The EconomistOctober 5th 2019 Asia 352
Banyan Ode to misconduct
L
ess is heardthese days about China’s
massive terraforming operations in
the South China Sea, which not long ago
exercised neighbours as well as the
United States. But that does not mean
China is any less assertive in the 1.4m
square-mile (3.5m square-km) sea which,
on the flimsiest grounds, it claims pretty
much in its entirety. On the contrary,
China seems to think its artificial islands
allow it to open a new phase of self-
assertion in the face of the South-East
Asian countries with overlapping claims
in the sea.
Starting in 2013 seven artificial is-
lands sprouted around distant reefs that
China controlled. Other countries, in-
cluding Vietnam, the Philippines and
Taiwan, have also reclaimed land from
the South China Sea for airstrips and
bases. But the scale of China’s efforts
dwarfs theirs. President Xi Jinping swore
that China’s operations served only the
common good, an assertion undermined
by the immense ecological damage of the
construction, and by the subsequent
installation of missiles, military radar
and reinforced bunkers for warplanes.
If the terraforming no longer makes
headlines, it is because it is largely com-
plete. The new bases, say American
commanders, allow China to control the
entirety of the South China Sea in any
scenario short of all-out war with the
United States. The new port and resupply
facilities are helping China project power
ever further afield. Chinese survey ves-
sels look for oil and gas in contested
waters. They run back and forth “like a
lawnmower”, says Bill Hayton of Chat-
ham House, a British think-tank.
Vietnam, in particular, is alarmed. In
2014 China towed an oil platform into
Vietnam’s exclusive economic zone (eez,
meaning the area off its coast in which itclaims exclusive fishing and mineral
rights), sparking a stand-off between
Chinese and Vietnamese maritime mili-
tias and big anti-China protests in Viet-
namese cities. The platform was subse-
quently removed, but China recently
unveiled a new, even bigger one.
Further afield, over a dozen Chinese
coastguard vessels patrol back and forth
around two reefs, barely underwater,
where China previously had no permanent
presence: the Second Thomas Shoal, west
of the Philippines, where a small Filipino
force maintains a presence aboard a rust-
ing hulk; and the Luconia Shoals, off the
Malaysian part of Borneo. The operations
assert sovereignty: patrol enough, and
other countries might eventually accept
China’s de facto control. Meanwhile, some
of the same vessels have intimidated rigs
(or their supply vessels) drilling in Viet-
namese and Malaysian waters.
Yet not everything is going China’s way.
Rumours suggest the new islands’ con-
crete is crumbling and their foundations
turning to sponge in a hostile climate. And
that is before considering what a direct hitfrom a super-typhoon might do.
More significantly, neighbouring
countries are resisting Chinese pressure
to develop gasfields that lie within their
eezs jointly. Even though the Philippines
agreed in principle to one joint devel-
opment, a formal agreement to that end
has yet to be signed. Nor has China pre-
vented foreign oil companies from work-
ing with other littoral states. The rig
Chinese vessels harried in Vietnamese
waters is operated by a Russian state
enterprise, Rosneft, even though Russia
is supposedly a close friend of China’s.
Meanwhile, China’s bullying is im-
peding the adoption of a “code of con-
duct” between it and the ten-nation
Association of South-East Asian Nations
(asean)—despite China proposing 2021
as the deadline for achieving one. Ian
Storey of the iseas-Yusof Ishak Institute
in Singapore sees lots of obstacles. One is
making any code legally binding—for
instance, by lodging it with the un;
China would oppose that. Another is
defining the geographical scope of the
agreement. China will insist on the vague
but expansive “nine-dash line” which
encompasses nearly the whole sea.
Nearly everyone else will oppose that.
Then there is the question of what
activities should be forbidden. China
would resist bans on further reclamation
and militarisation. And aseanwould
surely reject an insidious provision
against military exercises with countries
outside the code, in effect giving China a
veto over drills between aseanmembers
and America. China’s demands for the
code of conduct, says Teodoro Locsin,
the Philippine foreign secretary, are
intended as “implicit recognition of
Chinese hegemony”. They are, he contin-
ues, “a manual for...the care and feeding
of a dragon in your living room.”China is resorting to new forms of bullying in the South China Seacome the first open-source chip design to
reach a wide audience at the same time as
America clamps down on semiconductor
exports in the name of national security is
not a coincidence. S. Krishnakumar Rao,
the head of hardware design at cdac, says
that eliminating the risk of a technology
embargo is one of the primary reasons that
India is pursuing its own semiconductor
program. Chinese firms are adopting
risc-vquickly too. Interest is also growing
in Europe.
Developing an indigenous semicon-
ductor industry will be hard, however. In-dia does have talented engineers, but only
from a handful of elite engineering insti-
tutes. The country’s infrastructure is no-
where near the standards of southern Chi-
na and Taiwan, where most of the world’s
chips are made. Foxconn, Apple’s main
contractor, is investing billions of dollars
to make more iPhones in the southern state
of Tamil Nadu, but in much of India reli-
able power, water and transport are harder
to come by. The Indian government does
not typically welcome foreign investment
on the scale that would almost certainly be
required to produce chips, computers andsmart devices at scale. Although China is
host to plenty of this sort of manufactur-
ing, almost all the companies that carry it
out are Taiwanese.
Then again, the incentives for success
are strong, too. When India looks east, it
sees Huawei, a Chinese tech giant, being
cut off from American-made components
as a result of the trade war. To the west, it
sees its most talented engineers working in
Silicon Valley. By pouring millions of dol-
lars into Indian-made semiconductors, In-
dia’s government hopes to solve both pro-
blems at once. 7