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Philippines says protested against China arms buildup on South China Sea isles

MANILA (Reuters) – The Philippines has filed a diplomatic protest with China, its foreign minister said on Monday, over Beijing’s installation last year of anti-aircraft and anti-missile systems on its manmade islands in the disputed South China Sea.

The protest note was sent to the Chinese embassy in December, after confirmation of a report from the U.S.-based Center for Strategic and International Studies about a weapons buildup on seven artificial islands in the Spratlys.

One of those islands is located within the Philippines’ 200 nautical mile exclusive economic zone.

Foreign Secretary Perfecto Yasay told CNN Philippines it was important to raise concerns carefully, and not create a big row.

“I just want to assure the Filipino people that when we take action at engaging China in this dispute, we do not want to take such aggressive, provocative action that will not solve the problem,” he said.

China claims almost the entire South China Sea, through which about $5 trillion worth of goods passes every year. An international arbitration ruling last year invalidated those claims.

Speaking up about that has become a tricky issue for the Philippines since President Rodrigo Duterte turned its foreign policy upside down by seeking engagement and a new relationship with China. Until recently the Philippines had been one of the most outspoken critics of Beijing’s maritime assertiveness.

“We cannot engage China in a war,” Yasay added, but “when there are reports about the buildup of weapon systems in the area during our watch, we made sure that the interests and rights of the Philippines are properly protected.”

The Philippines this year chairs the Association of South East Asian Nations (ASEAN) and Yasay said last week he was confident a protracted code of conduct between the grouping and China could be finished by mid-year, after 15 years and limited progress.

China’s artificial islands became a hot issue last week when the U.S. nominee for Secretary of State, Rex Tillerson, told a Senate hearing that Beijing should be repelled from, and then denied access to, the controversial islets.

Yasay last week suggested the Philippines would play no part in that, and said of the United States, “Let them do it”.

(Reporting by Manuel Mogato; Editing by Martin Petty and Clarence Fernandez)

South Korea says securing THAAD location could be delayed

SEOUL (Reuters) – The signing of a contract which would secure the location of a U.S. missile defense system in South Korea could be delayed, Seoul’s defense ministry said on Monday.

The Terminal High Altitude Area Defence (THAAD) system is due to be deployed on land which is now part of a golf course owned by the Lotte Group conglomerate in the Seongju region, southeast of South Korea’s capital Seoul.

“The plan to go ahead with the exchange will be signed by mid-January, but there is a possibility it will be slightly delayed,” South Korean defense ministry spokesman Moon Sang-gyun told a regular news briefing.

“Lotte needs to hold a meeting of the board of directors to approve the final assessment fee,” Moon said. “We understand that the meeting has not happened yet, but will be held soon”.

South Korea and the U.S. say the deployment of THAAD is designed to protect against North Korea’s growing nuclear and ballistic capabilities.

But Beijing objects strongly to its use in South Korea, where it says THAAD’s powerful radar could penetrate Chinese territory, leading to calls from some South Korea opposition leaders to delay or cancel its deployment.

Moon Jae-in, a former opposition leader who currently leads polls of presidential hopefuls, has said its deployment should wait until the next South Korean administration is in place.

Former United Nations Secretary-General Ban Ki-moon, who is expected to run for president of South Korea and is currently polling second behind Moon in surveys of potential candidates, said on Sunday it is appropriate for THAAD to be deployed in the country, however.

South Korea has been gripped by a political crisis since lawmakers voted overwhelmingly in December to impeach President Park Geun-hye over an influence-peddling scandal. The motion is now with the Constitutional Court and will trigger an early presidential election if upheld.

The deployment of THAAD in rural Seongju has been met with protests from farmers concerned that the sophisticated missile defense system’s advanced radar will damage local melon crops and make the small town a target of a North Korean attack.

(Reporting by James Pearson; Additional reporting by Yun Hwan Chae; Editing by Simon Cameron-Moore)

China will ‘take off the gloves’ if Trump continues on Taiwan, state media warns

Donald Trump at news conference discussing Taiwan relations

By Christian Shepherd

BEIJING (Reuters) – China will “take off the gloves” and take strong action if U.S. President-elect Donald Trump continues to provoke Beijing over Taiwan once he assumes office, two leading state-run newspapers said on Monday.

In an interview with the Wall Street Journal published on Friday, Trump said the “One China” policy was up for negotiation. China’s foreign ministry, in response, said “One China” was the foundation of China-U.S. ties and was non-negotiable.

Trump broke with decades of precedent last month by taking a congratulatory telephone call from Taiwan President Tsai Ing-wen, angering Beijing which sees Taiwan as part of China.

“If Trump is determined to use this gambit in taking office, a period of fierce, damaging interactions will be unavoidable, as Beijing will have no choice but to take off the gloves,” the English-language China Daily said.

The Global Times, an influential state-run tabloid, echoed the China Daily, saying Beijing would take “strong countermeasures” against Trump’s attempt to “impair” the “One China” principle.

“The Chinese mainland will be prompted to speed up Taiwan reunification and mercilessly combat those who advocate Taiwan’s independence,” the paper said in an editorial.

Chinese Foreign Ministry spokeswoman Hua Chunying said the United States was clearly aware of China’s position on “One China”.

“Any person should understand that in this world there are certain things that cannot be traded or bought and sold,” she told a daily news briefing.

“The One China principle is the precondition and political basis for any country having relations with China.”

Hua added, “If anyone attempts to damage the One China principle or if they are under the illusion they can use this as a bargaining chip, they will be opposed by the Chinese government and people.

“In the end it will be like lifting a rock to drop it on one’s own feet,” she said, without elaborating.

TAIWAN MAY BE “SACRIFICED”

The Global Times said Trump’s endorsement of Taiwan was merely a ploy to further his administration’s short term interests, adding: “Taiwan may be sacrificed as a result of this despicable strategy.”

“If you do not beat them until they are bloody and bruised, then they will not retreat,” Yang Yizhou, deputy head of China’s government-run All-China Federation of Taiwan Compatriots, told an academic meeting on cross-straits relations in Beijing on Saturday.

Taiwan independence must “pay a cost” for every step forward taken, “we must use bloodstained facts to show them that the road is blocked,” Yang said, according to a Monday report on the meeting by the official People’s Daily Overseas Edition.

The United States, which switched diplomatic recognition from Taipei to Beijing in 1979, has acknowledged the Chinese position that there is only “One China” and that Taiwan is part of it.

The China Daily said Beijing’s relatively measured response to Trump’s comments in the Wall Street Journal “can only come from a genuine, sincere wish that the less-than-desirable, yet by-and-large manageable, big picture of China-U.S. relations will not be derailed before Trump even enters office”.

But China should not count on the assumption that Trump’s Taiwan moves are “a pre-inauguration bluff, and instead be prepared for him to continue backing his bet”.

“It may be costly. But it will prove a worthy price to pay to make the next U.S. president aware of the special sensitivity, and serious consequences of his Taiwan game,” said the national daily.

(Additional reporting by Ben Blanchard and John Ruwitch; Editing by Michael Perry and Randy Fabi)

Turkish court arrests two Uighurs in relation to Istanbul nightclub attack

Turkey police holding pictures of suspects

ANKARA (Reuters) – Two Chinese nationals of Uighur origin were arrested on Friday for suspected links to the mass shooting in an Istanbul night club on New Year’s Eve, state-run Anadolu agency said.

Two suspects, Omar Asim and Abuliezi Abuduhamiti, who are Chinese citizens, were remanded in custody on charges of being members of an armed terrorist organization, and aiding in 39 counts of murder.

Turkish authorities last week said the man who killed 39 people in an attack on an Istanbul nightclub was probably an ethnic Uighur.

Islamic State has claimed responsibility for the attack, saying it was revenge for Turkish military involvement in Syria.

Anadolu news agency also said 35 people had been detained so far in relation to the attack. Uighurs were among those detained, local media reports said.

The Uighurs are a largely Muslim, Turkic-speaking minority in far western China with significant diaspora communities across Central Asia and Turkey.

The suspect, who authorities have not named, shot his way into exclusive Istanbul nightclub Reina and opened fire with an automatic rifle, throwing stun grenades to allow himself to reload and shooting the wounded on the ground.

Among those killed in the attack were Turks and visitors from several Arab nations, India and Canada.

(Writing by Ece Toksabay; Editing by Angus MacSwan)

China, Russia agree on more ‘countermeasures’ against U.S. anti-missile system: Xinhua

THAAD Missile Defense System in South Korea

SHANGHAI (Reuters) – China and Russia have agreed to take further unspecified “countermeasures” in response to a U.S. plan to deploy an anti-missile system in South Korea, state news agency Xinhua reported on Friday.

The countermeasures “will be aimed at safeguarding interests of China and Russia and the strategic balance in the region”, Xinhua said, citing a statement released after a China-Russia security meeting.

China and Russia held a joint anti-missile drill last May after Washington and Seoul began discussions over installing the U.S. Terminal High Altitude Area Defense (THAAD) system to counter any North Korean threats.

THAAD is now due to be deployed on a South Korean golf course, unsettling Moscow and Beijing, which worry that the system’s powerful radar will compromise their security and do nothing to lower tensions on the Korean peninsula.

China and Russia said in October they would hold a second drill this year.

“China and Russia urged the United States and South Korea to address their security concerns and stop the deployment of THAAD on the Korean Peninsula,” Xinhua quoted the statement as saying.

North Korea’s drive to develop nuclear weapons capability has angered China, Pyongyang’s sole major diplomatic and economic supporter. However, Beijing fears THAAD and its radar have a range that would extend into China.

On Thursday, South Korea’s trade minister said the South might complain to China about actions perceived to have been taken in retaliation for its decision to deploy the U.S. anti-missile system.

(Reporting by Brenda Goh; Editing by Paul Tait)

China posts worst export fall since 2009 as fears of U.S. trade war loom

By Elias Glenn and Sue-Lin Wong

BEIJING (Reuters) – China’s massive export engine sputtered for the second year in a row in 2016, with shipments falling in the face of persistently weak global demand and officials voicing fears of a trade war with the United States that is clouding the outlook for 2017.

In one week, China’s leaders will see if President-elect Donald Trump makes good on a campaign pledge to brand Beijing a currency manipulator on his first day in office, and starts to follow up on a threat to slap high tariffs on Chinese goods.

Even if the Trump administration takes no concrete action immediately, analysts say the specter of deteriorating U.S.-China trade and political ties is likely to weigh on the confidence of exporters and investors worldwide.

The world’s largest trading nation posted gloomy data on Friday, with 2016 exports falling 7.7 percent and imports down 5.5 percent. The export drop was the second annual decline in a row and the worst since the depths of the global crisis in 2009.

It will be tough for foreign trade to improve this year, especially if the inauguration of Trump and other major political changes limit the growth of China’s exports due to greater protectionist measures, the country’s customs agency said on Friday.

“The trend of anti-globalization is becoming increasingly evident, and China is the biggest victim of this trend,” customs spokesman Huang Songping told reporters.

“We will pay close attention to foreign trade policy after Trump is inaugurated president,” Huang said. Trump will be sworn in on Jan. 20.

China’s trade surplus with the United States was $366 billion in 2015, according to U.S. customs data, which Trump could seize on in a bid to bring Beijing to the negotiating table to press for concessions, economists at Bank of America Merrill Lynch said in a recent research note.

A sustained trade surplus of more than $20 billion against the United States is one of three criteria used by the U.S. Treasury to designate another country as a currency manipulator.

China is likely to point out that its own data showed the surplus fell to $250.79 billion in 2016 from $260.91 billion in 2015, but that may get short shrift in Washington.

“Our worry is that Trump’s stance towards China’s trade could bring about long-term structural weakness in China’s exports,” economists at ANZ said in a note.

“Trump’s trade policy will likely motivate U.S. businesses to move their manufacturing facilities away from China, although the latter’s efforts in promoting high-end manufacturing may offset part of the loss.”

On Wednesday, China may have set off a warning shot to the Trump administration. Beijing announced even higher anti-dumping duties on imports of certain animal feed from the United States than it proposed last year.

“Instead of caving in and trying to prepare voluntary export restraints like Japan did with their auto exports back in the 1980s, we believe China would start by strongly protesting against the labeling with the IMF, but not to initiate more aggressive retaliation … immediately,” the BofA Merrill Lynch Global Research report said.

“That said, even a ‘war of words’ could weaken investor confidence not only in the U.S. and China, but globally.”

CHINA’S DECEMBER EXPORTS FALL

China’s December exports fell by a more-than-expected 6.1 percent on-year, while imports beat forecasts slightly, growing 3.1 percent on its strong demand for commodities which has helped buoy global resources prices.

An unexpected 0.1 percent rise in shipments in November, while scant, had raised hopes that China was catching up to an export improvement being seen in some other Asian economies.

China reported a trade surplus of $40.82 billion for December, versus November’s $44.61 billion.

While the export picture has been grim all year, with shipments rising in only two months out of 12, import trends have been more encouraging of late, pointing to a pick-up in domestic demand as companies brought in more raw materials from iron ore to copper to help feed a construction boom.

China imported record amounts of crude oil, iron ore, copper and soybeans in 2016, plus large volumes of coal used for heating and in steelmaking.

“Trade protectionism is on the rise but China is relying more on domestic demand,” said Wen Bin, an economist at Minsheng Bank in Beijing.

Prolonged weakness in exports has forced China’s government to rely on higher spending and massive bank lending to boost the economy, at the risk of adding to a huge pile of debt which some analysts warn is nearing danger levels.

Data next Friday is expected to almost certainly show that 2016 economic growth hit Beijing’s target of 6.5-7 percent thanks to that flurry of stimulus.

But signs are mounting that the red-hot property market may have peaked, meaning China may have less appetite this year for imports of building-related materials.

“It is hard to see what could drive a more substantial recovery in Chinese trade,” Julian Evans-Pritchard, China Economist at Capital Economics, wrote in a note.

“Further upside to economic activity, both in China and abroad, is probably now limited given declines in trend growth. Instead, the risks to trade lie to the downside…,” he said, saying the chance of a damaging China-U.S. trade spat has risen since Trump’s appointment of hardliners to lead trade policy.

A decline in China’s trade surplus in 2016, to just under $510 billion from $594 billion in 2015, may also reduce authorities’ ability to offset capital outflow pressures, which have helped drive its yuan currency to more than eight-year lows, ANZ economists said.

(Reporting by Lusha Zhang, Elias Glenn, Sue-Lin Wong and Kevin Yao; Writing by Sue-Lin Wong; Editing by Kim Coghill)

China rejects U.S. trade claims, says outlook challenging, complicated

employees stand next to container ship, holding U.S. trade goods

BEIJING (Reuters) – China’s commerce ministry said on Thursday it will “try all methods” to stabilize trade in what it sees as a challenging and complicated trade outlook this year.

Commerce Ministry spokesman Sun Jiwen told a regular briefing in Beijing that China faced weak foreign demand and “intensifying trade protectionism.”

Sun’s comments came as China faces threats from incoming U.S. President Donald Trump to impose heavy import taxes on Chinese goods entering the United States, China’s largest trade partner.

The Commerce Ministry spokesman dismissed the U.S.-China Economic and Security Review Commission’s November 2016 Report to Congress, which accused China of violating global trade rules.

The report said: “China continues to violate the spirit and the letter of its international obligations by pursuing import substitution policies, imposing forced technology transfers, engaging in cyber-enabled theft of intellectual property, and obstructing the free flow of information and commerce.”

Sun insisted China had strictly adhered to World Trade Organization rules.

“The report’s understanding of problems in China-U.S. trade and investment, and the reasons behind it, are different from China’s. China can’t accept it,” Sun said.

“We hope for equal dialogues and cooperation to resolve conflicts.”

(Reporting by Yawen Chen and Michael Martina; Editing by Eric Meijer)

Trump’s CIA nominee includes Russia in list of global challenges

By David Alexander and Jonathan Landay

WASHINGTON (Reuters) – U.S. President-elect Donald Trump’s nominee to head the CIA portrayed multiple challenges facing the United States on Thursday, from an aggressive Russia to a “disruptive” Iran to a China that he said is creating “real tensions.”

Diverging from Trump’s stated aim of seeking closer ties with Russia, Pompeo said that Russia is “asserting itself aggressively” by invading and occupying Ukraine, threatening Europe, and “doing nearly nothing” to destroy Islamic State.

Mike Pompeo, a Republican member of the House of Representatives and a former U.S. Army officer, was speaking at the start of his confirmation hearing in the U.S. Senate.

In his prepared opening statement, Pompeo noted that the CIA does not make policy on any country, adding, “it is a policy decision as to what to do with Russia, but it will be essential that the Agency provide policymakers with accurate intelligence and clear-eyed analysis of Russian activities.”

His testimony came at a time when Trump, a Republican who takes office on Jan. 20, has openly feuded with U.S. intelligence agencies.

For weeks, the president-elect questioned the intelligence agencies’ conclusion that Russia used hacking and other tactics to try to tilt the 2016 presidential election in his favor. Trump said on Wednesday that Russia was behind the hacking but that other countries were hacking the United States as well.

This week, Trump furiously denounced intelligence officials for what he said were leaks to the media by intelligence agencies of a dossier that makes unverified, salacious allegations about his contacts in Russia.

Pompeo, a conservative lawmaker from Kansas who is on the House Intelligence Committee, listed challenges facing the United States, saying “this is the most complicated threat environment the United States has faced in recent memory.”

This included what he called a “resilient” Islamic State and the fallout from Syria’s long civil war.

Pompeo also included North Korea, which he said had “dangerously accelerated its nuclear and ballistic missile capabilities.” He said China was creating “real tensions” with its activities in the South China Sea and in cyberspace as it flexed its muscles and expanded its military and economic reach.

He called Iran an “emboldened, disruptive player in the Middle East, fueling tensions” with Sunni Muslim allies of the United States.

(Writing by Frances Kerry; Editing by Howard Goller)

Taiwan scrambles jets, navy as China aircraft carrier enters Taiwan Strait

TAIPEI (Reuters) – Taiwan scrambled jets and navy ships on Wednesday as a group of Chinese warships, led by its sole aircraft carrier, sailed through the Taiwan Strait, the latest sign of heightened tension between Beijing and the self-ruled island.

China’s Soviet-built Liaoning aircraft carrier, returning from exercises in the South China Sea, was not encroaching in Taiwan’s territorial waters but entered its air defense identification zone in the southwest, Taiwan’s defense ministry said.

As a result, Taiwan scrambled jets and navy ships to “surveil and control” the passage of the Chinese ships north through the body of water separating Taiwan and China, Taiwan defense ministry spokesman Chen Chung-chi said.

Taiwan military aircraft and ships have been deployed to follow the carrier group, which is sailing up the west side of the median line of the strait, he said.

Taiwan’s top policymaker for China affairs urged Beijing to resume dialogue, after official communication channels were suspended by Beijing from June.

“I want to emphasize our government has sufficient capability to protect our national security. It’s not necessary to overly panic,” said Chang Hsiao-yueh, minister for Taiwan’s Mainland Affairs Council, during a news briefing in response to reporters’ questions on the Liaoning.

“On the other hand, any threats would not benefit cross-Strait ties,” she said.

China has said the Liaoning was on an exercise to test weapons and equipment in the disputed South China Sea and its movements complied with international law.

On the weekend, a Chinese bomber flew around the Spratly Islands in a show of “strategic force”, a U.S. official said on Tuesday.

The latest Chinese exercises have unnerved Beijing’s neighbors, especially Taiwan which Beijing claims as its own, given long-running territorial disputes in the South China Sea.

Chinese Vice Foreign Minister Liu Zhenmin said China’s ships “couldn’t always remain in port” and the navy had to hone its capabilities.

“The Taiwan Strait is an international waterway shared between the mainland and Taiwan. So, it is normal for the Liaoning to go back and forth through the Taiwan Strait in the course of training, and it won’t have any impact on cross-Strait relations,” Liu said at a briefing on Asia-Pacific security.

China claims most of the energy-rich waters of the South China Sea, through which about $5 trillion in ship-borne trade passes every year. Neighbors Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims.

China distrusts Taiwan President Tsai Ing-wen and has stepped up pressure on her after U.S. President-elect Donald Trump broke years of diplomatic protocol and took a congratulatory call last month from her.

Trump then riled China by casting doubt on the “one China” policy that Beijing regards as the basis of U.S.-Chinese relations.

Tsai drew anger from China again when she met senior U.S. Republican lawmakers in Houston on Sunday en route to Central America, in a transit stop that Beijing had asked the United States to not allow.

Beijing suspects Tsai wants to push for the island’s formal independence, a red line for the mainland, which has never renounced the use of force to bring what it deems a renegade province under its control.

Tsai says she wants to maintain peace with China.

(Reporting by J.R. Wu and Faith Hung; Additional reporting by Michael Martina in Beijing; Editing by Michael Perry, Robert Birsel)

New U.N. chief urges Security Council to do more to prevent war

By Michelle Nichols

UNITED NATIONS (Reuters) – New United Nations Secretary-General Antonio Guterres urged the Security Council on Tuesday to take more action to prevent conflicts instead of just responding to them as he pledged to strengthen the world body’s mediation capacity.

“The United Nations was established to prevent war by binding us in a rules-based international order. Today, that order is under grave threat,” Guterres said in his first address to the 15-member council since taking office on Jan. 1.

Guterres, a former prime minister of Portugal and former U.N. refugee chief, said too many opportunities to prevent conflicts had been lost due to mistrust among states and concerns over national sovereignty.

“Such concerns are understandable, in a world where power is unequal and principles have sometimes been applied selectively. Indeed, prevention should never be used to serve other political goals,” he told the council.

“On the contrary, prevention is best served by strong sovereign states, acting for the good of their people,” he said.

The council has been largely deadlocked on the six-year war in Syria, with Russia and China pitted against the United States, Britain and France. The body has also been split on its approach to other conflicts and crises such as South Sudan and Burundi, with some members citing sovereignty concerns.

“Russia has suggested … that failure to respect state sovereignty is the main driver of conflict,” U.S. Ambassador to the United Nations, Samantha Power, said.

“Even as Russia has used its veto to insulate itself from consequences in this council for trampling on Ukraine’s sovereignty,” she said, referring to Russia’s 2014 annexation of Crimea.

Russian U.N. Ambassador Vitaly Churkin shot back at Power.

“It is a violation of sovereignty by the United States that led to the very dire situation in a number regions of the world, which we now have to tackle,” he said, citing countries including Iraq and Libya.

Guterres asked the council to make greater use of Chapter 6 of the U.N. Charter, which allows the body to investigate and recommend procedures to resolve disputes that could eventually endanger international peace and security.

He outlined steps he was taking to bolster the United Nations’ prevention capabilities, which he described as “fragmented.” He has created an executive committee to integrate all U.N. arms and appointed a senior official merge U.N. prevention capacities for better action.

“We will launch an initiative to enhance our mediation capacity,” he said. “We spend far more time and resources responding to crises rather than preventing them … We need a whole new approach.”

(Reporting by Michelle Nichols; Editing by Tom Brown)

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