US-China tensions over rise in South China Sea with missile tests and sanctions

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US-China tensions over the South China Sea escalated on Wednesday.

US-China tensions over the South China Sea escalated on Wednesday, with Beijing firing four missiles into the waters around the time the Trump administration took action against Chinese companies that helped set up front -posts in the disputed region.

China launched four medium-range ballistic missiles into the South China Sea on Wednesday during the People’s Liberation Army’s larger military exercises, according to a US defense official who asked not to be identified. The missiles landed in the sea in an area between Hainan Island and the Paracel Islands, the official said, and were fired a day after Beijing protested an overflight by a US spy plane.

“As long as they do it in accordance with international law and standards, they have every right to do it,” Scott D. Conn, a U.S. Navy vice-admiral, told reporters on Thursday in response to a question about missile tests. He said the United States is ready to respond to any threat in the region, and said if all armies are operating professionally “you can have the same ships in the same water space.”

Separately, on Wednesday, the United States announced trade and visa restrictions on 24 companies for their efforts to help China “reclaim and militarize disputed outposts” in the disputed sea area, according to a department statement. American Trade. The most important were the units of the state-owned China Communications Construction Co., one of the largest project builders in President Xi Jinping’s Belt and Road Initiative, which saw its shares drop to 5, 6% Thursday in Hong Kong.

The escalating tensions come as the Trump administration attempts to push back what the United States sees as an increasingly intense Chinese campaign to dominate the resource-rich South China Sea and small countries in the region. Last month, it explicitly rejected China’s vast maritime claims in the region for the first time and sent aircraft carriers into the waters to conduct military exercises.

American position

President Donald Trump has made taking a tougher stance on China a key part of his re-election campaign against former Vice President Joe Biden, even as the two countries seek to maintain a trade deal of “Phase one” concluded at the beginning of this year. Asian stocks started Thursday’s session mixed after a surge in tech stocks pushed the S&P 500 Index and the Nasdaq Composite to new highs for a fourth straight day.

China carried out similar missile tests in July 2019 on the disputed waters and islets of the South China Sea. Greg Poling, director of the Asia Maritime Transparency Initiative and researcher at the Center for Strategic and International Studies in Washington, said the latest Chinese move was a measured step.

“As with most of China’s foreign policy lately, it seems to be aimed at signaling the force to the domestic public and small neighbors, not to tell the United States something they didn’t already know. Poling said. “Beijing has been careful to do so within acceptable limits – pulling into the uncontested waters off the southern coast with reasonable notice. ”

Announcing the measures against China Communications Construction and other companies, Commerce Secretary Wilbur Ross said the entities “had played an important role in the provocative construction of these man-made islands by China and should be held accountable.” Earlier today, Vietnam called on China to cancel its exercises this week near the Paracel Islands, saying they violated the country’s sovereignty.

“The United States, China’s neighbors, and the international community have rebuked the CCP’s claims to sovereignty over the South China Sea and condemned the construction of man-made islands for the Chinese military,” Ross said, using an abbreviation for the Chinese Communist Party.

In a related statement, Secretary of State Michael Pompeo said the United States would impose visa restrictions on Chinese people “responsible for or complicit in the large-scale reclamation, construction or militarization of” the lands of the South China Sea.

A senior State Department official, speaking to reporters on the customary condition of anonymity on Wednesday, said the visa restrictions were “just the beginning” of what could be more American action to punish the China for its claim work in the South China Sea. The official urged other countries to take similar action against those targeted to make it even more difficult for them to do business abroad.

The US measures must be understood in China as politically motivated due to the impending presidential election in November, said Wang Huiyao, a Chinese cabinet adviser and founder of the Center for China and Globalization, noting that companies on both sides are desperate to continue working together.

“China doesn’t need to respond to this,” he said.

China Communications Construction is involved in projects across the world, from Sri Lanka to Pakistan to Italy. The immediate impact on the company’s results remains uncertain, Eurasia Group said in a note.

“China’s immediate response will be shrill but measured,” the note said. “In this case, the entity list is a less powerful tool than Treasury sanctions, but China could still respond with retaliatory sanctions against American individuals in roughly comparable positions. “

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