Billingsley 01 Chinese container ship off the coast of Los Angeles California

China’s Economic Interests at Risk With Rise of Houthi Shipping Attacks

By Dodge Billingsley

04/09/2024|OE Watch, Product

Chinese container ship off the coast of Los Angeles, California.

“China is the customer for 90% of the oil exported by Iran. The chances of the Houthis firing on ships of a state-owned Chinese company are therefore very low, raising questions about the reasons for COSCO’s decision”

The Israel-Hamas conflict and the conflict’s subsequent spread to Yemen and the Red Sea is challenging Chinese economic interests and policy in the region. In early January, Chinese shipping giant China Ocean Shipping Company (COSCO) and Hong Kong–based subsidiary Overseas Orient Container Line announced that they would cut service to Israeli ports in response to Houthi attacks on ships destined for Israel. According to the first excerpted articles from the Israeli business news publication Globes, China has in effect sacrificed trade with Israel to maintain shipping access to the Red Sea. While the article vilifies the Chinese position, China is in a bind because both Israel and Iran are significant regional trading partners with China. The Houthis are militarily and diplomatically supported by Iran. China must balance its priorities in the region between Iran and Israel—and any regional war would be bad for China’s Middle East interests.[i] In the second excerpt, taken from a speech delivered by China’s UN Ambassador less than a week after the COSCO announcement, the Ambassador noted that “the waters of the Red Sea are an important transportation channel for goods and energy” and called on the Houthis to “to immediately stop harassing merchant ships and respect the navigation rights of merchant ships from all countries in the Red Sea waters, in accordance with international law.”[ii] Not long after, a Houthi official interviewed by Russian news source Izvestia stated that all Russian and Chinese ships would be safe navigating the Red Sea but that ships aligned with Israel would be subject to targeting. The Houthi spokesman continued “Our goal is to raise the economic costs for the Jewish state to stop the carnage in Gaza.” However, despite these assurances, any economic pain that Israel might feel because of reduced shipping to its ports also transfers to China, complicating its economic strategy in the Middle East.

Sources:

“Chinese shipping giant COSCO to stop visiting Israeli ports,” Globes (Israeli business news), 7 January 2024. https://en.globes.co.il/en/article-chinese-shipping-giant-cosco-to-stop-visiting-israeli-ports-1001467115

Chinese state-owned shipping giant COSCO Shipping has stopped visiting Israeli ports, “Globes” has learned. The company, the fourth largest container shipping line in the world, with about 11% of world trade, decided on this step even though it is not much threatened in the Red Sea, because of the very fact that it is Chinese, and because of China’s ties with Iran, the patron of the Houthi rebels in Yemen.

Besides the effect on trade between the Far East and Israel, COSCO’s decision is significant because it cooperates with Israeli shipping line ZIM, which will have to operate more ships on the Far East routes, which is liable to will lead to higher shipping costs, since XIM will be short of ships.

The second direct effect will be on the Haifa Bayport, which is operated by another state-owned Chinese company, SIPG. The port is dependent on the many COSCO ships that visit it.

The Houthis are threatening to attack vessels of any company that sails to Israel, but China is the customer for 90% of the oil exported by Iran. The chances of the Houthis firing on ships of a state-owned Chinese company are therefore very low, raising questions about the reasons for COSCO’s decision, of which international shippers have yet to be notified.

A pointer to COSCO’s step was the recent announcement by its Hong Kong-based subsidiary OOCL that it was ceasing to sail to Israel because of “operational problems”. That announcement, intended to enable it to sail in the Red Sea without interference by the Houthis, led to wide criticism. In the end, the company caved in, like Singapore-based shipping line ONE (Ocean Network Express).

“常驻联合国代表张军大使在安理会红海局势紧急公开会上的发言 (Speech by Ambassador Zhang Jun, Permanent Representative to the United Nations, at the Security Council’s emergency public meeting on the Red Sea situation),” PRC Permanent Mission to the United Nations, published by Ministry of Foreign Affairs People’s Republic of China, 12 January 2024. https://www.mfa.gov.cn/web/zwbd_673032/wjzs/202401/t20240114_11223386.shtml

Mr. President: China thanks Russia for its initiative to hold this emergency meeting and thanks Assistant Secretary-General Kyali for his briefing. The United States, Britain and other countries have carried out air strikes on targets in Yemen, further escalating tensions in the Red Sea region. China expresses serious concern about this.

The waters of the Red Sea are an important transportation channel for goods and energy. For some time, the Houthi armed forces have repeatedly attacked and seized merchant ships in the Red Sea waters, disrupting international trade order and not conducive to regional stability. China has repeatedly called on the Houthis to immediately stop harassing merchant ships and respect the navigation rights of merchant ships from all countries in the Red Sea waters in accordance with international law. China also calls on all parties, especially influential major powers, to play a constructive and responsible role in jointly safeguarding the safety of waterways in the Red Sea.

We regret to see that the brazen military actions taken by relevant countries against Yemen not only caused infrastructure damage and civilian casualties, but also aggravated security risks in the Red Sea waters and did not help protect the safety of commercial ships and freedom of navigation. Relevant military actions may also impact the political process in Yemen. We fail to see how such a military operation could achieve the stated intended objectives.

It must be noted that the Security Council has never authorized any country to use of force against Yemen. The military actions taken by relevant countries run counter to the purpose of Resolution 2722 just adopted by the Security Council. China reiterates that no country shall misinterpret or abuse international law and Security Council resolutions to create new tensions in the Red Sea waters.

Mr. President: The current tensions in the Red Sea are one manifestation of the spillover effects of the conflict in Gaza. Letting the conflict in Gaza prolong while hoping that the conflict will not expand may be wishful thinking. It is even more contradictory and irresponsible to advocate preventing conflicts from spilling over, while at the same time adding fuel to the fire and provoking military confrontation. The Middle East is already on the brink of extreme danger. What we should avoid most at the moment is reckless military adventurism. What we need most is calmness and restraint to prevent further expansion of conflicts. We urge all relevant parties, especially the influential powers, to abide by the UN Charter and international law, adhere to the correct direction of dialogue and consultation, and make practical efforts to maintain peace and stability in the Red Sea and the Middle East. Thank you, Chairman.

В «Ансар Аллах» гарантировали безопасность судам РФ и КНР в Красном море (Ansar Allah guaranteed the safety of Russian and Chinese vessels in the Red Sea),” Izvestia (Russian news source), 19 January 2024. В «Ансар Аллах» гарантировали безопасность судам РФ и КНР в Красном море | Новости мира | Известия | 19.01.2024 (iz.ru)

Representative of the al-Buheiti movement: the Houthis will not attack Russian and Chinese ships

The Yemeni Houthi movement Ansar Allah is attacking US and British ships in the Red Sea; as for other countries, including Russia and China, their shipping in the region is guaranteed safety. A member of the Ansar Allah Politburo, Muhammad al-Buheiti, stated this on January 19 in an interview with Izvestia.

“As for all other countries, including Russia and China, their shipping in the region is not threatened. Moreover, we are ready to ensure the safety of the passage of their ships in the Red Sea, because free navigation plays a significant role for our country,” Al-Buheiti noted.

The politician also added that any Israeli ships or those connected with Israel will not have the slightest opportunity to sail through the Red Sea – attacks on them will continue.

“Ansar Allah does not pursue the goal of capturing or sinking this or that sea vessel. Our goal is to raise the economic costs for the Jewish state to stop the carnage in Gaza. If the crews of the ships that came under our fire had not ignored our warning signals and changed their direction, the further escalation that the American side caused in the interests of protecting Israel could have been avoided,” he said.

Earlier, on January 17, the military representative of the Ansar Allah movement, Yahya Saria, said that it launched a missile attack on the American ship Genco Picardy in the Gulf of Aden. According to him, the Houthis recorded a direct hit on the ship.

On the same day, the UK Navy’s Maritime Trade Coordination Center (UKMTO) reported that a drone attacked a ship off the coast of Aden, Yemen, which led to a fire on board the ship. A previous attack on a ship in the Red Sea was reported the day before. The Houthis then took responsibility for it and confirmed the fact of a missile attack on the bulk carrier Zografia, which was flying the Maltese flag.The Houthis began attacking shipping in the Red Sea and Gulf of Aden from November 2023 to protest Israeli actions in the Gaza Strip…

Notes:

[i] For a previous perspective on the conflict in Gaza’s impact on China interests in the region see: “Israel’s close economic ties with China worked well – until the Gaza conflict,” South China Morning Post, 2 November 2023. https://www.scmp.com/news/china/diplomacy/article/3240061/israels-close-economic-relationship-china-worked-well-until-gaza-conflict-revealed-its-limits

[ii] A wide range of global reporting has indicated that China is also said to have put pressure on Iran to rein in the Houthis, while the United States has asked China to take more of a role in mediating the conflict in Israel.

Image Information:

Image: Chinese container ship off the coast of Los Angeles, California.
Source: Corey Seeman
Attribution: CC By-NC-SA 2.0

Distribution A: Approved for public release

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Finch 01 President Putin and Chief of General Staff Gerasimov Vostok 2022

Russia Claims Victory in Vostok 2022 Exercise

President Putin and Chief of General Staff Gerasimov, Vostok 2022, 6 September 2022.

One of Russia’s large-scale, annual military exercises, Vostok-2022, took place from 1-7 September. As with such exercises, it was widely covered in the Russian media, and as the brief excerpt from the Ministry of Defense’s TV Zvezda news network indicates, Russian forces again proved victorious. The article also stresses that Russia has not been isolated by its aggression against Ukraine, pointing out that 10 countries participated: Algeria, Armenia, Azerbaijan, Belarus, China, India, Kyrgyzstan, Mongolia, and Tajikistan. The article says that President Putin arrived at the Sergeevsky training ground to watch the final part of the exercises from a specially equipped command post. He watched his soldiers taking lines, liberating settlements, and forcing enemy retreats.

Sources:

Maxim Petrenko, Sergey Lebedev, “Враг уничтожен: как прошли учения Восток-2022»на полигоне Сергеевский (The enemy is destroyed: how did the exercises Vostok-2022 at the Sergeevsky training ground),” TV Zvezda (Ministry of Defense news network), 6 September 2022. https://tvzvezda.ru/news/2022961429-48GVw.html

Vladimir Putin watched the maneuvers from a specially equipped command post. From there, he fully assessed the operational situation. Real-time data came even from the distant borders of the huge test site. All thanks to cameras installed in the fields with 32x magnification.

At the same time, the Chief of the General Staff had a connection with all the commanders-in-chief. The most up-to-date information was received from the training ground to the Supreme Commander-in-Chief, the technical characteristics of the weapons used were shown on the screen.

According to the legend of the exercises, the mock enemy “Vostochnye” attacked the “Northern” and their allies, wedging 200 kilometers into the depth of defense. The enemy was stopped, suffered losses, but retained reserves. From this point, the action begins to unfold - a grouping of troops, supported by artillery and tactical landing forces, hitting the enemy, taking lines and liberating settlements. Massed strikes by rocket troops and artillery, breaking the enemy’s reserves as well, are forcing the enemy to retreat.

A special feature of Vostok this year is the creation ofa coalition grouping of the armed forces of ten countries - Russia, Azerbaijan, Algeria, Armenia, Belarus, India, Kyrgyzstan, China, Mongolia, Tajikistan. Operational groups of the defense departments of Kazakhstan, Laos, Nicaragua and Syria were also involved….…The participants of the maneuvers noted that all the goals of the exercises were fulfilled. The issues of ensuring military security in the Eastern Region have been worked out.

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Image: President Putin and Chief of General Staff Gerasimov, Vostok 2022, 6 September 2022.
Source: http://en.kremlin.ru/events/president/news/69288
Attribution: CCA CA 4.0 Intl

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Russian Navy Weaponizes Shipping Containers

Shipping Containers.

For the defense of Russian combat and auxiliary ships, an electronic warfare (EW) system is being developed. The EW system will be placed in ordinary 40-foot shipping containers.

The accompanying excerpted article from pro-Kremlin daily newspaper Izvestiya describes Russian efforts to place electronic warfare systems in standard 40-foot shipping containers. The Russian Navy is also experimenting with other shipping container-based weapon systems involving air defense, anti-ship, and surface and underwater unmanned reconnaissance capabilities. These shipping container-based weapon systems are not only intended to augment the capabilities of the Russian Navy’s ships, but also auxiliary ships (tugboats, transports, fuelers, etc.) that support the Russian Navy, and commercial ships if necessary. Shipping container-based weapon systems are likely to become more important to the Russian Navy as it transitions from larger ships, such as cruisers and destroyers, which have many capabilities to smaller ships, such as frigates and corvettes, with fewer capabilities. These shipping container-based weapon systems will permit these small vessels to expediently and cheaply add capabilities as required.

Source:

Roman Kretsul, “Шумящий патруль: российские корабли защитят

системы радиоэлектронной борьбы (The ‘noisy’ patrol: Russian ships will be protected by electronic warfare systems),” Izvestiya (pro-Kremlin daily newspaper), 8 September 2022. https://iz.ru/1392104/roman-kretcul/shumiashchii-patrul-rossiiskie-korabli-zashchitiat-sistemy-radioelektronnoi-borby

For the defense of Russian combat and auxiliary ships, an electronic warfare (EW) system is being developed. The EW system will be placed in ordinary 40-foot shipping containers. Thanks to this, the system can be easily installed on the decks of ships and vessels. Such protective "boxes" should reliably protect ships and vessels from enemy missiles and drones by way of electromagnetic interference. According to experts, as a result, this decision will significantly strengthen the protection of the country's coastal regions.

The Project 22160 ‘Vasily Bykov’ patrol ships will be the first to receive this electronic warfare systems. In the future, auxiliary vessels of the Russian fleet - tugboats, transports and others – could also acquire it…Initially, a weaker electronic warfare system was installed on Project 22160 ships, military historian Dmitry Boltenkov told Izvestia.“Apparently, they created a more powerful solution, of operational or strategic designation. Containers allow you to put the system on different ships,” the expert explained. “If necessary, it will be possible to build up the electronic warfare system of ship groups. They will be able to enter a given area and, in fact, completely “turn it off”. First, they will suppress drone control channels and communication systems. It will no longer be necessary to drive an electronic warfare vehicle onto a landing ship, instead they will simply put a container.

The Navy is also actively testing new container modules — with weapons and with various auxiliary equipment —including the Redut and Pantsir-M air defense systems, container modules with anti-submarine equipment, and container modules with cruise missiles. In particular, the Kalibr-NK cruise missiles. But the main possibility is that they can be adapted for the employment of underwater and surface unmanned vehicles of all types. This provides a reconnaissance capability over hundreds of kilometers…

Image Information:

Image: Shipping Containers
Source: https://commons.wikimedia.org/wiki/File:Container_%E3%80%90_2205_%E3%80%91_SAKC_000411(0)---No,1_%E3%80%90_Container_pictures_taken_in_Japan_%E3%80%91.jpg
Attribution: Gazouya-japan

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Wood 01 Drift ice camp in the middle of the Arctic Ocean as seen from the deck of icebreaker Xue Long

China Developing Improved Equipment for Deep Sea, Polar Exploration

Drift ice camp in the middle of the Arctic Ocean as seen from the deck of icebreaker Xue Long.

“The Xuelong 2 is like a mobile laboratory at sea, sailing into many areas that were inaccessible in the past.”

China regards deep-sea[i] areas and polar regions as critical to its future development due to their abundant resources. President Xi Jinping even included them in his Holistic National Security Concept, which lays out domains that he regards as critical to China’s development and national security.[ii] However, both deep-sea exploration and polar regions pose significant technical challenges due to the extreme pressure or weather conditions encountered. As the following excerpts explain, China has made significant progress in overcoming these challenges.

The first excerpted article, from an early March 2023 edition of the official newspaper of China’s Ministry of Science & Technology, examines some of the equipment China has completed or is developing to explore deep sea and polar regions as part of its efforts to become a powerful maritime country. The article focuses on two technologies: icebreakers and deep-sea drilling rigs. The Xue Long 1 [GRLCUT(1] and Xue Long 2 [GRLCUT(2] icebreakers, originally based on a Ukrainian design, have improved China’s ability to explore polar regions. The article cites an acoustic engineer with experience studying polar environments, who highlighted how the Xuelong 2 had opened many previously inaccessible areas to exploration.

The latter half of the article focuses on deep sea drilling, noting the advances made with the “Manatee II” deep sea drilling rig, which is reportedly capable of operating at depths of 2,000 m or more and has set world records by drilling over 200 m into the ocean floor. A major priority for exploitation by this and future rigs is “combustible ice,” a mixture of frozen water and natural gas present on the sea floor in the deep sea. According to the article, the Manatee II has carried out exploration missions searching for combustible ice in many areas surrounding China, as well as for traditional offshore oil and gas deposits. Due to the experience from operating the Manatee, China has improved its technologies in this niche but important area, and the first of China’s next generation of deep-sea drilling ships is expected to be completed in 2024.[iii] It will reportedly be capable of drilling in waters deeper than 10,000 m.[iv] The minerals and natural gas potentially recoverable by these drills could create an economic bonanza and help China offset its reliance on imported energy. The second article is based on an interview with Sun Bo, Party Secretary of the China Polar Research Center Polar Research Institute of China, which is part of China’s Ministry of Natural Resources. Sun Bo noted how vital China’s second icebreaker, the Xuelong 2, completed in 2019,[v] has been for China’s polar exploration efforts, highlighting that having two icebreakers now allows China to effectively support research teams at both poles at the same time. While these articles underscore how China has clearly made important strides in overcoming technical bottlenecks, it might now face legal ones. The UN recently concluded negotiations about exploiting biological and mineral resources on the high seas, which might constrain China’s activities in polar and deep-sea regions.[vi]

Sources:

He Liang [何亮], “科技扬帆，引领海洋探索挺进深蓝” (Science and Technology Set Sail, Setting a Course for Ocean Exploration into the Deepest Blue Sea), Science & Technology Daily [科技日报] (Official newspaper of PRC Ministry of Science & Technology [MOST]), 6 March 2023. http://digitalpaper.stdaily.com/http_
www.kjrb.com/kjrb/html/2023-03/06/content_550015.htm?div=0

Accelerating [China’s] development into a maritime great power and making good use of marine resources is not possible the important support of science and technology. To protect the marine ecological environment, it is necessary to strengthen basic research and fully understand the ocean’s riches; to develop marine resources, it is necessary to address the urgent requirements of improving development of technologies and equipment of scientific research for technology and equipment, and concentrate efforts to develop more “national strategic weapons.”[i]

“With the help of more and more advanced equipment, China’s polar scientific research has maritime, land and aerial capabilities.” Yin Jingwei [殷敬伟], vice president of Harbin Engineering University[ii], has long been engaged in research on polar acoustic technology….According to Yin [Xuelong 2’s] superior ice-breaking capabilities allow more scientific research facilities and supplies to be transported into the Antarctic regions. “It is like a mobile laboratory at sea, sailing into many areas that were inaccessible in the past.”

As of September 28, 2021, China has completed 12 Arctic expeditions. However, China is not an Arctic nation, and its deep-sea and polar-related research work started relatively late compared to other countries, and its support capabilities have also been limited to a certain extent. There are still many weak links and capabilities in the fields of polar science and technology research, polar equipment development, and deep-sea polar exploration. missing.

Yin Jingwei told the Science and Technology Daily reporter of that China does not yet have nuclear-powered icebreakers and underwater equipment capable of breaking ice in the polar regions, and the ability to collect maritime below the ice is also very weak. Additional efforts are needed to overcome technological and environmental hurdles to move forward.

“深耕新疆域，推动极地科考再上新台阶——海洋领域专家谈建设海洋强国” (Exploring New Frontiers and Taking Polar Scientific Research to a New Level—Maritime Experts Discuss Building a Maritime Great Power), Science & Technology Daily [科技日报] (Official newspaper of PRC Ministry of Science & Technology [MOST]), 19 January 2023 http://digitalpaper.stdaily.com/http_
www.kjrb.com/kjrb/html/2023-01/19/content_547740.htm?div=0In today’s world polar regions have become a “new frontier” for development and a focal point for global governance, a new high ground for technological competition, an area with new sea routes and a new source of resources. The China Polar Research Center of the Ministry of Natural Resources adheres to the principle of “understanding, protecting, and using” these regions proposed by General Secretary Xi Jinping, and is committed to providing support for China’s polar scientific research. China continues to improve its independent innovation capabilities and overall there is momentum to continue improvements. The China Polar Research Center independently built the “Xuelong 2” icebreaker with, filling a major gap in China’s capabilities required for polar scientific research and developed a way to use both the Xuelong and Xuelong two effectively in concert. This new pattern of “Double Xuelong” Polar exploration (one assigned to each polar region) has greatly improved the on-site support capabilities for China’s polar scientific investigations.

Notes:

[i] Deep-sea areas are typically defined as those below 200 meters. According to the US National Oceanic and Atmospheric Administration, 80 percent of the Earth’s ocean floor remains unmapped and unexplored. “How much of the ocean have we explored?,” NOAA [Accessed March 2023]. https://oceanservice.noaa.gov/facts/exploration.html

[ii] See: Peter Wood, “China’s Holistic Security Concept Explained,” OE Watch, 07-2018. https://community.apan.org/wg/tradoc-g2/fmso/m/oe-watch-articles-singular-format/275650

[iii] The ship was developed by China State Shipbuilding Corporation’s (CSSC) 708 Research Institute and is subordinate to the China Geological Survey Bureau. The bureau also operates ships involved in mapping the seafloor in potential sensitive areas, which has drawn the alarm of nearby nations. See for example, Naoki Inoue, Tsukasa Hadano and Jun Endo, “Chinese survey ships straying into other nation’s EEZs, data shows”, Nikkei, 31 January 2021. https://asia.nikkei.com/Politics/International-relations/South-China-Sea/Chinese-survey-ships-straying-into-other-nations-EEZs-data-shows

[iv] “China’s first ultra-deepwater scientific research drilling ship achieved main hull penetration today” [我国首艘超深水科考钻探船今日实现主船体贯通], China Mining News [中国矿业报 ], 18 December 2022. https://www.cgs.gov.cn/xwl/ddyw/202212/t20221218_720062.html

[v] See: Les Grau, “China Developing More High Latitude Equipment”, OE Watch, 11-2019. https://community.apan.org/wg/tradoc-g2/fmso/m/oe-watch-articles-2-singular-format/337636

[vi] “UN delegates reach historic agreement on protecting marine biodiversity in international waters,” United Nations, 5 March 2023. https://news.un.org/en/story/2023/03/1134157

Notes:

[i] This phrase, 国之重器, is frequently used to describe strategically impactful or game-changing weapons systems (ballistic missile submarines, aircraft carriers etc.,) and civilian technologies such as nuclear reactors.

[ii] Harbin Engineering University is one of the “Seven Sons of National Defense,” which are universities that work closely with the Chinese People’s Liberation Army.

Image Information:

Image: Drift ice camp in the middle of the Arctic Ocean as seen from the deck of icebreaker Xue Long.
Source: https://upload.wikimedia.org/wikipedia/commons/8/8d/Teadlased_j%C3%A4%C3%A4l.jpg
Attribution: Timo Palo, CC BY-SA 3.0

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