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STRATEGIC VISION Volume 6, Issue 34

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for Taiwan Security

August, 2017

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ISSN 2227-3646

Sea of Troubles Stakeholders Eye Code of Conduct for South China Sea Editorial Staff

Post-Islamic State Challenges Wen-hao Lu

China’s Navy Sails Westward Vijay Sakhuja

Chinese Security Architecture Charles Yang

Trade and Stability in Asia Shao-shuang Wen & Hua-hsi Huang


STRATEGIC VISION

Volume 6, Issue 34

for Taiwan Security w

August, 2017

Contents Post Islamic State challenges...........................................................4

Wen-hao Lu

Chinese naval presence in Indian Ocean......................................10

Vijay Sakhuja

China’s Central National Security Commission........................... 15

Charles Yang

Economic interdependence and stability in Asia........................ 20

Shao-shuang Wen & Hua-hsi Huang

South China Sea Code of Conduct............................................... 25

Editorial Staff

Submissions: Essays submitted for publication are not to exceed 2,000 words in length, and should conform to the following basic format for each 1200-1600 word essay: 1. Synopsis, 100-200 words; 2. Background description, 100-200 words; 3. Analysis, 800-1,000 words; 4. Policy Recommendations, 200-300 words. Book reviews should not exceed 1,200 words in length. Notes should be formatted as endnotes and should be kept to a minimum. Authors are encouraged to submit essays and reviews as attachments to emails; Microsoft Word documents are preferred. For questions of style and usage, writers should consult the Chicago Manual of Style. Authors of unsolicited manuscripts are encouraged to consult with the executive editor at xiongmu@gmail.com before formal submission via email. The views expressed in the articles are the personal views of the authors and do not necessarily represent the views of their affiliate institutions or of Strategic Vision. Manuscripts are subject to copyediting, both mechanical and substantive, as required and according to editorial guidelines. No major alterations may be made by an author once the type has been set. Arrangements for reprints should be made with the editor. Cover photograph of the USS Anchorage navigating between storms is courtesy of Liam Kennedy.


Editor Fu-Kuo Liu Executive Editor Aaron Jensen Associate Editor Dean Karalekas Editorial Board Tiehlin Yen Yi-hua Kan Richard Hu Guang-chang Bian Chung-kun Ma Lipin Tien STRATEGIC VISION For Taiwan Security (ISSN 2227-3646) Volume 6, Number 34, August, 2017, published under the auspices of the Center for Security Studies and National Defense University. All editorial correspondence should be mailed to the editor at STRATEGIC VISION, Center for Security Studies in Taiwan. No. 64, Wan Shou Road, Taipei City 11666, Taiwan, ROC. The editors are responsible for the selection and acceptance of articles; responsibility for opinions expressed and accuracy of facts in articles published rests solely with individual authors. The editors are not responsible for unsolicited manuscripts; unaccepted manuscripts will be returned if accompanied by a stamped, self-addressed return envelope. Photographs used in this publication are used courtesy of the photographers, or through a creative commons licence. All are attributed appropriately. Any inquiries please contact the Executive Editor directly via email at: dkarale.kas@gmail.com. Or by telephone at: +886 (02) 8237-7228 Online issues and archives can be viewed at our website: www.tcss.org. © Copyright 2017 by the Center for Security Studies. Articles in this periodical do not necessarily represent the views of either the TCSS, NDU, or the editors.

From The Editor

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he editors and staff of Strategic Vision would like to wish our readers well this fall season. The Asia-Pacific continues to undergo important developments. We hope that students and scholars in the academic community have the chance to keep up with these events. In support of that effort, we offer our latest edition of Strategic Vision. We open this issue with Wen-hao Lu, a colonel in the ROC Army and an instructor at the ROC War College at National Defense University, who examines the enduring anti-terrorist challenges which will remain after the fall of the Islamic State. Dr. Vijay Sakhuja, CEO and co-founder of The Peninsula Foundation, examines the Chinese Navy’s increased presence and activity in the Indian Ocean. Next, Charles Yang, a graduate of National Taiwan University’s Graduate Institute of National Development, argues that China’s Central National Security Commission still lacks a clear role and function. Shao-shuang Wen and Hua-hsi Huang, currently in the doctoral program in political science at the University of South Carolina, examine the impact of economic interdependence on the potential for conflict in the Asia-Pacific region. Finally, members of Strategic Vision’s editorial board examine the challenges and impact of a code of conduct in the South China Sea. We hope you enjoy this issue, and look forward to bringing you the finest analysis and reporting on the issues of importance to security in the Taiwan Strait and the Asia-Pacific region. Dr. Fu-Kuo Liu Editor Strategic Vision


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Strategic Vision vol. 6, no. 34 (August, 2017)

Terror Vacuum

Impending collapse of Islamic State poses challenges for regional security Wen-hao Lu

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n 11 July, 2017, Iraqi Prime Minister Haider al-Abadi officially announced victory over Islamic State (IS) militants in their former stronghold of Mosul. US President Donald Trump then congratulated the troops on their success, adding that this victory signals that Islamic State’s days in Iraq and Syria are numbered. Additionally, Russia’s recent claim of the death of Islamic State leader Abu Bakr al-Baghdadi—since confirmed by the Syrian Observatory for Human Rights—further bolsters the hope that the IS will soon fall. In fact, the Islamic State has been facing bitter setbacks since 2016 under a military onslaught from the US-led Global Coalition

against Daesh and its local allies, losing vast swathes of territory and thousands of fighters in Iraq, Libya, and Syria. Retaking Mosul, and possibly totally chasing IS out the region, is welcome news and worth celebrating. As the Islamic State’s grip on territory loosens, however, the different yet perhaps more daunting task of establishing a new political order begins. The endeavor to gather several factions in the region offers a great benefit for battling IS. Nevertheless, this effort would generate new challenges as those groups overcome their mutual enemy, and then turn their attention working together on building the peace. How its

photo: Kurdishstruggle Peshmerga fighters near the city of Mosul take down a captured ISIS flag and raise the Kurdish flag in its place.

Colonel Wen-hao Lu is an instructor at the ROC War College at National Defense University. He can be reached for comment at luwenhao73@gmail.com


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photo: Tommy Aviluceau Iraqi security forces perform a review for leaders in Baghdad, Iraq. Iraqi forces have been at the forefront in the struggle against the Islamic State.

aftermath is managed will be a turning point, and a critical obligation for the Iraqi government. Without a doubt, the country will implode into a new state of civil conflict if the lessons of the rise of IS have not been learned.

Among the many reasons that enabled IS to occupy around one-third of Iraq in the summer of 2014, there are a couple significant points that need to be addressed. Under US-backed former Prime Minister Nouri al-Maliki’s leadership and political motivation, the marginalization of Iraq’s Sunni communities had widened. In addition, systemic corruption within the

Iranian influence grew in Iraq and provided a great opportunity for IS to exploit the fears of Iraqi Sunnis and step in as an actor to fill the vacuum of security and provide basic state services to local communities. The situation in the Sunni communities in Iraq after two years is dramatically different, however. Senior Sunni figures today acknowledge that IS was initially viewed by some communities and politicians as a welcome “liberation.” There was an initial marriage of convenience between Islamist jihadists and Baathist insurgents that led to the capture of Mosul. Yet the IS-Baathist split, along with the Islamic State’s brutal rule and the displacement of millions of Sunnis from their homes, left these communities in Iraq—along with many other minority groups—devastated. The

Iraqi security services and state institutions enabled IS to capitalize on the Sunni sense of disenfranchisement. Moreover, the worsening civil war next door in Syria further inspired IS to establish its self-proclaimed caliphate across both Iraq and Syria. The fall of Mosul, and the IS threat to Baghdad in 2014, showed the fragility of the Iraqi security forces (ISF).

social fabric that initially supported IS has frayed, with many Sunnis now taking up arms to join the fight against the group. The unprecedented cooperation between various forces, most recently in Mosul among ISF, Kurdish fighters and various Shiite, Sunni and other paramilitary groups, plays a vital role in defeating IS. In

Sunni marginalization


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November 2016, Iraq’s Hashd al-Shaabi, known as Iraq’s Popular Mobilization Forces (PMF), closed off all available land routes between Mosul, IS’s last stronghold in Iraq, and Raqqa, the group’s de-facto capital in Syria. The PMF also teamed up with Kurdistan Democratic Party (KDP) fighters, or Peshmerga, to encircle Mosul and prevent access to IS-held territories in Syria. These forces have benefited from strong US and Iranian military backing. The military success of US-backed and Iranian-backed Iraqi forces has, in turn, given confidence to more Iraqis that IS can be defeated. As of early 2017, IS had already lost control of key population centers and territorial strongholds from Fallujah in Iraq to Manbij in Syria; coalition operations aimed at retaking Mosul and Raqqa—the central hubs of its power in Iraq and Syria—were underway. IS had also suffered an estimated 45,000 deaths at the hands of the US-led coalition through the late summer of 2016; it had seen its revenue significantly

constricted by airstrikes and other methods; flows of foreign fighters into Iraq and Syria had been reduced dramatically. As a result of all this, IS’s combat proficiency, organizational cohesion, and morale have all declined markedly from their peak of 2014–2015, and the group’s leaders have conceded publicly that the “caliphate” might be lost.

Emergent power factions Despite promising signs on the anti-IS military track, one of the biggest threats facing Iraqi security is the likelihood that new internal conflict among, and within, Iraq’s power factions will emerge the day after the guns stop pointing at IS. This is a fear shared by both Iraqi and Western officials in Iraq. The challenge is how these competing agendas can be balanced, and how the shattered community should be pieced back together. The military actors involved in Mosul’s liberation—Iraqi federal forces, Kurdish

photo: Christopher Bigelow Paratroopers engage ISIS militants with strategically placed artillery fire in support of Iraqi and Peshmerga fighters in Mosul, Iraq, July 6, 2017.


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Peshmerga, state-sponsored paramilitaries led by Shiite forces and those aligned to local Sunni and minority groups—each come with different political visions for how the province should be governed after IS is defeated. While an agreed-upon military plan exists, every group involved in the military campaign has its own plan B for what comes next. The potential for renewed conflict in these countries is increased by power rivalries between competing armed political and militia factions. Many of these factions seek support from regional powers, which, having fought hard to counter IS, now want to retain a degree of influence in the liberated areas. In such circumstances, it is almost impossible to establish a government that holds some elections and then leads the country to solve economic, political, sectarian, and security problems. Greater instability in Iraq and Libya is likely if the post-IS transition does not cope with the core drivers of extremist forces, or if regional rivalries provoke further conflict among the forces that defeated IS. Besides the issue of internal political and militia

factions, after the caliphate is eliminated, the issue of what becomes of the IS fighters who remain has also generated concern, especially as to how this may relate to the spread of terrorism. The defeat of the IS core will not necessarily destroy affiliated groups in countries as diverse as Nigeria, Libya, Egypt, and Afghanistan. It will not remove the danger that IS

“There is every probability that a group similar to the Islamic State will surface in the near future.” fighters may form a new insurgency to continue the fight even after the caliphate is destroyed. Nor will the defeat of IS remove the threat posed by Al Qaida affiliates such as al Shabaab in Somalia, AQAP in Yemen, Jabhat al Nusra in Syria, and other groups capable of carrying out major attacks. Additionally, the fact that the greater Middle East is riven by ongoing conflict and instability, and that it continues to generate toxic ideological radicalism, means that the broader danger of jihadist extremism is unlikely to disappear. In


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photo: Kathleen Polanco Soldiers from the 173rd Airborne Brigade practice target engagement with a Stinger Missile in South Korea.

particular, the problem of foreign fighters who gained experience in Syria before returning to their countries of origin means that Western homelands may face the threat of lone-wolf, wolf-pack, and copycat terrorist attacks such as those spawned by IS in California, Paris, Istanbul, and numerous other places. Finally, there is one more issue that needs to be considered. Despite international financial support, the struggle against IS and the fall in oil prices have drained Iraqi resources. Persistent corruption and economic mismanagement have added to those woes and led to a grave economic crisis. Continued economic downturn will further strain the ability of the Iraqi central government to deal with post-IS security and political challenges and to meet the demands of

future. With the IS decentralization in the Middle East, there could be multiple groups similar to the Islamic State all over the world at the same time. This is especially possible in Southeast Asia, where both groups have a strong footprint. Additionally, a megamerger between post-IS elements and al-Qaeda cannot be ruled out, either.

the country’s growing population of young people. The IS was born when a group split from al-Qaeda, considering the latter to be weak and lacking in vision. Its goal was to establish an Islamic caliphate. While the IS model will not survive for too long in the Middle East, there is every probability that a group similar to the Islamic State will surface in the near

respective countries. A new dimension would be returnees from regional conflicts such as in Marawi City, where there are Southeast Asian fighters from Indonesia, Malaysia, Singapore, Myanmar, and elsewhere supporting their Filipino co-jihadists. The security situation could worsen with the region being awash with IS and non-IS returnees who are skilled in

Implications for Asia Moreover, it is estimated that more than 1,000 Southeast Asians, both fighters and their family members, supported and live in the Islamic State. With IS central likely to be defeated soon, it is not difficult to believe that those people will return home to their


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combat operations, adept in the use of sophisticated military weapons and tactics, and most important of all, experienced in combat, ideologically fortified, and strongly networked. Undoubtedly, the Islamic State group will be defeated in the near future as expected. A lesson has been learned in recent years that counter-terrorism without stabilization simply does not work. Without a sustained international effort to address the political and economic grievances that gave rise to IS, a new wave of extremism and conflict will surely follow. There are, nevertheless, openings to bolster Iraqi security forces and provide willing political actors with expertise in capacity-building and decentralizing power. The states that have supported the anti-IS coalition should now shift their efforts into immediate and longer-term stabilization efforts. These are all encouraging developments, but it remains to be seen if this cooperation can continue into the political sphere once IS is defeated. Cooperation between

external, local fighting groups and the ISF will also be needed in the security realm if IS doubles down on its large-scale terrorist attacks and adopts more guerrilla warfare tactics once it has lost its territorial control. For Taiwan, the specter of a rising Muslim extremist presence in Southeast Asia as the IS collapses poses a threat to national security. The country imports hundreds of thousands of foreign laborers annually, a majority of whom are young Muslim men from Southeast Asia. Some of them may be susceptible to IS recruiting propaganda and might carry out terrorist attacks in Taiwan. Furthermore, the new Southbound Policy, which is the main focus of the Tsai Ing-wen administration, is seeking stronger economic ties with nations in Southeast Asia. In order to meet the possible challenges of a post-IS era, Taiwan should work more closely with intelligence communities in the region and organizations like Interpol to ensure that such potential threats do not go unaddressed. n

photo: Russ Scalf A security team 1st Battalion, 153rd Infantry Regiment provides security for a C-130J during a cargo mission in Somalia.


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Uninvited Guests New Delhi responds to increasing presence of Chinese navy in Indian Ocean Vijay Sakhuja

photo: Indian Navy Indian aircraft carriers INS Vikramaditya (R33) and INS Viraat (R22), during Vikramaditya’s maiden voyage to her home port at INS Kadamba, Karwar.

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n recent years, China has become much better positioned to project naval power in the Indian Ocean. Its naval presence is characterized by the near-continuous presence of its warships, frequent forays by submarines, and the building of a naval base and access arrangements for its navy at various ports in friendly countries in the region. The above initiatives are also supported by the sale of naval hardware, including submarines, to regional countries at friendly prices, and an aggressive training program for government functionaries at various

Army (PLA) Navy visits to the Indian Ocean have graduated from benign goodwill visits to joint naval exercises with friendly countries, military operations other than war (MOOTW) such as the evacuation of Chinese nationals from Libya and Yemen, and combat operations in support of counter-piracy operations against Somali pirates in the Gulf of Aden. Since 2009, the PLA Navy has deployed 26 naval task groups in the Gulf of Aden for escort missions. The total number of ships used in these missions comes to 83 vessels, with task groups typically composed of a

levels, particularly the navy. Beginning with an inconspicuous visit in 1992 by the training ship Zhenghe which made port calls to Bangladesh, India and Pakistan, People’s Liberation

mix of frigates, destroyers, amphibious landing ships and logistics vessels. The total number of sailors used in these missions comes to roughly 22,000, including a number of Special Forces personnel. Over the

Dr. Vijay Sakhuja is CEO and co-founder of The Peninsula Foundation, India. He is a former naval officer and former director of the National Maritime Foundation, New Delhi. He can be reached at sakhuja.v@gmail.com


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course of these missions, the PLA Navy has escorted over 6,400 merchant ships, including those belonging to the United Nations World Food Program. The deployment of nuclear and diesel-electric submarines individually, or in combination, in the Indian Ocean is a new dimension of the PLA Navy’s operational strategy for distant water operations. The first submarine deployment was reported in December 2013 when a Shang-class nuclear-powered submarine carried out operations for nearly three months in waters around India. This was followed by the deployment of a Song-class diesel electric submarine for three months between August and December of 2014. In 2015, a Han-class nuclear-powered submarine was detected, and shortly thereafter a Yuan-class diesel-electric submarine docked in Karachi harbor. Last year, China deployed both a Han-class nuclear submarine and a conventional submarine in the Indian Ocean. Early this year, on April 19th and 20th, a Yuan-class submarine was detected by an Indian Navy Poseidon-8I (P-8I) long-range maritime patrol aircraft soon after it transited the Strait of Malacca

into the Indian Ocean, making it the seventh such submarine interception.

Pattern of incursion A clear pattern of deployments has emerged involving nuclear submarines followed by a conventional diesel-electric submarine and, more recently, a combination of both types of vessels being simultaneously deployed in the Indian Ocean. This new activity is in line with the 2015 Chinese Defense White Paper which encourages the PLA Navy to “gradually shift its focus from ‘offshore waters defense’ to a combination of ‘offshore waters defense’ with ‘open seas protection,’ and to build a combined, multi-functional and efficient marine combat force structure.” In order to achieve these objectives, the PLA Navy is engaged in enhancing “capabilities for strategic deterrence and counterattack, maritime maneuvers, joint operations at sea, comprehensive defense and comprehensive support.” For regional support to Chinese submarine patrols,

photo: Deanna Gonzales Naval officers from India, the United States and Japan pose for a photograph during the opening ceremony of Exercise Malabar 2017.


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photo: Baycrest The Chinese aircraft carrier Liaoning, purchased from the Ukraine and retrofitted, sits at anchor in Hong Kong harbor during a training deployment.

there are at least two ports in Sri Lanka and Pakistan where Chinese submarines have docked, and two naval bases in Djibouti and Gwadar that can potentially provide special facilities for long-term deployment support. Colombo harbor in Sri Lanka has been a popular destination for port calls by the PLA Navy and Chinese submarines have been sighted in the harbor on a number of occasions. In September 2014, a Chinese Type 925 submarine and Changxing Dao support vessel docked at the Chinese-run Colombo International Container Terminal in Sri Lanka during a stopover in Colombo harbor for refueling, as well as for rest and recreation for the crew, before heading to the Gulf of Aden in support of international efforts to fight piracy. Likewise, port calls at Karachi, Pakistan are important for PLA Navy submarines because the base is also home to Pakistani Navy submarines and is fully equipped to provide special support for the Chinese boats. China and Pakistan have signed a contract for construction of eight conventional diesel-electric submarines, four of which will be constructed in

China, and delivered by 2023, and the rest will be assembled in Pakistan. The Pakistani port of Gwadar can potentially serve as a safe haven for PLA Navy submarines, particularly for operations in the Arabian Sea. Gwadar Port has been developed with Chinese financial and technical assistance, and is an important seaward node of the China Pakistan Economic Corridor which is closely linked to the 21st century Maritime Silk Road that passes through the Indian Ocean.

Mediterranean reach Similarly, Djibouti is now being developed by China and the port will also be used to support PLA operations in the region. It is also a springboard to the Mediterranean Sea and strategic engagements with Russia in the Black Sea, which in recent times have progressed exponentially through enhanced capacity building, naval interoperability and joint exercises to respond to maritime security threats and challenges in the Mediterranean and the Black Sea.


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There are three primary reasons for China to deploy submarines in the Indian Ocean. First, these platforms are most suitable for surveillance missions and the PLA Navy is anxious about the growing naval capability of the Indian Navy. It is also possible to monitor US naval operations and other Western naval activity, including the United Kingdom and France, who have naval bases in the Persian Gulf. Second, submarine operations are inherently data-intensive and it is critical for submarines to understand the key characteristics of seawater, such as temperature and salinity, which affects its density and impacts a submarine’s ability to detect other submarines. This information is essential for offensive and defensive submarine operations. The Pakistan Navy, which has collected an enormous amount of underwater data on the Arabian Sea over the decades, may have shared this data with their Chinese counterparts. Third, a Chinese naval presence is considered critical for the security of Chinese flagged merchant ves-

sels operating in the Indian Ocean, which carry strategic materials such as gas and oil and other cargo. Sea lane security is an increasingly important mission for the PLA Navy. Chinese submarines can also play

“Djibouti is now being developed by China and the port will also be used to support PLA Navy operations in the region.” a major role in the safety and security of Chinesebuilt infrastructure in friendly countries. The presence of Chinese submarines in the Indian Ocean has been the subject of intense debate and frequent discussion in the international strategic community, particularly in India. Indian naval planners have carefully monitored Chinese naval activity in the region. Discussion has recently become more intense after a July 2017 Indian media report which stated that the “Indian naval satellite Rukmini (GSAT-7), long-

photo: Anthony Maw A Pakistani border guard, left, and his Chinese counterpart hold hands at Khunjerab Pass. The two nations have become close, much to India’s chagrin.


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range maritime patrol aircraft like Poseidon-8I and warships have monitored at least 13 Chinese naval units in the Indian Ocean over the last two months.” The Indian government has responded to these developments by pledging that Chinese submarines are being “minutely and continuously” monitored and the Indian Navy is ready to respond to any challenges they could pose. According to Navy Chief Admiral Sunil Lanba, “As far as the People’s Liberation Army Navy ships and submarines are concerned, the Indian Navy keeps a close eye and monitor their movements. We launch surveillance missions in the form of aircraft and ships to keep a track of them.” India has made anti-submarine warfare operations in the Indian Ocean a top priority and has acquired a number of platforms—including ships, aircraft, submarines, and satellites—to monitor Chinese submarine activity through surveillance and reconnaissance missions. Additionally, the Indian Navy, along with

the US Navy, has conducted joint anti-submarine warfare exercises which involve ships and aircraft, including the US-made P-8Is. The presence of the PLA Navy in the Indian Ocean is a reality and Chinese submarines will soon be a common sight in the region. It is fair to argue that the presence of submarines in the Indian Ocean is also an expression of China’s aggressive political posture, and a tool for signaling coercive intent to a potential contestant. Sustained Chinese naval presence in the region will help the PLA Navy understand Indian Ocean underwater topography and obtain hydrographic data for future operational support. This will be critical for enhancing the ability of the Chinese submarines to detect targets, particularly boomers operated by the United States, Britain, and France, as well as India’s diesel-electric and nuclear-powered hunter-killer submarines. n

photo: Ryan Clement Cmdr. Divaya Guatam of the Indian Navy examines a patient aboard the hospital ship USNS Mercy.


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Hollow Purview

China’s Central National Security Commision lacks clear role and function Charles Yang

photo: Dong Fang Senior Chinese leaderships meets for the 18th National Congress of the People’s Republic of China.

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n 2013 the Communist Party of China (CPC) established the Central National Security Commission (CNSC) during the Third Plenum of the 18th Party Congress. The CNSC was designed to build a strong platform to coordinate national security work and to strengthen unified leadership of national security at the central level. The new commission has not achieved its purpose on diplomatic

sion. A common explanation for the establishment of the CNSC is that President Xi Jinping has aspirations for more power and seeks to undertake “big power diplomacy” in world affairs. This is an extended argument of the China Threat thesis. Another explanation is that the old decision-making process was mired in bureaucratic procedure and jealous turf competition (the tiao-kuai system). This explanation suggests that

issues, though it has increasingly affected the crossstrait relationship. There are two explanations for why the People’s Republic of China (PRC) established the commis-

the motivation to establish the CNSC had more to do with overhauling PRC bureaucracy and less to do with aggressive foreign policy aims. In theory, within the CPC, the critical deci-

Charles Yang is a graduate of National Taiwan University’s Graduate Institute of National Development. He specializes in the political-economic development of China. He can be reached at d88341003@ntu.edu.tw


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photo: Kremlin.ru President Xi Jinping, seen above in a meeting with Russian leaders, has stated his intention to seek to undertake big-power diplomacy in world affairs.

sion-making authorities are the Politburo and the Politburo Standing Committee. Each member is designated responsibility for a specific policy area and various “leading small groups.” The paramount leader is designated to lead on foreign and military affairs, which gives him an unparalleled position in determining the country’s national security policies.

“On key national security affairs or those deemed ‘strategically important,’ Chinese leaders are to hold discussions as broadly as needed and to make decisions through consensus-building. ” After Deng Xiaoping, power in the PRC regime has been anything but absolute. Generally speaking, the more important the issue, the broader the discussion. This process is influenced by institutional characteristics, as well as regime and culture issues. At the same time, no leader wants to risk taking sole responsibility for a major, critical policy decision in case that decision fails and backfires, jeopardizing his own career

and, in a worst case scenario, the whole system. On key national security affairs or those deemed “strategically important,” Chinese leaders are to hold discussions as broadly as needed and to make decisions through consensus-building. This decision model was best summarized by then-President Jiang Zemin at the 16th Party Congress in 1999 when he called it “collective leadership, democratic centralism, individual preparation, and decisions made at meetings.” This model has often displayed a number of shortcomings which include: diffused decision-making authority, lack of a core national security coordination team, unstable civil-military relations, narrow agency interests, struggles between objectivity and existing guidelines, and legal problems.

Difficult situations These problems have contributed to a lot of difficult situations for PRC leadership. For example, according to former Taiwan’s Deputy Minister of National


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Defense Chong-Pin Lin, there is no coordinating institution between the Ministry of Foreign Affairs, the People’s Liberation Army (PLA), and the Taiwan Affairs Office of the State Council. At times, key individuals like Zeng Qinghong, who served during Hu Jintao’s first term, have been able to play a key role in coordination between the Foreign Ministry and the PLA. After Zeng retired in 2008, however, there ceased to be smooth communication between the Ministry of Foreign Affairs and military. This lack of proper communication contributed to Beijing’s clumsy approach to establishing its East China Sea Air Defense Identification Zone in 2013, which led to international criticism of China. Thus Xi’s motivation to establish this commission is to avoid situations such as this, which result largely from poor communication. According to available information, the current CNSC is composed of 20 members. Twelve are politburo members and eight come from the State

Council, the military, diplomatic circles, the People’s Bank, etc. One of the members, Sun Zhengcai, was politically purged, so the current number may stand at 19. In terms of mission and function, Xi Jinping fur-

“It appears the CPC leaders in Xi’ Jinping’s inner circle wield significant influence in the CNSC.” ther defined the mission of the CNSC in 2016 and stipulated that it should handle national security issues in 12 areas: political security, homeland security, military security, economic security, cultural security, societal security, scientific and technological security, information security, ecological security, natural resource security, nuclear security, and overseas interest security. It appears that CPC leaders in Xi’s inner circle wield significant influence in the CNSC. According to a

photo: Rachel Treon Sailors aboard the USS Theodore Roosevelt prepare to move an F/A -18E Super Hornet to the deck during operations in the Pacific.


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photo: Nathan Maysonet US and Philippine marines practice movement ashore during bilateral exercise “KAMANDAG” at Marine Barracks Gregorio Lim in the Philippines.

government news release in 2015, Minister of Public Security Guo Shengkun said that he will obey Meng Jianzhu and Li Zhanshu’s order to conduct anti-terrorism work. Meng is secretary of the Committee of Political and Legal Affairs of the CPC Central Committee, so he is Guo’s supervisor. But why should Guo obey Li Zhanshu? This suggests that Li is likely the administrative officer of the CNSC.

In June 2017, India’s External Affairs Minister Sushma Swaraj announced that there had been an incursion by Chinese military forces at the border

Communication shortcomings Since its inception in 2013, it appears that the CNSC may not be functioning as well as hoped. A number

near Barahoti in Uttarakhand. This was a symbolic and sensitive incident because Indian Prime Minister Narendra Modi and Chinese President Xi Jinping were scheduled to meet in the Shanghai Cooperation

of incidents suggest that it may have shortcomings in its ability to coordinate and communicate with all segments of the military. Some observers note that there are no navy or air force generals in CNSC. This raises the question of whether the commission will be able to effectively manage incidents in the South China Sea and East China Sea.

Organization Heads of State Council Meeting in Kazakhstan on June 8th and 9th. PRC leaders rarely put themselves in this kind of embarrassing situation. Incidents such as this suggest that Xi may not be able to smoothly communicate with the Ministry of Foreign Affairs and the PLA. The emergence of the CNSC has mixed implica-

“Much of the PRC’s response to rapidly developing world events still depends on institutional inertia, rather than the will of the paramount leader.”


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tions for cross-strait relations. In the past, the Central Leading Group for Taiwan Affairs had responsibility for coordinating cross-strait policy. Its deputy head, Yu Zhengsheng, has not joined the CNSC. It suggests that the Central Leading Group for Taiwan Affairs still plays an important role. The CNSC also has an important role because Li Zhanshu, along with other members of the group, attended the historic 2015 meeting between Xi and Taiwan’s then-President Ma Ying-jeou. This creates an embarrassing situation for officers of the Taiwan Affairs Office of the State Council. No one from this group sits on the CNSC, and their coordination is also questionable. Recent incidents such as the one involving Lee Mingcheh, a former employee of Taiwan’s Democratic Progressive Party, who “disappeared” after crossing into China from Macau, raise doubts as to the coordination between the two offices. Although Lee disappeared on March 19, the PRC government announced only 10 days later that Lee had been detained

for engaging in “activities endangering national security.” When his family asked to see him, the office initially indicated that it did not know where he was. According to China scholar David M. Lampton, the CNSC’s focus is heavily weighted toward internal and periphery security, but it also is an institutionbuilding response to new global and transnational issues. The CNSC will play an increasingly important role in the cross-strait relationship because it has more resources. It could lead to a more rapid response and tough policies towards Taiwan, primarily because there are military members in the institution. Still, the CNSC does not have the capability to handle new global and transnational issues. The PRC’s problems were shaped by culture, regime, and institutions. Much of the PRC’s response to rapidly developing world events still depends on institutional inertia, rather than the will of the paramount leader. It is questionable whether the CNSC will be able to function and operate as it was intended to. n

photo: VOA Taiwanese human rights activist Lee Ming-cheh’s wife Lee Ching-yu and supporters at March 2017 press conference ask China to release her husband.


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Strategic Vision vol. 6, no. 34 (August, 2017)

Peace Through Trade Theorists see economic integration with China as contributing to stability Shao-shuang Wen & Hua-Hsi Huang

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ith rapid economic development and remarkable advancements being made in the fields of science and technology, economic globalization has become inevitable. Economic globalization also promotes economic interdependence, which is a concept wherein “in the division of labor, individuals depend on others to produce all or most of the goods they need to sustain their lives.” Analyzing the effects of economic interdependence on political relations has become a focal point among international relations scholars. A considerable volume of recent scholarship has focused on the relationship between economic interdependence and interstate relations following the Second World

War. There is a divergence of opinion between adherents of liberalism and realism, with liberal theorists arguing that economic interdependence decreases and mitigates interstate conflict, while realists contend that asymmetries in trade increase and exacerbate interstate conflict.

Economic interdependence Scholars first began to argue that de jure economic interdependence, as exercised through such mechanisms as free trade agreements (FTAs), tends to decrease international conflict and enhance world peace, interpreting the European Economic Community as

photo: US Department of State ASEAN leaders and senior US officials display unity and cooperation during the first ASEAN-US Summit held 9 October, 2013 in Brunei.

Shao-shuang Wen and Hua-hsi Huang are currently PhD students in the Department of Political Science at the University of South Carolina. They can be reached at huahsi@email.sc.edu and swen@email.sc.edu


Economic Integration  b  21

photo: Gnovick In order to drive the economy and supply vital resources to the region, large container ships require peaceful seas to transport their cargo.

a force that has contributed significantly to peace between France and Germany since the end of the Second World War. They found that multilateral FTAs and bilateral FTAs act differently in terms of war. Some scholars argue that economic globalization, which makes possible easier access to foreign markets (i.e. multilateral FTAs), tends to increase multilateral trade at the expense of bilateral trade. In this sense, bilateral FTAs raise the relative cost of a bilateral conflict and therefore reduce its probability. However, at the same time, it lowers the relative costs of a bilateral conflict with third countries as well. As a result, a bilateral FTA may increase the likelihood of military conflict with third countries.

policy-controlled barriers, they might have very few incentives to make concessions to avert escalation of any conflicts with another member country. FTAs are used to solve trade problems that occur in complex and dense economic interdependencies, and to exploit the trade potential between less-developed economic relationships. Bilateral FTAs promote economic interdependence as they significantly reduce

Other scholars have contended that bilateral FTAs deter bilateral war, while multilateral FTAs increase the probability of war between any given pair of countries in the FTA agreement. Bilateral trade increases the opportunity cost of bilateral conflict. In multilateral FTAs, since all members comply with the same principles of trading and face the same level of

policy-controlled barriers to trade. Therefore, bilateral FTAs should increase the degree of economic interdependence through regulating and solving trade conflicts and exploiting trade potential. Moreover, the opportunity cost hypothesis holds that the huge opportunity cost of conflict leads interdependent states to seek other alternatives to the use of force

“Countries decide whether to enter into a bilateral FTA as they evaluate existing FTA relationships with third countries.”


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photo: Erwin Sampaga A Marine F-35B prepares to land on the flight deck of the amphibious assault ship USS Essex.

in order to solve disputes. There are several factors which support this hypothesis.

Safer alternative First, the nature and motivation for disputes and conflicts between two countries is to acquire scarce resources and to defend state sovereignty. Compared with direct military confrontation, bilateral FTAs are a more efficient, more economical, and safer alternative to acquire scarce resources based on a formal document with the satisfaction of both sides. Therefore, most countries look for economic cooperation opportunities via bilateral FTAs rather than military confrontation. Second, countries decide whether to enter into a bilateral FTA as they evaluate existing FTA relationships with third countries. According to economists Sumit Joshi and Maggie Xiaoyang Chen, “when one country has an existing FTA with a third country, the incentive of that country to form a new FTA with a new partner country is unambiguously stronger

compared to a benchmark case of no pre-existing FTA.” Specifically, it creates an “own-FTA effect,” which economists Scott Baier, Jeffrey Bergstrand, and Ronald Mariutto define as “the impact on the net welfare gains of an FTA between two countries owing to either already having other FTAs.” In this sense, if conflict disturbs the validity of bilateral FTAs due to trade destruction or trade sanctions, then both sides face a high cost by losing the opportunity to pursue bilateral FTAs with third coun-

“The South China Sea is one potential flashpoint in Asia where economic interdependence and trade have arguably worked against conflict.” tries. Therefore, the existence of bilateral FTAs could become an important political and economic factor during conflict, and eventually mitigate interstate conflict. Finally, the opportunity cost of not forming bilateral


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FTAs includes less trading, a lower level of economic interdependence, distrust between two countries, lower national welfare, a less-efficient export market, domestic tensions caused by companies and a public who loses faith in the economy, shortages of resources, the cost of establishing ties with new trading partners, and the cost of forming new FTAs with new trading partners. Therefore, opportunity cost should remain high during conflict and thereby helps conflict to be solved more quickly. Using the above reasoning, bilateral FTAs would tend to reduce bilateral conflicts.

Potential flashpoint The South China Sea is one potential flashpoint in Asia where economic interdependence and trade have arguably worked against conflict, and contributed to peace and cooperation. In recent years, overlapping maritime claims in the South China Sea have been a source of friction between China, and countries like the Philippines and Vietnam. China’s ex-

tensive maritime claims in the South China Sea, represented by the so-called nine dash line, extensively overlap with those of the Philippines and Vietnam, as well as Malaysia and Brunei. These overlapping maritime claims have sometimes resulted in periods of heightened tensions. In May 2014, China and Vietnam experienced a tense standoff when China moved an oil exploration rig into Vietnam’s Exclusive Economic Zone near the disputed Paracel Islands. Although direct conflict between the two countries did not occur, there were extensive public protests in Vietnam which resulted in damage to Chinese-owned businesses in the country. China and the Philippines experienced a similar standoff in 2012 near the disputed Scarborough Shoal, located northwest of the Philippine’s main island of Luzon. In response to Chinese fishing vessels operating in the Shoal, the Philippines sent its largest warship to arrest the Chinese fisherman. Chinese ships from China Marine Surveillance subsequently intervened and blocked attempts by the Philippines to arrest the suspects, producing a brief standoff.

photo: Erwin Sampaga Vietnam saw anti-China protests followed by unrest and riots in May 2014 after China deployed an oil rig in a disputed region of the South China Sea.


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photo: VOA President Rodrigo Duterte and President Xi Jinping shake hands prior to their meeting at the Great Hall of the People in Beijing on 20 October, 2016.

Despite the ongoing territorial disagreements in the South China Sea, serious conflict has not yet erupted, and some disputes in the region may have actually stabilized somewhat. An important factor in regional stability has been the deepening economic relations between countries in the region. It is estimated that trade between China and members of the Association of Southeast Asian Nations (ASEAN) will reach US$1 trillion by 2020. The lure of trade and mutual economic benefit has already worked to reduce tensions in the region.

Recently, relations between China and the Philippines have improved dramatically. Shortly after his election,

nomic relations between China and the Philippines will likely take priority over maritime territorial disputes, and thus contribute to stability. The sea lines of communication which pass through the South China Sea are vital for trade and energy imports for countries in the region. Several trillion dollars worth of goods passes through the South China Sea each year, so conflict or instability in this vital waterway would have a profoundly negative effect on regional economies, and world trade in general. Roughly one-third of worldwide shipping traverses the South China Sea. Given the importance of the South China Sea to the global economy, any move towards conflict in the region would be met with worldwide diplomatic and economic pressure to resolve the situation. Thus, eco-

Philippine President Rodrigo Duterte announced his decision to shelve territorial disputes with China, and went on to secure US$24 billion in investment and financing agreements from Beijing in 2016. In 2017, an unnamed Chinese company reached an agreement to build a high-speed rail network in the Philippines. At least during Duterte’s term in office, deeper eco-

nomic interdependence will work to keep maritime tensions in the region from growing out of proportion. In order to better safeguard regional peace and stability, countries in the region should continue to pursue bilateral and multilateral trade agreements which will further increase mutual economic gains, and reduce the likelihood of opportunism. n

Improved relations


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Strategic Vision vol. 6, no. 34 (August, 2017)

Conduct Unbecoming Hopes, concerns raised over South China Sea code-of-conduct discussions Editorial Staff

photo: Conor Minto Four F/A-18C fighters fly in formation over the USS Theodore Roosevelt during operations in the Pacific Area of Responsibility.

A

s ASEAN celebrates its 50th anniversary this year, it is moving closer to achieving a code of conduct on maritime activity in the South China Sea between its member states and China. A draft framework of the code of conduct was made final in May at a meeting of senior officials

the South China Sea. First, ROC Army colonel Lipin Tien examines the legal dimensions of a code of conduct. Next, South China Sea Think Tank Director Jonathan Spangler examines the implications of this development for the United States.

from ASEAN and China that was held in China’s southwestern province of Guizhou. Although not yet publicly released, plans for the code of conduct have produced speculation and raised questions regarding the details of the agreement. Members of Strategic Vision’s editorial board offer their perspectives on how a future code of conduct may affect disputes in

Lipin Tien Vexed territorial claims, suspicion among regional and non-regional states due to interest entanglement, perceived threats from China’s military expansion, and continuing allegations of unfriendly acts continue to undermine the status of the South


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photo: Monika Fluekiger ASEAN leaders meet during the 2015 Annual Meeting of the World Economic Forum.

China Sea as a secure and peaceful domain. The states China Sea during the ASEAN Foreign Ministers’ anin the region have been unable to achieve a legally nual conference in Manila from August 2nd to 8th. binding agreement to govern activities in the South The framework envisions the COC as a set of norms China Sea. In place of a legally binding agreement, to guide ASEAN states and to promote maritime coin 2002 representatives from ASEAN member states operation in the South China Sea, and not an instruand the People’s Republic of China (PRC) signed the ment to settle territorial disputes or maritime delimiDeclaration on the Conduct of Parties in the South tation issues. When asked whether the COC would be China Sea (DOC). Rather than serving as an instrulegally binding, PRC Foreign Minister Yi Wang said ment to impose legal obligations or implement enhe would leave it up to the ministers. The joint comforceable measures for the settlement of territorial muniqué issued by the ASEAN Foreign Ministers’ disputes, this declaration rather is a poMeeting the day after adopting the COC litical instrument proposed to avoid esframework included language pointing calating tensions over the disputed terto an “effective,” as opposed to a legallyritories and to reduce the risk of armed binding, COC based on the framework. conflict in the South China Sea. If we look back at the fact that responses After more than 15 years of interby regional states to the Award of South mittent talks, on 6 August, 2017, the China Sea Arbitration were generalPRC and ASEAN members endorsed ly subdued, restrained, and consistent a framework that provides a guideline with the declaratory policy of ASEAN, FCO for shaping the negotiations over the and the fact that the award has not yet Chinese Foreign Minister Wang Yi Code of Conduct (COC) on the South been enforced—as well as the soft state-


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ment made at the ASEAN Summit this May which dropped any references to land reclamation and militarization—it is unrealistic to expect the COC to be legally binding. From the perspective of international law, if the DOC is a gentlemen’s agreement, then the COC may be deemed as a soft law on a gentlemen’s agreement. A code of conduct is a soft-law instrument characterized by diminished obligations due to vague, ambigu-

“The COC is an illusory achievement; and without stipulating a mechanism for the settlement of disputes under the COC, it is unlikely to actually regulate behavior.” ous, imprecise, or otherwise indeterminate language, and thus deemed as a legally non-binding document. Nonetheless, when legally binding agreements cannot be reached, a soft law instrument has the ability to help states and international organizations set out new international norms of cooperation which may later come to form the basis of legally binding inter-

national agreements, and assist in the interpretation and application of existing treaties on the law of the sea and other maritime obligations. Not all soft-law instruments lead to the formation of new rules or serve as the basis for new treaties, however. From the aspect of the factors mentioned above, the COC is an illusory achievement; and without stipulating a mechanism for the settlement of disputes under the COC, it is unlikely to actually regulate the behavior of regional and non-regional states in South China Sea. The South China Sea disputes remain a potential flashpoint of conflict in the international community. n

Jonathan Spangler After nearly 15 years of slow-moving diplomatic negotiations following the 2002 signing of the Declaration on the Conduct of Parties in the South China Sea, ASEAN and China managed to push through a framework for a more substantial Code of Conduct for the South China Sea (COC) in early August 2017. Although the framework is still far from what many

photo: US Navy Chinese dredging ships operate at Subi Reef in 2015, just 26 km southwest of the Philippines’ Thitu Island. Subi is also claimed by the ROC and Vietnam.


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photo: Adam Cazerez A Patriot missile launcher from the 1st Air Defense Artillery Battalion defends Kadena Airbase in Okinawa, Japan.

proponents have aspired to all these years, its endorsement by senior policymakers nevertheless has several important implications for US policy in the region.

First, the framework and policymakers’ statements that accompanied it provide evidence that regional actors value and are committed to regional stability

ic, and opportunity costs of becoming more deeply entangled in maritime disputes that affect its interests but are nevertheless well beyond its borders. Countries’ commitment to regional stability with caveats, though, forces the United States to remain alert, maintain some level of military presence in neighboring areas, and recognize that it cannot afford to disengage from the issue entirely. Second, the text of the framework carefully avoids mentioning issues related to legally binding provisions or enforcement mechanisms. For years, proponents of a stronger COC had been striving for the inclusion of these issues, but few observers familiar

and security. It is equally clear, however, that these countries’ commitment comes with the caveat that regional stability and security must not adversely impact their own core interests. Sovereignty and territorial integrity are the obvious issues. For Washington, regional stability means that it can rest easy and avoid the political, diplomatic, econom-

with regional diplomatic processes will be surprised by their omission from the framework. The all-butinevitable lack of legally binding provisions or enforcement mechanisms in a hypothetical future COC means that the United States and its military forces will remain tasked with the uncomfortable and increasingly costly role of serving as the de facto police

“ASEAN is a regional grouping of which China is not even a member, yet its tentacles extend deep into the region.”


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force for global affairs. For better or for worse, it is precisely due to the fact that international law and agreements lack enforcement mechanisms that US forces conduct freedom of navigation operations in maritime areas around the world, including in the South China Sea. Third, the delayed diplomatic negotiations, slowmoving progress, and diluted draft texts in preparation for a COC are, above all, a reconfirmation that Beijing has become the most influential actor in ASEAN. The irony of this, of course, is that ASEAN is a regional grouping of which China is not even a member, yet its tentacles extend deep into the region. Through economic incentives as well as coercive means, Beijing has successfully demonstrated that it has the capacity and wherewithal to steer ASEAN

decision-making processes and exert its veto power when it faces a situation that could be detrimental to its interests. For the United States, this is but one of many manifestations of China’s rise, and Washington will struggle with its resulting identity crisis as the global authority and influence it enjoyed in the unipolar world order of the post-Cold War era continues to slide. n

Dean Karalekas There are many disputes in the South China Sea (SCS): China vs. Vietnam, China vs. The Philippines, China Vs. Malaysia. The list goes on. Tensions have been ramping up over the past decade, so in recent weeks, officials from ASEAN and China began lay-

image: Goran tek-en


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photo: US Navy A crewmember on a Chinese trawler uses a grapple hook in an apparent attempt to snag the towed acoustic array of the USNS Impeccable.

ing the groundwork for negotiations on a Code of Conduct to deal with the many overlapping claims and counterclaims. While the details of the negotiations remain opaque, stakeholders are hopeful that any such agreement will serve to reduce tensions in the area. This outcome seems unlikely, however, given the divergent motivations among the parties involved. For the most part, SCS claimants seek protection from China’s aggressive expansion in the sea: its militarization of islands, harassment of fishing and other vessels, and the odd trespassing oil rig. China’s motivation, however, appears to be to provide diplomatic cover for these ongoing activities, and to placate counterclaimants. As evidence, witness a precedent: China conceded to the toothless but symbolic Declaration on the Conduct of Parties in 2002 only in the face of severe pushback for its 1995 seizure of Mischief Reef from the Philippines. This acquiescence was meant to buy Beijing a cooldown period. And it worked: in the years since, China’s expansion of influence, military and otherwise, in the South Chine Sea has proceeded almost without resistance. Beijing clearly hopes

another symbolic bit of paperwork will buy it more time to consolidate its hold over the sea’s myriad islands, reefs and atolls. Therefore, as negotiations progress, claimant nations must understand China’s perspective on the matter, and that it will seek a non-binding, feel-good agreement, just like in 2002. They must therefore push for something stronger if they want real protection of their maritime interests. Conversely, China would do well to understand the perspective of its counterclaimants. Thus far, the leaders in Beijing seem to have failed to understand the simple fact that SCS claimant nations want little more than peace of mind. They have few choices when faced with China’s maritime belligerence: push for a legally binding code of conduct that has the force of law to constrain China, or else continue to rely on the United States to secure their interests through its security umbrella. This is why any future revisiting of this agreement must be more than merely symbolic: it must have teeth if it to protect the nations of the SCS. For if China won’t make them feel secure in their sovereignty, America surely will. n


STRATEGIC VISION

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Strategic Vision, Issue 34  

Strategic Vision is a journal published by the Taiwan Center for Security Studies and the ROC National Defense University that provides anal...

Strategic Vision, Issue 34  

Strategic Vision is a journal published by the Taiwan Center for Security Studies and the ROC National Defense University that provides anal...