China-Japan-U.S. relations

China threatens Japan over jailed captain

Wen Jiabao, China’s premier, has brushed aside Japan’s call for calm in a dispute over a detained Chinese ship captain, threatening retaliation unless Tokyo “immediately” released the man recently picked up in disputed waters.

In the first comments on the diplomatic row by a senior Chinese leader, Mr Wen said Japan was “solely responsible” for the “severe damage” done to bi-lateral relations by the incident.

“If Japan clings to its mistake, China will take further actions and the Japanese side shall bear all the consequences that arise,” Mr Wen said.

The Chinese premier was speaking to a group of Chinese citizens and Chinese-Americans after his arrival in New York on Tuesday to attend meetings at the UN.

U.S. Congress to move on China currency bill

U.S. lawmakers may vote next week on legislation that would penalize China for keeping its currency artificially low, a touchy issue that has gained broader political support as congressional elections approach.

The decision to move a bill to pressure China to let its yuan currency appreciate against the U.S. dollar comes a day before President Barack Obama is due to meet with Chinese Premier Wen Jiabao in New York.

A House of Representatives committee scheduled a vote for Friday on a China currency bill, and a Democratic aide said the full House was expected to vote on the measure next week.

Election season ploy, or will this have legs after the election?

Here's an article discussing how easy it is to stir up trouble in the Pacific.

Vague sea borders let hawks pick their fight

Here is the crux: all around China there are vague sea boundaries, with even vaguer claims, and any side can push the envelope, or take actions that may be perceived as pushing the envelope. At any given moment an aircraft, a submarine or a fishing boat could cause an incident. Somebody can then leak it to the press and have it become a big international issue, stirring public emotions that kindle other incidents. In a matter of days, it could become a wildfire in which other countries demonize China or China demonizes other countries.

In other words, China can pick a fight with the rest of the world just by pushing the envelope on its vague ocean borders. Similarly, any country in the world can push China into a fight by stirring trouble with one of its neighbors.

The author, Francesco Sisci, also discusses how nationalism and xenophobia in China is contained by the undemocratic political system and draws a comparison to Germany in the 20th Century.

That's not to say China is Germany, but whereas U.S. and Japanese politicians can be directly influenced by nationalists and xenophobes, China's leaders have an easier time controlling internal debate. However, if foreign powers generate confrontation, it works in favor of the nationalists and against the leadership in China. In terms of the currency manipulation bill in Congress, this type of act will work to strengthen nationalist elements in China—as well as in the U.S., where they will look to extend their political victory—making further confrontation more likely. Toss in declining social mood and it makes for a pessimistic outlook for international relations.

Update: I missed this story earlier.

Amid Tension, China Blocks Vital Exports to Japan

Sharply raising the stakes in a dispute over Japan’s detention of a Chinese fishing trawler captain, the Chinese government has blocked exports to Japan of a crucial category of minerals used in products like hybrid cars, wind turbines and guided missiles.

Chinese customs officials are halting shipments to Japan of so-called rare earth elements, preventing them from being loading aboard ships at Chinese ports, industry officials said on Thursday.

This is going to be huge because China currently controls over 90% of the global supply.

American companies now rely mostly on Japan for magnets and other components using rare earth elements, as the United States’ manufacturing capacity in the industry became uncompetitive and mostly closed over the last two decades.

The Chinese halt to exports is likely to have immediate repercussions in Washington. The House Committee on Science and Technology is scheduled on Thursday morning to review a detailed bill to subsidize the revival of the American rare earths industry. The main American rare earths mine, in Mountain Pass, Calif., closed in 2002, but efforts are under way to reopen it.

The House Armed Services Committee has scheduled a hearing on Oct. 5 to review the American military dependence on Chinese rare earth elements.

The Defense Department has a separate review under way on whether the United States should develop its own sources of supply for rare earths, which are also used in equipment including rangefinders on the Army’s tanks, sonar systems aboard Navy vessels and the control vanes on the Air Force’s smart bombs.

This could potentially tip a couple of votes in favor of the currency legislation in the House.

Second Update: China says not so on rare earths story.

China Denies Halting Rare-Earth Exports to Japan