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China Has An 800,000-Square-Mile ‘City’ In The South China Sea

A new report by the U.S. Naval War College pulls together what is known about one of the world’s oddest cities. China Has An 800,000-Square-Mile ‘City’ In The South China Sea


China Has An 800,000-Square-Mile ‘City’ In The South China Sea

Sansha City In The Disputed Paracel Islands

Sansha City
was founded by China in 2012 and is the world’s largest city by area, covering 800,000 square miles of the South China Sea within the “nine-dash line” that China claims for itself.


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That makes it 1,700 times the size of New York City. Most of Sansha City is salt water, although it includes the Paracel Islands, which Vietnam and Taiwan claim, and the Spratly Islands, various of which are claimed by Vietnam, Taiwan, the Philippines, Malaysia, and Brunei.

City Hall, so to speak, is on Woody Island, one of the Paracels. “Once a remote outpost, Woody Island has become a bustling hub of activity,” says the 57-page, heavily footnoted report, which was written by China expert Zachary Haver for the War College’s China Maritime Studies Institute.

“The island now boasts expanded port infrastructure, seawater desalination and sewage treatment facilities, new public housing, a functioning judicial system, 5G network coverage, a school, and regular charter flights to and from the mainland.”

Beyond Woody Island, Sansha City is “developing tourism in the Paracel Islands, attracting hundreds of newly registered companies, cultivating aquaculture, and encouraging long-term residency,” the report says. There are jails and a courthouse, where two people were tried and sentenced for buying and transporting endangered wildlife in the Spratly Islands.

The obvious question is why China is going to such lengths to build a civilian infrastructure in a watery region that is effectively under control of the People’s Liberation Army Navy and China’s semi-militarized coast guard.

Haver’s nuanced answer is that China’s system of “military-civil fusion” is “a mechanism to govern contested areas as if they were Chinese territory,” like any mainland city. Sansha City is effectively an extension of the Chinese Communist Party. “The expansion of the city’s party-state institutions allows municipal authorities to directly govern contested areas of the South China Sea and ensures the primacy of Chinese Communist Party (CCP) interests in local decision-making,” the report says.

Sansha City is what China calls a prefecture-level city, which on the mainland is an administrative unit that includes a central city as well as surrounding cities, towns, villages, and rural areas. In other words, geographically large—but not this large.

The “normalized administrative control” exercised by Sansha City is strongest in the Paracels, but “elements of this system also exist in the Spratly Islands and show signs of expanding,” writes Haver, who is a fellow at the Center for Advanced China Research, lived in China for three years, and is proficient in Mandarin Chinese.

Sansha City, just nine years old, is evidence that China is settling in for a long stay. “In entrusting these responsibilities to the municipal party-state and supporting the city’s development, Beijing has revealed that its ambitions extend beyond dominating the South China Sea via CCG [Chinese Coast Guard] and PLA Navy operations,” Haver concludes. “Through Sansha’s system of normalized administrative control, China is gradually transforming contested areas of the South China Sea into de facto Chinese territory.”

Updated: 3-11-2021

The US hypocrisy On The South China Sea And Diego Garcia

The U.S. has publicly accused China of violating the existing international order, bullying other claimants, and crimes against the environment in the South China Sea. China may well be guilty—at least from the US perspective. But the same and more can be said of U.S. behaviour regarding disputed Diego Garcia in the southern Indian Ocean.

The U.S. claims to uphold what it deems to be the ‘international order’ and often calls out and unilaterally punishes those countries who do not abide by its interpretation thereof. Indeed, the U.S. says that in the South China Sea in particular, China is violating the ‘international order’ and trying to revise it through its claims and actions – – including rejection of an international arbitration decision against it. Again this may be so.

But the U.S. also frequently steps outside the ‘international order’ that it helped build in its interests and now leads and claims to hold sacrosanct—unless it goes against its immediate interests. Alone among maritime powers the U.S. has not ratified the UN Convention on the Law of the Sea (UNCLOS).

Yet it accuses China – a ratifier – of violating the Convention in the South China Sea and even uses warships to challenge its claims and regimes that in its interpretation violate it.

It has also repeatedly lambasted China for refusing to accept and abide by an arbitration decision against it regarding its claims there that was rendered through a process mandated by UNCLOS.

But when the U.S. had an opportunity to support an advisory opinion by the International Court of Justice (ICJ), for Mauritius against Britain regarding ownership of the strategically important island of Diego Garcia that is home to a US military base, it not only declined but did the opposite.

Diego Garcia is an atoll just south of the equator in the central Indian Ocean. It is the largest of 60 small islands comprising the Chagos Archipelago which was part of the British colony of Mauritius. Between 1968 and 1973, the indigenous population of Diego Garcia was forcibly removed in a possible crime against humanity by the U. K. and the U.S. through bribery, bullying and denial of return to any who left the island.

The U.K. then leased the atoll to the U.S. and it built very large naval and air force bases there. In doing so, like China, it severely damaged the environment. The main difference is that no country filed a complaint against it under UNCLOS –as the Philippines did against China –with US backing. Of course unlike China, the U.S. as a non-ratifier could not be brought before its dispute settlement mechanisms.

The bases became fully operational in 1986. Like China’s occupied South China Sea features, their strategic value is paramount.

Diego Garcia was used for U.S. military operations during the Iraqi invasion of Kuwait, Operation Desert Fox, Operation Enduring Freedom, Operation Iraqi Freedom and allegedly for CIA renditions.  It continues to play a key role in America’s military strategy regarding the Indian Ocean and its environs –including serving as a base for bomber training missions over the South China Sea.

A difference between U.S. use of Diego Garcia and China’s use of its occupied features in the South China Sea and is that the US uses it to maintain hegemony over the region while China uses its features to defend itself against US hegemony.

China has installed capabilities on its features to detect and if necessary target US intelligence probes searching for and targeting its nuclear submarines hiding in the South China Sea. Unlike China, the U.S. has not disavowed a first nuclear strike. Thus China views its capability to protect its retaliatory nuclear strike submarines as critical to its defense against US bullying and indeed its very continued existence.

Regarding Diego Garcia, the ICJ ruled that decolonization of Mauritius “was not lawfully complete” when it attained independence because Britain retained control over the Chagos Archipelago. The ICJ advisory opinion was rendered at the request of the UN General Assembly (UNGA). The resolution making the request was supported by 94 countries. But it was vehemently opposed by Britain and the U.S..

Britain maintained that the dispute was a bilateral matter between it and Mauritius and indicated it would reject any ICJ decision against it—and it did so. This is remarkably similar to China’s position regarding the international arbitration brought against it by the Philippines. In that case, China argued that the matter should be negotiated between it and the Philippines.

It refused to participate in the hearings and when the decision went against it, it declared that it would neither recognize nor abide by the binding decision. This was also similar to the U.S. behavior when in 1986 Nicaragua successfully brought a complaint against it to the ICJ for supporting the Contras and mining its harbor.  But the U.S. has severely criticized China for taking this position and alleged that it was a prime example of China’s revisionist tendencies regarding existing international law and order.

The political context of the South China Sea disputes and that surrounding Diego Garcia may be different. But the ‘violations’ of principles are the same—defiance of the ‘international order’, ‘bullying’ and crimes against the environment. It is the height of hypocrisy for the U.S. to criticize and castigate China for these ‘violations’ while it does the same.

Updated: 4-5-2021

China Tests Biden With South China Sea Tactic That Misled Obama

Based on the official view from Beijing, the Philippines has no reason to worry about Chinese fishing boats sitting along a disputed reef in the South China Sea.

The vessels — initially numbering in the hundreds — were simply “taking shelter from the wind” and the Philippines should view the situation in a “rational light,” Chinese Foreign Ministry spokeswoman Hua Chunying said on March 22 when the news first broke.

Two weeks later, more than 40 boats are still at Whitsun Reef and the statements are getting more and more terse. The Philippine Foreign Affairs Department on Monday warned China it would issue daily diplomatic protests as long as the “maritime militia” remains in place, using the same language as the U.S. to describe the fleet stationed in an area known as Julian Felipe Reef in the Philippines and Niu’e Jiao in China.

“If your goal is to take over a sea space and atoll without fighting for it, this is a brilliant if dishonest tactic,” said Carl Schuster, a former operations director at U.S. Pacific Command’s Joint Intelligence Center. “Only professional seamen know it’s a lie — no one ‘shelters’ their ships in a storm area weeks ahead of a storm. If they truly are commercial craft, it is costing hundreds if not thousands of dollars a day having them sit idly lashed together.”

All in all, it’s beginning to look more and more like Beijing is probing whether President Joe Biden will take any action after pledging to work with allies in the region to deter Chinese assertiveness. Philippine Foreign Affairs Secretary Teodoro Locsin has blamed the Obama administration for failing to stop China during a similar incident in 2012 at the Scarborough Shoal, a precursor to President Xi Jinping’s move to build military installations throughout the South China Sea.

“It is a test to see what the administration is willing to do,” said Schuster, who is now an adjunct faculty member of Hawaii Pacific University’s diplomacy and military science program. “How the U.S. reacts will determine the next test. Right now, everything we have done is more rhetorical than substantive.”

The U.S. last month said it stands by the Philippines while accusing China of using a “maritime militia to intimidate, provoke and threaten other nations.” Asked about Chinese relations at a press briefing last month, Biden said his administration was “going to hold China accountable to follow the rules” in the South China Sea and elsewhere.

One big problem is how to calibrate the response. China’s use of commercial fishing boats amounts to a “gray zone” tactic that allows Beijing to deny anything is amiss. Sending an aircraft carrier or other warships near the reef risks appearing like an overreaction that would make the U.S. look like the aggressor.

On the other hand, doing nothing could look weak. Over the past few years the U.S. has stepped up challenges to Chinese sovereignty in the waters, increasing the frequency of so-called freedom of navigation operations around disputed territory.

The Biden administration also reaffirmed that the U.S.-Philippine defense treaty covers any attacks in the South China Sea, a clarification made under President Donald Trump that came after decades of official ambiguity.

Another major complication for Biden is Philippine leader Rodrigo Duterte, who has undermined the alliance while hailing closer ties with Beijing.

“As long as President Duterte is in power there are very limited options for the Navy,” said Rommel Ong, a retired rear admiral in the Philippine Navy who is now a professor at Ateneo de Manila University’s School of Government. “Bereft of any coherent strategy it is limited to filing diplomatic protests and pronouncements against China’s through social media.”

The Philippine statement on Monday used some of the strongest language yet, saying a 2016 international arbitration award made clear China has no historic rights to fish in the area, which falls within the Southeast Asian country’s exclusive economic zone. It also denounced the Chinese Embassy for criticizing Defense Secretary Delfin Lorenzana, who has said the weather is fine and the boats have no reason to stay. “I am no fool,” he said over the weekend.

‘Irrational Emotions’

Duterte’s government was reacting to an April 3 statement by China saying the waters had been “a traditional fishing ground for Chinese fishermen for many years” and reiterating that it was “completely normal” for the vessels to “take shelter near the reef during rough sea conditions.” China has denied the boats constitute a maritime militia and said it hoped Philippine officials would “avoid any unprofessional remarks which may further fan irrational emotions.”

Duterte has so far personally stayed quiet, though his spokesman Harry Roque said his view of the situation hasn’t changed.

“The president’s stand is that we will stand by our rights, but this is not a reason to resort to violence,” Roque said. “He is confident that because of our close friendship with China, we will be able to resolve this.”

Credibility Damaged

One factor restraining Duterte from a tougher stance may be the need to secure vaccines: Metro Manila was locked down again last week amid the nation’s worst coronavirus surge. The Philippines currently sources most of its vaccines from China’s Sinovac Biotech Ltd., with Duterte attending a March 29 ceremony in which Chinese Ambassador Huang Zilian said the jabs were testament of a “closer partnership in the new era.”

The U.S. “isn’t so naive” this time around after its failed 2012 effort to strike a deal for a mutual withdrawal at the Scarborough Shoal “caused immense damage to U.S. credibility in Southeast Asia,” said Shahriman Lockman, a senior analyst at the Institute of Strategic and International Studies in Malaysia.

“The Americans are wary of wading into this and not knowing if they’ll end up being blamed for escalating the situation, which is a real possibility with the capricious leadership in Manila,” he said. “A perfunctory response — that’s all that’s available to the Philippines.”

Updated: 4-8-2021

Digital Yuan Campaign Planned For Contested Island In The South China Sea

Participants will receive a discount for every central bank digital currency expenditure worth 100 yuan.

South China’s Hainan Province, which administers the prefectural Sansha City on a disputed archipelago in the South China Sea, will run a two-week campaign later this month to promote the use of the digital yuan among island residents.

The city, established in 2012, is on the front line of disputes over territorial claims in the South China Sea and is unusual in being both the People Republic of China’s smallest city by population and its largest by geographic reach — formally encompassing over 280 islands and their surrounding waters, reaching almost 800,000 square miles of sea and land area.

Between April 12 and April 25, the Industrial and Commercial Bank of China’s Hainan Branch, together with Haikou Branch of China’s central bank and the Sansha municipal government, plans to host a themed digital yuan consumption parade in a bid to encourage consumer adoption of the forthcoming digital currency.

Official reports herald the event as a temporary transformation of Yongxing Island, where the city’s administrative seat is located, into a “digital renminbi consumer island.” The promotional campaign will be targeted at Sansha City government staff, local corporate employees, other institutions and residents of the island.

The Industrial and Commercial Bank’s Hainan Branch, or ICBC Hainan, will support various consumption offers across island supermarkets, hotels and restaurants, where participants will receive a 99-yuan discount ($15) for every expenditure worth 100 yuan.

ICBC Hainan’s merchant and mobile banking infrastructure, together with digital yuan wallets, will be implemented to illustrate the safety and convenience of the new currency and foster public awareness of it. In a brief outline for the public, Chinese official media reports explain:

“The digital renminbi can be simply equivalent to the cash renminbi, but in a different form, and has the characteristics of legal compensation and controllable anonymity.”

As previously reported, China has already organized a swath of digital yuan promotional events, including a recent one in conjunction with International Women’s Day and festive lotteries for the Chinese New Year.

Earlier pilots to test the central bank digital currency and its infrastructure were held in the regions of Shenzhen, Suzhou, Xiong’an and Chengdu provinces, with further tests across Shanghai, Hainan, Changsha, Qingdao, Dalian and Xi’an set for 2021.

Updated: 12-20-2022

China Accused of Fresh Territorial Grab in South China Sea

* China Seeking To Control More Territory In Spratlys: Sources
* Beijing Claims More Than 80% Of Resource-Rich Waters

China is building up several unoccupied land features in the South China Sea, according to Western officials, an unprecedented move they said was part of Beijing’s long-running effort to strengthen claims to disputed territory in a region critical to global trade.

While China has previously built out disputed reefs, islands and land formations in the area that it had long controlled — and militarized them with ports, runways and other infrastructure — the officials presented images of what they called the first known instances of a nation doing so on territory it doesn’t already occupy.

They warned that Beijing’s latest construction activity indicates an attempt to advance a new status quo, even though it’s too early to know whether China would seek to militarize them.

Fishing fleets that operate as de facto maritime militias under the control of authorities in Beijing have carried out construction activities at four unoccupied features in the Spratly Islands over the past decade, according to the officials, who asked not to be identified to discuss sensitive information. Some sand bars and other formations in the area expanded more than 10 times in size in recent years, they said.

The officials said new land formations have appeared above water over the past year at Eldad Reef in the northern Spratlys, with images showing large holes, debris piles and excavator tracks at a site that used to be only partially exposed at high tide.

A 2014 photo of the reef, previously reported to have been taken by the Philippine military, had depicted what the officials said was a Chinese maritime vessel offloading an amphibious hydraulic excavator used in land reclamation projects.

They said similar activities have also taken place at Lankiam Cay, known as Panata Island in the Philippines, where a feature had been reinforced with a new perimeter wall over the course of just a couple of months last year.

Other images they presented showed physical changes at both Whitsun Reef and Sandy Cay, where previously submerged features now sit permanently above the high-tide line.

Asked to respond to the claims, China’s Foreign Ministry in Beijing said: “The relevant report is purely made out of thin air.”

In a statement after the report was published, the Philippine Foreign Ministry said any reclamation activities by China on unoccupied features would contravene agreements between Beijing and Southeast Asian nations on conduct in disputed waters, as well as a 2016 ruling by an international tribunal that said China’s claims had no legal basis.

“We are seriously concerned,” the ministry said, adding: “We have asked relevant Philippine agencies to verify and validate the contents of this report.”

China asserts rights to more than 80% of the South China Sea based on a 1947 map showing vague markings that have since become known as the “nine-dash line.” It has previously said it has the sovereign right to build upon its own territory.

Tensions between China and other claimants in the South China Sea — the Philippines, Taiwan, Malaysia, Indonesia, Vietnam and Brunei — have been rising for years as Beijing invested more in naval and coast guard ships to enforce its claims.

The Spratly Islands, historically tiny and uninhabited, have taken on greater geopolitical significance given they straddle one of the world’s busiest shipping lanes and could have military significance, particularly if tensions over Taiwan trigger a regional war.

China’s actions have prompted other nations in the region to step up defense spending and also undertake reclamation work. Vietnam expanded dredging and landfill work at several of Spratly outposts this year, according to a report this month by the Asia Maritime Transparency Initiative.

The Philippines this month protested Chinese vessels swarming two reefs nearby Reed Bank, a disputed area where both nations have discussed a possible joint oil and gas exploration plan.

Last year, the Philippines also amassed vessels at Whitsun Reef, located about 175 nautical miles (324 kilometers) west of the nation, after more than 200 Chinese militia ships were spotted in a similar swarming maneuver.

Long before the recent surge in tensions, Beijing signed a non-binding “declaration of conduct” with Southeast Asian nations in 2002 that called on parties to refrain from “inhabiting on the presently uninhabited islands, reefs, shoals, cays and other features.”

In 2016, a United Nations-backed international tribunal ruled in a case brought by the Philippines that China’s claims had no legal basis. China dismissed the ruling, saying the tribunal had no jurisdiction, and continued to send thousands of “fishing” ships to disputed land features.

The US has repeatedly criticized China’s actions in the South China Sea, and sought to challenge its territorial claims with so-called freedom of navigation operations.

US Secretary of Defense Lloyd Austin said this month the US is building a more lethal force posture in the Indo-Pacific as part of efforts to make sure China doesn’t dominate the region.

China is “the only country with both the will and, increasingly, the power to reshape its region and the international order to suit its authoritarian preferences,” he said on Dec. 3. “So let me be clear — we’re not going to let that happen.”

Updated: 3-11-2023

How Beijing Boxed America Out Of The South China Sea

Mischief Reef, An Artificial Island In The Spratly Group Of Islands In The South China Sea, Built By China As A Military Outpost. Ezra Acayan/Getty Images

China incrementally built up military outposts, with little pushback from the U.S., and has emerged as a power in the strategic waters through which trillions of dollars in trade passes.

In early February, a Philippine coast guard vessel approached a small outpost in the South China Sea when it was hit by green laser beams that temporarily blinded its crew.

The source was a Chinese coast guard ship, which Philippine authorities said approached dangerously close.

A few weeks earlier, the U.S. military accused a Chinese fighter pilot of another unsafe action over the waterway—flying within 20 feet of the nose of a U.S. Air Force aircraft.

Before that came a November incident involving a Philippine boat that was towing debris from a Chinese rocket launch. China’s coast guard deployed an inflatable boat to cut the tow line and retrieve the object, said Philippine officials.

Beijing is becoming the dominant force in the South China Sea, through which trillions of dollars in trade passes each year, a position it has advanced step-by-step over the past decade.

With incremental moves that stay below the threshold of provoking conflict, China has gradually changed both the geography and the balance of power in the area.

The disputed sea is ringed by China, Taiwan and Southeast Asian nations, but Beijing claims nearly all of it. It has turned reefs into artificial islands, then into military bases, with missiles, radar systems and air strips that are a problem for the U.S. Navy.

It has built a large coast guard that among other things harasses offshore oil-and-gas operations of Southeast Asian nations, and a fishing militia that swarms the rich fishing waters, lingering for days.

The U.S. missed the moment to hold back China’s buildup in part because it was focused on collaborating with Beijing on global issues such as North Korea and Iran, and was preoccupied by wars in Iraq and Afghanistan. China also stated outright in 2015 that it didn’t intend to militarize the South China Sea.

China’s broader challenge to America’s long pre-eminence across the Indo-Pacific region threatens U.S. allies such as Japan, and puts the vast majority of the world’s advanced semiconductors, which are produced in Taiwan, at risk. China’s buildup in the South China Sea especially threatens the Philippines, a U.S. ally.

Former U.S. and Southeast Asian officials and security analysts warn that China’s gains in the waters are now so entrenched that, short of military conflict, they are unlikely to be reversed.

“They have such a reach now into the South China Sea with sea power and air power” they could obstruct or interfere with international trade, said retired Adm. Harry B. Harris Jr., who long was a senior naval officer in the region and led the U.S. Pacific Command from 2015 to 2018.

The U.S. would have to decide if it would go to war with China if it carried out such actions, he said.

China’s Foreign Ministry didn’t respond to a request for comment.

China said previously its coast guard used the laser with the Philippine vessel for navigation safety and said it took possession of the rocket debris after friendly consultation.

In response to the U.S. allegation that it conducted an unsafe air maneuver in December, Beijing accused the American aircraft of flying dangerously.

More broadly, China has accused the U.S. of meddling in the region, and rejected a 2016 ruling by an international tribunal that said its claims to historic rights in the South China Sea had no legal basis.
Global clout

In recent years, the U.S. has named China as its main security challenge. Lately, disputes between the two nations over a suspected surveillance balloon and sharp rhetoric have pushed U.S.-China relations to their most hostile in years.

President Xi Jinping, who took office as China’s head of state in 2013, has backed a stronger Chinese military and a more assertive foreign posture as part of his campaign to steadily expand Beijing’s global clout.

On Friday, Iran and Saudi Arabia agreed to re-establish diplomatic relations in a deal mediated by China, signaling its rapidly growing influence overseas.

China Has An 800,000-Square-Mile ‘City’ In The South China Sea

Along its disputed Himalayan border with India, China has gradually widened its troop presence and built new infrastructure to press its territorial claims. In the Arctic, White House officials have said China is seeking to increase its influence with economic and military activities, as warming temperatures melt sea ice and potentially widen trade routes.

China Has An 800,000-Square-Mile ‘City’ In The South China Sea

Taiwan, which China claims as its territory, is at the center of growing tensions in the region. In August, China carried out dayslong military exercises around Taiwan that included launching missiles over the island for what is believed to be the first time.

China’s gradualist approach has often confounded its opponents, leaving them uncertain about whether, when and how strongly to respond without escalating tensions.

“That’s the long game that they often play,” the U.S. Navy’s 7th Fleet Commander Vice Adm. Karl Thomas said in an interview last year. “They will build a capability—it’s there and they’ll just incrementally increase their presence.”

U.S. Defense Department spokesman Lt. Col. Martin Meiners said that China’s decision “to conduct large-scale land reclamation, outpost construction, and militarization of disputed land features in the South China Sea is deeply destabilizing and has, over the years, brought into sharper focus Beijing’s increasing resort to coercion and deception to change facts on the ground.”

The U.S. will maintain an active military presence in the South China Sea through strategic patrols, and combined and multinational exercises, he said.

The U.S. is also upgrading its force posture in the Indo-Pacific, he said, to build a more dynamic and flexible forward presence in the region.

In January, aircraft carrier USS Nimitz with around 5,000 crew on board sailed through the South China Sea with three American destroyers and a cruiser. The carrier strike group’s mission was to show the flag, said Rear Adm. Christopher Sweeney.

“We’re going to fly, sail and operate wherever international law allows us,” he said, amid the whir and thud of fighter jets landing on the flight deck.

China Has An 800,000-Square-Mile ‘City’ In The South China Sea

China’s outposts present additional potential threats for the U.S. military to track and counter. Three of the outposts in the Spratly group of islands are full-fledged military bases that host airfields, surface-to-air and anti-ship missiles, radars and sensors that allow China to see and hear almost everything that happens in the area.

One in the Paracels, farther north, also has an airfield, and China has landed a heavy bomber there.

Adm. Thomas said China already flies patrol aircraft from the Spratly outposts and could easily operate fighter jets from the sites.

The islands are “giant information sponges out there providing a much, much better targeting picture of the area than China would have if those bases weren’t there,” said Thomas Shugart, an adjunct senior fellow at the Center for a New American Security, a Washington-based think tank that specializes in national-security issues.

When they were first being built, a lot of people were “pretty dismissive of those island bases—‘Oh, we’d be able to scrape them clean with Tomahawk [missiles] in the first hour of the conflict,’” said Mr. Shugart. “I don’t think people see it that way anymore.”

The Chinese have done a very good job at building an integrated air-defense system, said Adm. Thomas. He said the U.S. has studied the islands’ vulnerabilities and could disable them. “Will it be easy? I wouldn’t use that word,” he said.

China Has An 800,000-Square-Mile ‘City’ In The South China Sea

The U.S. military is still more capable than its adversaries, and China’s military more broadly has its own obstacles, including in developing the capability to carry out a potential invasion of Taiwan.

The Central Intelligence Agency said Mr. Xi set a 2027 deadline for China to be ready for such action, but said Mr. Xi and the military had doubts whether Beijing could currently do so.

In the South China Sea, China has challenges in maintaining the island bases and hasn’t been able to establish total dominance.

Southeast Asian nations, in defiance of Beijing, have pushed through some oil-and-gas projects, upgraded structures on islands they control and maintained military outposts.

China’s forceful actions are also hurting its broader efforts to consolidate ties with its neighbors.

Seeking Cooperation

China has built outposts in two groups of islands in the South China Sea, the Paracels, which are closer to the mainland, and the Spratlys, which are much farther away.

Parts of the Paracels were developed earlier, but over the past decade, China continued to reclaim land and move more military hardware there.

It now has around 20 outposts there, most of them small, but some with energy infrastructure, helipads and harbors, along with the airfield on the largest.

The artificial islands in the Spratlys deepened China’s control. The seven outposts there—including three large ones known internationally as Mischief Reef, Fiery Cross Reef and Subi Reef—extend China’s reach far south of its coastline and make it possible for its navy, coast guard and fishing boats to consistently sail across the waters Beijing claims.

The Spratlys buildup began around a decade ago, when the U.S. military was still deeply involved in conflicts in the Mideast and Central Asia.

The Obama administration was seeking Chinese cooperation on priorities including securing the Iran nuclear deal, limiting North Korean provocations, making progress on climate change and stopping intellectual-property theft and cyber espionage.

China Has An 800,000-Square-Mile ‘City’ In The South China Sea

In the years after Mr. Xi rose to power, U.S. officials didn’t realize the degree to which he would break from the past in taking a more confrontational foreign-policy approach, said former U.S. political and military officials.

They “found it very hard to believe that China would do something so coercive and so brazen, and by the time they understood the ambition—just how big these things are going to get, just how militarized—it was too late to do anything about it,” said Gregory Poling, author of a 2022 book on the history of America’s involvement in the South China Sea and director of the Asia Maritime Transparency Initiative at the Washington-based Center for Strategic and International Studies.

Some U.S. officials and analysts had initially expected Mr. Xi to carry on the consensus-driven collective leadership that prevailed under his recent predecessors.

Instead, Mr. Xi over the years has consolidated his singular control to a degree unseen since Mao Zedong, which makes his policies more difficult to predict.

Daniel Russel, who was Assistant Secretary of State for East Asian and Pacific Affairs from 2013 to 2017, said the Obama administration’s strategy was to manage differences with China without allowing competition to “deteriorate into spiteful rivalry.”

To get Beijing to stop its actions in the South China Sea, he said, the U.S. could have put something very valuable on the table, such as a concession on Taiwan.

Alternatively, he said, “We could have made this the absolute be-all and end-all of the relationship, and in effect double-dared the Chinese to enter into military conflict with the U.S. over this at the cost of any hope of progress in any other area of the relationship.”

Both approaches were “utterly unrealistic,” he said.

‘A Matter Of Wait And See’

A 2012 crisis became a harbinger of the problems to come. After a standoff between Philippine and Chinese vessels, China seized a coral atoll called Scarborough Shoal.

U.S. officials tried to mediate, but when Beijing took control Manila expected a more direct show of support from its ally, former Philippine officials said.

In early 2014, Chinese dredgers were spotted piling sand onto reefs in the Spratlys. U.S. officials knew that hard-liners in the Chinese military sought to dominate the waters, but it wasn’t clear they would prevail, said Mr. Russel.

“Early on, there was more uncertainty and ambiguity about how serious this was…and what the prospects were for a diplomatic accommodation,” he said. “Now, in retrospect, it looks like the Chinese never ever had the intention of compromising [and were] just playing for time.”

Mr. Russel added that his military colleagues at the time didn’t see the islands as a major national-security threat to the U.S. The outposts were likened at that stage to a handful of warships scattered around the area that couldn’t move, he said.

Adm. Harris said it was obvious to him at the time China was building military installations. He recommended sailing a U.S. warship close to one of the islands to demonstrate U.S. seriousness, but the proposal was rejected by his superiors, he said.

The first time the then-chief of the U.S. Navy, Adm. Jonathan Greenert, raised the issue with his Chinese counterpart was September 2014. Adm. Wu Shengli, then commander of the Chinese navy, said he was surprised it had taken the U.S. that long, according to Adm. Greenert, who is now retired from the Navy.

The implication was that China might have expected to be confronted on the South China Sea activity before then, Adm. Greenert said.

Adm. Greenert asked what China intended to do with the islands. Logistics, said Adm. Wu. The islands would support Chinese ships and crews and would have “notional defensive measures,” he said, according to Adm. Greenert.

Adm. Greenert was suspicious. The momentum of construction suggested it wouldn’t take much to install offensive capabilities.

It was also feasible, he said he thought, that Adm. Wu was being upfront. China hadn’t yet put the capabilities there that would later cause worry. “It was really a matter of wait and see,” he said.

Adm. Wu, who is retired from the Chinese navy, couldn’t be reached, and China’s Defense Ministry didn’t respond to questions.

Analysts say in hindsight 2014 was a critical year. Of the seven Spratly outposts, dredgers focused first on the smaller ones, with Beijing seemingly gauging the level of pushback. Then, they forged ahead, according to Mr. Poling, of the Asia Maritime Transparency Initiative.

Philippine Defiance

Mr. Russel said U.S. officials repeatedly told the Chinese they were making a mistake—driving countries in the region closer to the U.S. militarily and hurting China’s ties with Washington.

The Obama administration also tried to help Southeast Asian nations create new ground rules for behavior in the South China Sea with China, he said. Most governments didn’t want to push too hard.

The Philippines was an exception. After the loss of Scarborough Shoal, it filed a landmark arbitration case at an international tribunal challenging China’s South China Sea claims, which it won—although China rejected the ruling.

Washington helped rally support for the case and signed a new security pact with Manila in 2014.

But there was ambiguity around an older pact, the countries’ mutual-defense treaty. Philippine officials said they believed the treaty covered an attack in the South China Sea.

Washington at the time didn’t say that explicitly, though it did so in 2019 when the Trump administration pressured China more directly on issues ranging from trade to technology.

By mid-2015, the largest three islands China was building were developing rapidly. In September, Adm. Harris, who by then had taken charge of the Pacific Command, raised his concerns before the Senate Armed Services Committee.

The late Sen. John McCain, a former naval officer and an Arizona Republican, grilled the Defense Department about why the U.S. hadn’t pushed back against China’s actions by sailing near one of the new islands.

The following month, the U.S. Navy would undertake the maneuver, known as a freedom of navigation operation, or Fonop. It now regularly does Fonops in the South China Sea, actions that China describes as illegal.

In late-September 2015, Mr. Xi offered reassurance on a visit to the U.S. After a White House meeting with President Barack Obama, Mr. Xi said his country had no intention of militarizing the South China Sea.

Some U.S. officials said they saw this public pledge as a turning point, signaling that the hawks in the Chinese military wouldn’t be allowed to execute all their plans.

It quickly became clear that wasn’t the case. Most of the seven Spratly artificial islands were completed by early 2016. China then added military infrastructure: 72 aircraft hangars, docks, satellite communication equipment, antenna array, radars, hardened shelters for missile platforms and the missiles themselves.

Economic ventures in the South China Sea became more risky for Southeast Asian nations because of the potential for conflict with Chinese ships, said former Rear Adm. Rommel Ong, who retired as a vice commander of the Philippine navy in 2019.

China’s expansion eroded American credibility and altered regional dynamics, he said.

A warning by the Obama administration in March 2016 helped prevent China from further expanding its reach by building on Scarborough Shoal.

The Trump administration took a harder line by officially rejecting specific Chinese claims in the South China Sea and casting China as a bully.

The Biden administration has built on that by deepening the U.S. alliance with the Philippines and expanding U.S. access to Philippine bases. It calls China’s actions in the South China Sea destabilizing and coercive.

“We just don’t build military bases in international waters simply because we can and we want to,” said Adm. Harris. “The Chinese apparently can and did.”


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Bank Of England Governor: Libra-Like Currency Could Replace US Dollar (#GotBitcoin?)

Binance Reveals ‘Venus’ — Its Own Project To Rival Facebook’s Libra (#GotBitcoin?)

The Real Benefits Of Blockchain Are Here. They’re Being Ignored (#GotBitcoin?)

CommBank Develops Blockchain Market To Boost Biodiversity (#GotBitcoin?)

SEC Approves Blockchain Tech Startup Securitize To Record Stock Transfers (#GotBitcoin?)

SegWit Creator Introduces New Language For Bitcoin Smart Contracts (#GotBitcoin?)

You Can Now Earn Bitcoin Rewards For Postmates Purchases (#GotBitcoin?)

Bitcoin Price ‘Will Struggle’ In Big Financial Crisis, Says Investor (#GotBitcoin?)

Fidelity Charitable Received Over $100M In Crypto Donations Since 2015 (#GotBitcoin?)

Would Blockchain Better Protect User Data Than FaceApp? Experts Answer (#GotBitcoin?)

Just The Existence Of Bitcoin Impacts Monetary Policy (#GotBitcoin?)

What Are The Biggest Alleged Crypto Heists And How Much Was Stolen? (#GotBitcoin?)

IRS To Cryptocurrency Owners: Come Clean, Or Else!

Coinbase Accidentally Saves Unencrypted Passwords Of 3,420 Customers (#GotBitcoin?)

Bitcoin Is A ‘Chaos Hedge, Or Schmuck Insurance‘ (#GotBitcoin?)

Bakkt Announces September 23 Launch Of Futures And Custody

Coinbase CEO: Institutions Depositing $200-400M Into Crypto Per Week (#GotBitcoin?)

Researchers Find Monero Mining Malware That Hides From Task Manager (#GotBitcoin?)

Crypto Dusting Attack Affects Nearly 300,000 Addresses (#GotBitcoin?)

A Case For Bitcoin As Recession Hedge In A Diversified Investment Portfolio (#GotBitcoin?)

SEC Guidance Gives Ammo To Lawsuit Claiming XRP Is Unregistered Security (#GotBitcoin?)

15 Countries To Develop Crypto Transaction Tracking System: Report (#GotBitcoin?)

US Department Of Commerce Offering 6-Figure Salary To Crypto Expert (#GotBitcoin?)

Mastercard Is Building A Team To Develop Crypto, Wallet Projects (#GotBitcoin?)

Canadian Bitcoin Educator Scams The Scammer And Donates Proceeds (#GotBitcoin?)

Amazon Wants To Build A Blockchain For Ads, New Job Listing Shows (#GotBitcoin?)

Shield Bitcoin Wallets From Theft Via Time Delay (#GotBitcoin?)

Blockstream Launches Bitcoin Mining Farm With Fidelity As Early Customer (#GotBitcoin?)

Commerzbank Tests Blockchain Machine To Machine Payments With Daimler (#GotBitcoin?)

Bitcoin’s Historical Returns Look Very Attractive As Online Banks Lower Payouts On Savings Accounts (#GotBitcoin?)

Man Takes Bitcoin Miner Seller To Tribunal Over Electricity Bill And Wins (#GotBitcoin?)

Bitcoin’s Computing Power Sets Record As Over 100K New Miners Go Online (#GotBitcoin?)

Walmart Coin And Libra Perform Major Public Relations For Bitcoin (#GotBitcoin?)

Judge Says Buying Bitcoin Via Credit Card Not Necessarily A Cash Advance (#GotBitcoin?)

Poll: If You’re A Stockowner Or Crypto-Currency Holder. What Will You Do When The Recession Comes?

1 In 5 Crypto Holders Are Women, New Report Reveals (#GotBitcoin?)

Beating Bakkt, Ledgerx Is First To Launch ‘Physical’ Bitcoin Futures In Us (#GotBitcoin?)

Facebook Warns Investors That Libra Stablecoin May Never Launch (#GotBitcoin?)

Government Money Printing Is ‘Rocket Fuel’ For Bitcoin (#GotBitcoin?)

Bitcoin-Friendly Square Cash App Stock Price Up 56% In 2019 (#GotBitcoin?)

Safeway Shoppers Can Now Get Bitcoin Back As Change At 894 US Stores (#GotBitcoin?)

TD Ameritrade CEO: There’s ‘Heightened Interest Again’ With Bitcoin (#GotBitcoin?)

Venezuela Sets New Bitcoin Volume Record Thanks To 10,000,000% Inflation (#GotBitcoin?)

Newegg Adds Bitcoin Payment Option To 73 More Countries (#GotBitcoin?)

China’s Schizophrenic Relationship With Bitcoin (#GotBitcoin?)

More Companies Build Products Around Crypto Hardware Wallets (#GotBitcoin?)

Bakkt Is Scheduled To Start Testing Its Bitcoin Futures Contracts Today (#GotBitcoin?)

Bitcoin Network Now 8 Times More Powerful Than It Was At $20K Price (#GotBitcoin?)

Crypto Exchange BitMEX Under Investigation By CFTC: Bloomberg (#GotBitcoin?)

“Bitcoin An ‘Unstoppable Force,” Says US Congressman At Crypto Hearing (#GotBitcoin?)

Bitcoin Network Is Moving $3 Billion Daily, Up 210% Since April (#GotBitcoin?)

Cryptocurrency Startups Get Partial Green Light From Washington

Fundstrat’s Tom Lee: Bitcoin Pullback Is Healthy, Fewer Searches Аre Good (#GotBitcoin?)

Bitcoin Lightning Nodes Are Snatching Funds From Bad Actors (#GotBitcoin?)

The Provident Bank Now Offers Deposit Services For Crypto-Related Entities (#GotBitcoin?)

Bitcoin Could Help Stop News Censorship From Space (#GotBitcoin?)

US Sanctions On Iran Crypto Mining — Inevitable Or Impossible? (#GotBitcoin?)

US Lawmaker Reintroduces ‘Safe Harbor’ Crypto Tax Bill In Congress (#GotBitcoin?)

EU Central Bank Won’t Add Bitcoin To Reserves — Says It’s Not A Currency (#GotBitcoin?)

The Miami Dolphins Now Accept Bitcoin And Litecoin Crypt-Currency Payments (#GotBitcoin?)

Trump Bashes Bitcoin And Alt-Right Is Mad As Hell (#GotBitcoin?)

Goldman Sachs Ramps Up Development Of New Secret Crypto Project (#GotBitcoin?)

Blockchain And AI Bond, Explained (#GotBitcoin?)

Grayscale Bitcoin Trust Outperformed Indexes In First Half Of 2019 (#GotBitcoin?)

XRP Is The Worst Performing Major Crypto Of 2019 (GotBitcoin?)

Bitcoin Back Near $12K As BTC Shorters Lose $44 Million In One Morning (#GotBitcoin?)

As Deutsche Bank Axes 18K Jobs, Bitcoin Offers A ‘Plan ฿”: VanEck Exec (#GotBitcoin?)

Argentina Drives Global LocalBitcoins Volume To Highest Since November (#GotBitcoin?)

‘I Would Buy’ Bitcoin If Growth Continues — Investment Legend Mobius (#GotBitcoin?)

Lawmakers Push For New Bitcoin Rules (#GotBitcoin?)

Facebook’s Libra Is Bad For African Americans (#GotBitcoin?)

Crypto Firm Charity Announces Alliance To Support Feminine Health (#GotBitcoin?)

Canadian Startup Wants To Upgrade Millions Of ATMs To Sell Bitcoin (#GotBitcoin?)

Trump Says US ‘Should Match’ China’s Money Printing Game (#GotBitcoin?)

Casa Launches Lightning Node Mobile App For Bitcoin Newbies (#GotBitcoin?)

Bitcoin Rally Fuels Market In Crypto Derivatives (#GotBitcoin?)

World’s First Zero-Fiat ‘Bitcoin Bond’ Now Available On Bloomberg Terminal (#GotBitcoin?)

Buying Bitcoin Has Been Profitable 98.2% Of The Days Since Creation (#GotBitcoin?)

Another Crypto Exchange Receives License For Crypto Futures

From ‘Ponzi’ To ‘We’re Working On It’ — BIS Chief Reverses Stance On Crypto (#GotBitcoin?)

These Are The Cities Googling ‘Bitcoin’ As Interest Hits 17-Month High (#GotBitcoin?)

Venezuelan Explains How Bitcoin Saves His Family (#GotBitcoin?)

Quantum Computing Vs. Blockchain: Impact On Cryptography

This Fund Is Riding Bitcoin To Top (#GotBitcoin?)

Bitcoin’s Surge Leaves Smaller Digital Currencies In The Dust (#GotBitcoin?)

Bitcoin Exchange Hits $1 Trillion In Trading Volume (#GotBitcoin?)

Bitcoin Breaks $200 Billion Market Cap For The First Time In 17 Months (#GotBitcoin?)

You Can Now Make State Tax Payments In Bitcoin (#GotBitcoin?)

Religious Organizations Make Ideal Places To Mine Bitcoin (#GotBitcoin?)

Goldman Sacs And JP Morgan Chase Finally Concede To Crypto-Currencies (#GotBitcoin?)

Bitcoin Heading For Fifth Month Of Gains Despite Price Correction (#GotBitcoin?)

Breez Reveals Lightning-Powered Bitcoin Payments App For IPhone (#GotBitcoin?)

Big Four Auditing Firm PwC Releases Cryptocurrency Auditing Software (#GotBitcoin?)

Amazon-Owned Twitch Quietly Brings Back Bitcoin Payments (#GotBitcoin?)

JPMorgan Will Pilot ‘JPM Coin’ Stablecoin By End Of 2019: Report (#GotBitcoin?)

Is There A Big Short In Bitcoin? (#GotBitcoin?)

Coinbase Hit With Outage As Bitcoin Price Drops $1.8K In 15 Minutes

Samourai Wallet Releases Privacy-Enhancing CoinJoin Feature (#GotBitcoin?)

There Are Now More Than 5,000 Bitcoin ATMs Around The World (#GotBitcoin?)

You Can Now Get Bitcoin Rewards When Booking At Hotels.Com (#GotBitcoin?)

North America’s Largest Solar Bitcoin Mining Farm Coming To California (#GotBitcoin?)

Bitcoin On Track For Best Second Quarter Price Gain On Record (#GotBitcoin?)

Bitcoin Hash Rate Climbs To New Record High Boosting Network Security (#GotBitcoin?)

Bitcoin Exceeds 1Million Active Addresses While Coinbase Custodies $1.3B In Assets

Why Bitcoin’s Price Suddenly Surged Back $5K (#GotBitcoin?)

Zebpay Becomes First Exchange To Add Lightning Payments For All Users (#GotBitcoin?)

Coinbase’s New Customer Incentive: Interest Payments, With A Crypto Twist (#GotBitcoin?)

The Best Bitcoin Debit (Cashback) Cards Of 2019 (#GotBitcoin?)

Real Estate Brokerages Now Accepting Bitcoin (#GotBitcoin?)

Ernst & Young Introduces Tax Tool For Reporting Cryptocurrencies (#GotBitcoin?)

Recession Is Looming, or Not. Here’s How To Know (#GotBitcoin?)

How Will Bitcoin Behave During A Recession? (#GotBitcoin?)

Many U.S. Financial Officers Think a Recession Will Hit Next Year (#GotBitcoin?)

Definite Signs of An Imminent Recession (#GotBitcoin?)

What A Recession Could Mean for Women’s Unemployment (#GotBitcoin?)

Investors Run Out of Options As Bitcoin, Stocks, Bonds, Oil Cave To Recession Fears (#GotBitcoin?)

Goldman Is Looking To Reduce “Marcus” Lending Goal On Credit (Recession) Caution (#GotBitcoin?)

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