Chinese Aircraft Carrier Adds to Tensions

China launched its first aircraft carrier built on domestic soil, in a move meant to solidify its place as a major global power. The ship is adding to the tensions in the Pacific Rim and Indian Ocean, where China is engaged in territorial battles with a number of its neighbors, including India, Japan, and the Philippines. A larger fleet might also eventually be called into play to manage the worsening relationship between the United States and North Korea, if China is unable to rein in its unpredictable ally. Although the carrier will probably take two or three years to be combat ready, analysts believe that the primary benefit currently is psychological.

China launches second aircraft carrier as US-Korea tensions grow.

Will China Save South Korea from Trump’s Armada

The launch comes as China tried to catch up to the naval might of the United States, which has a fleet of 10 aircraft carriers, including the Carl Vinson, which was shipped out earlier this month in an attempt to deter North Korea’s President Kim Jong-Un from conducting nuclear weapons testing. Unfortunately, the strike force, which is headed to the Korean Peninsula, doesn’t have the defense capabilities necessary to shoot down missiles should Kim make good on his threats towards South Korea or Japan.

Trump Praises Chinese Peace Efforts

Since Trump and Chinese President Xi Jinping met three weeks, the Asian country has been working more aggressively to convince North Korea to deescalate Kim’s push towards becoming a nuclear power. China refused to accept several shipments of North Korean coal that were subject to a ban per a U.N. resolution, and in return, the United States has promised to renegotiate treaties to provide more favorable deals. Trump has also backed down on his criticism of the Asian superpower as a currency “manipulator”, although he ascribes that to his taking office, stating that “from the time I took office, he has not, they have not been currency manipulators. Because there’s a certain respect because he knew I would do something or whatever.”

China Attempts to Threaten South Korea

However, some economic experts are unconvinced about the genuine nature of the new relationship between America and China, and point to an increase in cyber-attacks against South Korea which seem to be originating from inside China. The attacks coincided with the installation of the THAAD defense system, which was put in place as an answer to North Korea’s ongoing missile tests.

Ironically, China’s increasingly strong measures against Seoul may have been counter-productive, as public opinion in South Korea on China is currently at a low. This has encouraged China to shift to negotiations. Accordingly, earlier in April, Beijing sent one of its top envoys to come up with non-military methods of dealing with the standoff between Trump and Kim Jong-Un.

China Seeks to Rule the Open Seas

The Chinese aircraft carrier joins another already in service which was refitted from a skeleton purchased from Ukraine. The goal for China is to eventually build a fleet of five or six aircraft carriers built to handle the open seas, commonly referred to as “bluewater capability”. This makes it easier for the country to press its case regarding territorial claims which have only grown as new reserves of minerals and fishing grounds are discovered in the region.

Will China Use its Ship to Bully Neighbors?

The increased militarization by China may also signal a continued distancing from international treaties. In 2014, The Philippines took China to a tribunal over marine rights in the South China Sea. While The Hague eventually ruled in favor of the Philippines, China has refused to acknowledge the judgement. The fear is that China will fall back on bullying its neighbors instead of trying to resolve issues via diplomacy.

How Will a Stronger Chinese Military Affect Trading?

As China continues to play a larger role on the world stage this will cause the dollar to fall, as Trump will soon find his hands tied in terms of North Korea. The yen may also suffer as China is a major competitor looking to push into more local markets without following the typical route of establishing treaties and partnerships. Gold could see an upturn if it seems like the situation in North Korea could become more volatile, or if two nuclear powers like China and India continue to have conflicts.