US senator Marco Rubio, a Florida Republican, floated a bill that’s sure to stoke anger in Beijing. The measure would, among other things, sanction Chinese companies that engage in “illegitimate activities” in the South China Sea, such as dredging to expand the militarized islands China has built.
The timing is curious.
This also happens to be the week when Rex Tillerson, US president Donald Trump’s secretary of state, makes his first big trip to Asia on behalf of the government. Arguably his most important stop will be in Beijing, where he hopes to persuade Chinese leaders to take a tougher stance against North Korea. The rogue nation, which relies heavily on trade with China for cash, has been rattling the region with its testing of ballistic missiles and nuclear weapons. The US state department is reportedly considering deeper sanctions against Chinese companies that continue to do business with North Korea.
Tillerson also will have to deal with Beijing’s anger over the THAAD antimissile defense system the US is beginning to set up in South Korea. The idea behind the system is to stop sudden North Korean missile attacks, but Beijing fears THAAD’s advanced radar capabilities will also make its weaponry—or at least the threat of it—less potent, and thereby upset the balance of power in the region. (South Korean companies already are facing an economic backlash in China over the system.)
There’s also the issue of trade tensions between the US and China. During his campaign, Trump said he would declare China a currency manipulator on the first day of his administration. He has yet to do so, but Beijing is nervous enough that its premier, Li Keqiang, emphasized this week that China does “not want to see any trade war breaking out between the two countries.”
Amid all this, Rubio chose now to introduce his bill, called the “South China Sea and East China Sea Sanctions Act.” He was joined by Democratic senator Ben Cardin, showing bipartisan support for the measure.
The timing seems especially curious given that the bill is a revision of an earlier one submitted last December. Why is it being resurfaced just as Tillerson prepared to visit Beijing on March 18 and 19? Quartz reached out to Rubio’s office about the timing but did not received an immediate reply.
Busy in the South China Sea
China claims as its own nearly the entire South China Sea, despite an international tribunal ruling last July that its sweeping claim had neither a legal nor historical basis. Beijing dismissed the ruling and continues to fortify its position, expanding upon artificial militarized islands it’s built atop reefs in recent years.
The bill specifically mentions (pdf, p. 21) a few dozen Chinese companies that should be watched for their involvement in such activities, and sanctioned if necessary. Among them are China’s biggest state-owned oil companies, including China National Offshore Oil Corporation (CNOOC).
Tillerson has bumped heads with CNOOC in the past, during his reign as the CEO and chairman of ExxonMobil. In 2014, CNOOC moved a giant rig into an offshore block near the coast of Vietnam. ExxonMobil had received exploration rights for the block from Hanoi, but part of it falls within China’s nine-dash line, which it uses to justify its vast claims to most of the sea. Deadly riots against ethnic Chinese and Chinese businesses ensued in Vietnam, and after a military standoff China backed down.
Despite the uneasiness over China’s claims—which has generally scared off exploration by foreign energy giants in the resource-rich South China Sea—Tillerson helped lay the groundwork for a $10 billion natural gas project called Blue Whale off Vietnam’s central coast. It’s possible Tillerson might have to confront China over that or similar projects involving US energy companies in the area during his term—somewhat awkward given his Big Oil background.
Tillerson barely got the chance to have his cabinet appointment confirmed by the full US Senate. In mid-January, the Senate’s foreign affairs committee was in a 10-10 deadlock, along party lines. One Republican lawmaker was still mulling things over and held the tie-breaking committee vote to decide whether the nomination would be put up for a vote in the full Senate, where a victory was assured because of Republican dominance. That lawmaker was Rubio, who, despite reservations on Tillerson’s commitment to human rights, eventually cleared the way for the former CEO.
Critics contended that Rubio’s public skepticism of Tillerson was essentially a form of grandstanding. They might decide that, with the timing of this week’s bill introduction, he is once again seeking attention. Perhaps. But if so, the move seems less about personal posturing and more about bringing attention to the issue at hand.
Rubio’s resistance to China’s growing assertiveness at sea and authoritarianism at home seems genuine. Last month he helped reintroduce the “Hong Kong Human Rights and Democracy Act,” which would “renew the United States’ historical commitment to freedom and democracy in Hong Kong at a time when its autonomy is increasingly under assault.” Once again, his criticism (expressed through legislation) was essentially directed at Beijing.
The introduction of the act this week will create an additional awkward moment or two for Tillerson on an already awkward trip. Rubio, who received considerable flack for clearing Tillerson for Senate confirmation to his new role after expressing strong reservations about him, probably doesn’t mind that too much.
But more important, it conveys a message that the US hasn’t lost track of Beijing’s overreaching claims in the South China Sea, and is prepared to take action. Each year, $5.3 trillion of global trade passes through the vital waterway, including $1.2 trillion of US commerce. Last year the Center for Strategic and International Studies warned the sea could become “virtually a Chinese lake” by 2030.