
Chinese Ships Put On Show of Force in Neighbor's Economic Waters
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
A Chinese coast guard and paramilitary ship are nearing two weeks of patrols in the energy-rich waters of Malaysia's exclusive economic zone.
Chinese government or state-sponsored vessels were observed in the area on 359 days last year, a slight uptick from 2023, according to the Center for Strategic and International Studies think tank.
Why It Matters
China claims most of the South China Sea, citing historical rights—despite an international tribunal's 2016 decision rejecting the country's sweeping claims. These claims overlap with competing claims by several neighboring countries.
The encroachment has been met with a more muted response from Kuala Lumpur compared with U.S. ally the Philippines. Yet Beijing's challenge could set the stage for increased tensions as Malaysia expands its oil and gas exploration and development.
Newsweek reached out to the Chinese embassy in Malaysia and the Malaysian foreign ministry via emailed requests for comment outside of office hours.
What To Know
Chinese coast guard vessel 5403 and a maritime militia vessel Yue Hui Wan Yu 22888 on Tuesday remained around 100 miles off the coast of Sarawak state in Malaysian Borneo after first being observed on July 10, according to ship-tracking data shared with Newsweek by maritime analyst Ray Powell.
This is well within Malaysia's exclusive economic zone, within which Malaysia alone is entitled to natural resources under maritime law.
Powell described the patrols as "intrusive" and intended to normalize China's sovereignty claims in its neighbor's maritime zone.
A Chinese Coast Guard ship is seen near the Philippine-occupied island of Thitu in the disputed South China Sea on June 3, 2025.
A Chinese Coast Guard ship is seen near the Philippine-occupied island of Thitu in the disputed South China Sea on June 3, 2025.
Ted Aljibe/AFP via Getty Images
One of three gas fields that began production last year, state-owned operator Petronas started producing gas at Kasawari in August 2024, with an initial flow rate of 200 million standard cubic feet per day. The field is estimated to hold about 10 trillion cubic feet of gas.
In a diplomatic note from China's foreign ministry to the Malaysian embassy in Beijing—leaked to The Philippine Daily Inquirer—China reiterated its "firm opposition" to Malaysia's exploration and development activities, calling them an infringement on China's sovereignty.
The leak prompted a rare public statement on the issue from Malaysian Prime Minister Anwar Ibrahim, who played down the impact of the controversy on bilateral relations while pledging to continue the projects.
What People Have Said
Ray Powell, the director of the Stanford University-affiliated maritime analysis group SeaLight, wrote on X, formerly Twitter: "People's Republic of China maritime militia ships 'act as frontline enforcers of China's maritime claims and work in close coordination with the China Coast Guard'—as with Yue Hui Wan Yu 22888 clearly coordinating with China Coast Guard 5403 on this patrol."
Malaysian Prime Minister Anwar Ibrahim said in September after China's objections over the gas exploration: "We will continue, but we will not close the door on discussions with any country.
"We have issues but these issues do not affect diplomatic relations. These issues do not affect trade relations and close friendships with our neighbors."
What's Next
Production from Kasawari and the other new offshore fields is expected to deliver a significant boost to both Malaysia's domestic energy supply and exports.
The Center for Strategic and International Studies has cautioned, however, that Malaysia's increased activity could prompt more assertive behavior from China.
"With Malaysia's expanding drilling and a potential reduction in China-Philippine tensions, Beijing could ratchet up the pressure on Malaysian hydrocarbon production," CSIS's Asia Maritime Transparency Initiative wrote in a report late last year.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


The Hill
6 minutes ago
- The Hill
Here are the trade deals Trump has made ahead of Aug. 1 tariffs
After months of delays, President Trump's long-awaited global tariffs are slated to take effect at the end of this week. Trump on April 2 announced 'reciprocal' tariffs on dozens of other countries, using trade deficits to help calculate the tariff rate. But a week later, he lowered those rates to 10 percent for three months as markets reacted negatively, allowing time for countries to negotiate. As the 90-day window was nearing its end earlier this month, Trump sent letters to countries informing them of the new 'reciprocal' rate that, he said, would take effect Aug. 1. The White House has managed to secure some significant trade deals since the president's unprecedented sweeping tariffs were first announced in the spring. Trump on Sunday announced a trade deal with the European Union, setting tariffs at 15 percent for European goods, including automobiles — lower than the 30 percent rate Trump had threatened to impose on the EU next month. The EU will purchase $750 billion worth of energy from the U.S. as part of the deal, Trump announced, and agreed to invest in the U.S. $600 billion more than the current investments for other goods. Trump similarly reached a deal last week with Japan, setting a 15 percent tariff on Japanese goods — lower than lower the 25 percent tariff Trump had threatened to impose. Also in that deal, Trump said Japan would invest $550 billion in projects in the U.S. and would open its markets to U.S. automobiles, rice and other agricultural products. The Philippines agreed to a trade deal with the United States that would lower U.S. tariffs on its exports to from 20 percent to 19 percent, Trump announced last week. Trump had originally set a 17 percent duty on imports from the Philippines in April before warning that figure would rise to 20 percent last month. An agreement with Indonesia would also set a tariff rate of 19 percent on its imports. Trump announced an agreement with the United Kingdom in early May, in what is considered the first major deal struck since the president announced his sweeping tariffs in April. That agreement set the tariff rate at 10 percent, down from 25 percent. The U.K. is allowed to export 100,000 cars to the U.S. at a 10-percent tariff rate, as opposed to the 25-percent rate announced March 26, marking a win for the British car industry. Trump and British Prime Minister Keir Starmer are expected to talk about the implementation of that deal when they meet Monday in Scotland. The US and China announced in late May the contours of a deal to stave off a trade war between the two countries temporarily. The U.S. reduced its tariff rate from 145 percent to 30 percent, and China reduced its rate from 125 percent to 10 percent. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to hold talks Monday for the third time this year, with The Associated Press reporting that China is expected to press for the U.S. to remove its 20 percent tariff related to fentanyl. Both countries have an additional 10 percent baseline tariff in place. The White House sent dozens of letters this month informing countries of what they should expect their tariff rate to be, come Aug. 1. Trump has insisted he would not further extend the tariff deadline, but Commerce Secretary Howard Lutnick said Sunday that the president would be open to continuing discussions even after the tariffs are in place. For countries that have yet to secure a deal with the U.S., here are the tariff rates set to take effect on Aug. 1: Canada: 35 percent Mexico: 30 percent South Korea: 25 percent South Africa: 30 percent Kazakhstan: 25 percent Laos: 40 percent Malaysia: 25 percent Myanmar: 40 percent Tunisia: 25 percent Bosnia and Herzegovina: 30 percent Bangladesh: 35 percent Serbia: 35 percent Cambodia: 36 percent Thailand: 36 percent Libya: 30 percent Iraq: 30 percent Algeria: 30 percent Moldova: 25 percent Brunei: 25 percent Sri Lanka: 30 percent Brazil: 50 percent

Miami Herald
17 minutes ago
- Miami Herald
Fed decision, jobs report will step out into spotlight
It's rare that folks think about a week of economic reports as potentially dramatic. This week, however, has the potential to be very dramatic. There's just so much data and, yes, politics, about to be loosed on markets, on businesses and around the world. Don't miss the move: Subscribe to TheStreet's free daily newsletter There's the July unemployment report, due Friday. The widely studied and analyzed PCE inflation report inflation report, due Thursday. There's the first round of estimates of second-quarter gross domestic product, the report card on how the economy is faring. Related: It's a lollapalooza week ahead for markets Parallel to the economic data are some 843 earnings reports due this coming week from the likes of Microsoft (MSFT) , Facebook-parent Meta Platforms (META) , Apple (AAPL) and (AMZN) . It all comes in the context of continued negotiations on trade deals with tariff rates coming in at lower rates than President Trump suggested in April. Trump said Sunday the European Union has agreed to a deal that envisions tariffs on European goods at 15%. The United States is still negotiating on tariffs with China, Canada and others. So far, stock investors are happy to get a settlement. Stock index futures were signaling stocks will open higher on Monday. Gains would come after the Standard & Poor's 500, Nasdaq Composite and Nasdaq-100 indexes all hit record highs last week. And, of course, there's the Federal Reserve meeting on Tuesday and Wednesday. Will the central bank cut its key federal funds rate, not at 4.25% to 4.5%? Donald Trump wants a rate cut badly now. Treasury Scott Bessent says he wants it. Howard Lutnick, the Commerce Secretary, says he wants it. Two Fed governors, Christopher Waller and Michelle Bowman, are for it. But the other 10 voting members of the Federal Open Market Committee, including Fed Chairman Jerome Powell, have said they're content to wait, probably until the Fed's Sept. 16-17 meeting. Related: Intel CEO outlines 'hard but necessary decisions'; Trader Guilfoyle: CEO Tan 'Has a Chance' Powell attracts most of President Trump's ire; he's threatened to fire Powell, whose term expires next May. (Whether he legally can fire Powell is not clear.) Powell remains worried the president's big beautiful tax bill and his tariffs will affect inflation. Powell is not opposed to cutting later and, in fact, the futures markets think the Fed will decide to wait until September. A second rate cut will come in October or December. Overnight trading in the 10-year Treasury note shows the yield rising to 4.41% from Friday's 4.392%. Related: Mexican restaurants, chains hit hard by Chapter 11 bankruptcy There are estimates showing jobs growth falling to around 110,00 from 147,000 in June with the unemployment rate holding at 4.1% or so. But this bit of data has become quite volatile and a bit suspect because it's getting harder to obtain reliable data from phone and online surveys. Bloomberg/Getty Images Another indicator should come Thursday when outplacement firm Challenger, Gray & Christmas should release its monthly tally of reported layoffs and job cuts. One more jobs indicator: the weekly report on initial jobless claims, due Thursday. The most recent report showed 217,000 layoffs, down 4,000 from a week earlier. More Tech Stocks: Analyst who correctly predicted Rocket Lab stock surge resets forecastVerizon Q2 earnings report surprises with remarks on tax reformFund manager who forecast Nvidia stock rally reboots outlook The Personal Consumption Expenditures Index measures what is happening to prices for services and products consumers actually buy. It was 2.3% year-over-year in June and may be up slightly in July. Related: Chapter 11 bankruptcy forces popular animal attractions to close Two reports will look at this question: the S&P Case-Shiller report that looks at home prices on Tuesday and the National Association of Realtors Pending Home Sales Index on Wednesday. The Case-Shiller report has suggested home prices are moderating. The pending sales report was up slightly in June but is down around 40% from levels last seen in 2022. Part of the downturn is due to: Higher interest home little construction of homes aimed at first-time home buyers. The Conference Board releases its Consumer Confidence Index report for July at 10 a.m. Tuesday. The University of Michigan releases its Consumer Sentiment Index at 10 a.m. Friday. Both look at how consumers are looking at inflation, the economy and other factors. The June reports showed increasing confidence, a reflection of better conditions in financial markets and the economy. Related: Veteran fund manager points to glaring stock market risk The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.


San Francisco Chronicle
36 minutes ago
- San Francisco Chronicle
Hong Kong's CK Hutchison seeks Chinese investor to join Panama Ports deal
HONG KONG (AP) — A Hong Kong conglomerate that's selling ports at the Panama Canal said Monday it may seek a Chinese investor to join a consortium of buyers, a move that could please Beijing but bring more U.S. scrutiny to the geopolitically fraught deal. CK Hutchison Holdings' initial plan to sell port assets in dozens of countries to a group that includes U.S. investment firm BlackRock Inc. pleased President Donald Trump, who has alleged that China interferes with the critical shipping lane's operations in Panama. However, they apparently angered Beijing and drew a review from Chinese anti-monopoly authorities. A Hutchison subsidiary has operated ports at both ends of the Panama Canal since 1997. After months of uncertainty brought by tensions between Washington and Beijing, Hutchison said in a statement that the exclusive negotiations period with the consortium has expired. However, it added 'the Group remains in discussions with members of the consortium with a view to inviting major strategic investor from the PRC to join as a significant member of the consortium,' referring to the People's Republic of China. It said they needed to change the membership of the consortium and the structure of the transaction for the deal to be able to pass reviews by 'all relevant authorities." The awkward position Hutchison found itself in for months highlights the challenges Hong Kong business elites face in navigating Beijing's expectations of national loyalty, especially when relations between China and the United States are strained. Hong Kong has overhauled its electoral system to ensure the city is run by 'patriots.' CK Hutchison is owned by the family of Hong Kong's richest man, Li Ka-shing. It announced March 4 that it would sell all its shares in Hutchison Port Holdings and in Hutchison Port Group Holdings to the consortium that also includes BlackRock subsidiary Global Infrastructure Partners and Terminal Investment Limited, a subsidiary of the Mediterranean Shipping Company. In May, Hutchinson co-managing director, Dominic Lai told shareholders that Terminal Investment was the main investor. Its parent company is led by Italian shipping scion Diego Aponte, whose family reportedly has a longstanding relationship with Li's. The initial deal, valued at nearly $23 billion including $5 billion in debt, would have given the consortium control over 43 ports in 23 countries, including the ports of Balboa and Cristobal, located at either end of the canal. That agreement also required approval from Panama's government.