war, U.S. sanctions and China’s increasingly muscular military posture in the South China Sea.

Mattis told Wei on Thursday that the world’s two largest economies needed to deepen high-level military ties so as to navigate tension and rein in the risk of inadvertent conflict.

Some current and former U.S. officials say U.S. warship passages in the Taiwan Strait are still too infrequent, and note that a U.S. aircraft carrier hasn’t transited the Taiwan Strait since 2007, during the administration of George W. Bush.

When the last two U.S. warships, both destroyers, sailed through the Taiwan Strait in July, it was the first such operation in about a year.

Beijing, which has never renounced the use of force to bring Taiwan under its control, responded to the July passage with a warning to the United States to avoid jeopardizing “peace and stability” in the strategic waterway.

It has also viewed U.S. overtures toward Taiwan with alarm, including its unveiling a new de facto embassy in Taiwan and passage of the Taiwan Travel Act, which encourages U.S. officials to visit the island.

Military experts say the balance of power between Taiwan and China has shifted decisively in China’s favor in recent years, and China could easily overwhelm the island unless U.S. forces came quickly to Taiwan’s aid.

China has also alarmed Taiwan by ramping up military exercises this year, including flying bombers and other military aircraft around the island and sending its aircraft carrier through the narrow Taiwan Strait separating it from Taiwan.

Taiwan’s President Tsai Ing-wen said last week the island will increase its defense budget every year to ensure it can defend its sovereignty, including resuming domestic development of advanced training aircraft and submarines.

“At this time, China’s intimidation and diplomatic pressure not only hurts relations between both sides, but seriously challenges the peaceful stability in the Taiwan Strait,” she said in a National Day speech in Taipei on Oct. 10.

Her remarks came ahead of island-wide local elections in late November that are seen as a bellwether for her ruling party’s performance in presidential elections due in 2020.

Reporting by Phil Stewart; Editing by Simon Cameron-Moore

Source: Reuters “Exclusive: U.S. weighs new warship passage through Taiwan Strait”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

EU-Asia United Front to Counter US Protectionism

SCMP highlights in its report “At Brussels summit, EU embraces China and other Asian powers, in the face of Trump’s protectionism”:

●EU states are being joined at the summit by more than 20 Asian leaders, including Chinese Premier Li Keqiang, as they hammer out a joint defence of free trade
●The meeting comes amid bitter disputes with Washington over Donald Trump’s protectionist policies

It seems quite difficult for the US to strike a trade deal with EU, let alone having some toxic pill against China in the hard deal.

In my opinion, given the good relations between US President Trump and his Chinese counterpart Xi Jinping, the probability of striking a deal between the US and China is bigger, if any.

Comment by Chan Kai Yee on SCMP’s report, full text of which can be viewed at https://www.scmp.com/news/china/diplomacy/article/2169237/brussels-summit-eu-embraces-china-and-other-asian-powers-face

Exxon Mobil signs framework agreement to supply LNG to Zhejiang Energy for 20 years

October 18, 2018

ZHOUSHAN, China (Reuters) – Exxon Mobil Corp said on Thursday it signed a framework agreement for a liquefied natural gas (LNG) supply deal with Zhejiang Provincial Energy Group, the Chinese company’s first long-term supply deal.

Peter Clarke, the president of Exxon Mobil gas and power marketing, inked the 20-year supply deal in a signing ceremony during the International Petroleum and Natural Gas Enterprise conference at Zhoushan, in Zhejiang province, the company said in a statement.

The Chinese company will receive 1 million tonnes of LNG per year from Exxon Mobil under the agreement, Zhejiang Energy President Tong Yahui told Reuters on the sidelines of the event.

Exxon Mobil said in the statement it will deliver the LNG starting in the early 2020s.

Exxon Mobil is stepping up its efforts to meet soaring LNG demand, coupling multi-billion dollar production projects around the world with its first mainland storage and distribution outlet.

LNG supplies to China would come from a combination of Exxon Mobil’s global portfolio – not necessarily from the United States – as the company boosts output from Papua New Guinea and Mozambique, Clarke said on the sidelines of the meeting.

State-owned Zhejiang Energy is a coal producer and utilities operator, and formed a joint venture earlier this year with commodities trader Glencore to trade energy products including LNG.

Zhejiang Energy is teaming up with state-owned Sinopec Corp to build a LNG receiving terminal near the city of Wenzhou in Zhejiang with a capacity of 3 million tonnes per year. The plant is planned for start up by the end of 2021.

Reporting by Meng Meng and Dominique Patton; editing by Richard Pullin and Christian Schmollinger

Source: Reuters “Exxon Mobil signs framework agreement to supply LNG to Zhejiang Energy for 20 years”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

Tesla secures Shanghai site for $2 billion China Gigafactory

Yilei Sun, Adam Jourdan October 17, 2018

BEIJING (Reuters) – Tesla Inc has signed an agreement with the Shanghai government for an 860,000 square meter plot of land to build its first overseas Gigafactory, the electric carmaker said in a Chinese social media post on Wednesday.

The land agreement marks a key step toward the firm and its Chief Executive Elon Musk making cars locally in China for the fast-growing market, even as tariffs imposed by Beijing on U.S.-made goods have caused it to hike prices of its imported models.

Tesla signed a long-anticipated deal with Shanghai authorities in July to build its first factory outside the United States, which would double the size of its global manufacturing and help lower the pricetag of Tesla cars sold in the world’s largest auto market.

“Securing this site in Shanghai, Tesla’s first Gigafactory outside of the United States, is an important milestone for what will be our next advanced, sustainably developed manufacturing site,” Robin Ren, Tesla’s vice president of worldwide sales, said in a statement.

Tesla did not give the price tag for the plot, but the Shanghai Bureau of Planning and Land Resources said on Wednesday that a plot of land of 864,885 square meters had been sold at auction at a price of 973 million yuan ($140.51 million).

Tesla signed a deal with Shanghai authorities in July to open a plant in the Chinese city with an annual capacity of 500,000 cars.

The factory will help tap China’s rapidly growing market for so-called new-energy vehicles (NEVs), a category comprising electric battery cars and plug-in electric hybrid vehicles, even as China’s wider car market cools.

NEV sales were up 54.8 percent in September and climbed 81.1 percent in the first nine months of this year to 721,000 vehicles, the country’s top automobile industry association said last week.

Beijing, however, is reining in subsidies for the sector, concerned about overcapacity and “blind development,” with many inside the industry expecting a shake-out to hit the wide array of smaller local electric car start-ups.

Tesla, which started hiring for the new Shanghai factory in August, previously said that it would raise capital from Asian debt markets to fund the construction, which will cost around $2 billion.

Reporting by Yilei Sun and Adam Jourdan; Editing by Christopher Cushing

Source: Reuters “Tesla secures Shanghai site for $2 billion China Gigafactory”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

Why today’s troops fear a new war is coming soon

By: Leo Shane III  October 16

WASHINGTON — Nearly half of all current military troops believe the United States will be drawn into a major war soon, a jarring rise in anxiety among service members worried about global instability in general and Russia and China in particular, according to a new Military Times poll of active-duty troops.

About 46 percent of troops who responded to the anonymous survey of currently serving Military Times readers said they believe the U.S. will be drawn into a new war within the next year. That’s a jarring increase from only about 5 percent who said the same thing in a similar poll conducted in September 2017.

Another 50 percent think the country will not end up in a major conflict during the next year. But that number is falling, down from more than two-thirds of those surveyed last fall who said a war was unlikely.

The fears of war come as President Donald Trump in the last year has repeatedly emphasized improving military readiness in the face of growing threats from foreign adversaries, both loosely affiliated terrorist groups and traditional major power rivals. At the same time, top Pentagon officials have spoken publicly about the need to prepare for a conflict against a “near-peer” adversary.

When asked about specific countries, troops said Russia and China were among their top concerns. The poll showed a big increase in the number of troops who identify those two countries as significant or major threats: About 71 percent of troops said Russia was a significant threat, up 18 points from last year’s survey. And 69 percent of troops said China poses a significant threat, up 24 points from last year.

Some top Pentagon officials have voiced similar views. Last year, Marine Corps Commandant Gen. Robert Neller told Marines that he thought there was a “big-ass fight” on the horizon.

“I hope I’m wrong, but there’s a war coming,” Neller told Marines in Norway.

Cyber-terrorism topped the list of threats to U.S. security in the Military Times poll. Nearly 89 percent of those surveyed listed it as a significant threat, with more than half of those calling it a major concern.

And many troops worry the U.S. is not fully prepared for cyber warfare. One-third of service members said they disapprove of the country’s current policies on combating cyber terrorism. Only about 13 percent said they strongly back government and military efforts underway.

Foreign terrorist organizations like Al Qaeda and the Islamic State group were seen as less of a threat than domestic terrorist groups. About 57 percent of troops see U.S.-based Islamic extremists as a significant threat, compared to 49 percent for other domestic terrorist groups and 48 percent for foreign ones. Last year, more than 59 percent of troops said Al Qaeda and ISIS posed significant threats.

The biggest decrease shown in this year’s poll was North Korea, which was seen as a significant threat by more than 72 percent of troops one year ago, but in this year’s poll only 46 percent described the country that way.

In the last year, U.S. posture toward North Korea has also seen a dramatic shift. Trump moved from mocking North Korean leader Kim Jong Un on social media last fall — calling him “Little Rocket Man” — to publicly proclaiming his respect for the controversial dictator, following a peace summit between the two in June.

Even with U.S. forces still deployed to Iraq and Afghanistan — or perhaps because of it — those countries were seen as a significant threat by less than 13 percent of the armed forces. That’s well behind Iran (41 percent), Syria (24 percent) and Saudi Arabia (18 percent).

Similar to past polls, those conflict zones were also seen as a lesser threat to U.S. national security than white nationalists (35 percent, up slightly from a year ago) and immigration (23 percent, steady from a year ago).

“It has never been this bad”

One of the Military Times poll respondents, an Army recruiter with more than 18 years of service, said Trump’s handling of the standoff over North Korea’s nuclear weapons looked risky at times, but overall the soldier approves of how Trump is going “toe-to-toe” in negotiations.

“It was kind of scary, but he had the guts to go over there and stand up for what a lot of Americans are believing in,” the recruiter, who asked not to be identified by name, told Military Times in a telephone interview.

Some services members believe that President Trump is contributing to the instability and fears. One soldier, a female Army sergeant first class based in Hawaii who asked to remain anonymous, said she’s has seen junior enlisted soldier opt to not re-enlist due to fears that a major war could erupt soon, and that Trump has made the chances of such a war more likely.

“I feel it has never been this bad and with this many adversaries, because of the way he [Trump] chooses to do business,” she told Military Times in a telephone interview.

She is afraid of a “constant conflict” occurring soon, of endless deployments and fighting.

“With the way we’re growing our force, I tell my soldiers the reason we are growing the force is because we need you, and we’re going to fight,” she said.

Troops voiced overwhelming support for Defense Secretary Jim Mattis, the retired Marine Corps general, and hope that he will curtail some of the president’s riskiest impulses.

“I think that it is a scary thing when I hear some of the stuff on the news and how stuff is being handled. I do think we have an excellent secretary of defense who kind of keeps us on an even keel as much as he can,” said an enlisted sailor based in California who asked for anonymity. “But it is scary to think about what could happen, just from somebody saying the wrong thing.”

Chief Warrant Officer 2 Jay Thompson, an Army helicopter pilot at Fort Drum, New York, said he doesn’t think China or Russia wants war any more than the United States does, and that will help temper tensions.

“No one is seeking the peer-on-peer war,” he said.

Our methodology

Between Sept. 20 and Oct. 2, Military Times, in collaboration with the Institute for Veterans and Military Families (IVMF) at Syracuse University, conducted a voluntary, confidential online survey of U.S. service members. The survey included 19 questions on service members’ opinion(s) related to the current political climate, policy and national security in the United States.

The survey received 829 responses from active-duty troops. The IVMF used standard methodology to estimate the weights for each individual observation of the survey sample. The margin of error for most questions was roughly 2 percent.

The survey audience was 89 percent male and 11 percent female and had an average age of about 31 years old. The respondents identified themselves as 76 percent white, 13 percent Hispanic, 9 percent African American, 5 percent Asian and 6 percent other ethnicities. Respondents were able to select more than one race.

Military Times editor George Altman and staff writers Shawn Snow, Kyle Rempfer, Geoff Ziezulewicz and Steve Losey contributed to this report.

Source: Military Times “Why today’s troops fear a new war is coming soon”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

Growing impact: a third of Japan Inc hurt by U.S.-China trade war – Reuters poll

Tetsushi Kajimoto October 16, 2018

TOKYO (Reuters) – The number of Japanese companies affected by the U.S.-Sino trade war has jumped to a third, soaring from just 3 percent in May with firms fretting about prospects for their exports from China as well as slower Chinese demand, a Reuters poll found.

The survey also showed 53 percent of firms were worried about the fallout from the escalating trade friction and that some, albeit still a small percentage, had begun looking at shifting production of exports out of China to other countries.

Of the companies citing an impact, the vast majority said they were feeling the effect ‘to some extent’, with only 2 percent calling the impact large.

The fear is, however, that the fallout will become much worse.

“If it does become a fully fledged trade war, then this could hit Japanese exports and supply chains, in turn hurting capital expenditure and dampening consumer spending and potentially damaging Japan’s entire economy,” said Masaki Kuwahara, senior economist at Nomura Securities, who reviewed the survey results.

Washington in September levied tariffs of up to 25 percent on $250 billion of Chinese goods as punishment for what it says are unfair trade practices, while Beijing has hit back with tariffs on about $60 billion of U.S. imports.

U.S. President Donald Trump has since threatened to slap tariffs on an additional $267 billion of Chinese imports.

“The trade friction is having a big impact on exports from China of the raw materials used to build products in the United States,” a manager at an auto-sector firm wrote.

“Even if we consider measures to avoid tariffs, there’s a limit to what we can do,” the manager added.

The survey, conducted Sept. 27-Oct. 10, showed non-manufacturers firms were just as worried as manufacturers about the fallout.

“Any direct impact may be small, but sluggish business conditions and anxiety about the future could cause a decline in demand in the medium to long term,” wrote a manager at a construction firm.

Companies responded anonymously to the survey, conducted for Reuters by Nikkei Research. It polled 482 large and mid-sized non-financial firms, about 240 of which responded to the question about on the extent of the impact of the trade war.

Asked if they had an export base in China and were thinking of moving any facilities out of the country, 13 out of 97 firms that responded to the question said they were considering such a move.

Among the firms looking at shifting production, most said they were considering Southeast Asia as an alternative, while some were thinking about bringing output back home. None chose the United States.

Firms that have publicly said they could shift production include Toshiba Machine Co (6104.T) which has said it plans to move output of U.S.-bound plastic moulding machines from China to Japan or Thailand. Mitsubishi Electric Corp (6503.T) is shifting output of U.S.-bound machine tools from its base in Dalian, in northeastern China, to a Japanese plant in Nagoya.

The survey also found that 40 percent of Japanese firms thought the trade conflict could disrupt supply chains over the next three years, with many citing fears that prices for imports of raw materials and parts could surge.

“If major U.S. companies like Google, Amazon and Apple start bringing production home, that could destroy Chinese parts makers with which we do business,” a manager at a machinery maker also wrote.

Only 11 percent of firms said, however, that they were currently considering steps to deal with a potential escalation of trade spats.

Of those considering contingency measures, shifting production as well as diversifying sales and procurement routes were the most often cited.

The International Monetary Fund last week lowered its global economic growth forecasts for this year and next, predicting 3.7 percent for both years instead of 3.9 percent, citing trade policy tensions and the imposition of tariffs as a key factor behind the cut.

Reporting by Tetsushi Kajimoto; Editing by Malcolm Foster and Edwina Gibbs

Source: Reuters “Growing impact: a third of Japan Inc hurt by U.S.-China trade war – Reuters poll”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.