CHINA BLAMES US
A top Chinese general has blamed the US "pivot" to Asia for escalating tensions in the South China Sea that have sparked violent anti-China riots across Vietnam, forcing factories to shut production.
Fang Fenghui, chief of the general staff of the Chinese military, said during a visit to the Pentagon that Washington should hold an "objective view" of the disputes in the resource-rich South China Sea.
"The ones that are provoking those issues in the South China Sea is not China but certain countries that are attempting to gain their own interest because they believe China is now developing its economy and the US is adopting this Asia-Pacific rebalancing strategy," Gen Fang said in a press briefing on Thursday.
Sino-Vietnamese relations have plunged into crisis after China started drilling for oil in waters near the disputed Paracel Islands – which China controls and calls the Xisha – in the South China Sea. The incident is the latest escalation in maritime tensions between China and its neighbours, including the Philippines.
The geopolitical tensions have spilled into the commercial realm as manufacturers that supply everyone from Walmart to Nike have shut factories because of the violence that has killed at least one Chinese worker. Local mobs have been ransacking factories near Ho Chi Minh City in protest over China 's move.
Li & Fung, the world's biggest sourcing company that supplies goods for retailers such as Target and Walmart, on Thursday said factories in south Vietnam had halted operations as a precaution. Yue Yuen, the sports shoe manufacturer that supplies Nike and Adidas, also suspended production for a second day.
The disruption is a problem for multinationals that rely on places such as Vietnam for the cheap production of consumer goods from smartphones to sweatshirts. Global retailers already face supply chain issues that include rising labour costs in China, safety concerns in Bangladesh and political risk in Thailand.
Gen Fang blamed Vietnam for the tensions which have sparked a stand-off between Chinese and Vietnamese ships near the oil rig that is owned by Cnooc, a Chinese state-controlled energy company. He said China was drilling within 12 nautical miles – the territorial waters – of the Paracels. China has controlled them since 1974 following a brief conflict with Vietnam, but Hanoi still claims the islands.
"The related countries in the South China Sea region have drilled actually many oil wells in the South China Sea, but China has never drilled even one," said Gen Fang. "From this single fact, we can see how much restraint China has exercised."
Speaking alongside him was Martin Dempsey, the chairman of the US joint chiefs of staff, who offered little rebuttal. Gen Fang said China could not understand why it was being singled out for criticism.
"We don't quite understand why there are no comments from the outside when other nations are drilling so many oil wells in the region, but when China starts to do the drilling, we instantly become a threat to the region," said Gen Fang. "The external world should view this issue in an objective and fair manner."
Earlier this week, the Philippines accused China of breaching a 2002 regional code of conduct that bans construction on disputed features in the South China Sea. Manila said China was reclaiming land at Johnson South, a reef in the contested Spratly Islands, for use as a possible runway.
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