- - Wednesday, July 4, 2012

As China ratchets up military tensions with almost all of its neighbors in the Western Pacific, the United States is hosting its largest multinational maritime exercise and has excluded China from joining the maneuvers near Hawaii called Rim of the Pacific (RIMPAC).

Beijing is not happy about it.

“The United States is using this exercise to show off its military strength, seeking military alliances in order to contain the military rise of another country in the region. Such [a] scheme is so thoroughly exposed now,” the official People’s Daily stated Saturday. The newspaper is the official mouthpiece of the Chinese Communist Party.

“It is obvious that the purpose of the U.S. calling in these many allies to conduct joint exercises is to exert pressure onto certain neighboring countries through military drills, as well as to [examine] the combat readiness of the U.S. military,” the newspaper said.

It appears that what particularly angered the Chinese was the invitation to and participation by Russia and India in this year’s 22-nation exercises, which began Friday.

On many global strategic issues such as Syria, Iran and NATO, Moscow and Beijing consider themselves strategic allies.

However, China’s military buildup at a dizzying speed also has worried the Russians, who view themselves as key players in the Pacific with several countries as traditional allies, such as Vietnam, that are wary of Beijing’s military aggressiveness.

First-time RIMPAC participant Russia also is running a brisk arms trade with many Asian and Pacific countries that have open confrontations with China on territorial disputes.

Also participating in the exercise for the first time is India. China is engaged a decades-long border dispute with India, which increasingly sees itself as a key maritime player in the Indian and Pacific oceans as a counterbalance to China’s growing military presence. India is arming itself rapidly and has become the world’s largest weapons-importing country.

Asked about the lack of a Chinese contingent at RIMPAC, Navy Capt. Lydia Robertson, a spokeswoman for U.S. Pacific Command, said the Chinese were last invited in 1998 and sent observers.

China was not invited to RIMPAC 2012,” Capt. Robertson said. “We are open to considering inviting China to future RIMPAC exercises. We engage regularly with the [People’s Liberation Army] navy through mechanisms such as the Military Maritime Consultative Agreement talks.”

Defense contractor fined for tech transfer

A major U.S. defense contractor admitted last week to federal prosecutors that it knowingly violated export rules and laws by providing China with sensitive technology used in China’s newest military attack helicopter, according to an investigation led by U.S. Immigration and Customs Enforcement.

United Technologies Corp., based in Hartford, Conn., reached a plea deal in the case and was ordered to pay a $75 million fine, one of the heaviest in recent history.

United Technologies pleaded guilty to deceiving U.S. export control officials and failing to report contraband shipments to an embargoed country — China.

The case highlighted a major issue facing the U.S. industrial and financial regulators: the porous control mechanisms for multinational corporations such as United Technologies that have many subsidiaries outside of the United States, complicating efforts to enforce federal regulations.

In this case, the most damaging violation of export controls took place through United Technologies subsidiary Pratt & Whitney Canada.

New York-based financial services firm JPMorgan Chase & Co. recently lost billions of dollars despite the watchful eyes of financial and market regulators. JPMorgan had been highly regarded as an example of corporate responsibility.

After the debilitating loss, a congressional hearing disclosed that Securities and Exchange Commission officials and other market regulators did not have any meaningful jurisdiction over JPMorgan’s international operations. The huge financial loss took place at its London branch, far from the watchful eyes of Washington and New York.

• Miles Yu’s column appears Thursdays. He can be reached at mmilesyu@gmail.com.