{"id":102136,"date":"2017-02-14T11:30:13","date_gmt":"2017-02-14T16:30:13","guid":{"rendered":"http:\/\/countingpips.com\/?p=102136"},"modified":"2017-02-14T06:30:42","modified_gmt":"2017-02-14T11:30:42","slug":"south-china-sea-controversy-could-spark-wwiii","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/02\/south-china-sea-controversy-could-spark-wwiii\/","title":{"rendered":"South China Sea Controversy Could Spark WWIII"},"content":{"rendered":"<div id=\"inves-4070608674\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">February 14, 2017<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p>By <a href=\"http:\/\/WallStreetDaily.com\/\"><u>WallStreetDaily.com<\/u><\/a> <img loading=\"lazy\" decoding=\"async\" class=\"attachment-home-th size-home-th wp-post-image\" style=\"display: block; margin-bottom: 5px; clear: both;\" src=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/02\/0217_china_feature2.jpg\" sizes=\"auto, (max-width: 580px) 100vw, 580px\" srcset=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/02\/0217_china_feature2.jpg 580w, https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/02\/0217_china_feature2-300x155.jpg 300w\" alt=\"South China Sea Controversy Could Spark WWIII\" width=\"580\" height=\"300\" \/><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" style=\"float: left; max-width: 85px;\" src=\"https:\/\/duip7hn7nchpo.cloudfront.net\/editor-circle-louis-basenese.jpg\" alt=\"Louis Basenese\" width=\"85\" height=\"100\" \/>In the wake of the latest military incident in the South China Sea, I\u2019d like to reassert an investment opportunity sitting atop my watch list.<\/p>\n<p>First, let me get you caught up on what\u2019s happening.<\/p>\n<p>Last week, the U.S. Defense Department acknowledged a close call between an American naval jet and a Chinese surveillance aircraft.<\/p>\n<p>Press wires report that the two planes got within a thousand feet of each other.<\/p>\n<p>The incident happened above the hotly contested Scarborough Shoal in the South China Sea.<\/p><div id=\"inves-2059302680\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>If you\u2019re wondering why the South China Sea suddenly lies at the epicenter of controversy, there are three contributing factors:<\/p>\n<p class=\"blockquote\" style=\"padding-left: 30px;\"><b><u>Factor #1<\/u><\/b>: China claims virtually all rights to the South China Sea, including a vast channel of tiny islands \u2014 islands that stretch as far as 800 miles from the Chinese mainland.<\/p>\n<p class=\"blockquote\" style=\"padding-left: 30px;\"><b><u>Factor #2<\/u><\/b>: The Philippines, Malaysia, Brunei and Vietnam contest China\u2019s rights to those islands.<\/p>\n<p class=\"blockquote\" style=\"padding-left: 30px;\"><b><u>Factor #3<\/u><\/b>: China is expanding its territory by pouring cement onto coral reefs in the South China Sea and turning them into military bases.<\/p>\n<p>The latter factor has the United States military totally unnerved.<\/p>\n<p>Seeing is believing\u2026<\/p>\n<p class=\"centered\"><img loading=\"lazy\" decoding=\"async\" class=\"centered aligncenter\" src=\"https:\/\/s3.amazonaws.com\/agorafinancialwebsite\/wp-content\/uploads\/2017\/02\/shipsbuildingreef.png\" alt=\"South China Sea building reefs\" width=\"300\" height=\"179\" \/><\/p>\n<p>Take a look at the image below of dredging ships building up a reef with concrete (courtesy of <i>The<\/i> <i>New York Times<\/i>).<\/p>\n<p>The United States has deployed a fleet of <b><u><a href=\"https:\/\/pro1.agorafinancial.com\/628865\/?email={emailaddress}\">underwater drones<\/a><\/u><\/b> to conduct reconnaissance missions in the South China Sea.<\/p>\n<p>You\u2019ll recall that China recently captured one such drone.<\/p>\n<p>To access my full report on the proliferation of sea drones, and how you could make a fortune, <b><u><a href=\"https:\/\/pro1.agorafinancial.com\/628865\/?email={emailaddress}\">click here.<\/a><\/u><\/b><\/p>\n<p>Since the situation is getting extremely volatile, I asked my senior analyst, Martin Hutchinson, to do a deeper dive.<\/p>\n<p>In my interview, Hutchinson details China\u2019s massive \u201cconcrete reefs\u201d initiative.<a name=\"video\"><\/a><\/p>\n<p>It\u2019s truly shocking.<\/p>\n<p>Click below for Hutchinson\u2019s full report.<\/p>\n<p>Smart Investing,<\/p>\n<p>Louis Basenese<br \/>\nChief Investment Strategist, <i>Wall Street Daily<\/i><\/p>\n<hr \/>\n<p><script src=\"\/\/fast.wistia.com\/assets\/external\/E-v1.js\" async><\/script><\/p>\n<div class=\"wistia_responsive_padding\" style=\"padding: 56.88% 0 0 0; position: relative;\">\n<div class=\"wistia_responsive_wrapper\" style=\"height: 100%; left: 0; position: absolute; top: 0; width: 100%;\">\n<div class=\"wistia_embed wistia_async_vnjthyy3jb videoFoam=true\" style=\"height: 100%; width: 100%;\"><\/div>\n<\/div>\n<\/div>\n<hr \/>\n<p><strong>Question:<\/strong> Yesterday, Martin handicapped the odds of a market crash. But today, he\u2019s discussing something potentially even bigger. That is, the increased military activity in the South China Sea. With so much activity of late, I thought it would be prudent to understand the situation better and how it may impact our investment decisions.<\/p>\n<p>Martin, why has there been such a military buildup?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> It\u2019s been going on for quite a long time. China has fortified the first island chain, which is a huge chain of islands that stretches right down from Japan, past Taiwan and the Philippines to the Straits of Malacca. And China\u2019s been taking reefs on that chain \u2014 in other words, bits of rock that are covered at high tide \u2014 and building them up. It\u2019s pouring concrete on them, until they go above the tide line and so effectively become extra islands.<\/p>\n<p>Once they\u2019ve done that, you can put military installations on them \u2014 which China has. But you can also declare a 200-mile zone round them. In which you\u2019ve got the drilling rights, and you can interdict other countries\u2019 shipping if you want to.<\/p>\n<p>China has been doing that very aggressively \u2014 asserting its rights in the offshore China Sea.<\/p>\n<p><strong>Question:<\/strong> So they\u2019re in effect expanding their territory. It\u2019s so interesting. But what\u2019s changed recently?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> They\u2019ve got more aggressive about it. I mean, China seized a U.S. naval drone in December. The aircraft carrier Liaoning is now patrolling the western Pacific beyond that chain of islands. In other words, they effectively expanded their zone of naval patrol right out into the Pacific.<\/p>\n<p>China\u2019s aggression in this area has galvanized the neighbors\u2026 Japan is fortifying the Ryukyu Islands. And the U.N. tribunal recommended that the Philippines have the rights to a part of the first island chain near the Philippines. But it\u2019s not done them any good.<\/p>\n<p>Fortunately, President Duterte of the Philippines appears to be trying to make nice with China at the moment \u2014 I think because he thought the U.S. wasn\u2019t a reliable ally under President Obama. Of course, now he\u2019s got President Trump, so he may be happier \u2014 and that may not happen.<\/p>\n<p>The most important thing that\u2019s happened recently is that the new secretary of state, Rex Tillerson, has said that the U.S. will deny China access to its bases that it\u2019s built on these reefs.<\/p>\n<p><strong>Question:<\/strong> So, Martin, what is the likelihood that this powder keg is going to blow?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> I think, regrettably, quite high. Of course, an aggressive policy gets Xi Jinping\u2019s support in China. The Chinese economy is not doing as well as it has been these days. So he needs to bolster his support. Like in any country, a bit of local aggression always cheers up the populace. He\u2019s got that, and he\u2019s warned of a large-scale war if the U.S. does anything in these islands.<\/p>\n<p>We have to remember that China is a much more important adversary than Russia. Everybody goes on about President Putin and what Russia might do. But Russia is economically a pipsqueak. It has GDP of only $2 trillion.<\/p>\n<p>China is $12 trillion, and the U.S. is $19 trillion. So China is really big enough to challenge the U.S. if it wants to. The U.S. has been looking at options regarding what to do with this.<\/p>\n<p><strong>Question:<\/strong> Give it to us, please, Martin. Bottom line it for me. What\u2019s likely to happen next?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> The U.S. has looked at a number of options. One is to blockade these reefs. In other words, stop Chinese shipping from getting there. Another is to blow up the Chinese installations on the reefs. Another is to mine the South China Sea so the Chinese can\u2019t use it to get to the reefs. And the other thing they could do is use their naval artillery to attack Chinese vessels.<\/p>\n<p>All of those are pretty aggressive, and China has said that there could be a large-scale war. I think it\u2019s something that we need to be very carefully watching.<\/p>\n<p><strong>Question:<\/strong> This is a situation that we\u2019re monitoring closely, Martin. If news breaks or the situation changes, will you report back?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> Very much so. Absolutely.<\/p>\n<p>Smart Investing,<\/p>\n<p>Martin Hutchinson<br \/>\nSenior Analyst, <i>Wall Street Daily<\/i><\/p>\n<p>The post <a href=\"https:\/\/www.wallstreetdaily.com\/2017\/02\/14\/south-china-sea-controversy-spark-wwiii\/\" rel=\"nofollow\">South China Sea Controversy Could Spark WWIII<\/a> appeared first on <a href=\"https:\/\/www.wallstreetdaily.com\" rel=\"nofollow\">Wall Street Daily<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By WallStreetDaily.com In the wake of the latest military incident in the South China Sea, I\u2019d like to reassert an investment opportunity sitting atop my watch list. First, let me get you caught up on what\u2019s happening. Last week, the U.S. Defense Department acknowledged a close call between an American naval jet and a Chinese [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-102136","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/102136","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=102136"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/102136\/revisions"}],"predecessor-version":[{"id":102145,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/102136\/revisions\/102145"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=102136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=102136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=102136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}