Pacific Weekly (2-8 December 2024)

China and the US institute export restrictions, Taiwan warns of an imminent Chinese exercise, and the PLA Coast Guard rammed a Filipino vessel. Plus more...

Author

Nick
December 08, 2024

Pacific Weekly

Good morning and happy Sunday,

This is Pacific Weekly, a special edition of The Intel Brief intended to keep you updated on events across the hotly contested Indo-Pacific region.

Reporting Period: 2-8 December 2024

Bottom-Line Up Front:

1. China restricted the export of critical minerals to the US. Beijing issued the new policy after the US restricted exports to Chinese semiconductor firms. The decision was made to curb Chinese advancements in tech and defense industries.

2. In a Global Times article, President Xi called for increased protection of BRI assets abroad. The guidance came as China is quietly negotiating the deployment of security personnel to Myanmar amid the ongoing civil war. China now backs the ruling military junta.

3. The US announced that a Chinese cyberattack had breached the security of 8 telecommunication companies. Officials stated that the operation has been active for 1-2 years.

4. US and Taiwanese officials have warned that China may launch exercises surrounding Taiwan this week. Officials warned that the PLA may launch a new iteration of the “Joint Sword” exercises. The warning comes as Taiwan’s president recently visited Hawaii.

5. A Chinese Coast Guard vessel rammed a Filipino vessel in the South China Sea. The incident is the most recent aggression against Filipino vessels in regions that Beijing claims as its own. The incident occurred in Philippine waters.

US Restricts Exports To Chinese Semiconductor Companies, China Restricts Mineral Exports

Summary
On 2 December, the Biden administration instituted export restrictions to 140 Chinese companies. In response, China announced export restrictions on gallium, germanium, and antimony; critical minerals used in high-tech defense and technology industries. Despite decreasing diplomatic relations with China, the incoming Trump administration is likely to retain this policy unless it can secure an advantageous import deal from Beijing.

Findings

  • Strategic Materials Impact: Gallium and germanium are crucial for semiconductor manufacturing, while antimony is used in manufacturing defense products. China is the dominant global supplier of these minerals, giving it significant leverage over the global supply chain

  • Geopolitical Implications: This intensifies the ongoing trade and technology rivalry between China and Western powers. The US is particularly reliant on rare earth materials from China for manufacturing. The decision risks escalating a trade war under the incoming Trump administration in addition to straining supply chains

  • Wider Context: China has previously restricted of materials essential for technological and military manufacturing. This move reflects China's strategic goal to control vital minerals as a means of retaining supply chain dominance

  • US Policy: This is the third time the Biden administration has instituted export restrictions on China’s chip industry. President-elect Donald Trump is likely to retain or expand on this decision. Trump enters office on 20 January 2025

Why This Matters
These new export restrictions represent a shift in China's strategy to consolidate its control over critical materials as it pursues technological and defense superiority. The US and other Western nations are already working to diversify their supply chains, with increased investments in domestic production and alternative sources.

As global demand for these materials rises, especially in sectors like renewable energy and defense, China's actions may lead to higher prices and shortages in critical industries. The geopolitical landscape is likely to be further shaped by tensions over resources, which could have long-term implications for international relations and economic policies.

Xi Jinping Calls For Protection Of BRI Assets As CCP Looks To Establish Security Force In Myanmar

Summary
Despite previously supporting the opposition in the ongoing civil war, China is partnering with Myanmar’s military junta to establish a joint security company to protect the China-Myanmar Economic Corridor (CMEC), a key part of Xi’s global Belt and Road Initiative (BRI).
On 2 December, Xi demanded greater efforts towards BRI security due to increasing “risks and challenges.” Xi’s statement adds a layer of legitimacy to China’s security company tactic.

Findings

  • Hybrid Warfare: China’s proposed security company, a concept pioneered by the Russian Wagner Group, is widely considered a hybrid warfare scheme designed to bypass sovereignty laws

  • Geopolitical Strategy: China’s CMEC project is critical for the development of the BRI in the region. This allows Beijing to have access to the Indian Ocean via a land route, thereby bypassing the Malacca Strait if necessary

  • International Law: The use of military personnel as private security forces complicates international law by highlighting the lack of enforcement mechanisms (i.e. the ineffectiveness of the UN)

Why This Matters
The decision reflects China’s ever-increasing willingness to subvert international sovereignty laws in order to progress its strategic goals.

The CMEC is critical to Xi’s efforts in South Asia as it facilitates the transport of oil, gas, and goods to China’s Yunnan Province; ensuring a shorter and more lucrative supply chain.

US Discloses Scale Of Chinese-Linked Cyberattack

Summary
On 4 December, the United States announced that eight telecommunications providers or infrastructure companies were compromised by Salt Typhoon, a hacker group linked to the CCP. The hack established entry into US telecommunications networks to support espionage and sabotage activities for future crises or conflict.

Findings

  • Impact: The White House claims the attack has been going on for 1-2 years. The FBI and CISA briefed the White House that customer records, communications, and metadata were stolen. It is uncertain if classified materials were compromised

  • Ongoing Risk: Officials stated that the operation is likely ongoing and has affected “a few dozen countries” so far. None of the US firms have “fully removed the Chinese actors” from their networks yet. News of the cyberattack coincides with a Chinese vessel sabotaging two undersea telecommunications cables in the Baltic Sea last week

  • High-Level Infiltration: The US government believes that the hackers were able to access the communications of “senior US government officials and prominent political figures”

Why This Matters
The scale of the Salt Typhoon attack indicates significant and continued vulnerabilities in American cybersecurity.

The hack also diminishes the bilateral trust between Washington and Beijing and is likely to complicate future diplomacy, economic deals, and security cooperation.

China Reportedly Preparing For New Joint Sword-2024 Exercise Around Taiwan

Summary
This week, US and Taiwanese officials warned that China may launch a third Joint Sword-2024 exercise around Taiwan. The warnings were preceded by a new US arms sale to Taiwan and a visit to Hawaii by President Lai Ching-te. It is likely that Joint Sword-2024C will be conducted this week, and will span 48 hours.

Findings

  • Previous Exercises: Joint Sword-2024A was the first exercise of this type in 2024 and was conducted as “punishment” for the inauguration of Taiwanese President Lai Ching-te. Joint Sword-2024B, which occurred in October, was in response to Taiwan celebrating National Day.

  • Warnings: On 3 December, US satellites observed the PLA Navy carrier Lioaning traveling towards Taiwan from maneuvers in the East China Sea. Taiwan’s government previously warned that China may launch exercises due to President Lai’s visit to Hawaii.
    On 7 December, Taiwan’s Defense Ministry stated that 14 PLA Navy vessels were operating around the island in addition to 4 balloons flying over the strait.

  • Preparations: Before President Lai departed Taipei for Hawaii, Taiwan’s air defense forces conducted joint drills to improve readiness and review engagement procedures.

Why This Matters
The PLA Eastern Theater Command’s Joint Sword-2024 exercises have slowly become a standard manifestation of the Cross-Strait relationship. It highlights China’s intent to normalize pressure of Taiwan as a means of coercion.

Over time, as the PLA develop the technical and tactical capabilities necessary for seizing the island, Taiwan may feel pressured to negotiate a “diplomatic” resolution. China views a forceful or diplomatic integration of Taiwan into China as the “One China” solution.

Despite a resolute and “tough-on-China” stance proposed by President-elect Trump, it is very likely that “Joint Sword” exercises, or something similar, will continue into 2025.

China Resumes South China Sea Provocations, Prompts Trilateral Response

Summary
On 4 December, a PLA Coast Guard vessel harassed a Filipino Navy vessel on patrol in Philippine territorial waters. The Chinese ship fired water cannons at the vessel before ramming it. The incident is a continuation of China’s policy of provocations in the South China Sea, a contested region where Beijing asserts sovereignty over islands legally claimed by the Philippines.

Findings

  • Continued Provocations: In 2024, there have been numerous instances of Chinese aggressions against Filipino vessels and personnel in Philippine territorial waters.

    1. February - March 2024: Chinese vessels rammed, blocked, and harassed Filipino resupply vessels in the Second Thomas Shoal.

    2. April 2024: PLA Coast Guard damaged a Filipino vessel with water cannons in the Second Thomas Shoal.

    3. August 2024: PLA vessels rammed two Filipino vessels near the Sabina Shoal.

  • Strategic Competition: Chinese provocations reflect dissatisfaction with the Philippines’ growing role in the US-led order. On 3 December, the Chinese Global Times condemned the deployment of US Typhon missile systems to the Philippines. The US shares a 1951 Mutual Defense Pact with the Philippines. Japan and the Philippines signed strategic agreement in July 2024 to increase security and defense coordination as a result of Chinese aggressions.

  • Trilateral Response: In response to the incident, the US deployed a reconnaissance aircraft while Japan and the Philippines conducted a joint naval patrol in the South China Sea.

Why This Matters
This seemingly minor incident reflects the South China Sea’s reputation as a geopolitical flashpoint.

The coercive and aggressive tactics China uses to progress its strategic gains risks sparking a violent confrontation with Filipino personnel. Notice how China constructs defensive narratives, stating it is protecting its sovereign territories and national interests despite UN rulings siding with the Philippines.

China is very likely to continue these provocations, especially as US-Filipino security cooperation deepens. Beijing will continue to attempt to illicit a violent response by Filipino personnel in order to have cause for formal military action.

End Brief

That concludes this edition of Pacific Weekly.

Enjoy you Sunday,

Nick