China’s New City: Is this Beijing’s Pivot?

Paracel islands
Paracel islands. Photo: Nicolas Lannuzel/flickr.

It’s not relocating aircraft carriers to the Pacific or stationing 2,500 marines in Australia but China’s provocative establishment of a new city, Sansha, in the disputed Paracels chain takes the geopolitical drama in the South China Sea to a new stage. This escalating assertiveness may have a larger strategic importance as part of Beijing’s response to the often touted US “pivot” or rebalancing in Asia.

Proclaiming a new city on the 2km long atoll in the South China Sea (population some 150 fishermen), replete with its own mayor, municipal council, and military garrison takes the issue a step beyond diplomatic quarrels with other claimants, in this case the Philippines and Vietnam. China appears to also view its newly anointed Sansha as a sort of administrative and monitoring hub for the wider South China Sea area.

OPEC and Saudi Shrewd Middle Power Diplomacy

For middle powers like Saudi Arabia an effective foreign policy requires both cunning and a knack for identifying force multipliers. Of course, being the world’s largest oil producer is a bit of a force multiplier by itself, as the move on Thursday by the Organization of Petroleum Exporting Countries (OPEC) not to reduce production despite a price decline from $128 to $97 per barrel suggests.

OPEC price hawks like Iran sought to reduce the current 30 million barrel a day production quota (actual production is nearly 32mil brls a day as OPEC members routinely exceed their quotas). But Riyadh was not only opposed, but sought a production increase, though in the end the compromise was the status quo. That may sound a bit counter-intuitive – it was the first time in a decade that OPEC did not reduce production quotas after a more than 20 percent price decline. In fact, the Saudis were actually contemplating a production increase, even though that might drop prices close to the roughly $80/brl they need to balance their budget.