This article was written by -- the leading provider of energy news in the world. Also check out these recent articles:

The Chinese believe that they can achieve their objective of acquiring islands throughout the South and East China Seas without a fight.  It worked against the Philippines.  If they try the same strategy against Japan over the Senkaku Islands, they just may get a bloody surprise.

The Reference to the "String of Pearls" first appeared in a 2005 intelligence report about the emergence of China as a regional power.  The String of Pearls is a number of Chinese built port facilities in Myanmar, Sri Lanka, Bangladesh, and Pakistan and were constructed by Chinese state owned corporations.  That is to say that they were built under Chinese government direction.

The Chinese insist that they are strictly commercial operations, while the United States, India, and Japan are convinced that they will eventually be transformed into military advanced positions for what is seen as a rival emerging naval power, but that is unlikely.  There is a very remote chance that China will position military forces far from the homeland where they cannot be supported in a time of crisis and in countries that could undergo regime and attitude changes abruptly.  

Beyond that problem, not many of the host countries will permit China to maintain military forces in their territory.  An alliance with China would make the host a potential target should China become involved in a military conflict.

The real threat from China comes from the Paracel Islands near Vietnam or Scarborough Shoal 190 kilometers west of Subic Bay in the Philippines.  A map that was published by China in 1951 and presented to the United Nations in 2009 declares these to be Chinese territory.  Chinese claims encompass two million square kilometers of the South China Sea.  If China were to achieve its objective, the South China Sea would become a Chinese lake and China would become the gatekeeper between the Indian and Pacific Oceans.

The Paracels were seized by the Chinese in 1974 after a brief skirmish with the South Vietnamese Navy.  It was only in June of 2012 that China established Sansha City on Woody Island as the administrative capital of the Paracel and Spratly Islands.

On January 21, 2014, a 5,000 ton patrol boat began regular patrols from a newly established base on Woody Island.  Included in its patrol area is Scarborough Shoal that was abandoned by the Philippine Navy on June 15 2012 to a superior Chinese naval force after a brief encounter.

Unlike the Paracels, the Chinese seizure of the shoal was accomplished through simple intimidation without a shot fired.  The success of the strategy has prompted Beijing to look at the event as a model for future actions that have been labeled as "extended coercion."

The chart that was presented to the United Nations as China's counter argument against Vietnam and the Philippines was drawn long before Beijing was interested in oil and gas deposits and long before China had a navy that could enforce Chinese claims over the far-flung islands.  What is revealed in the vague charts is an awareness of China's vulnerable underbelly that was the means by which foreigners invaded the country.  

The Paracel Islands and the Scarborough Shoal are bricks in what is the construction of a new Great Wall of China.  Like the first wall that was designed to block a land invasion, the new marine wall is intended to protect China from attacks on its weak underbelly.  

Geography has given China natural barriers to shield it from land invasions.  Through the control of the four non-Han Chinese regions of Manchuria, Inner Mongolia, Xinjiang and Tibet,  China can secure the heartland from attacks from Russia, the western steppes, India or Southeast Asia;  and Beijing is strengthening its hold over the vital buffer states by moving Han Chinese into the regions.

For many centuries, the natural barriers made China into an isolated island where it had the opportunity to nurture a unique civilization, but isolation will no longer shield the society in an age of modern technology.  China will have to do what Japan did more than a hundred and fifty years ago when it opted to adopt the strength of the foreigners to equal them.

Deng Xiaoping Started China along that course when he began the industrialization of the country.  The new strategy requires China to become international in its outlook.  Like Japan and all other industrial states, China relies upon the outside world to provide the markets for its goods and the natural resources to feed the industries and the people.

Eighty percent of Chinese commerce is carried by ships that transit through the South and the East China Seas.  To reach Chinese ports, the ships pass between a chain of islands that extend between Okinawa and the Philippines and between Indonesia and Singapore.  Who controls those islands determines whether they are a trap for China or a barrier against an invasion.

The United States Navy since 1945 has assured the freedom of the open seas to the benefit of all nations engaged in international commerce.  5.3 trillion dollars in trade passes through the South China Sea; and China, more than most, has benefited from American control of the seas.  

In spite of the benefits, Beijing sees that their economic survival depends upon the good will of a potential enemy.  This fear has been made more real by the introduction of the new American pivot to Asia that includes the strategy of Air-Sea Battle, which requires the establishment of air and naval bases from Hawaii to India, the introduction of new weapon systems and strengthens alliances with Japan, Australia, India, and Vietnam as well as the Philippines and Singapore.

China views the strategy as a method of containment that must be overcome. The commissioning of China's first aircraft carrier Liaoning in 2012 was a conspicuous move by China to create the image of the country as a major military power to impress the smaller neighbors, to inflate the national pride and to provide a training platform for the expansion of a carrier force. The military has been growing by ten percent per annum with emphasis upon naval and air forces as a part of their strategy of access denial to potential enemies. If China could base its coastal defenses on the chain of islands, hostile naval forces could be kept far from the mainland.  

The U.S. carrier forces allows American power to remain outside of the non-Chinese controlled islands and beyond the reach of Chinese anti-ship defenses from where it can block the passage of ships through the South and East China Seas.  American control of the sea lanes gives it the means to cut the vital link between Chinese factories and stomachs with the world outside.  In spite of years of rapid development, the Chinese navy lacks the strength to challenge the U.S. Navy on the open seas.

However much bravado the Chinese display, they seek to attain their objectives without engaging in a shooting war with a major power; and believe that they can.  That is the lesson that Beijing learned from the incident in 1974 when the American naval forces refused to assist their Vietnamese ally or in June 2012 when the U.S. declined to take a position on the side of the Philippines.  The lesson is that American interest is restricted to insuring that freedom of the seas is maintained in the Commons and not to become embroiled in every territorial squabble; and that is to China's advantage.  Even in the case of the Senkaku, Washington has expressed its determination to defend Japan, if Japan is attacked, but Washington has not acknowledged the Japanese ownership of the islands.

What Scarborough Shoal taught Beijing is how to apply pressure without employing a level of force that would provoke the United States to intervene.  American ships will not fire upon a cluster of Chinese fishing boats in waters where they do not belong or upon an oil rig drilling in a neighbor's waters.  These are matters better left to the parties involved to resolve peacefully.

Among the various territories in dispute, it is the Senkaku Islands that are in the headlines and it is these islands where there is little room for compromise.  When China and Japan in 1972 were settling the problems left from World War II, the question of the Senkaku was left for a future generation to resolve.  Tokyo knew that the islands were Japanese and Beijing was unable to enforce Chinese claims of ownership.  

A drunken Chinese Fishing boat captain in 2010 changed the minor issue of the islands into a crisis.  The captain rammed two Japanese patrol vessels and was arrested, which sparked outrage in China.  Anti-Japanese riots and the cut off of rare earth shipments to Japan forced Tokyo to release the captain who returned home a national hero.

In Japan, nationalists treated Japan's release of the captain as a humiliation.  Governor Shintaro Ishihara of Tokyo, who has built his political career upon an outspoken promotion of nationalism, started a program to purchase the islands in order to establish a physical Japanese presence on them.

Prime Minister Yoshihiko Noda in September 2012 saw the move of the nationalists as a provocation of the Chinese that he could thwart by having the government purchase the islands from the private Japanese owner.  What was intended to defuse an explosive situation was treated in Beijing as the Japanese nationalization of a Chinese island.

Since the days of the drunken captain, the Chinese have been sending fleets of fishing boats with patrol boats into Senkaku waters.  Each time, Japanese Coast Guard boats are forced to drive them away.  Over a one year period, the Chinese Coast Guard intruded fifty-nine times into Senkaku waters and has been stretching the resources of the Japanese Coast Guard to its limits.

Chinese military aircraft are being sent to the edge of the Japanese air defense identification zone.  The Japanese scramble fighters to intercept and the Chinese aircraft always change course just on the edge of the zone.

On two occasions, Chinese armed vessels activated their weapon systems against a Japanese helicopter and against a Japanese ship.  The Japanese simply filed protests with Beijing about the provocation.

The surprise came on November 24 2013 when China declared the creation of an Air Defense Identification Zone.  Twenty zones exist around the world under the control of the United States, Canada, the UK, Norway, Japan, and South Korea.  They have no real standing under international law, but are widely accepted as a means of regulating air traffic.

The Chinese zone is different.  It overlaps the zones of Japan and South Korea and extends over territory that is claimed by Japan and by South Korea.  The declaration of the zone came when Vice President Joseph Biden was to visit Beijing.

It was Scarborough Shoal again.  Without risking any losses, Xi Jinping could posture without taking any risk; and he was rewarded for his audacity.  Washington refused to recognize the zone for military flights while advising commercial aircraft to comply with Chinese demands.  Without expending any resources beyond talk, China gained partial recognition of its claim from the United States.  The Japanese refuse to acknowledge the zone.

On January 24, 2014, the Chinese raised the temperature again.  They are demanding that military aircraft report when they enter the zone.  They claim that verbal warnings have been given to aircraft violating the zone, but did not specify to which aircraft the warnings were given or when.  Neither did Beijing explain what would be done if their demands are ignored in the 

They Chinese are not eager to start a war, but they do want to secure a vital brick in their new wall and are seeing the opportunity slipping away.  Driven in good part by the Chinese growing assertiveness, the nationalists in Japan are calling for an expansion of the military to counter the threat.

The submarine force is to be increased from sixteen to twenty-two.  The helicopter carrier ships are to expand from two to four, and Japan will be adding the F35 jet fighter and is adding a new unit of marines to their army and are supplying Vietnam with patrol boats to counter Chinese encroachment into their waters.  Already, Japan has a formidable military that has the most advanced weapons available.  In a few more years, Japan will be even more capable of defending its interests at home and abroad where they are beginning to collide with the Chinese in Africa.

The nationalists in Japan have made the Senkaku Islands a point of national pride.  Prime Minister Shinzo Abe, who has been an advocate for the development of the Japanese military, has introduced into the public schools the order to have Japanese students taught that the islands are Japanese.  He is making it impossible for the government to abandon the claim.

If Beijing intends to acquire the Senkaku Islands to add to their wall, they will have to move quickly before Japan expands the military bases on nearby Okinawa and acquires the more advanced weapons that are planned.  The question is if the lesson of Scarborough Shoal that worked against the far weaker Philippine Navy can be applied to the Japanese.  Extended coercion may prove to be the trigger to an unexpected and unwanted fight that the Japanese just might win and lead to the third humiliation of China by Japan.  Xi Jinping has to think about that very carefully.

Bad news for OPEC could be good news for investors
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!


Written by Felix Inmonti at

Compare Brokers