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Activities of the Claimants

China

China orders civilian ships adapted for military use

State-run media said on June 18 that China’s government has passed new guidelines requiring civilian shipbuilders to ensure their vessels can be used by the military in the event of conflict. The regulations require five categories of vessels including container ships to be modified to “serve national defence needs.” The regulations “will enable China to convert the considerable potential of its civilian fleet into military strength”, it said. The report said that China had about 172,000 civilian ships at the end of last year, suggesting the measure could be a major boost to China’s navy. China’s government will cover the costs of the plan.

Drilling platform put into operation in South China Sea

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According to the Chinese Maritime Safety Administration (MSA) on June 25, that China’s Haiyang Shiyou 981 (HD-981) oil rig was being moved to waters where China and Vietnam’s Exclusive Economic Zones (EEZs) overlap. The platform is now located 17°03'75’' North latitude and 109°59’05’’ East longitude. The rig will conduct oil and gas exploration activities from June 25 to August 20, 2015, the MSA said.

The new deployment comes amid increasing concerns over Beijing’s aggression in the South China Sea. In recent months, China has undertaken a massive reclamation project on reefs and rocks in the South China Sea, which it is transforming into civilian and military bases. These new islands will enhance China’s ability to project power in the region. China has also been increasing the frequency and sophistication of its military exercises in the region.

China responded to US’s comment on China’s large scale reclamation projects in the South China Sea

In a speech delivered on June 26 at the Center for a New American Security think tank, the US Deputy Secretary of State Antony Blinkenpointed that China's massive reclamation in the South China Sea was a threat to peace and stability and an unilateral move to coercively change the status quo. Chinese Foreign Ministry Spokesperson Hua Chunying, in regular press conference on June 29, responded that “the relevant construction falls entirely within China's sovereignty.” She said “It is hoped that the US side would refrain from discriminating in favor of its allies, act on the own merits of the case and respect China's sovereignty and rights and interests, stop making any irresponsible remarks that deliberately fuel regional tensions and confrontation, and do more things that will genuinely contribute to regional peace and stability.”

China concerned over Philippines hyping up South China Sea issue

In a recent event, the Philippino Foreign Ministry, Presidential Press Office and Press Bureau jointly made a three-episode documentary film in the official Tagalog language, in which it accused China of nibbling Philippino territories and pillaging resources that should belong to the Philippines. Spokespersons of the Philippino Foreign Ministry, Defense Department and armed forces all said the film aimed to raise the public's awareness of the importance of the territories in the South China Sea and to unite forces of the whole country behind the government on resolving the disputes.

On June 29, Chinese Foreign Ministry Spokesperson Hua Chunying responded that “the Chinese side is strongly dissatisfied with the groundless criticism by the Philippine documentary which ignores the facts and confuses right and wrong, and is deeply concerned about the sitting Philippine government’s hyping up of the South China Sea issue and fueling of confrontation between the Chinese and Philippine peoples.” She pointed out that the Philippino side attempted to win sympathy and create a false "victim" image of itself by means of misleading and lying.  She added “the Chinese side urges the sitting Philippine government to put first the bilateral relations and regional peace and stability, follow the trend of the times featuring peace, development and cooperation as well as the common aspiration and expectation of the two peoples” to safeguard the traditional friendship between the two peoples and regional peace and stability.

China adopts new law on national security

The new law, which will be signed into force by President Xi Jinping on July 1, covers a wide spectrum of areas including defense, finance, science and technology, culture and religion. Outer space activities and assets, as well as those at ocean depths and in polar regions, were also brought under the national security umbrella. A national security review and regulatory system and relevant mechanisms would be set up to censor items that have or may have an impact on national security, including foreign investment, particular materials and key technologies, network and information technology products and services, projects involving national security.

China: Philippines's arbitration case a political provocation

In a response at regular press conference on July 2 when asked about the Philippines-initiated arbitration case on the South China Sea, Chinese Foreign Ministry Spokesperson Hua Chunying said that “what the Philippines does is an obvious political provocation under the cloak of law. By negating China's territorial sovereignty and maritime rights and interests in the South China Sea, the Philippines attempts to attain more illegal interests for itself and force China to make compromise on relevant issue. This is impractical and will lead nowhere. We once again urge the Philippine side to discard illusions, meet China halfway and come back to the right track of resolving relevant disputes through negotiation and consultation.” In an earlier press conference on June 30, Hua told the press that the land reclamation project of China's construction has been completed recently as scheduled. She said “in the next stage, the Chinese side will start the building of facilities to meet relevant functional requirements,” and claimed that “necessary military defense requirements will also be fulfilled.”

China launches military exercises in Yellow Sea

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The Chinese People's Liberation Army's Daily reported late July 3 that the drills began that day, without specifying the exact location and how long the drills would continue. The drills came amid Beijing’s territorial tensions with its neighbors around the South China Sea.

The report revealed that around 100 warships, tens of naval aviation planes, and electronic countermeasure forces, divided into the red and blue armies, were involved in the maneuver, carrying out “intensive confrontations within a short period of time, including long-range fire assaults, coordinated assaults at surface targets and comprehensive air defense and anti-missile operations.”

The PLA daily said "the density of fire was unprecedented. Both sides used real weapons in the whole process of the confrontation, during which missiles, torpedoes, artillery shells and jamming bombs were fired more densely than before."

The newspaper said electronic warfare units of the Shenyang Military Area Command, which is located near North Korea, and the Jinan Military Area Command also participated in the drills. Their participation “turned the naval drill into a multiservice joint exercise, making the drill more close to a real IT-based sea battle.”

Philippines

PHL gets Canadian helicopters, South Korean landing craft

Military spokesmen said on July 2, the Philippines has received two new Canadian-built helicopters and a surplus South Korean transport vessel as it pushes through with a long-delayed military modernization program. Two Bell 412EP helicopters were delivered last week, the first of an eight-helicopter order, said Air Force spokesman Colonel Enrico Canaya. The rest of the order will arrive before the end of the year, supplementing the military's fleet of ageing "Huey" helicopters. Meanwhile, a surplus landing craft donated by South Korea, was also delivered to the Philippines, navy spokesman Commander Lued Lincuna said. The landing craft, which came with 16 inflatable dinghies, can carry about a hundred troops and will be used for transport purposes in the archipelagic nation.

Both military spokesmen said the new acquisitions were not related to the Philippines' ongoing maritime territorial dispute with China in the South China Sea

Philippines sees favorable claim case ruling

Deputy presidential spokesperson Abigail Valte said over radio dzRB “we prepared a strong case. We believe we stand on strong legal ground.” She added “we believe the tribunal will look at our case with favor. We are confident of the Philippine position on this matter.”

The tribunal has set hearings on July 7-13 to determine whether it has jurisdiction over the case. Foreign affairs spokesman Charles Jose said that if the Netherlands-based court decides it has jurisdiction, the Philippines would be asked to argue the merits of its case in another round of hearings. “We have prepared well enough for these oral arguments,” Jose said.

Australia

Prime Minister Tony Abbott criticized China's recent large-scale land reclamation projects in the disputed South China Sea

Delivery in a speech in the 35th Singapore Lecture on June 29 at Shangri-La Hotel, Singapore, with attendance of Singapore’s Prime Minister Lee Hsien Long and Deputy Prime Minister Teo Chee Hean, Australian Prime Minister Tony Abbott said "like all trading nations, Australia upholds freedom of navigation on the seas and in the air. Land reclamation on a massive scale, not only unsettles the mutual respect upon which our prosperity depends, but threatens one of the world's most complex and beautiful reef systems. These actions have strained some of the relationships that China has otherwise worked hard to cultivate."

On the same day, in a joint press conference with Prime Minister Lee, Prime Minister Tony Abbott “on the South China Sea, obviously there are some issues. Like Singapore, we take no side in the territorial disputes but we certainly deplore any unilateral alteration of the status quo. We think that disputes should be resolved peacefully and in accordance with international law and like Singapore we strongly uphold freedom of navigation on the sea and in the air.”

China not fit for global leadership

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At the 2nd Crawford Australian Leadership Forum held in the Australian National University on 28-30 June, Secretary of the Department of Prime Minister and Cabinet, Michael Thawley said China had shown itself to be more interested in challenging the existing order than building a better one. "China won't help you produce a solution," addressing.

Asked whether China was willing or able to play a global leadership role, he said: "The answer is no, it's not willing or able to play a serious global leadership role." He added China's recent flirtation with what it calls "a new kind of great power relations" with the United States in the form of a so-called G2 forum "didn't work out very well," China wasn't ready to take on the responsibility either economically or politically or security-wise. He claimed that “US leadership is going to be crucial in the period ahead, we ought to maximise our capacity to influence US strategy and to make sure it maintains its alliance commitments."

Regional Snapshots

China-led multilateral bank takes key step forward

Representatives of the 57 prospective founding countries gathered in Beijing on June 29 for the signing ceremony of the Asian Infrastructure Investment Bank (AIIB) in the Great Hall of the People. Australia was the first country to sign the document. The bank will have authorized capital of 100 billion U.S. dollars, and Asian countries will contribute to up to 75 percent of the total capital. Each member will be allocated a share of the quota based on their economic size, according to the agreement. China, India and Russia are the three largest shareholders, taking a 30.34 percent, 8.52 percent, 6.66 percent stake, respectively. Their voting shares are calculated at 26.06 percent, 7.5 percent and 5.92 percent. China's Vice Finance Minister Shi Yaobin said in an interview with Xinhua that the country's stake and voting share in the initial stage are "natural outcome" of current rules, and may be diluted as more members join. "China is not deliberately seeking a veto power," Shi stressed.

No plans for military alliance with Moscow, says Chinese envoy

Answered the question of RIA Novosti during an interview on June 30, about whether there was any likelihood of increased cooperation in the military technology sphere, the Chinese ambassador to Russia Li Hui said “China and Russia are not only friendly neighbours, but also strategic partners.” He added that China hoped to develop “all-inclusive and broad cooperation” with Russia, which, he noted, includes military technology.

However, Li emphasized, “China and Russia have asserted on multiple occasions that they are not planning to establish a military alliance in any form”, and any military ties the countries do develop “are not aimed against third parties and do not affect the interests of third countries”.

Japan joins US-Australia war games in Northern Territory and Queensland amid China dispute

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The two-week “Talisman Sabre” exercise kicked off on July 4 in the Northern Territory and Queensland involves 30,000 personnel from the US and Australia practising operations at sea, in the air and on land. About 40 personnel from Japan’s army – the Ground Self-Defense Force (JGSDF) – will join the American contingent, while more than 500 troops from New Zealand are also involved in the exercise, which concludes on July 21.

The Prime Minister, Tony Abbott, said on Friday in Sydney on board the USS Blue Ridge that “It is a very, very important alliance, which is taking part in the exercise, referring to Australia-US ties.” “It’s a very important relationship and right now we are facing quite significant challenges in many parts of the world, but particularly in the Middle East.”

The war games, being held for the sixth time, come as China flexes its strategic and economic muscle in the region.