Latest / Bloomberg Intelligence / Alston & Bird's Shimp on South China Sea Ruling Impact (Audio)

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Alston & Bird's Shimp on South China Sea Ruling Impact (Audio) · Bloomberg Intelligence

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  Speaker 1: intermediate Now at I'm Charlie Pollock. That's a Bloomberg Business Flash.
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  Speaker 1: This is taking Stock with Pim Box and Kathleen Mays
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  Speaker 1: on Bloomberg Radio. China in Focus. A ruling by an
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  Speaker 1: international court on the South China Sea dispute hits the
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  Speaker 1: world overnight today. It looks like China maybe more willing
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  Speaker 1: to negotiate on this, taking some focus on Brexit and
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  Speaker 1: certainly putting the focus back on Asia. Eric Shim joins
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  Speaker 1: this now, policy adviser for the International Trade and Regulatory
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  Speaker 1: Group at Alston and Bird in Washington, d C. So Eric,
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  Speaker 1: start with the tribunals ruling, what they said, and China's
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  Speaker 1: response today seeming a bit more cooperative. I don't know
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  Speaker 1: if I go so far as as cooperative today. You know,
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  Speaker 1: yesterday the Chinese Foreign Ministry very quickly came out and
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  Speaker 1: and rejected the ruling in its entirety. Today in China,
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  Speaker 1: the Foreign Ministry followed up with a ninety minute press
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  Speaker 1: conference that was broadcast twice live uh to the nation,
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  Speaker 1: in which the Foreign Ministry rolled out about a thirteen
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  Speaker 1: thousand word position paper in which it defended all of
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  Speaker 1: the claims that China had made and which the tribunal
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  Speaker 1: in the Hague rejected yesterday. UH, So it's definitely rather
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  Speaker 1: firm rhetoric from China. Another senior Chinese official also declared
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  Speaker 1: that that China has the right to UH demarcate an
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  Speaker 1: air defense identification zone over the disputed islands where China
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  Speaker 1: has has claimed sovereignty. So they're not relinquishing any claims today. Eric.
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  Speaker 1: Just to be clear, this case was brought by the Philippines. Right.
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  Speaker 1: This is we're a dispute with China regarding the right
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  Speaker 1: of the Philippines to exploit natural resources in what is
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  Speaker 1: described as the exclusive economic zone. It extends from territory
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  Speaker 1: that it claims in the South China Sea. That's right.
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  Speaker 1: This stems from a long running dispute between China and
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  Speaker 1: the Philippines over territory around the Spratley Islands UH, and
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  Speaker 1: territory that extends it's within UH, mainly within the Philippines
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  Speaker 1: exclusive two nautical mile UM exclusive economic zone. Over the
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  Speaker 1: past several years, China has built artificial reefs UH and
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  Speaker 1: other structures within those waters UH, in effect laying sovereign
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  Speaker 1: claim to that territory and by extension, to to all
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  Speaker 1: the waters where where the Philippines had had previously enjoyed
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  Speaker 1: sovereign control. Well, you know, you have noted that there
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  Speaker 1: are real risks to train in commerce through the South
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  Speaker 1: China Sea and all this. But is there a military
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  Speaker 1: risk here? There is a military risk, and I would
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  Speaker 1: say that the military and commercial are linked. Uh. There's
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  Speaker 1: now a lot of immediate public opinion pressure in the
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  Speaker 1: Philippines saying, hey, we've been vindicated. Uh, those waters are
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  Speaker 1: ours to fish or the ones that are not ours
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  Speaker 1: are at least now internationally open high seas. Uh. The
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  Speaker 1: Philippines has a very lucrative national fishing industry. Many of
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  Speaker 1: those fishing vessels have lost significant revenues over the past
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  Speaker 1: couple of years as they've been increasingly denied access to
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  Speaker 1: their traditional fishing grounds by UH by either the Chinese
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  Speaker 1: military vessels or by what's known as China's maritime militia,
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  Speaker 1: which essentially are fishing fishing fleets under the under the
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  Speaker 1: supervision of China's military. Now we could see uh, you know,
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  Speaker 1: all manner of fishing vessels, whether they be Filipino or
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  Speaker 1: Vietnamese or Indonesian, seeking to return to those international high
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  Speaker 1: seas areas where where China's claims were we're rejected by
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  Speaker 1: the tribunal. The question is are those going to be
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  Speaker 1: met by Chinese navel or other vessels? Are those going
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  Speaker 1: to provoke clashes at SEE which could lead to greater
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  Speaker 1: military involvement by all the parties UH in the region Erica.
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  Speaker 1: Other members of the region include Japan and I wonder
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  Speaker 1: if you could comment on the dispute between Japan and
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  Speaker 1: China in the East China Sea and also the dispute
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  Speaker 1: that really comes when you talk about economic issues because
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  Speaker 1: it has to do with the natural gas projects that
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  Speaker 1: Beijing has been constructing. That's right. The China and Japan
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  Speaker 1: have had UH an extremely long running UH argument over
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  Speaker 1: the Senkaku or as the Chinese city of Dayu islands
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  Speaker 1: in the East China Sea UH. That is a hotbed
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  Speaker 1: for natural resource development, with both National oilk On both
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  Speaker 1: the Chinese National oilk Company in various Japanese oil companies
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  Speaker 1: competing for UH for seabed exploration find um. The Japanese
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  Speaker 1: have long been considering whether or not to submit their
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  Speaker 1: case to arbitration at the Hague, and the Japanese strongly
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  Speaker 1: supported yesterday's ruling, So we might might expect the Japanese
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  Speaker 1: effectively to to take China to court uh sooner than later,
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  Speaker 1: believing that now they've got the weight of international maritime
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  Speaker 1: law on their side. Eric quickly back to China. Those
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  Speaker 1: social media flooded with thousands of comments testy, often for
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  Speaker 1: fane nationalism one of our Bloomberg view people rights, uh,
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  Speaker 1: some even calling for war. This was you know, blocked
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  Speaker 1: to a certain extent. But the fact that the Chinese
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  Speaker 1: let any of these testy comments out does it show?
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  Speaker 1: Is this a little waving a warning flag at the US? Certainly?
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  Speaker 1: Um uh typical Chinese UM behavior. I mean they have
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  Speaker 1: a uh, they have a public that has that has
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  Speaker 1: grown in its awareness of their country's strength, both economic
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  Speaker 1: and military over the last decade and a half. Uh.
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  Speaker 1: In a way, the she government UM may have put
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  Speaker 1: itself in a bit of a corner by sticking out
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  Speaker 1: such a strong position. So it's going to be hard
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  Speaker 1: for China to climb down. And that's where the US
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  Speaker 1: and a lot of diplomatic players will have to enter
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  Speaker 1: and find a creative way to move forward. Thank you
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  Speaker 1: very much. Eric Schimp, his policy advisor, International Trade and
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  Speaker 1: regulatory group for Austin Bird in Washington, d C. Home
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