Kenneth Rijock

Kenneth Rijock

Saturday, March 24, 2012

SOUTH CHINA SEA REMAINS UNSETTLED, AND MERITS ATTENTION FOR COUNTRY RISK PURPOSES

China has seized two Vietnamese fishing vessels, and detained 21 crew members, all Vietnamese nationals, in the area of the disputed Paracel Islands. A fine equivalent to $11,000 has been demanded by the Chinese Government for the release of the fishermen. The fisherman have been accused of "Illegal Poaching," for working in what the Chinese view as sovereign territory, notwithstanding conflicting claims of other countries.

The Paracels, which were occupied by the now-defunct Republic of Vietnam (South Vietnam) until China took military action against the islands in 1974, have been considered by China to be within its exclusive area of influence ever since, though this is in dispute.

This incident is only the latest in a number of actions taken by China, regarding its stated official position that literally the entire South China Sea is within its territorial waters, though it is also a major international waterway to the Far East. Under the circumstances, it would be prudent to consider raising country risk on Vietnam, as well as the other countries whose territories border the South China Sea, should China seek, through military means to establish exclusive and sole control of the Paracel and Spratley Islands. The Chinese claim to the entire maritime region was established by the Republic of China(now relegated to only Taiwan) in 1947.

Look for further incidents to occur, which means increased potential regional country risk, especially for Vietnam and the Philippines, 

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