By -

Kanishka Sakrikar - 521, Roseann Alphonso - 548

Jignesh Sanghrajka - 518, Bianca Luis - 510
 Anti Access Area Denial
Throughout the history of warfare, adversaries have regularly attempted to deny one another
freedom of movement on the battlefield. Past forms of anti-access served to both protect friendly
forces, and prevent enemies from gaining positions of advantage. China has emerged as a
regional power with robust anti-access/area denial (A2/AD) capabilities designed to disrupt U.S.
power projection in the western Pacific.

Anti-access (A2) strategies aim to prevent US forces entry into operations, and area-denial (AD)
operations aim to prevent their freedom of action in the more narrow confines of the area under
an enemy’s direct control. Area Denial operations thus include actions by an adversary in the air,
on land, and on and under the sea to contest and prevent US joint operations within their
defended battle-space.

China has adopted a different strategy towards achieving its goals. With the help of its trade and
foreign policies China aims to create an economic barrier which other Global powers of the
world cannot penetrate.

China’s policies claim mutual cooperation

China claims that it has unswervingly pursued an independent foreign policy of peace. The basic
objectives of the policy center on safeguarding national independence and state sovereignty, and
creating an international environment favourable to its reform, opening and modernization
efforts, as well as maintaining world peace and promoting common development.

The policy is based on the following main elements:

Maintaining independence: Abiding by principles in international affairs, determining their

position and policies in accordance with the merits of each case, and never giving in to pressure
from major powers nor entering into alliance with any major power or power block.

Good-neighbourly and friendly relations: China has vigorously advanced friendly relations
with neighbouring countries, worked diligently for regional peace and stability, and promoted
regional economic co-operation. The nation stands for fair and reasonable settlements of border
and territorial disputes through negotiations and consultations, including the offshore territory.
Despite having a good neighbourly and friendly relations policy, tensions still exist between
Tibet and China.

Opening policy: China is open to both developed and developing countries and has engaged in
extensive international cooperation on the basis of equality and mutual benefit to promote
common development. China, the world's largest developing country and a permanent member
of the UN Security Council, stands ready to make unremitting efforts to ensure world peace and
development, and the establishment of a new fair and equitable international political and
economic order based on peace and stability.
The Disputed Islands in question

• The Spratly Islands, disputed between the People's Republic of China, the Republic of
China, and Vietnam, with Malaysia, Brunei, and the Philippines claiming part of the
archipelago
• The Paracel Islands, disputed between the People's Republic of China, the Republic of
China, and Vietnam[2]
• The Pratas Islands, disputed between the People's Republic of China and the Republic of
China
• The Macclesfield Bank, disputed between the People's Republic of China, the
Philippines, and the Republic of China
• The Scarborough Shoal, disputed between the People's Republic of China, the
Philippines, and the Republic of China

There are minerals, natural gas, and oil deposits on the islands and their nearby seafloor. Because
of the economic, military, and transportational importance, the control, especially of the Spratlys,
has been in dispute by China and several Southeast Asian countries such as Vietnam from the
mid-20th century onwards.

The Republic of China (ROC) named 132 of the South China Sea Islands in 1932 and 1935. In
1958, the People's Republic of China(PRC) issued a declaration defining its territorial waters
which encompassed the Spratly Islands. North Vietnam's prime minister, Phạm Văn Đồng, sent a
diplomatic note to Zhou Enlai, stating that The Government of the Democratic Republic of
Vietnam respects this decision. China has indisputable sovereignty of the South Sea and China
has sufficient historical and legal backing. On the other hand, Vietnam claims all Spratly Islands
belong to a district, first in 1973, of the Phuoc Tuy Province, then, of the Khanh Hoa Province.
In addition to the People's Republic of China and Vietnam, the Republic of China (Taiwan),
Malaysia, Brunei, and the Philippines also claim and occupy some islands. Taiwan claims all the
Spratly Islands, but only occupies one island and one shelf including Itu Aba (Taiping). Malaysia
occupies three islands on its continental shelf. The Philippines claims most of the Spratlys and
calls it the Kalayaan Group of Islands, and they form a distinct municipality in the province of
Palawan. The Philippines, however, only occupies eight islands. Brunei claims a relatively small
area including islands on Louisa Reef. Indonesia's claims are not on any island, but on maritime
rights.

Commercial Importance of Spratly Islands

• The Geology and Mineral Resources Ministry of the People's Republic of China (PRC)
has estimated that the Spratly area holds oil and natural gas reserves of 17.7 billion tons,
as compared to the 13 billion tons held by Kuwait, placing it as the fourth largest reserve
bed in the world.
• The first major Philippine oil discovery occurred off the coast of Palawan, within the
Spratly Islands territory, and these oil fields now account for fifteen percent of all
petroleum consumed in the Philippines.
• An additional motive is the region's role as one of the world's most productive areas for
commercial fishing.
• The PRC has predicted that the South China Sea holds combined fishing and oil and gas
resources worth one trillion dollars.
 • The region is also one of the busiest shipping lanes in the world. Tanker traffic through
the South China Sea is over three times greater than through the Suez Canal and five
times more than through the Panama Canal; twenty five percent of the world's crude oil
passes through the South China Sea.

Chinas Accession of WTO: China’s WTO accession will have major implications for China and
present both opportunities and challenges for East Asia. With WTO accession, China will
continue the process of opening its markets to other countries’ exports. The most important
impact will be felt by the Chinese economy itself as it is opened up to foreign competition and as
its exports are given greater protection by WTO rules which will benefit both China and its
trading partners. Increased exports from China to the region will also lower the import prices of
its trading partners and improve their competitiveness. However, challenges would be countries
that produce similar products will face increased competition for market share in third markets.

China’s policy and regulations will become more transparent and accountable.
The market access commitments made by China leading to its accession to the WTO will
increase the entry of foreign goods, firms and investments into the country heightening the level
of competition. At the same time, China will gain access to foreign technology and management
know-how.

The China-ASEAN Free Trade Agreement (CAFTA) is a series of economic agreements with
ASEAN countries, which has contributed to China being the 3rd largest trading partner with
ASEAN, behind Japan and the EU, also overtaking U.S. CAFTA may not be comprehensive, but
it has a clear impact on the economic integration of China and ASEAN and East Asia.

To briefly study China’s Trade relations with its neighboring ASEAN Countries

China and Taiwan: The two sides sharply disagree on a number of points but at the same time
are making consolidated efforts to improve their trade relations as this would in turn have an
impact on every other aspect. . The People's Republic of China asserts that there is only "One
China" and Taiwan is an inalienable part of it. Beijing says Taiwan is bound by the consensus
reached in 1992 between the representatives of both governments in Hong Kong. Referred to as
the 1992 Consensus, it states that there is only one China, but China and Taiwan can interpret
that principle however they wish. Taiwan's former president Chen Shui-bian, however, rejected
the very existence of the consensus.

Despite intermittent diplomatic friction, the cross-strait economic relationship has blossomed.
China entered the World Trade Organization (WTO) in 2001 and, within a month, Taiwan
entered as "Chinese Taipei." Bilateral trade between China and Taiwan in 2007 reached $102
billion, up from $8 billion in 1991. China was Taiwan's largest trading partner; in 2007, 30
percent of Taiwan's exports were sold to China. Likewise, Taiwan ranks in the top ten of China's
trading partners. Taiwanese businesses have invested an estimated $150 billion in the mainland
since 1988. In 2009, Taiwan opened up one hundred of its industries to mainland investments.
China and Taiwan have also agreed to allow banks, insurers, and other financial service
providers to invest and work in both markets. Negotiations between the two for an Economic
Cooperation Framework Agreement that ease trade restrictions even further was passed earlier
this year.

Continuing the conciliatory trend, President Ma has called for increased cultural and educational
exchanges with China. He also continues to vow that Taiwan will not move toward political
unification with China, while at the same time insisting that Taiwan will not declare
independence.

China and Japan: The rise of China has clearly stirred Japan’s competitive impulses, but its
posture toward China remains, like its larger sense of national purpose, characterized by
considerable ambivalence. Japanese leaders are now more willing to cite China explicitly as a
potential military threat, and the two nations have engaged in heated disputes over territorial
boundaries, historical issues, and regional leadership. Japan has edged closer to the United States
and strengthened ties with other regional partners, from India to Australia to Taiwan, and these
moves are increasingly justified in reference to China. China’s rise in importance both in Asia
and globally since the 1970s has been driven by the rapid growth in its economy and trade

Over the last decade China has become one of the top three export markets for most of the Asian
countries, competing with the United States and Japan for pride of place. The major losers from
Chinese exports are the companies and the workers who compete with the Chinese domestically
or on foreign markets. In Japan, much of the political backlash from increased Chinese exports
has been from companies that compete against imports from China. Some of the most vociferous
complaints have come from farmers who face competition from imports of much cheaper
Chinese vegetables, fruits, and mushrooms. Japanese farmers have been especially effective at
maintaining barriers to Chinese imports. Firms dealing in electronics, textiles, and other
industries in which China has been successful and in industries in which Chinese competition is
less well known, such as machinery components and plastics, have launched a number of
antidumping cases. In every country, clothing manufacturers have lost out or shifted operations
to China.

At the same time, however, Japan’s economic planners remain convinced that the nation’s
economic well-being remains tied to continued trade and investment with China. Japan’s
economic relations with China have deepened dramatically in recent years and continue to
provide incentives for both governments to manage their problems. China is now Japan’s largest
trade partner. The relationship largely, although not entirely, is defined by Japan’s use of China
as a production base for its export industries—with many of its exports to China destined,
ultimately, for markets in the United States and elsewhere

China and North Korea: China is North Korea's most important ally, biggest trading partner, and
main source of food, arms, and fuel. After Pyongyang tested a nuclear weapon in October 2006,
experts say that China has reconsidered the nature of its alliance to include both pressure and
inducements. North Korea's second nuclear test in May 2009 further complicated its relationship
with China, which has played a central role in the Six-Party Talks, the multilateral framework
aimed at denuclearizing North Korea. The 1961 Sino-North Korean Treaty of Friendship,
Cooperation and Mutual Assistance says China is obliged to defend North Korea against
unprovoked aggression
China has supported North Korea ever since Chinese fighters flooded onto the Korean peninsula
to fight for their comrades in the Democratic People's Republic of Korea (DPRK) in 1950. Since
the Korean War divided the peninsula between the North and South, China has lent political and
economic backing to North Korea's leaders: Kim Il Sung and his son and successor, Kim Jong-Il.
At the same time, China has too much at stake in North Korea to halt or withdraw its support
entirely. Bilateral trade between China and North Korea reached $2.79 billion in 2008, up 41.3
percent compared to 2007. The Chinese are "doing just what they have to do and no more" in
terms of punishing North Korea. The economic effect of UN Resolution 1874, passed after the
second nuclear test in 2009, is also not likely to be great unless China cooperates extensively and
goes beyond the requirements of the resolution.

Pyongyang is economically dependent on China, which provides most of its food and energy
supplies. Since the early 90’s China has served as North Korea's chief food supplier and has
accounted for nearly 90 percent of its energy imports. By some estimates, China provides 80
percent of North Korea's consumer goods and 45 percent of its food. North Korea's economic
dependence on China is rapidly increasing, as indicated by a significant trade imbalance. Chinese
imports amounted to $2.03 billion, while exports to China including coal and iron ore totaled
$750 million. Some experts see the $1.25 billion trade deficit as an indirect Chinese subsidy
given that North Korea cannot finance its trade deficit through borrowing. China also gains
economically from its association with North Korea; growing numbers of Chinese firms are
investing in North Korea and gaining concessions like preferable trading terms and port
operations.

Phillipines and China : Phillipines has been closely allied with US due to security received
while it views China as a threat viewing it as an expansionist power trying to claim sovereignty
over South China Sea by building its Millitary force. During 1990’s, relations between
Philippines and China were tense due to territorial disputes over the Spratly islands. In 1995 the
conflict was resolved, however in 1997 PLA navy vessels were sighted near the Mischief Reef.
However currently China – Philippine relationship has moved towards co operation
Phillipines has successfully exported electronics and also agricultural products to China. China
however has wiped out Phillipines textile and foot wear industries and also Christmas ornaments
industry. Until recently Philipines import of consumer goods from China was limited. However
cheaper Chines products have made its way through in the Phillipine markets. Phillipines was the
last ASEAN country to sign ASEAN China FTA. Trade with China is rapidly expanding,
importers retailers and consumers are benefiting from low cost Chinese goods. China views US
as a major competitor with regards to trade with Phillipines

Thailand and China: In 2001 Thai’s politicians displayed growing partnership China due to
China’s growing importance as a trade partner, which seemed like a drift from US. A bilateral
FTA was signed and arms were purchased from China. Thailands economy has grown since the
dip in 1997 – 99, the economy being highly dependant on exports. In about 10 years Thailand
has gone from being the 8th larges trade partner to the 3rd with China shifting focus away from
US and Japan. Thai’s exports include office machines and electronics, and also primary goods
like crude rubber, plastic, petroleum and organic chemicals and imports iron and steel from
China. Chinese and Thai firms collaborate in the motorcycle, telecommunication and automotive
sectors. Investments by Japanese and Western Multinationals shape trade between Thailand and
China as Japan holds large investments in Thailand

China and Indonesia: Indonesia and China have a troubled history. Recently leaders of
Indonesia and China signed agreements on to establish a "strategic partnership" and open the
way for more trade, investment and maritime cooperation. China has also helped Indonesia by
providing relief at the time of Tsunami. Chinese companies have shown particular interest in
Indonesia's oil and gas sector. With the onset of a new free trade agreement, where in Indonesia
displayed a little hesitation attached to the concern that cheaper goods from China will threaten
the future of their manufacturing industries. This entails that tariff barriers for certain product
categories, such as several textiles and garment products will be fully dismantled.
Brunei and China: Trade between Brunei Darussalam and China stood at 93.5 per cent growth,
it’s the biggest leap so far between both countries. However there is still room for further
cooperation, especially in the fields of fisheries, halal (products) and agriculture. Brunei’s
economy is highly dependent on oil production major exports to China include mineral fuel
consisting of mainly petroleum crude. Brunei imported garments, agriculture products and
machinery from China

Vietnam and China : Vietnam was expecting both opportunities and challenges brought about
by the FTA. FTA will also make cooperation among Vietnam, China and other ASEAN
members in production of a particular product easier. However FTA brings tougher competition
for Vietnamese companies as there are similarities in manufacturing products between Vietnam
and the other countries within the FTA. The planned Dongxing-Mong Cai economic zone, new
pattern of cooperation for both sides, allows more free movement of capital, people and cargo,
and plays an important role in facilitating trade between the two cities. This would call for
speeding up the construction of infrastructure at border gates including bridges, expressways and
inland cargo deport to facilitate trade and investment among five localities of China and
Vietnam. In 2008 Vietnam cut exports of Coal to China by half to meet its own demands, its
exports to China mainly include rubber, seafood, cashew nuts, fruits, vegetables, and minerals

Cambodia and China: China and Cambodia enjoy time-honored traditional friendship
Recent years have seen fast development of economic and trade relations between China and
Cambodia, and the areas for cooperation kept expanding. In 1996, the two countries signed the
agreement on trade, investment promotion and protection, and in 2000 set up an economic and
trade cooperation committee. China's exports to Cambodia are textiles, steels, electric device,
metals machinery and building materials and its imports from Cambodia are rubber, plywood,
panels and furniture. Over the recent years, China and Cambodia have seen continuous
expansion of contacts and cooperation in various areas. They have signed agreements on
cooperation in culture, tourism and agriculture, and there were exchanges of visits between the
parliaments, armies, press, and health of the two countries. Furthermore China also provided aid
to Cambodia

Singapore and China: Singapore is a major commercial and financial Center. Seventy-eight
percent of Singapore’s population is ethnically Chinese, so ethnic affinities have to be factored
into Singapore’s relations with China, particularly in the cultural and educational spheres.
Singapore was one of the last countries in Southeast Asia to establish diplomatic relations with
the People’s Republic of China. Singapore exports a large proportion of electronic components
and parts, polyethylene, household refrigerators, freezers, refined oil, petrochemicals, and
pharmaceuticals to China. The three largest categories among Singapore’s imports from China
are electrical and electronic machinery and appliances, telecommunications equipment, mostly
information and communication technology products, and office machines. Despite the rapid
growth in their investments in China, Singaporeans, like others, perceive China as risky because
of its murky regulatory and legal environment. The Chinese market, the Singaporeans have
learned, is difficult to penetrate, lacks transparency, and lacks a reliable legal regime.
Singaporean leaders see the United States as both the principal stabilizer in the
event of internal Chinese unrest.. As China becomes more powerful, Singaporean leaders will
make further adjustments to maintain the country’s independence, growth, and room for
maneuver. Toward these ends, they will do everything they can to ensure a continued balance of
power in the region, so that China does not and cannot dominate.
Malaysia and China: Malaysia is now China’s largest trading partner among the ASEAN.
They have signed several agreements, granting Chinese companies’ contracts in the
construction of one of the country's biggest dams, an aluminum smelting plant and
a bridge. China imports electrical and electronic components, including integrated
circuits and semiconductors and palm oil. China produces large quantities of clothing and textiles
products. Light industrial goods, and selected agricultural goods that may satisfy Malaysian
demand. Bilateral trade will remain robust, given the long established links and competitively
priced quality products from Malaysia.
Total bilateral investments were close to $4 billion, and the areas of investment
have expanded to include such industries as manufacturing, processing, energy,
communication, transportation, real estate, recreation, services and finance. Co-operation
between the two countries in tourism, education, science and technology, and finance
has increased steadily. The basic reason for the rapid expansion of economic and trade
relations between China and Malaysia since the establishment of diplomatic relations lies
in mutual political trust, economic complementarities and market expansion. Bilateral co-
operation plays a crucial role in deepening economic ties among countries by eliminating
obstacles and formulating enabling rules within a broad institutional framework. Two-
way ties will be further enhanced by the trend towards regional co-operation in East
Asia especially under the constructive framework of CAFTA. As CAFTA reaches full
maturity, China-Malaysia relations will enter a new phase of development characterized
by an unprecedented level of economic interdependence.

China and Myanmar: Chinese imports to Myanmar typically focus around oil, steel
and textile products, while Myanmar imports range from natural rubber to raw wood.
Economically, Myanmar is important for China as a trading outlet to the Indian Ocean for
its landlocked inland provinces of Yunnan and Sichuan.

China and Laos: The two countries have similar trade and investment policies. Laos’
major exports to China are mineral resources, furniture, agricultural products and
handicrafts, while the main goods imported from China to Laos are electrical equipment
Conclusion

China uses imported goods such as machinery, minerals and fuels, plastics, fats and oils, rubber
and organic chemicals to produce low-cost products and sell them mainly to the United States
and the European Union. Countries within the FTA can produce different parts of a product
based on their strength so that consumers could enjoy a higher-quality but lower-cost finished
product. The cooperation in the manufacturing process would not only help businessmen tap the
markets of China and ASEAN countries, but also pave the way for them to enter other markets
such as the European Union and Africa.
China emerged as a global economic force leading the growing interdependence between
ASEAN and China The expanding role of china with respect to trade with other neighbouring
countries has long term implications. Chinese companies are playing a vital role in shaping the
economies of the ASEAN countries. The domestic companies would not only find it difficult to
compete with the power houses of china but also lose the protection they enjoyed when the
imports where not as high. This would result in the unattractiveness of other countries as a viable
foreign investment option, thus raising the importance and dependence of other countries on
China. This in turn gives China an upper hand when negotiating the disputes that have plagued
the region since time eternity. Over the next coming years China would not only be a superpower
but also have the power to influence these countries. The repercussions of disagreeing with
China would have detrimental effects on the economies of these countries. The lack of per capita
resources in China is being leveraged by the import of raw materials from the ASEAN countries.
The domestic and export demand is being fulfilled by such imports which cost much lesser than
the export of finished goods to the same countries. The trade surplus would increase year after
year which would ensure that China develops its capabilities and the cycle thus continues. The
fate of the ASEAN countries is slipping slowly from their own hands to those of China.
Countries like Japan, South Korea and Taiwan have reasons to be alarmed at the pace of Chinas
growth but there is very little they can do to stop the sleeping dragon from reaching its full
potential. China believes that once it has control over and co-operation with its neighbours it can
then block USA and other major global players from dictating terms to them and the locus of
power would shift from the West to the East
Bibliography:

Articles from EBSCO:

• ‘China warns U.S., Japan against missile defense’

Source: Washington Times, The (DC); 06/06/2007 (Ebsco)
• Non War Section: WORLD NEWS & ANALYSIS
Source: Aviation Week & Space Technology; 3/10/2008, Vol. 168 Issue 10, p24- 25,
2p, 1 Color Photograph (Ebsco)
• China's role in Asia: implications for the United States.
Korean Journal of Defense Analysis; Dec2008, Vol. 20 Issue 4, p295-304, 10p

Articles from Think Tanks

• CSB – Center for Strategic and Budgetary Assessments

• ASEAN-China Expert Group on Economic Cooperation
http://www.rand.org/paf/
• Why Air Sea Battle? By Andrew F. Krepinevich, Center for Strategic and Budgetary
Assessments
• China's maritime aggression should be wake-up call to Japan
http://shadow.foreignpolicy.com/posts/2010/09/20/chinas_m be_wake

Articles From Wall Street Journal

• Battle of the South China Sea

http://online.wsj.com/article/SB10001424052748703977004575392631691738648.html
• Japan caves in on China; looks to U.S.
http://online.wsj.com/article_email/SB10001424052748703384204575511033698480628
-lMyQjAxMTAwMDIwNjEyNDYyWj.html
• Battle of the South China Sea
http://online.wsj.com/article/SB10001424052748703977004575392631691738648.html

Other Articles

• The New York Times

• E to China.com
• China Daily
• People.com.cn
• Ministry of Foreign Affairs of People Republic of China
• Asia Times
• Centre of Malaysian Chinese studies
http://www.cfr.org/publication/11097/chinanorth_korea_relationship.html