Award issued by the Permanent Court of Arbitration
Transitioning from a continental nation to a maritime nation
Transitioning from a coastal navy to a modern navy
Sections listed above are discussed in Part 1.

US-China relations based on vigilance and harmony

In the 1970s, the United States and China began talks and established diplomatic relations, which is, for China, acting as a deterrent against the Soviet Union. In addition, the infusion of currency and technology from Japan, the United States and Europe spurred high economic growth in China. Then, at the end of 1991, the Cold War between the United States and Soviet Union ended with the collapse of the Soviet Union. This released China from the military pressure which had been exerted by the Soviet Union for many years. The high economic growth and release from the military pressure of the Soviet Union (Russia) should have ensured China with the opportunity to dispel the longstanding grudge which had been held against Europe, the United States, and Japan for many years. However, Chinese leadership (the Jiang Zemin administration) became acutely aware of the overwhelming military supremacy of America. During the Gulf War which occurred in early 1991 within the process of ending the Cold War, Chinese leadership was astonished at the strength of the US military, particularly considering the concept of RMA (Revolution in Military Affairs). China had no choice but to maintain harmony within the United States while remaining vigilant at the same time.

In March 1996, there was a heightened possibility that Lee Teng-hui, a strong supporter of Taiwanese independence, would become President in Taiwan. China attempted to intimidate Taiwan by launching missiles, but America suppressed this intimidation by deploying two aircraft carriers and battleships such as Aegis destroyers. During the NATO bombing of Yugoslavia in May 1999, an American aircraft accidentally bombed the Chinese embassy in Belgrade, resulting in the death of three Chinese reporters. Although the Jiang Zemin administration expressed strong protest regarding this incident, China ultimately accepted the explanation of the accidental bombing and did not take any effective measures.^{(Note 7)} China continued with military expansion, causing the administration of George W. Bush to label China as a strategic competitor in the post-Cold War era and view it as concern regarding military threat to America. On April 1, 2001, immediately after the start of the Bush administration, a US navy patrol aircraft (electronic surveillance aircraft) collided with a Chinese military aircraft and was forced to make an emergency landing on Hainan Island. Although countries attempted to blame the other party for the incident, a compromise was eventually reached, with China returning the pilot and aircraft to America.

After the terrorist attacks on September 11, 2001, America formed an international anti-terrorism alliance with China, which faced domestic separatist movements by ethnic minorities such as Tibetans and Uyghurs, and with Russia, which was handling lingering separatist movements in regions such as Chechnya. Together, this alliance started the war in Afghanistan. However, America then started a war in Iraq, a country which was led by Saddam Hussein and was formerly a friendly nation with the Soviet Union. This action went against the expectations of China and Russia. China strongly criticized the war in Iraq and accelerated preparations to oppose American military power. Moreover, China was also stimulated by the American policy of rebalancing or pivoting, under which the military deployment to the Asia-Pacific Region was prioritized, as announced by Secretary of State Clinton and President Obama in 2011. Chinese leadership (Hu Jintao administration) had accumulated a sense of humiliation at being forced to acquiesce in the face of American military superiority. In response, Chinese leadership accelerated the comprehensive and high-level advancement of military strength. Specifically, this included strengthening the Chinese navy (including submarines) and enhancing the country’s space defense system by launching the manned spacecraft Shenzhou and hunter-killer satellites.

Expansion of one-way policy by China

China followed the dictum of “hide your capabilities and bide your time” as espoused by the late Deng Xiaoping, who advocated that China kept a low international profile until the nation had become sufficiently powerful. China suppressed its humiliation and continued to compromise with America. Then, in 2008, when Europe, the United States, and Japan were struggling with the effects of the Bankruptcy of Lehman Brothers, China was credited for keeping the global economy afloat via a large-scale economic stimulus measure which reached 4 trillion RMB (approximately 56 trillion yen). In 2010, China surpassed Japan to boast the second-largest GDP in the world after America. This was around the time that China began its enforcement of one-way policy. This shift in policy was founded on confidence in having become sufficiently powerful. Upon assuming office, President Obama stated that America would no longer be the world’s policeman. In response to this statement, the newly-confident China now appears to be working hard to achieve the significantly-delayed phase (2) of their military plan during the term of President Obama.

It is now clear that the first objective of phase (2) is to secure the First Island Chain in order to oppose American naval power in the Pacific Ocean, as well as to secure the Second Island Chain in order to ensure Chinese naval superiority in the Western Pacific Ocean at the very least. At a hearing of the United States Senate Committee on Armed Services which was held in March 2008, Timothy J. Keating (Navy Admiral and Commander-in-Chief of Pacific Command) testified as follows: “When I visited China in May 2007 in the capacity of Commander-in-Chief, a Chinese navy official suggested the idea that America should control waters east of Hawaii and China should control waters west of Hawaii.” Furthermore, when Secretary of State Kerry was visiting China on May 17, 2015, Chinese President Xi suggested to Kerry that “the vast Pacific Ocean is large enough to accommodate the two superpowers of China and America.” America now recognizes that China is implementing a strategy of Anti-Access/Area Denial (A2/AD) while adhering to a theory of dividing the Pacific Ocean.^{(Note 8)}

The second objective of phase (2) is to obtain seabed resources and to secure a sea lane between Africa and Europe. There is a high possibility that resources such as oil and natural gas are buried in the seabed of the South China Sea and East China Sea, and China aims to claim these resources. Furthermore, China seeks to establish exclusive control over the South China Sea as a chokepoint for a sea lane that is used to import resources from and export products to foreign markets. The power of the Communist Party of China is justified by (1) the assertion that the Party released China and Chinese people from the oppression of Japanese militarism, and (2) that the Party would realize equality. As many Chinese people began studying overseas and using SNS, justification (1) has been lost as Chinese people became aware of true historical facts. Justification (2) was completely refuted by the famous dictum of “let some people get rich first” which was part of reformist and open-door policies overseen by Deng Xiaoping. Instead, economic growth became the new basis for justification. Even while inciting social instability caused by economic disparity, realizing unceasing economic growth became the main premise for autocratic rule by the Communist Party of China. Accordingly, securing resources and trade became essential for maintaining the autocratic power, and is now the second main policy of China after opposing the American military. The AIIB (Asian Infrastructure Investment Bank) and the One Belt, One Road plan are becoming embodiments of methods for securing resources and trade, even while continued economic growth in China is a prerequisite. However, due to domestic issues such as a sharply declining birthrate, an aging population, severe economic disparity, government corruption, oppression of ethnic minorities, and religious oppression, it is no longer feasible for China to expect a high rate of economic growth continuously. Moreover, as previously experienced by England and America, it is clear that overstretching will result in the decline of national power.

South China Sea and US-China relations

It can be said that the Xi Jinping administration appeared in order to dispel the humiliation that China feels it has suffered at the hands of America for many years. For both military and economic purposes, the Xi administration is creating artificial islands in the South China Sea and pushing forward with the construction of military facilities. However, this policy of one-way expansion by China will collapse sooner or later. It’s true that for a short period of time, in the United States, Zbigniew Brzezinski and Robert Zoellick called for a Group of Two (G2 theory) composed by the two superpowers of the United States and China. Furthermore, strategic and economic talks are still being held between America and China. Even so, although it may be long overdue, the Obama administration is starting to show increased wariness towards the Chinese behavior of ignoring international law. Regardless of whether the presidential election in early November is won by Clinton or by Trump, neither candidate will be able to ignore the strong calls both inside and outside of Congress for vigilance against China. Although China may boast the world’s second largest GDP, its per capita GDP is 75th in the world (as of 2015), far beyond countries such as Turkey and Mexico. Moreover, in terms of military spending in 2015, China spent 215 billion dollars (12.8% of world share), which is only one-third of American military spending of 596 billion dollars (35.6% of world share).

China as a nation has strongly criticized the award issued by the Permanent Court of Arbitration, ignoring the verdict and continuing to push forward with the construction of military facilities on artificial islands. This has drawn increased criticism from previously neutral countries such as Indonesia and EU nations which participated in the AIIB. In contrast to its bullish action and talk, the Xi administration is placed in a difficult situation due to domestic contradictions and international criticism.