We recently wrote,
"China is probably glad to see that the West doesn't have any teeth in assertions about rolling back territorial grabs like it contemplates in the South China Sea and elsewhere. Japan has to wonder how it could go it alone were territorial disputes with China turn into armed conflicts. Our Saudi friends have already expressed their displeasure at our "leading from the back." "Now, the Chinese has served their notice to Taiwan, Malaysia, Vietnam and the Philippines that it intends to press its uniquely conceived territorial claims in the South China Sea. Our hollow claims of some sort of right to free military passage won't pass muster, but worse they won't change Chinese behavior.
The Chinese have also made it clear from 2011 that any challenges to their territorial claims which they say date back to 1947 will be viewed as attacks on Chinese sovereignty.
Coming home in the car today, I heard a report on Vice President Biden's speech visiting Ukraine where he reportedly said that the U.S. won't recognize any Russian annexation of Crimea and that Russia must stop fomenting violence through proxies in masks. This kind of speech is one the President should have made, but it's good to put something clear, fundamental and principled on the table.
German Chancellor Merkel, who had been very visible during the long, drawn on European currency crisis is conspicuously absent on the world stage. She must be ruing her ill-conceived energy policies. Mothballing the German nuclear power industry, creating expensive, inefficient renewable targets, and selling out to Gazprom--a trifecta of policies to play into Russia's hands.
President Putin continues to pull the strings in the Ukraine, but market disciplines through the flight of capital are the only clear signal the Russian President is getting that he may have to tack from his full speed ahead attempts to recreate the Russian empire.