China to Invest $1.6 Billion on Disputed Islands

Posted on December 26, 2012


China plans to spend more than $1 billion building an airport, piers and other infrastructure on islands at the center of a territorial dispute with Vietnam and the Philippines, the 21st Century Business Herald reported.

China's establishment of Sansha City on Woody island (part of Vietnam's Paracel archipelago) to administer 90% of South China sea, and in effect, robs ASEAN's  properties' rights.

China’s establishment of Sansha City on Woody island (part of Vietnam’s Paracel archipelago) to administer 90% of South China sea, and in effect, robs ASEAN’s properties’ rights.

The central government approved plans to invest 10 billion yuan ($1.6 billion) in infrastructure for areas administered by the city of Sansha, the newspaper reported today, citing Jiang Dingzhi, governor of Hainan province, which holds jurisdiction over the city. China set up Sansha in June to oversee the Paracel and Spratly islands, parts of which are also occupied or claimed by Vietnam, the Philippines, Taiwan, Malaysia and Brunei.

Tensions between China and its neighbors in the South China Sea have spurred concern that competing territorial claims will disrupt economic relations between the Association of Southeast Asian Nations and the group’s largest trading partner. A dispute over control of the Diaoyu, or Senkaku, islands in the East China Sea is also weighing on trade between China and Japan.

The funds for Sansha will also be spent on marine law enforcement and ocean fisheries, according to the 21st Century Herald, which is based in the southern city of Guangzhou. Construction of some facilities has already started, the newspaper reported, without giving more detail.
Vietnam Ousted
Sansha is located on Yongxing, the largest island in the Paracels, with an area of 2.1 square kilometers (0.8 square miles). China ousted Vietnam from the 30 islets and reefs that comprise the Paracels, known as Xisha in China and Hoang Sa in Vietnam, in a 1974 battle that killed 71 soldiers.

“Sansha’s immediate work is for airports, ports, piers and other important infrastructure, as well as law enforcement vessels, supply ships and other projects to be established,” Hainan Governor Jiang was quoted as saying by the newspaper. “In the long term, we need to implement a platform for Sansha’s development.”


Vietnam-China 2012: Waves from the East Sea

Cooperation between the two countries in 2012 was maintained and gained certain progress. Politically, the two sides continued exchange of high-level visits and meetings.

On the occasion of the Chinese Communist Party Congress, Head of the Party Central Committee’s Information and Public Relations Commission Hoang Binh Quan represented the Vietnamese Communist Party to celebrate the success of the Congress and transferred the congratulation message of Party General Secretary Nguyen Phu Trong to his Chinese counterpart Xi Jinping.

Exchanges between ministries, branches, localities and people continued to be implemented, such as the 13th Vietnam-China Youth Friendship Meeting in China and the 7th Conference of ASEAN-China People’s Friendship Organizations in Vietnam.

In terms of economic cooperation, bilateral trade turnover by October reached $ 33.67 billion (up 17.4%).

The situation on the land border and the Gulf of Tonkin was stable. For maritime issues, both sides discussed to implement the high-level perception.

Waves in the East Sea

Although the Vietnam-China ties in recent years had certain progress, unfortunately China’s acts in the East Sea have affected the stable development momentum of bilateral relations, which would have continued to be strengthened further.

2012 witnessed the escalation of China related to sovereignty disputes in the East Sea, especially in the second half of the year, which not only stirred up waves in the East Sea but also placed the relationship between Vietnam and China before profound challenges.

VietNamNet reviews some severe unilateral actions of China:

Establishing the so-called “Sansha” city
The information about China’s establishment of the so-called “Sansha” city, which includes the island district of Truong Sa (Spratly) of Khanh Hoa province, Vietnam and the Hoang Sa (Paracels) island district of Da Nang, Vietnam, was released in June.

In July, China formally established the so-called “Sansha” city, based on Phu Lam Island, in Vietnam’s Hoang Sa archipelago, despite the objections of the international community.

China urgently strengthened the so-called government apparatus of “Sansha” city by building ports, airports, bridges, offices, etc.

China also planed to build waste treatment works, apartments, roads in Vinh Hung or Vietnam’s Phu Lam Island.

China held a flag raising ceremony on October 1 to mark its National Day on Phu Lam Island in the Hoang Sa archipelago.

On October 3, the Chinese navy’s Nanhai Fleet held an exercise in the waters of the Hoang Sa archipelago and five days later, China set up a meteorological station in the so-called Sansha City.

Vietnamese Foreign Ministry spokesman Luong Thanh Nghi said the activities of the Chinese side has seriously violated Vietnam’s sovereignty over the Hoang Sa and Truong Sa archipelagoes, the international law, the basic principles on the settlement of sea issues between Vietnam and China signed in October 2011, going against the spirit of the Declaration on the Conduct of the Parties in the South East Sea (DOC) signed in 2002 between ASEAN and China, making the situation in the East Sea more complicated.

Invitation of international bids for 9 oil and gas lots

The nine oil and gas lots that the CNOOC opened international bids for are entirely in the exclusive economic zone of 200 nautical miles and the continental shelf of Vietnam.

The nine oil and gas lots that the CNOOC opened international bids for are entirely in the exclusive economic zone of 200 nautical miles and the continental shelf of Vietnam.

In June, China announced the opening of international bids for 9 oil and gas lot within Vietnam’s exclusive economic zone and Vietnam’s continental shelf.

In August, China again opened international bid for the oil and gas block 65/12, seriously violating Vietnam’s sovereignty over the Paracel Islands.

Spokesman Luong Thanh Nghi said, this action is illegal and invalid.

The nine oil and gas lots that the CNOOC opened international bids for are entirely in the exclusive economic zone of 200 nautical miles and the continental shelf of Vietnam

Vietnam asked China to immediately cancel the wrong biddings and not make any act that would make the situation in the East Sea more complicated and strictly observe the Agreement on the principles for the settlement of marine-related issues signed between the two countries, respect international law, especially the UN Convention on the Law of the Sea in 1982 and the spirit of the Declaration on the Conduct of Parties in the East Sea (DOC).

Seizing Vietnamese fishing vessels and fishermen

In 2012, China arrested 21 fishermen and two Vietnamese fishing vessels in the waters of the Paracel Islands of Vietnam.

In a diplomatic note to the Embassy of China, Vietnam protested the actions of the Chinese side that seriously violated the sovereignty, sovereign rights and jurisdiction of Vietnam and asked the Chinese side to unconditionally release Vietnamese fishermen and fishing vessels, to stop the arrest and obstruction of Vietnamese fishermen in the waters of Vietnam.

China had to release 21 fishermen and 1 fishing vessels.

‘U-shaped’ passports

China began issuing electronic passports with the U-shaped line in May.

China began issuing electronic passports with the U-shaped line in May.

China began issuing electronic passports with the U-shaped line in May. Shortly after it was discovered, Vietnam asked China to remove the wrong content on this passport.

The Foreign Ministry spokesman Luong Thanh Nghi said China’s act violated Vietnam’s sovereignty over the two archipelagoes of Hoang Sa and Truong Sa, as well as sovereignty, sovereign rights and jurisdiction of Vietnam to the relevant waters in the East Sea.

Escalating violations

November 23 – China published a map of “Sansha,” which includes the Hoang Sa and Truong Sa archipelagos and the exclusive economic zone and continental shelf of Vietnam.

November 27- Hainan Province ratified the revised “Charters on coastal border management and security of Hainan Province,” which put the two archipelagoes of Hoang Sa and Truong Sa of Vietnam in the scope of application.

November 30- While Vietnam’s Binh Minh 02 ship was conducting normal seismic exploration in the exclusive economic zone and continental shelf of Vietnam, two Chinese fishing vessels deliberately obstructed and cut the ship’s cable, regardless of the warning signal of functional forces of Vietnam.

Linh Thu

Asia is adrift as some states subordinate themselves to China

The year 2012 began with festering Chinese sovereignty claims in the South and East China Seas, but also with hope that a code of conduct brokered by the Association of Southeast Asian Nations would enable them to be resolved peacefully. The year is ending, however, with those hopes dashed and ASEAN more divided than it has ever been. Indeed, a handful of its members now seem eager to subordinate their national interests – and the interests of ASEAN – to those of China. China’s increasing assertiveness in staking its claims contributed to the landslide victory of the defense-minded Liberal Democrats in Japan, and to the conservative Park Geun-hye’s election as South Korea’s first-ever female president. Rising regional tensions also provided the backdrop to U.S. President Barack Obama’s trip to Southeast Asia shortly after his re-election.

Obama announced the United States’ strategic “pivot” to the Asia-Pacific region in January 2012, and a whirlwind of activity there – from Australia to Indonesia to India – marked America’s security diplomacy throughout the year. In Japan, too, worries about Chinese assertiveness have become so powerful that a government that showed considerable hostility to the U.S.-Japan alliance when it came to power three years ago had, by November, begun to trumpet the alliance’s mutual-defense commitments as it confronted China’s claim to the Senkaku (Diaoyu) Islands.

The security concerns that have animated this diplomacy are forging a broad coalition, bringing in not only the region’s democracies, but also countries like Vietnam, which is embroiled in its own territorial dispute with China that centers on maritime oil exploration. Even India, which has been cautious about deepening its security ties with the U.S., has now embraced the idea of regional mutual defense – not only with America, but also with Japan and other East Asian countries.

This new emphasis on regional security is not confined to governments. Popular support for the creation of a pan-Asian security structure can be found not only in the election outcomes in Japan and South Korea, but also in the ecstatic crowds that greeted Obama in Myanmar (Burma) during his recent tour. Ordinary Burmese well understand that their country’s democratic transition is the direct result of its recoil from China’s excessive demands on its natural resources.

So far, China’s reaction to all of this new activity has been to dig in its heels and insist on addressing its territorial disputes with ASEAN’s militarily inferior members on a bilateral basis. In November, China foiled ASEAN members’ efforts to create a multilateral forum and an agreed code of conduct to govern economic and security activity in the South China Sea. By doing so, it split the group and may well have thwarted ASEAN’s ambition to transform itself into a European Union-like regional bloc by the end of 2015.

China succeeded by winning over Cambodian Prime Minister Hun Sen, the host of November’s ASEAN summit, who cut off discussion of China’s assertive role in the South China Sea by falsely claiming that ASEAN’s members had reached a “consensus” against “internationalizing” the issue. (Ironically, in 1984, when Hun Sen was foreign minister, his ministry published a book entitled “The Chinese Rulers’ Crimes against Kampuchea,” which documented China’s backing for the genocidal Khmer Rouge.)

That ASEAN debacle has had serious consequences. The foreign minister of the Philippines, which is also currently engaged in a heated territorial conflict with China, called on Japan to rearm itself to balance China militarily, notwithstanding his country’s bitter legacy of Japanese occupation. The landslide election of Shinzo Abe, who campaigned on a robust defense platform, may well lead to a serious Japanese push to invigorate the country’s military capabilities.

A recent announcement by the provincial government in Hainan, China, which has responsibility for the South China Sea territories claimed by China, has probably reinforced that impulse. According to the Hainan authorities, from Jan. 1, 2013, China’s police will be authorized to board and detain ships that are suspected of “illegal activities” in what China claims are its territorial waters.

What constitutes “illegal” activity in the eyes of the Hainan authorities was not spelled out, but many worry that the order will give carte blanche to the maritime police to interfere with commercial activity in the South China Sea. This approach, according to Stephanie Kleine-Ahlbrandt of the International Crisis Group, appears to be “part of an overall strategy by Beijing to more forcefully defend its sovereignty claims” by “operational means.”

As a result of China’s hardening stance, Surin Pitsuwan, ASEAN’s outgoing secretary-general has said Asia is entering its “most contentious” period in recent years. He warns that “the South China Sea could evolve into another Palestine” unless countries try harder to defuse rather than inflame tensions.

One reason to hope that matters will not get out of hand is China’s deep integration into the global economy. But, within China, as the U.S. political scientists Andrew Nathan and Andrew Scobell argued in Foreign Affairs magazine, there is growing tension between domestic economic priorities and Chinese leaders’ belief that “China’s political stability and territorial integrity are threatened by foreign actors and forces.”

The fears of China’s rulers, I suspect, do not bode well for reaching a peaceful resolution of its territorial disputes in the South and East China Seas. A country that is “unstable at the grass roots, dejected in the middle strata and out of control at the top,” as a group of Chinese scholars recently put it, may see adventurism abroad as the best means of maintaining unity at home.

Jaswant Singh

The Year of Living Nervously: China Pushes the Pivot

The passing year was the People’s Republic of China’s (PRC) first opportunity to get up close and personal with the United States’ pivot back to Asia, the strategic rebalancing that looks a lot like containment.

The PRC spent a lot of 2012 wrestling with contentious neighbors emboldened by the US policy, like Vietnam and the Philippines; combating American efforts to nibble away at the corners of China’s spheres of influence on the Korean peninsula and Southeast Asia; and engaging in a test of strength and will with the primary US proxy in the region, Japan.

This state affairs was misleadingly if predictably spun in the Western press as “assertive China exacerbates regional tensions”, while a more accurate reading was probably “China’s rivals exacerbate regional tensions in order to stoke fears of assertive China.”

Whatever the framing, this was the year that the world – and in particular Japan – discovered that the PRC can and could kick back against the pivot.

The fat years for “rising China” were the presidencies of George W Bush. Preoccupied with cascading disasters in the Middle East, a burgeoning fiscal deficit that demanded a foreign partner with an insatiable appetite for US debt, and, later on, a meltdown in the US and world economies, Bush had no stomach for mixing it up with China.

The PRC took the ball and ran with it, emerging as an overpowering presence in East Asia, plowing into Africa, establishing itself as a crucial paymaster for the European Union, and hammering away at the final bastions of Western leadership of the post-World War II planet: the major multinational policy and financial institutions.

Rollback was inevitable, and it was pursued, purposefully, carefully, and incrementally under Barack Obama.

Also back is ineffable American self-regard. With the election and re-election of a black president from a modest background, the United States reclaimed as its assumed birthright the moral high ground, something that one might think the US had forfeited for a decade or two thanks to the Iraq War, American mismanagement of the global financial system, and the failure to face the existential issue of climate change.

It would have been amusing, in a grim sort of way, to see if the election of Mitt Romney as president would have elicited the same ecstatic neo-liberal squealing about the glories of American democracy that we saw with President Obama’s re-election. In any case, the comically inept Romney was no match for the popularity, intelligence, and relentless organizational focus of Obama and American self-righteousness – or, as Evan Olnos of the New Yorker would approvingly characterize it, America’s “moral charisma” – is back.

With the United States firmly back in the leadership saddle, at least as far as the foreign affairs commentariat is concerned, China has nothing to show the world except the flaws of an authoritarian political and economic system, nothing to teach except as an object lesson in how to avoid them, and no right to participate in any world leadership councils except by Western sufferance.

This attitude dovetails almost perfectly with Obama’s apparent disdain for the PRC as an opaque, unfriendly, and unsavory regime that responds to engagement with overreach, one that must be stressed, pressured, and coerced in order to drive it toward humanity’s preferred goals. Under the leadership of the Obama administration, the West has made the significant decision to restrain China instead of accommodate it.

China will be a welcome partner in the world order, at least defined by the West, only if it democratizes, dismantles its state-controlled economy, and adheres to the standards of liberal multinational institutions in seeking its place in the world order. These outcomes are so far off the radar as far as the current PRC leadership is concerned, the only near-term endgame on these terms is regime collapse.

That’s a risky bet. If the regime doesn’t collapse, a simmering, constitutional hostility between the PRC and its many antagonists is on the books for the foreseeable future.

China’s response has been to avoid confronting the United States head-on, instead probing for weaknesses in the US chain of proxies and allies, while trying to shore up weaknesses in its own proxies and allies.

The only unalloyed win for the PRC in East Asia in 2012 was the re-election of the Kuomintang’s Ma Ying-jeou as president of Taiwan. President Ma has a steady-as-she-goes policy of minimal friction with the PRC, in contrast to the fractious pro-independence and pro-Japanese Democratic Progressive Party. In 2012 he went a step further. In a move that was largely ignored in the Western press because it complicated the narrative of unilateral PRC thuggery, Ma dispatched a flotilla of official and unofficial vessels to give grief to the Japanese coastguard presence around the Senkaku/Diaoyu Islands.

Other than Taiwan, one of the brighter spots in the authoritarian firmament has been the gradual pro-China/pro-reform tilt of North Korea under Kim Jong-eun. The PRC is still making the Obama administration pay for its disastrous miscalculation in 2009, when the US thought that the PRC’s overwhelming trade ties with South Korea would cause Beijing to abandon North Korea in the aftermath of the Cheonan outrage (the sinking of a South Korean frigate by forces unknown, but widely assumed to be North Korea) and join the United States in a multi-lateral diplomatic and sanctions-fueled beatdown of the Pyongyang regime.

Instead, the late Kim Jung-il realized that his long-standing opera-bouffe efforts at engagement with the United States were futile and got on his armored train to journey into China and fall into the welcoming arms of Hu Jintao.

On the other side of the ledger, Myanmar threatened to slide out of the PRC camp with the decision of the government to rebalance its foreign policy away from China toward the United States and reach an accommodation with domestic pro-democracy forces. The necessary demonstrations of pro-democracy and pro-Western enthusiasm by the Thein Sein government were 1) the release of Aung San Suu Kyi from house arrest and her return to public life and 2) postponement of the Myitsone hydroelectric project.

The Myitsone project was unpopular domestically because it was PRC-funded and had been adopted as a symbol of the casual sell-out of Myanmar interests to China by corrupt generals. Postponing Myitsone was popular with the West because it raised the possibility it would block development of Myanmar’s sizable hydroelectric potential by China and, instead, allow Western interests, shut out of the Myanmar economy for years because of sanctions, to reorient hydropower exports away from China and towards Thailand.

The PRC has responded cautiously to the Myanmar shift, apparently taking consolation in its dominant role in Myanmar’s economy, foreign trade, and security policy thanks to the long and porous border the two countries share.

Myanmar’s political elites, including Aung San Suu Kyi, apparently have decided that an anti-China economic jihad would be counter-productive and the PRC has good reason to hope that by upping its public relations game, spreading money around to deserving citizens both inside and outside politics (and perhaps discretely renegotiating some terms of some excessively favorable sweetheart deals with the Myanmar junta), it can successfully navigate the now dangerous shoals of Myanmar multi-party politics (in which a traditional strain of anti-Chinese populism has become an inevitable tool of political and popular mobilization).

In a sign that the United States also hoped to put Laos and Cambodia into play, Secretary of State Hillary Clinton paid a rare visit to the Laotian capital of Vientiane before putting in an appearance at Phnom Penh for a get-together of the Association of Southeast Asian Nations (ASEAN). Results were mixed, as Cambodia loyally defended the PRC from an attempt to place an ASEAN united front versus China concerning a South China Sea mediation initiative on the agenda.

Cambodian and Laotian desires to distance themselves from the big bully of Asia, the PRC, are perhaps counterbalanced by their desire to keep the big bully of Southeast Asia, Vietnam, at bay. As for Vietnam, it has learned that, as far as the United States is concerned, China is not Iran and Vietnam is not Israel – at least for now, and quite possibly for always.

Even as the United States has vocally supported freedom of navigation in the South China Sea and a multilateral united front in dealing with the PRC, it has avoided “taking sides in territorial disputes” – the only kind of dispute that the nations surrounding the South China Sea care about, since “the PRC threat to freedom of navigation” in the area is little more than a nonsensical canard.

With the US Seventh Fleet unlikely to slide into the South China Sea and blast away at Chinese vessels as an adjunct to the Vietnamese navy, Vietnam appears to have drawn the lesson from the PRC’s ferocious mugging of Japan that the disadvantages of auditioning for the role of frontline state in the anti-China alliance may outweigh the benefits.

The big story in East Asian security affairs this year was the PRC’s decision to bully Japan, ostensibly over the idiotic fetish of the Senkaku/Diaoyu Islands, but actually because of Tokyo’s decision to give moral and material support to the US pivot by once again making an issue of the wretched (Taiwanese) islands.

In 2010, China made the diplomatically disastrous decision to retaliate officially against a Japanese provocation – Seiji Maehara’s insistence on trying a Chinese fishing trawler captain in Japanese courts for a maritime infraction near the Senkakus. A relatively limited and measured effort to send a message to Japan by a go-slow enforcement effort in the murky demimonde of rare earth exports became a China bashing cause celebre, an opportunity for Japan to raise the US profile in East Asian maritime security matters, and an invitation to China’s other neighbors to fiddle with offshore islands and attempt to elicit a counterproductive overreaction from Beijing.

In 2012, the PRC was ready, probably even spoiling for a fight, seizing the opportunity even when the Yoshihiko Noda government clumsily tried to defuse/exploit the Senkaku issue by cutting in line in front of Tokyo governor and ultranationalist snake-oil peddler Shintaro Ishihara to purchase three of the islands.

This time, Chinese retaliation was clothed in the diplomatically and legally impervious cloak of populist attacks on Japanese economic interests inside China. The 2012 campaign did far more damage to Japan than the 2010 campaign, which was conceived as a symbolic shot across the bow of Japan Inc. The Japanese economy was not doing particularly well even before the 2012 Senkaku protests devastated Japanese auto sales and overall Japanese investment in China, raising the possibility that China might deliver a mortal blow, and not just a pointed message, to Japan.

The major US effort to refocus the economic priorities of Asia and offer material benefits to countries like Japan which line up against the PRC – the China-excluding Trans Pacific Partnership – is facing difficulties in its advance as economies hedge against the distinct possibility that China and not the United States (which is looking more like an exporting competitor than demand engine for Asian tigers) will be the 21st century driver of Asian growth.

It looks likely the US pivot into Asia will be a costly, grinding war of attrition fought on multiple fronts – with Japan suffering a majority of the damage – instead of a quick triumph for either side.

This year, let’s call it a draw.

Call it a draw in most of the rest of the world as well.

The Indian government apparently feels that the Himalayas provide an adequate no-man’s-land between the PRC and India and warily navigated a path between China and the United States.

With the re-election to president of Vladimir Putin and a return to a more in-your-face assertion of Russian prerogatives vis-a-vis the United States, Russia is less likely to curry favor with the US at Chinese expense than it was under Dmitry Medvedev.

On the other hand, the European Union, winner of the Nobel Prize for Pathetic Lurching Dysfunction, excuse me, the Nobel Peace Price, is desperately cleaving to the United States in most geopolitical matters, including a stated aversion to Chinese trade policies, security posture, and human rights abuses. It remains to be seen whether this resolve is rewarded by a recovery in the Western economies, or falls victim to Europe’s need for a Chinese bailout.

The most interesting and revealing arena for US-China competition and cooperation is one of the most unlikely: the Middle East. The PRC has apparently been attempting a pivot of its own, attempting to leverage its dominant position as purchaser of Middle Eastern energy from both Saudi Arabia and Iran into a leadership role.

With the United States approaching national, or at least continental self-sufficiency through domestic fracking and consumption of Canadian tar sands – and ostentatiously pivoting into Asia – it might seem prudent and accommodating to welcome Chinese pretensions to leadership in the Middle East.

The PRC has a not-unreasonable portfolio of Middle East positions: lip service at least to Palestinian aspirations, acceptance of Israel’s right to exist and thrive, a regional security regime based on economic development instead of total war between Sunni and Shi’ite blocs, grudging accommodation of Arab Spring regimes (as long as they want to do business), an emir-friendly preference for stability over democracy, and an end to the Iran nuclear idiocy.

As to the issue of the Syrian bloodletting, the PRC has consistently promoted a political solution involving a degree of power-sharing between Assad and his opponents. The United States, perhaps nostalgic for the 30 years of murder it has abetted in the Middle East and perversely unwilling to let go of the bloody mess, has refused to cast China for any role other than impotent bystander.

Syria, in particular, symbolizes America’s middle-finger approach to Middle East security. Washington is perfectly happy to see the country torn to pieces, as long as it denies Iran, Russia, and China an ally in the region.

The message to China seems to be: the United States can “pivot” into Asia and threaten a security regime that has delivered unprecedented peace and prosperity, but the PRC has no role in the Middle East even though – make that because – that region is crucial to China’s energy and economic security.

This is a dynamic that invites China to muscle up militarily, project power, and strengthen its ability to control its security destiny throughout the hemisphere.

The likely response is not going to be for threatened regional actors to lean on Uncle Sam, which has more of a sporting than existential interest in keeping a lid on things in Asia. Even today, the Obama administration has yet to come up with an effective riposte to China’s playing cat and mouse with Japan – and chicken with the global economy. Sailing the Seventh Fleet around the western Pacific in search of tsunami and typhoon victims and dastardly pirates is not going to help Japan very much.

If Japan decides to seize control of its security destiny by turning its back on its pacifist constitution, staking out a position as an independent military power, and turning its full spectrum nuclear weapons capability into a declared nuclear arsenal – and South Korea nukes up in response – the famous pivot could turn into a death spiral for US credibility and influence in the region.

If this happens, 2012 will be remembered as the year it all began to unravel.