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Global Supply Chain News: In Ominous Development, China Said to Be Considering Laws to Claim Control over Shipping Far Off Its Shore


Tensions Continue to Get Worse, Posing Huge Supply Chain Risks, as a Map of Claims Shows What a Mess This Is

Feb. 20, 2017
SCDigest Editorial Staff

Tensions continue to rise in the seas around China, with potentially huge ramifications for the global supply chain.

Last week, the Global Times, a tabloid controlled by the Communist Party's People's Daily newspaper, reported that the Legislative Affairs Office of the State Council is considering amendments to the 1984 Maritime Traffic Safety Law.

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The US and other countries will go far to protect the free movement of ships through what they consider international waters - but just how far is the question.

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"The revisions are based on the UN Convention on the Law of the Sea and Chinese laws on the seas, adjacent areas, and exclusive economic zones."

Of course, China is claiming control over several areas of ocean far off its coastline, notably in the South China Sea, where is has been turning a series of rock formations into manmade islands, and putting military capabilities on several of them.

As reported by the web site, the amendments are slated to take effect in 2020, and if enacted, would violate Beijing-s obligations as a signatory to the UN Convention on the Law of the Sea. Specifically, the changes would require foreign ships to obtain permission to pass through "Chinese waters."
China's rules are inconsistent with the internationally accepted concept of "innocent passage," which is incorporated in Section 3 of UNCLOS, as the UN convention is known, and recognized by customary international law.

In general, foreign warships under the innocent passage rule may expeditiously transit the territorial waters of a coastal state without permission if they do not engage in certain activities.

The effect of China's proposed rules will depend on how expansively Beijing interprets "Chinese waters." China-s official maps show nine or ten dashes that enclose about 85% of the South China Sea. Beijing takes the position it has sovereignty to every island, shoal, atoll, rock, and other feature inside that infamous line -claims vigorous disputed by the US and Asian countries such as Vietnam and The Philippines.

Japan, meanwhile, contests similar China claims in the East China Sea.

China has not, however, clarified whether it claims the waters inside the "cow's tongue," as the bounded area in the South China Sea is called, as sovereign.

"The official Xinhua News Agency in 2011 made a statement that can only be interpreted as a claim to all such waters," World Affairs says, adding that "It is nonetheless clear Beijing would like to control those waters as well as waters beyond the nine-dash boundary."

In December, China seized a US Navy drone in an area outside the cow's tongue, violating international law.

The USS Carl Vinson, an aircraft carrier, has been doing what it calls are routine patrols in the South China Sea since last week, a move clearly intended to send a message to China. Some 7500 sailors are on-board the ship.

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The graphic below illustrates the various territorial claims by countries in the region, including as can be seen China's claim to almost all the waters.

Competing Territorial Claims in the South China Sea



Source: CNN


China is also ignoring a landmark ruling last year by the Permanent Court of Arbitration in The Hague, which said there was no legal basis for China's maritime claims.

Of course, trillions of dollars of trade now move on ships through these waters every year. The US and other countries will go far to protect the free movement of ships through what they consider international waters - but just how far is the question.

CNN notes that "Even though they now have international law on their side, other claimants have done little to challenge Beijing," adding that this situation "has become a testing ground for whether China will rise as part of the existing international order or outside it."

This mess - a huge supply chain risk for many companies - continues to get worse, not better. Be advised.

Do you have any thoughts on China's apparent plans? Will the country really try to control shipping through the South China Sea? Does this end badly? Let us know your thoughts at the Feedback section below.


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