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Freedom of the Seas Is Important

Sigma Investment Counselors

July 16, 2020

Over the last several years we have posted a number of blogs relating to the importance of the “freedom of the seas”, most recently on (17May16) and (25Jan17).  Despite the fact that approximately 80% of the world’s trade volume travels by sea, the international community has largely ignored China’s efforts to exert military control over the South China Sea, a vital waterway.

No longer, in a statement released Monday, July 13, 2020, the State Department declared that “Beijing’s claims to offshore resources across most of the South China Sea are completely unlawful.”  This position seems to have some international support and was essentially affirmed by a 2016 determination by the Permanent Court of Arbitration in The Hague.  The State Department document, for the first time, embraces this ruling and says that “The world will not allow Beijing to treat the South China Seas as its maritime empire.”

Recently, reflecting increasing international concern regarding Beijing’s belligerence, the European Union and its member states announced a plan to take coordinated action to respond to China’s tightening grip on Hong Kong.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA

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