Here they come: the Sanctions, Reactions and Countermeasures

Following Nancy Pelosi’s visit there have been some steps taken and, as I predicted previously, they are broad and they are strict. But there’s even more than what’s been announced. Stick with me while I explain the 5 steps that China has taken and how they will affect Taiwan and the USA.

First: is what appears, according to international media, to be a blockade of Taiwan.

As far as I can ascertain, and I’ve done a lot of research, I can find no reference in any legal document under the United Nations Law of the Sea — UNCLOS, or any other international Maritime law or agreements where there is any reference to the wording of “International Waters” or “freedom of navigation”.

In fact, these terms “international waters” and “freedom of navigation” appear to have been invented by the USA.

If we are to take the legal definition of a part of the sea, the wording used should be: territorial and/or contiguous. In the legal definition under Part 2 of UNCLOS conventions the Taiwan Strait or the Taiwan Straits, as technically there are two of them, but only because the US created something called the Davis Median Line in 1954 to separate the waters of Taiwan from the waters of China (something else neither China nor the UN recognises but the US conveniently imposes), are known as “Internal Waters”. The waters within 12 miles of the coast are Territorial Waters, China owns them and can use them in any way it wishes, and because of the world recognising the One China Policy, this includes the waters within 12 miles of the island.

The waters of China which happen to be between the Island of Taiwan, which is recognised by the UN and the USA, are known under the Convention as Internal Waters.

China, quite recently, claimed this as being true and have indicated that they will conduct maritime military exercises in those territorial, contiguous and internal waters. When they do this, they break no laws, no conventions and, legally are quite entitled to do so as long as they give advice to shipping that there are dangers there — something they have already done.

However, under the Convention, and this is where it gets interesting; all ships of all countries have the right of innocent passage through these inland waters; note the use of one very important word here, “innocent” passage. Can what the USA and their military allies do by passing their military fleets through these waters be considered by any reasonable person to be innocent?

And it’s here that we have the first point at which the Chinese and the Americans can legally have a dispute. This is why courts exist — to establish which interpretation is correct.

However, there are two problems for the US if it wants to win in an international court — they must first join it and they won’t. If you want to know the reasons, they are many and varied and can be found on a link I’ve provided. Effectively all the good reasons for protecting the sea bed, limiting danger to others and protecting undersea cables and exploration of non sovereign regions such as Antartica, would interfere with how the USA manages its own interests and doesn’t really care much about others. One of the really strange reasons given by the US is that “UNCLOS won’t help resolve disputes in the South China Seas”!

The other problem is that under legal terms, since there are no such things as “freedom of navigation” or international waters, they are US constructs to meet their own requirements and this thing they call “rule of law” which has no basis in international law.

So, China and the US can argue in a court of law who has the right to passage through these waters and whether their intent is innocent or not. But it’s very unlikely that US would win and when China did win, it’s very unlikely that US would care — they’d just defy any order given as not applicable to them.

The ramifications of these military exercises are such that they are effectively blockading the region so Taiwan is embargoed (something the US is very experienced at doing) and the US can’t or won’t come to help them. China, by doing this is clearly pointing to Taiwan and saying: “look, your friends have promised to protect you but they can’t. We, on the other hand are clearly demonstrating that we can”. I suspect China would like the people of Taiwan to understand this and will, in my opinion, be pushing PR companies they almost certainly employ to get the message out to the citizens of Taiwan.

Second: China has blocked imports of frozen fish products, certain agricultural products and, according to almost all international news has avoided interfering with microchip production, in fact, it’s amusing to search and find out how widespread our propaganda is, from almost every headline in the world we see exactly the same words. But the depth of the truth is not mentioned

Try a Google search for fun

About 100 products were banned, mostly fruits, particularly citrus fruits. Taiwan has only one large export market for these products and it’s the Mainland so the banning of imports from there is going to hurt a lot of people.

But what I find really interesting is the banning of sand and gravel from the mainland to Taiwan. If you know anything about the Harmonised System of Tariffs, then you’ll know that internationally, sand and gravel fit under the same category and would be listed as the same, or similar products around the world.

Most people think Taiwan relies on China for its base building supplies but despite importing 5.67 million tonnes last year, only 8% of that was sand, the rest was gravel and they can, as they did once before get that from sources such as the Philippines. Gravel is important in construction as is sand but only 8% of it comes from the Mainland. Why so little?

Taiwan is an island, it has its own sand so it doesn’t need to import much, if any, for construction. The major reason is that sand contains silica, silica makes chips and 8% the sand and gravel shipped over the Strait, equates to only 71,000 tons. This sand may look like it’s for construction as it fits under the same part of the HST codes but only 71,000 tons? This doesn’t look like it’s for construction, it’s a special kind of sand used for chip production. At least that’s the theory here in China. If it isn’t, then Taiwan needs to find a new source of very little construction material and can do that easily.

These countermeasures are aimed to hurt and the loss of a relatively small amount of construction material wouldn’t hurt at all. I may not be able to prove this is true but it certainly looks like silica is the reason, not construction.

So, let’s see if the amount of chips coming out of Taiwan in coming months starts to decline as their stores of silica dry up and suppliers can’t be found easily elsewhere — that would hurt both Taiwan and the USA and remember, China has leapt several generations and is in creating their own chips by the billion. As with Space Stations and many other technologies, when the US wants to cut China out, China moves internally and finds a way through it.

The third, and perhaps a significant individual step, China has sanctioned Pelosi and her family. She’s the highest-ranking individual ever to have been sanctioned by China and that was a step not taken lightly.

Read though a lot of Western, including America and you’ll see Pelosi is unpopular with a lot of people. Her own electorate is in a shambles, in the richest State in America she looks after a regions with a poverty rate of 10.5% and homelessness soaring, (160,000 Californians sleep in tents, cars or on the streets every day) while she and her family get richer using the knowledge she’s gained from her position in politics.

Her family seem to be very heavily invested in China although it’s almost impossible for amateur sleuths like myself to find detailed information without access to all kinds of paid for lists, there are reports that her husband made up to a million dollars on his Chinese investments. Google searches confirm the reports but they don’t confirm the investments or the amounts — whatever it is it’s now no longer theirs.

They can no longer enter China, do business in China, own any assets in China or work with any company that has business with China. The implications are enormous. Apart from the obvious loss of her family investments inside Mainland China as potentially millions of shares would be seized there’s the difficulty of any company which supports her, funds her, donates to her political campaigns — and remember, these are all transparent documents China has seen or can easily find. Each of those individuals and companies will no longer be able to do business in China unless they sever ties with her and her family interests.

We’ve covered the sanctions and how they will apply and who they affect. Now, I’m going to discuss two other aspects, namely one thing the entire world seems to be missing but I think is going to be the biggest and perhaps the boldest move China has ever taken. If China does it, the world will really hold its breath in anticipation of the US response and it will challenge the world order.

One possible move China can, and the world would agree, should take. As well as the 8 counter measures

A fourth reaction is speculation on my part but time will tell if I’m right and that is a commitment to help Cuba. It was widely reported that Cuba had a disaster this week with the explosion at a fuel storage facility. For a country that’s been under embargoes for the last 70 years this is more than just a humanitarian and social disaster, this is a life-threatening moment for the nation. But China has committed to help its friend and comrade. Humanitarian aid was immediately dispatched, there will be more and, for sure there will be some experts sent there to help in the recovery process. The USA is going to be very angry if Cuba asks and China agrees to send some PLA experts. However, as a sovereign nations Cuba would be entitled to ask and as a good friend China would be right to help. This one is a “watch this space” moment.

If China does this, it will have the support of the rest of the world — remember the United Nations recently held a vote on releasing Cuba from sanctions and 184 countries voted in favour of doing so, three countries abstained and only the USA and Israel voted in favour of keeping the sanctions, that vote was the 29th time inn a row that the world voted to relieve Cuba and the 29th time in a row that the US squashed it — some democracy the world has found for itself!

We can be assured that, China helping Cuba will upset the Americans, but what action will they take? Will they see this as humanitarian and humane, or will they see it as a threat? As I said, watch this space.

The last issues that China has implemented are what they call the “eight Countermeasures”

Three of them are cancelling military cooperation and 5 of them are suspending other cooperational areas:

The China US theatre commanders talk — this means the exercises going on now will not be discussed and it also means the USA will be very unwise to go near them as they have no idea what China is likely to do. Normally, in the local theatre, when there are exercises the two commanders speak with each other and understand there are no issues to worry about — Now, the largest military exercise being held off the coast of China is a complete blind spot to the US forces.

Defence Policy Coordination talks are now cancelled. If you remember when General Milley called his opposite number in China to reassure China that, despite the fact thar the USA looked like it was coming close to an overthrow of democracy on January 6th, the generals would ensure that this didn’t escalate outside of the US or pose any threat to China. Well, that can’t happen anymore.

In 1998, China and the USA decided to discuss issues related to safety at sea. If you remember a collision was narrowly avoided in the South China Sea when the US destroyer Decatur came within 45 metres of a Chinese Navy vessel, the Lanzhou. These kinds of incidents are discussed and arrangement put in place to avoid them happening again through the 1998 agreement. Not anymore. If a US vessel in the South China Sea comes close to a Chinese vessel, the Chinese vessel under international and maritime law may defend itself. As of now, there’s no discussion at higher levels to prevent that.

As a result of these three cancellations, the world is a less safe place for sure but the US Navy in particular at the moment is a lot less safe than it used to be.

There are also five suspensions: China has suspended cooperation on legal assistance in criminal matters — if I were an American citizen contemplating breaking the law in China, I’d be very worried about this — it appears to mean that a US citizen will no longer receive consular assistance. For the time being a Chinese citizen in America will still be entitled to legal and consular help but it’s possible the USA will deny that in coming days.

Further cooperation on illegal immigrants and transnational crime have been suspended but won’t impact China very much. These will affect Americans who are illegally in China, now, they’re not going to be immediately deported, they will serve out their prison sentences or pay their fines before being allowed out. This looks like they will be allowed to go back to the US if they want but could also travel to other countries and, if they happen to be wanted in the US for other, more serious crimes China will not automatically send them home. The US will have to negotiate with the third country where they go to after they leave Chinese shores.

Chinese who are illegally in the USA will still be deported back to China, although again, this may change in retaliation, this is not a big issue for China but there are some fairly large corporate criminals and corrupt former government officials in the USA, the reason this won’t affect them is because the USA rarely sends them back anyway, they prefer to use them as TV personalities in order to denigrate the Chinese government as “purging their enemies” — in short, the US are already in breach of their side of this arrangement.

The really big one in this list of suspensions is the counternarcotics cooperation. The USA has a very large drug problem, some of the chemicals for manufacturing those drugs are made legally here in China and shipped legally to other parts of the world where they can be illegally combined to create recreational or even prescription drugs which have millions of addicts in the USA. America’s own statistics are staggering. There’s a link if you want to see them but they might shock you.

Of course, America blames China but China didn’t cause the societal problems that lead to drug or substance abuse and, in fact China has been working very well with the US Drug Enforcement Agency (DEA), in fact the DEA have, or should I say had, an office in China cooperating with the Chinese police. The Central Government, working with the DEA created a new list of controlled or illegal chemicals and either banned or control their production, there have been new laws to prevent the exportation of certain, legal chemicals which, when used illegally can be manufacture opioids and other illicit drugs — that all stops now. China doesn’t have significant drug problems and will continue to police its own issues but it will no longer respond to requests for information, action or assistance from the USA. If new chemicals are created and they are not on the controlled list, it may be totally legal to export them as they have no restrictions, this is something the DEA will be anxious to avoid. As far as the list of countermeasures is concerned, I personally believe this one is the one that will hit the US hardest.

Finally, the talks on climate change are suspended and the USA is telling the world that China is punishing everyone — in fact China’s doing a lot on climate change without the USA but the US are going to be hard pushed to manage a change to clean energy without China’s cooperation because they’ve lost the ability to manufacture in great amounts. The US, according to the UN, is still and will remain one of the world’s largest polluter per capita, the US military is still and will also remain up there in the list of top polluters and even claim immunity from the restrictions that cause positive change in this domain. China will continue to do what it does while the US will continue to do what it does.

So, those are the countermeasures; will there be more? I’ve no doubt there will and they could cause significant harm to the USA. We can be assured there are people in China’s central government and others in think tanks around the country looking at ways in which to make America suffer. But will they be implemented?

All China asks for is that the USA backs off and allows it to handle its own internal affairs in a civilised and efficient way. If the US can learn from these escalations and is big enough to take one step back, I’m willing to bet that China will take two steps back. In fact, China has already shown it’s willing to allow certain offensive actions to go unpunished. Remember when the US admitted they have troops on Taiwan, in clear breach of all agreements but China did nothing, remember when former administration officers entered Taiwan late last year, again China did nothing. Just a few days ago, another congressional visit took place and so far, China hasn’t reacted in any way other than to voice concerns.

China has now said to itself, and its people have said to the government, we can no longer sit back and accept these blatant moves to destabilise the region.

Are the Administration and the State Department in the USA willing to risk further escalations and further pain for their already suffering people, will they allow more escalations to the point where China, can and possibly would strangle the richest country on earth?

Or can they step back, consider the longer play and allow China to grow in a cooperative way?

The ball is very definitely in the court of the USA now.

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Jerry Grey

Jerry Grey

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I’m British born Australian living in Guangdong and have an MA in Cross Cultural Change Management. I write mostly positively about my China experiences