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LRP's Original "China Rim" Analysis

Crisis on the China Rim: An Economic, Crude Oil, and Military Analysis

"There is a crisis rising on the China Rim, a crisis made of economic imbalances, energy insecurities, ancient hatreds, and unsettled scores. The catalyst for this crisis is success itself, the success of the People’s Republic of China in its de facto rejection of a failed experiment in communism and its rapid transformation into a thriving market economy. The inseparable companion of this success, though, is an insatiable hunger and thirst for precious resources... most important among these, crude oil."

2005.04.14 | 85 pages | download

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Post 30 - 2005.07.05
Taiwanese MND: "Coastal Defense Military Drill" to Coincide with Chinese "Shanghai Maritime Search and Rescue Drill" 

Taiwan's Ministry of National Defense (MND) announced today that it has called up 5,000-plus reservists to take part in Operation Tunghsin (Common Heart) No. 17.  Op Tunghsin, to be held on 2005.07.07, will provide reservists with further training regarding the defense of Taiwan's central-western coastal regions in Miaoli and Taichung counties.

Further details regarding Op Tunghsin are as follows:

The Taiwanese MND will mesh Op Tunghsin exercises with its on-going Operation Han Kuang No.21.  Op Han Kuang, which commenced in 2005.05, is Taiwan's largest annual combined services drill.

On the same day, China will conduct a maritime search and rescue drill off the coast of Shanghai.  This drill is being organized by China's Maritime Safety Administration.

Maritime safety officials from ASEAN countries will be in attendance to observe the Shanghai drill.  This drill is expected to focus on personnel rescue, firefighting and pollution control.

MND has discouraged local Taiwanese media from speculation regarding and connection between Taiwan's military training drills and China's maritime rescue exercise.

In our experience, there is no such thing as "coincidence" when it comes to civilian and military drills on either side of the 145-kilometer wide Strait of Taiwan.  Further, from a Taiwanese air defense standpoint - we've had several opportunities over the past 18 months to view the Strait from the air - the Strait of Taiwan is extremely narrow.

In our 2005.04.14 "Crisis on the China Rim..." (CCR) analysis, Laguna Research Partners discussed China's approach to China Rim confrontation.  The following is an excerpt from page 76 of CCR:

"...ancient Chinese military doctrine dictates that China limit its military confrontations to one front at a time ...in our view, it is no coincidence that, during the same month that China’s National People’s Congress raised tensions in the Taiwan Strait by adopting a controversial Anti-Secession Law, China simultaneously quelled tensions in the South China Sea by signing an energy exploration pact with the Philippines and Vietnam ...just two months earlier, Chinese coast guard ships killed eight Vietnamese fisherman and detained another eight in a confrontation in the Tonkin Gulf ...we have no doubts that, once China’s military de-emphasizes the Taiwan Strait, the South China Sea will witness increased tensions over competing natural resource claims"

In our view, China is now applying its "one front at a time" focus to the East China Sea in general, and Japan and Taiwan in particular.  As evidenced by recent events around the China Rim, China is in a desperate quest for long-term energy supplies and the East China Sea holds significant potential as an area where huge energy reserves can still be described as being "up for grabs".

While we expect that China will refrain from using military force in the China Rim region during the timeframe leading up to the 2008 Summer Olympic Games in Beijing, we do expect that China will continue to implement its strategy of confrontational - and, sometimes, mis-calculated - brinkmanship in dealing with matters related to energy security in the China Rim region.

Posted by:
Kevin B. Skislock
Partner and CEO
Laguna Research Partners
[bio] [disclaimer]

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