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South China Sea
China Lures Private Investors To Paracel Outpost

China will make a big push to get private investors interested in developing infrastructure for some of the disputed islands and atolls in the South China Sea, Chinese media reported today. Reuters has the story:

China will invite private investment to build infrastructure on islands it controls in the disputed South China Sea and will this year start regular flights to one of them, state media said Friday, moves likely to anger other claimants.

China claims almost all of the energy-rich waters of the South China Sea, through which more than $5 trillion of maritime trade passes each year. The Philippines, Brunei, Vietnam, Malaysia and Taiwan have overlapping claims.

 In 2012 China set up what it calls Sansha city, based on Woody Island in the Paracels, to administer its islands there.

Though China calls it a city, its permanent population is no more than a few thousand, and many of the disputed islets and reefs in the sea are uninhabited.

“The city will also push forward the planning and construction of a maritime medical rescue center. Submarine optical cables will be laid and put into use this year, and WiFi will cover all inhabited islands and reefs,” Sansha’s mayor said.

China may have a tough time attracting large scale private investment to such a hotly contested and politically unstable place. Still, its efforts are as much as anything about signaling its seriousness to other countries with claims to the islands. Regular readers will recall that Vietnam was incensed after China recently landed several test flights on an air strip built on Fiery Cross Reef. That project was administered out of Sansha City. There was no immediate response from the U.S. or any of the other claimants to this latest news. The United States has generally been quieter about the Paracels than it has been about China’s activities in the Spratlys, which are to their south.

Meanwhile, on Wednesday, the Philippine Supreme Court ruled that the Enhanced Defense Cooperation Act co-signed with the United States is constitutional, paving the way for more American troops to rotate through Philippine bases. That should make it easier for the United States to increase its presence in the region, much to Beijing’s displeasure.

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  • Anthony

    Another interpretation, perhaps, may be China is not signaling seriousness regarding island claims but focusing on its ambitious plan to revitalize the Ancient Silk Road Overland and Maritime trade routes.

    “The original Silk Road, established more than 2,000 years ago, was a critical network of trade routes that promoted economic, political, and cultural exchange among Asia, Africa, and Europe. China’s new ‘Silk Road Economic Belt’ and Twenty-first Century Maritime Silk Road’ will do the same, with newly built or upgraded infrastructure facilitating the flow of trade, investment, culture, and ideas….” http://www.project-syndicate.org/commentary/china-new-silk-road-strategy-by-liu-mingkang-and-wenzhi-lu-2016-01

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