China’s public response to the Mischief Reef FONOP

“Unreasonable”: CCTV’s 10pm Evening News (晚间新闻) bulletin introduces the US FONOP near Mischief Reef, Thursday May 25, 2017.

Chinese media coverage of the recent US naval patrol near its outposts in the disputed Spratly Islands suggests, to me at least, Beijing’s increasing confidence in its handling of public opinion on this sensitive issue. 

In turn, the content of some of Beijing’s publicity offers insight into China’s intentions for the handling of the matter going forward. Specifically, the government’s response suggests a firm determination to avoid escalating tensions. It could even foreshadow an increasingly tolerant attitude towards US assertions of freedom of navigation into the future.

The basis for this speculation is outlined below, but as always i’d encourage readers with other explanations to get in touch or leave a comment.

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South China Sea arbitration: don’t count on a decisive Philippines win


Thomas A. Mensah, Presiding Arbitrator of the Philippines vs China arbitral tribunal. Among Judge Mensah’s many qualifications, he was the inaugural President of the ITLOS, on which he served from 1996 to 2005. Contrary to PRC propaganda claiming the arbitral tribunal is “presided over by a former Japanese diplomat” Judge Mensah is from Ghana.

Here’s a bit of speculation ahead of the UNCLOS arbitration decision on Tuesday, written for the Australian Institute of International Affairs’s website.

My argument is that, however shrill and legally unconvincing the PRC’s propaganda campaign may seem, it will force the tribunal to take politics into account to an even greater extent than it would have otherwise — so expect some significant concessions to China. As Bill Bishop points out, the CCP has a long tradition of overcoming deficiencies of reason via sheer force of rhetoric (强词夺理). Of course, i could be proved wrong in short order; if so, things may get very interesting for the PRC’s relationship with the UNCLOS.

I’ve also added in the page numbers of the article’s references to the tribunal’s Award on Jurisdiction. Obviously i’m not a lawyer and it’s a case where the fine-grain details are crucial, so i’d especially appreciate any corrections.


South China Sea arbitration: don’t count on a decisive Philippines win

AIIA Australian Outlook
July 7, 2016

By Andrew Chubb

On 12 July, an international arbitral tribunal will hand down its findings in a landmark case brought by the Philippines against China over the South China Sea issue. The decision will have far-reaching implications, not only for this contentious maritime dispute but also for international law and politics in East Asia.

United States officials have expressed concern that the decision may exacerbate tensions in the region if China responds to an adverse finding with new assertive moves in the disputed area. However, contrary to the expectations of many observers, a total victory for the Philippines is unlikely. At least some key findings will probably favour China due in part to the political interest of the tribunal in protecting the status and relevance of the law of the sea in international politics.

The case has been particularly contentious due to China’s allegation that the Philippines is “abusing” the UN Convention on the Law of the Sea (UNCLOS) processes. China’s subsequent refusal to take part in the proceedings, relentless propaganda campaign aimed at delegitimising the tribunal among domestic and international audiences, and its frenetic efforts to enlist statements of support from foreign governments, have created a backdrop that means the tribunal is unlikely to decide the case on legal merits alone.

Even if the merits of the Philippines’ claims are strong, the arbitrators will be keen to avoid appearing to make a one-sided ruling. Instead, they will seek to make at least some concessions to China in order to neutralise Beijing’s political attacks on the tribunal’s authority, minimise the political fallout, and forestall the possibility of a Chinese withdrawal from UNCLOS. The latter scenario, while highly unlikely, would be a major disaster for the cause of international law, so it is likely to be among their considerations as legal professionals.


The current state of play

The Philippines has asked the arbitral panel to rule on 15 specific questions concerning the South China Sea with the aim of clarifying the limits of the sea areas that China can legally claim under UNCLOS. The Philippines’ contentions can be summarised as:

  • China’s claims to “historic rights” within the nine-dash line are invalid under the Convention (submissions 1 & 2)
  • Scarborough Shoal is not an island, and therefore generates no entitlement to maritime rights beyond 12 nautical miles (nm), such as an Exclusive Economic Zone (EEZ) or Continental Shelf (submission 3)
  • China’s outposts in the disputed Spratly archipelago are also not islands, and therefore also generate no EEZ or Continental Shelf entitlement (submissions 4, 5, 6 & 7)
  • China has conducted maritime law enforcement and economic exploitation activities in areas where it does not have any lawful claim, thereby violating the Philippines’ lawful rights under the Convention, while also violating the Convention’s safety requirements (submissions 8, 9, 10, 13 & 14)
  • China’s massive island-building projects breach the Convention’s rules on artificial islands, constitute unlawful appropriation of maritime spaces, and violate the Convention’s obligations not to damage the marine environment – as do its fishing, coral and clam harvesting activities at Scarborough Shoal and in the Spratly Islands (submissions 11 & 12)

The Philippines is also asking the tribunal to order China to drop any unlawful claims and desist from any unlawful activities (submission 15).

In response, China argues that these matters are “in essence” issues of territorial sovereignty, which UNCLOS was not intended to govern, and maritime boundary demarcation on which China has invoked its right to reject compulsory dispute resolution. Beijing also argues the Philippines is legally bound by its previous “commitments” to settle its disputes with China through bilateral negotiations.

However, in October 2015, the tribunal issued its preliminary award  and found that it is competent to rule on at least seven of the Philippines’ 15 claims against China. In an official statement, China expressed anger at the ruling, this time accusing both the Philippines and the arbitrators themselves of having “abused the relevant procedures”. Notably, however, it avoided any suggestion that it was rejecting the UNCLOS itself.


Political considerations

Numerous analysts, including many in Manila both inside and outside government, expect that when the arbitral tribunal hands down its final award, the ruling will find in favour of the Philippines.

But as Phillipines legal academic Jay Batongbacal has noted, the tribunal had a strong incentive to accept jurisdiction over the case because doing otherwise would have been tantamount to an admission that UNCLOS is irrelevant in one of the world’s most important waterways, and one of its most dangerous maritime hotspots.

However, the same considerations make a total victory for the Philippines unlikely. Not only would this outcome draw even more furious political attacks on the tribunal’s authority from China, a decision seen as one-sided would increase the rhetorical bite of Beijing’s international propaganda.

The Award on Jurisdiction issued last October foreshadowed findings favourable to China on some key issues. For example, it noted that if China’s island-building and law enforcement actions are found to be “military in nature” then it may be unable to rule on their legality as these are excluded from the Convention’s dispute resolution procedures (p.140).

Perhaps even more importantly, the Award (pp.62-63) also flagged the possibility of the tribunal providing an implied reading of the nine-dash line’s meaning for China:  development that could effectively legalise the PRC’s infamously unclear and expansive claim.


What to expect

The case’s greatest significance may lie in providing the first legal precedent defining specific criteria for what constitutes an “island” (entitled to an Exclusive Economic Zone and Continental Shelf under UNCLOS), as opposed to a “rock” (which is only entitled to 12 nautical miles of territorial sea).

Previous international legal rulings have deliberately avoided this question, but the Philippines’ submission has put the issue front and centre. The Award explicitly noted that “the Philippines has in fact presented a dispute concerning the status of every maritime feature claimed by China” in the disputed area (p.72). This suggests the tribunal may make the long-awaited definition. This would also accord with the arbitrators’ imperative to maximise UNCLOS’ relevance in international politics as it would help clarify the status of other disputed maritime rights claims in Asia and beyond, notably Japan’s claim to a 200nm EEZ around Okinotorishima.

It is no certainty that this will happen. It remains possible that the tribunal would simply rule that there may exist one or more islands within 200nm of the relevant areas: a conclusion that would be sufficient to prevent consideration of the Philippines’ claims against China in those areas.

Although the case is too complex to predict specific findings with certainty, the Philippines’ best hopes probably lie in obtaining an explicit rejection of China’s claims to “historic rights” and an affirmation that Scarborough Shoal—but not the much larger Spratly archipelago—is a rock and not an island, meaning the surrounding waters outside 12nm cannot be subject to any legitimate Chinese claim.

US officials worry that the ruling may exacerbate tensions in the region if China responds to an adverse finding with more assertive moves. Reclamation activities at Scarborough Shoal and the declaration of an Air Defense Identification Zone in the South China Sea have been touted as possible responses.

Despite China’s decision to ignore the tribunal’s verdict, it has major stakes in UNCLOS’ ongoing viability. These include deep seabed mining concessions in international waters and its outer continental shelf claim in the East China Sea. UNCLOS is also central to China’s argument that US naval surveillance activities off its coast are illegal.

This leaves Beijing in the awkward position of trying to cast itself as a defender of UNCLOS while ceaselessly attacking an arbitration process constituted directly under its auspices. The continuation or even intensification of China’s political campaign threatens the global authority of UNCLOS as it seeks to divide signatory states into opposing camps. I may be proved wrong on Tuesday but I suspect the SCS tribunal’s arbitrators will be only too aware of this as they prepare their ruling.

“The arbitrators will themselves be judged by history”: domestic aspects of China’s UNCLOS propaganda blitz

People's Daily, June 27, 2016, p.3

People’s Daily, June 27, 2016, p.3

There has rightly been plenty of attention directed towards the PRC’s furious campaign to enlist, or at least appear to enlist, international support for its rejection of the arbitral tribunal that will shortly adjudicate on 15 complaints about China’s actions in the South China Sea. The latest broadside against the tribunal from the People’s Daily is a helpful reminder of some domestic aspects shaping the propaganda blitz.

The wave of propaganda from China’s English-language mouthpieces (and presumably those in other languages too) is certainly not receding, and in fact judging by Xinhua’s Twitter stream it is gathering momentum. 

The weekend just gone brought forth one of the more brazen pieces of propaganda from Xinhua, titled, Turkey agrees China’s stance for resolving disputes via dialogue. Readers who clicked through to the story may or may not have noticed that by “Turkey,” the article was in fact referring to Dogu Perincek, Chairman of the Patriotic Party, which has zero seats in the Turkish parliament, and who just recently got out of jail following one of Erdogan’s crackdowns.

But “Chairman of the Turkish Patriotic Party” sounds quite legitimate and credible, at least when translated into Chinese. Not surprisingly, then, the story was widely publicized in the domestic media under the headline: Turkish Patriotic Party Chairman says China has no duty to obey the South China Sea arbitration ruling.

This points to the importance of domestic considerations shaping China’s campaign to delegitimize the UNCLOS arbitration. As is so often the case, domestic may help explain quite a bit: the curiously un-legalistic tone of China’s critiques of the international legal process, with lots of high-strung rhetoric of brazen betrayals and malicious conspiracies instead; a fixation with getting foreigners to back the PRC’s position (even as the Beijing maintains its resolute opposition to “internationalizing” the issue); and a conga-line of usually obscure domestic organs lining up to say exactly the same thing, from the China Society of the Law of the Sea to the China Fisheries Association.

Besides pursuing the ever-elusive goal of “unified thinking” among party and military, there are good reasons why the CCP would be concerned about shoring up support among the general public in China. In early 2013, before the PRC had gone public with its rejection of the arbitration, about 6 out of 10 urban survey respondents indicated that they thought international arbitration sounded like a reasonable way of handling the South China Sea disputes. The article that appears below in summary translation, from the People’s Daily‘s foreign affairs commentary team “Zhong Sheng,” seems illustrative of how hard the CCP is trying to delegitimize the arbitration among domestic audiences. It appeared on p.3 of the official party mouthpiece, and became a top headline throughout the day on major commercial news portals on June 27.

The article also makes plain the PRC’s heavy stake in the ongoing viability of the UNCLOS system, which has put China is in the awkward position of trying not to undermine the convention while ceaselessly attacking an arbitration process constituted directly under its auspices. This may seem hopelessly contradictory, but in the CCP’s eternally-correct dialectical approach to policy there’s generally a way for the party to have its cake and eat it too. In this case, the correct handling of the contradiction lies in convincing domestic and international audiences that China is in fact defending the authority and integrity of the UNCLOS by rejecting the arbitration. Not only is the Philippines maliciously “abusing” the process, and the US hegemon puppeteering behind the scenes, the arbitrators themselves are reckless and ill-intentioned co-conspirators who will be judged by history.

(Now just repeat ad nausem and — bingo! — another contradiction inevitably resolved…as long as the immutable laws of history haven’t been infiltrated by those same shadowy forces who got to the law of the sea.)

Appearing next to the article in the People’s Daily print version was a piece proclaiming that participants at a conference at Leiden University, co-organized with Wuhan University, had concluded: Philippines’ South China Sea arbitration violates international legal principles. An English version of the latter piece is available here: Int’l experts question proceedings of South China Sea arbitration.


Zhong Sheng: China’s inevitable choice of determination and capability


Top headline on Sina, QQ, Baidu, Huanqiu, NetEase news platforms under headline. “Party paper: China completely capable of towing away Philippines ship on Second Thomas Shoal”

“Zhong Sheng” begins by observing that America’s pushing of the militarization of the SCS and words and deeds showing off its weaponry, have deepened China’s concerns about harm to its own interests, and raised China’s resolve to increase its capabilities to defend those interests.

Of course, the islands of the SCS belong to China and no country even said anything to the contrary otherwise until the 1970s. But then,

“tempted by the prospect of resources, the Philippines and other countries, under the excuse that the islands were within 200nm of their shores, attempted to using maritime administrative rights claims to negate China’s sovereignty over the Spratlys. To use a common expression, China’s Spratly islands were looted.”

As to why the PRC allowed this to happen,

it wasn’t because China did not have the ability to stop the illegal occupations, but rather because of China’s extremely restrained response. However, China has bottom lines, and no Chinese government administration has made any compromise on the sovereignty questions. Today, in the southern part of the South China Sea China does not have a single oil well, Chinese fishing boats are often impounded, and fisherfolk often detained. People should ask whether this is the ‘strong bullying the weak’ or the ‘weak bullying the strong.’

Since the 1960s China has settled border disputes with 12 out of 14 land neighbours. This is “the best example of China resolving disputes through bilateral negotiation, of its independent foreign policy, its peripheral diplomacy policy of good-neighbourliness, and its practice and upholding of international law.”

The story of Second Thomas Shoal, according to Zhong Sheng, is evidence of China’s good intentions:

“China is completely capable of towing away the Philippine ship grounded there, but for the sake of the overall situation of stability in the SCS, China has kindly and patiently waited, all along maintaining an extremely restrained attitude.”

The Philippines’ has openly engaged in vile treachery 背信弃义 by requesting arbitration, Zhong Sheng tells readers, for in 2011 Pres Aquino agreed to joint development and promised to resolve disputes through negotiation. But then 18 months later he wantonly filed for arbitration without even telling China beforehand.

UNCLOS article 298 provides for state parties to declare non-acceptance of dispute resolution processes, including arbitration. China did this in 2006 and nearly 30 other countries have done likewise. Thus,

China’s non-acceptance and non-participation, much less recognition, is completely in accordance with international law including UNCLOS. It is proper and legitimate, and is an action that respects international law and safeguards the integrity and authority of the UNCLOS. If the tribunal ignores basic principles of UNCLOS, and basic common sense in international law, forcing a judgement, it will set a dangerous precedent, opening a maritime ‘Pandora’s Box’, for which the arbitrators will themselves be judged by history.”

Finally, America is militarizing the SCS in the name of opposing militarization – it’s America’s ships and aircraft making waves there, and American officials who are “issuing evil words that destroy the peace and stability of the region.”

“America’s advancing of the militarization of the SCS, and its words and deeds that show off its weaponry, have deepened China’s concerns about harm to its own interests, and raised China’s resolve to increase its capabilities to defend those interests.”

China’s capabilities and determination mean that it will not compromise. However, China has no intention of becoming a world superpower, or even a regional boss.

“America absolutely does not need to worry about a strong China challenging its global interests. Ideas about treasuring peace have been handed down through the generations in China, and the gene of peace is deeply planted in the blood of the Chinese people.”

Are China’s hawks actually the PLA elite after all? [Revised]

Yawei Liu

Dr Yawei Liu, of the Carter Center

[Updated 17 Dec: As with most things on here, this was bashed out hastily in the not-so-early hours of a morning, so i’ve taken the liberty of revising and adding some bits as i read through it two weeks later. In particular i felt the need to add in the various things i agree with from Liu and Ren’s excellent article, in addition to the criticisms i made.]


In an upcoming Journal of Contemporary China article addressing the always fascinating question of PLA officers’ belligerent media statements, Yawei Liu and Justine Zheng Ren advance exactly the opposite case to the one made here earlier this year. They argue that military commentators’ media statements represent the “consensus” voice of the PLA, fighting to influence the CCP’s foreign policy. 

Dr Liu, who directs the Carter Center’s China Program, happens to be the brother of General Liu Yazhou, most recently of Silent Contest fame. General Liu himself even features in the article, but references to his thinking are indirect (“General Liu seems to share the conviction that…”), presumably meaning that the two brothers have not talked over these work-related issues. Still, if anyone is in a position to knock the teeth out of my “propaganda, not policy” argument, Dr Liu should be the man.

To briefly recap, my argument was that, based on the backgrounds and affiliations of the main “hawks”, the belligerent military voices in the Chinese media are largely those of nominated propaganda/publicity experts (the two terms conflated as 宣传), whose job is to mould a positive image of the PLA among the domestic population and augment the military’s capabilities by shaping international audiences’ perceptions.[1]

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Luo Yuan’s US-style military report, and difficulties for Dai Xu

Press conference launching China Strategy Culture Promotion Association's 中国战略文化促进会  2011 reports on US and Japanese military developments

Press conference launching China Strategy Culture Promotion Association’s 中国战略文化促进会 2011 reports on US and Japanese military developments

Here is an actual weblog post — a log of what one reads on the internet — rather than the usual rambling speculative essay.

Luo Yuan’s think tank, the “China Strategy Culture Promotion Association” (中国战略文化促进会), yesterday released separate reports on the “military power of the US and Japan”.

Curiously, given it’s supposedly an non-governmental think tank (民间智库), the Global Times quoted China Foreign Affairs University’s Su Hao calling the reports “strong and timely responses to the inaccurate remarks in the US annual report on China’s military and the Japanese Ministry of Defense’s recent white paper” (emphasis added).

The report has been given lots of coverage in the Chinese-language media. Chinese radio bulletins yesterday were reporting on the report before it was even released.

The radio also mentioned that this year’s reports will be issued in English. I hope this is true, because it looks to be packed with highlights:

The reports pointed out that neither the US nor Japan had enough transparency regarding their military budgets.


The report concluded that Japan has strengthened its defense in its southwest islands and was preparing to take over the Diaoyu Islands by force in the future and intervening in any potential conflict in the Taiwan Straits.

Luo Yuan himself was quoted:

“We need to prepare for the worst [situation],” Luo said, adding that China should be well equipped.

This is the second year the think tank has released these reports. Copies of last year’s report carried the term “public version 民间版” on the cover, as pictured at the top, which seems to suggest there also exists some kind of restricted-circulation government version. If so, the China Strategy Culture Promotion Association looks like a good analogue of Luo Yuan’s own roles, at the intersection of military intelligence gathering, public diplomacy, propaganda work, and Taiwan affairs.


2011 U.S. Military Power Assessment and 2011 Japan Military Power Assessment reports

Note the watermark on the above pictures, which are taken from the think tank’s own website here. is a website of the PRC State Council Taiwan Affairs Office, which Luo Yuan’s father Luo Qingchang directed in the 1970s and early 1980s.

* * *

I stumbled across a couple of rather astonishing little Dai Xu tidbits a couple of weeks back.

1.) According to China Intellectual Property News, Dai Xu sued a Hong Kong magazine Wide Angle Lens《广角镜》 and others including a Beijing airport newsagent, for lifting 52% of the 2011 Long Tao article calling for a South China Sea war. He demanded withdrawal of the magazine from circulation, apologies, compensation of ¥200,000. Judgement was handed down in January this year. He was awarded……wait for it…….¥240.

Among other things, i guess this shows Colonel Dai is not that well-connected.

2.) A sharp-witted blogger has outed Dai Xu for writing a preface, under his penname “Long Tao”, to his own chapters, in a book edited by him. Of one Dai Xu chapter, “Long Tao” asserts that “this piece can be called the modern-day Strategies of the Warring States 《战国策》” and that “Dai Xu has continued his consistent style of speaking the truth . . . on national strategy, Dai Xu’s viewpoint is deafeningly clear, and manifestly superior”. In the other self-preface, Long Tao says the following article “will receive the support of the majority of Chinese people and Chinese military personnel . . . an incomparably correct position . . . nobody has ever explained important theoretical problems so clearly, correctly, reasonably and vividly”.

Preface to brilliant Dai Xu chapter, written by Dai Xu

Preface to brilliant Dai Xu chapter, written by Dai Xu

Here we see essentially the same self-wumao tactic as Luo Yuan got caught employing on weibo a few months back. A post appeared on Luo’s weibo account, praising Luo Yuan’s superb analysis of the North Korean problem, and declaring him “the most popular military commentator on television”.

The Major General claimed he claimed his account had been hacked, but Kai-fu Lee certainly wasn’t buying it. He did, however, offer Luo some expert advice: “Although you can use different browsers to operate multiple weibo accounts, the premise is that each browser must be logged into a different account!”

Luo Yuan's enthusiastic weibo post in praise of...Luo Yuan

Luo Yuan’s enthusiastic weibo post in praise of…Luo Yuan. Screenshots from Kai-fu Lee’s weibo 

The enigma of CEFC’s Chairman Ye

The Son? CEFC & Huaxin Chairman Ye, presiding

CEFC & Huaxin Chairman Ye Jianming 叶简明

UPDATE JANUARY 2017: Lots more information about Chairman Ye has come to light, including confirmation that he is not Ye Jianying’s grandson (but he is in business with Marshal Ye’s granddaughter). Read the latest update here first.

UPDATE APRIL 2016: The following odyssey through the business and ideological world of CEFC, an apparent platform of the Liaison Department of the PLA General Political Department (GPD-LD), was co-written with John Garnaut. Based on new information received, I now believe it’s unlikely that Chairman Ye Jianming is a grandson of Marshal Ye Jianying. Interestingly, there may be a connection with Marshal Ye’s family by marriage, which could be confirmed in coming months or years. The evidence of the young Chairman’s connection with the GPD-LD, however, remains strong, and has been anecdotally supported by people in a position to know. Thus, the new information doesn’t substantially alter the story below, just our theory on who exactly the Chairman’s father may be.*

Read on if you dare…


The enigma of CEFC’s Chairman Ye

 By Andrew Chubb & John Garnaut

Senior Colonel Dai Xu, of the People’s Liberation Army Air Force, apologised profusely for running late as he lowered his tiny frame into a plastic chair.

The display of manners and humility, in the mosquito-ridden lobby of his three-star Sanya hotel, seemed an unlikely departure point for an exploration of the evolving nature of Chinese power and how it is projected into the world.

Nevertheless, he was about to open a door into the labyrinthine universe of China’s ruling families, big oil and the most secretive and least understood corner of its military intelligence complex.

“I used to use Long Tao as pen name,” Colonel Dai said, confirming for the first time that he was indeed the “China Energy Fund Committee strategic analyst” whose incendiary writings have provoked fear and anxiety across the resource-rich South China Sea.

The most memorable article, published in the state-owned Global Times in September 2011, is now seen as emblematic of China’s “peaceful rise” entering a more belligerent phase.

“When those towering oil drilling platforms become flaming torches, who will be hurt the most?,” said Long Tao, presenting a case for waging war against the Filipino and Vietnamese “chickens” in order to scare the hegemonic American “monkey”.

The identity of Long Tao as Colonel Dai – a media pundit who holds a senior military rank yet has never commanded any troops – proved to be straightforward, however, compared with the organisation he purported to represent.


The cult of Chairman Ye

The China Energy Fund Committee (CEFC) describes itself as a “non-profit, non-governmental think tank” that strives for “a better future for mankind”.

At its apex sits a mysterious 36-year-old chairman named Ye Jianming, about whom so little is known that the Chinese-language internet has numerous bulletin board posts asking, “Who is Ye Jianming?

Chairman Ye, it turns out, heads an energy logistics megalith that came from nowhere in 2010 to claim revenues of more than US$30 billion last year.

China Huaxin Energy Company is the centre of a constellation of Hong Kong, Singapore and mainland Chinese companies that link as far as Zhuhai Zhenrong, a company that is subject to US sanctions for oil trading with Iran.

News on the company’s website details Chairman Ye leading delegations on visits to dignitaries around the world.

Despite his tender years, he has won the admiration of global statesmen from King Abdullah of Saudi Arabia to Henry Kissinger, who apparently addresses him as “Chairman”.

Kissinger - Ye inscription - Screen shot 2013-05-15 at 9.07.16 PM

Ye Jianming and Henry Kissinger

Ye Jianming and Henry Kissinger

The young chairman’s “thought” (in the sense of Mao Zedong Thought) and “important speeches” are lauded in the pages of company publications.

His slogans adorn the company’s website: “Starting with power, finishing with virtue”, “Faith, Unity, Rigor, Devotion” and – rather strikingly for a self-proclaimed private enterprise  – “Repay the country through industry”.

“We must continue to deeply study Chairman Ye’s speeches and articles,” says a piece in the 120-page internal study journal, “to thoroughly understand the development path the Chairman has pointed out for us.

“As an enterprise, Chairman Ye has assigned Huaxin the mission of ‘repaying the country through industry’, and this is Huaxin’s fundamental pursuit and final destination.”

Rapturous scenes ensued when the chairman made an appearance at Huaxin’s Chinese New Year function in February – according to the company’s in-house publicity (propaganda) centre.

“At 11 o’clock the entire room erupted into enthusiastic applause as Chairman Ye entered the venue, cordially shaking hands with everyone . . . the children jumped up one after another to wish Chairman Ye a happy new year.”

Chairman Ye enters the room

Chairman Ye enters the room

Explaining Huaxin

Yet, despite his flourishing cult of personality, the chairman is far from satisfied with the work of his propaganda department.

In April last year he told them they had “fallen behind”, “not grasped the main themes”, and “not explained what it is that Huaxin does”.

Indeed, how does Huaxin make its billions – aside from sponsoring belligerent think tanks?

The answer, according to the man himself: “In business it is a global trading company, in industry it is centred on energy storage and new energy projects.”

According to Singapore corporate filings, Ye Jianming was previously chairman of the board at Shanghai Zhenrong, part of the Zhuhai Zhenrong family that was hit with US sanctions for oil trading with Iran.

One of Huaxin’s current projects is to build a mammoth oil storage facility on Hainan Island, with capacity of 12 million cubic metres, to absorb a large share of China’s strategic oil reserve.

“Oh yes, Huaxin – the princeling company . . . they are into everything around here,” ventured a Hainan taxi driver late last year.

“No-one dares to mess with them.”

Aside from energy logistics, Huaxin’s subsidiaries are involved in rubber, chemicals, and metals.

At a meeting last month with Mexican state oil giant Pemex, Huaxin CEO Chen Qiutu (representing Chairman Ye Jianming of couse) boasted of his company’s “great financial system made up of many domestic and foreign listed companies and equity banks, trusts and securities companies”.

Its interests even extend as far as Australia, where last year it spent about $2 million for control of an iron ore hopeful, Buxton Resources, under the name National Business Holdings.

Huaxin’s website specifies its mission as, “Expanding the country’s overseas energy economic interests, being a national enterprise.”

But some assets closely related to the Huaxin family appear to be the personal property of the chairman.

In November 2011, Singapore Petrol Development Pte Ltd (SPD) purchased a beauty products trader called Sun East, with the intention of “exploring” a move into the petrochemical trading business.

SPD promptly renamed its acquisition CEFC International.

Corporate filings indicate that Ye Jianming is the sole shareholder of SPD, as well as the controlling shareholder of Daiwah Group, a Shanghai-based company established in January 2012 with capital of RMB 100 million. Daiwah deals in rubber, palm oil, non-ferrous metals, chemicals and shipping.


CEFC (Huaxin) Energy Company

CEFC (Huaxin) Energy Company

China Energy Fund Committee logo

CEFC think tank logo

Cryptic symbolism

Huaxin’s English name, China CEFC Energy Co, is almost identical to that of the CEFC think tank and until recently it listed the think tank as one of its charitable ventures.

Their logos are also almost identical except that the corporate entity’s is tinted Communist Party red, with golden stars like the Chinese flag, while the think tank has bronze stars on a background of United Nations blue.

At the centre of its logo is a big star which represents “civil rights”, according the CEFC’s English-language version of its website.

But the Chinese-language explanation makes no mention of civil rights and, in contrast, says the star represents how “this organization will play a strong and powerful role for the interests of the Chinese state and nation”.

Three smaller stars represent its participant “organizations and individuals”. A CEFC spokesperson declined repeated inquiries as to their identity or nature.

Months of questions to CEFC headquarters have provided no answers on the question of who or what is really behind its activities.

“Sometimes you just know it’s better not to know, so I don’t even ask,” was one typical response, from an employee.

“Let’s not talk about money, let’s eat lunch.”


Friends all over the world

The fact that CEFC might be set up and owned by an opaque oil company has not deterred global statesmen from participating in its high-level events.

Last month it quietly co-hosted an “energy conference” in Beijing attended by Kissinger and former German Chancellor Gerhardt Schroeder.

And while Huaxin’s internal structure uses Chinese government nomenclature and refers to its executives by the Communist Party appellation “comrade”, the United Nations has nonetheless vouched for CEFC’s non-government-status.

The “NGO” was granted Special Consultative Status with the UN Economic and Social Council which, in turn, enabled it to segue away from oil and war in order to co-host a “dialogue between Confucianism and Christianity” at United Nations headquarters in New York, in November 2012.

CEFC’s partner in that venture, the Nishan Forum on World Civilizations, is another new and mysterious Chinese organisation that describes itself as an NGO.

Its personnel and aspirations overlap with those of CEFC.

The interests of the Nishan vice chairman, Xing Yunming, reach far beyond Confucius and religion and might provide a clue to what lies behind the CEFC think tank.


Political warfare?

Mr Xing is in fact a lieutenant-general in the People’s Liberation Army and, according to isolated, and perhaps inadvertent, reports in provincial media, he is director of the military’s secretive political warfare agency – the Liaison Department of the PLA General Political Department (GPD).

The PLA GPD Liaison Department emerged in 1955 out of an entity with a more descriptive moniker: The Enemy Work Department.

Almost unknown to civilian researchers, it behaves like an intelligence agency but with broader scope and greater power, targeting foreign political and economic elites.

In recent years it appears to have broadened the focus of its “enemy work” – a term its operatives still use – from Taiwan and overseas Chinese communities to Western countries and their allies.

“Liaison work operates at a nexus of politics, finance, military operations, and intelligence,” said Mark Stokes, executive director of a Washington think tank, the Project 2049 Institution.

“It is responsible for active measures taken to influence foreign defence policies,” said Mr Stokes, who is sifting through reams of internet material to map the department’s personnel and networks across various front organisations.

The central strategy of enemy work is to create two simultaneously contradictory perceptions in the adversary’s mind: one, that China is friendly and benign, the other (invoked at the crucial moment) that China is powerful, ruthless and inevitable.

Perhaps this might explain why CEFC, the think tank, goes to great lengths to organize friendly cultural exchanges, yet also associates itself with warmongering articles by PLA officers.

CEFC, the think tank, repeatedly declined requests to clarify the nature of its links to the PLA GPD Liaison Department.

But publicly available records say from 2003 to 2005 chairman Ye Jianming was deputy secretary general of the China Association for International Friendly Contacts (CAIFC) – one of the GPD Liaison Department’s best-known public platforms.

CAIFC has mediated many of Kissinger’s contacts with the Chinese regime.

And there is a certain similarity at the center of CEFC and CAIFC’s logos, too.

China Energy Fund Committee logo

CEFC logo

CAIFC logo

CAIFC logo


More questions than answers

Which, in turn, hints at an answer to the ultimate mystery: who is Ye Jianming, the 36-year-old who sits atop both the CEFC think tank and its sponsor, the start-up oil megalith Huaxin?

Close observers in Hong Kong and southern China note that his features bear a striking resemblance to Lt-Gen Ye Xuanning — Director of the PLA GPD Liaison Department until 1998, and long-time President the Carrie (Kaili) Group, of one the original PLA business empires.

Ye Xuanning is the son of one of China’s great marshals, Ye Jianying, and has been described by peers as “the spiritual leader” of the princelings – the children of China’s original communist revolutionary heroes, who now dominate the top echelons of the party leadership.

The close observers say the PLA GPD Liaison Department continues to be his power base, 15 years after his official retirement.

Could the young chairman be – as many suspect – the youngest and previously unidentified son of Ye Xuanning?

Are his businesses and the CEFC think tank an instrument of Chinese state power, a family fiefdom, or merely private initiatives?

Dai Xu, the Air Force colonel, who has been pictured with Chairman Ye, knows the answers but is not forthcoming.

Is Ye Jianming the grandson of Ye Jianying? “It’s not convenient to say.”

Father and son? Ye Xuanning 叶选宁 (undated picture - source), Ye Jianming 叶简明

Father and son? Ye Xuanning 叶选宁 (undated picture – source), and Ye Jianming 叶简明

The father? Long-time Director of the Liaison Department of the PLA General Political Department, and of Marshal Ye Jianying, Ye Xuanning 叶选宁

Long-time Director of the Liaison Department of the PLA General Political Department, and of Marshal Ye Jianying, Ye Xuanning 叶选宁

* Another credible alternative hypothesis is that Chairman Ye Jianming may be a grandson of Admiral Ye Fei, who commanded the PLA Navy from 1980 to 1982. Yet another fascinating character to add to the roll-call, Ye Fei was born in the Philippines to a family with deep roots in Fujian Province, the original home of CEFC. He was a close associate of Marshal Ye Jianying and apparently opposed the June 4, 1989 crackdown.