`Similarly in the oil market. We have nearly 20 per cent of the April futures contract. When the oil price begins to rise I think it will stand to do very well indeed.'
At 1130 the Xinhua (New China) News Agency released a curt statement. `In regard to the situation in the South China Sea, President Wang Feng drew attention to the Territorial Waters Act promulgated in 1992. Non-military shipping has right of passage in our sovereign territory. Military shipping and nuclear-powered ships must receive Chinese permission to pass through our waters. The sovereign territory is being patrolled by the submarines of the PLA-N.'
The Chinese were not bluffing. They had deployed twenty Romeo and Ming class submarines. The Romeos were functional but ageing Soviet vessels whose design dated back to the 1960s. The Ming was a Chinese-built version. The submarines were loosely positioned in packs of five, organized in semicircles to guard the shipping routes of the South China Sea. Other Romeo submarines were in the shallower waters around the Spratly Islands, which although more dangerous were ideal places for the quiet diesel-electric engines. They could only wreak enough destruction to sink a modern warship if the crews of the antiquated submarines could outwit their high-tech enemies. In many modern navies the old diesel-electric design was being wound down for nuclear-powered submarines. China aspired to having a modern military, but knew that for Dragonstrike to succeed the PLA would have to revert to the tactics of barefoot warfare with which it won the civil war in 1949. The men would be familiar with their equipment and know the area of battle. Then with a World War Two wolf-pack style of operations the naval commanders believed they could safeguard China's sovereignty.
Elsewhere in the South China Sea, three of China's Russian-built Kilo (Granay) class SSK attack submarines took up positions between Singapore and the Indonesian state of Kalimantan in Borneo; in the Luzon Strait between the northern Philippines and southern Taiwan; and across the Gulf of Thailand between southern Vietnam and the area around the Thai-Malaysian border.
Ten minutes after the Xinhua announcement, two torpedoes were fired by a Romeo class submarine off to the west of the Paracel Islands near the Gulf of Tonking, an area which so far had not been drawn into the conflict. A Vietnamese 400-ton Sonya class minesweeper/hunter split in two. The impact ignited the fuel tanks. All but one of the sixty crew died in the explosion, which even in daylight could be seen for kilometres around. The survivor lived for three more minutes before being sucked down by the wreckage and drowning.
`We have proved our point,' said Wang Feng so quietly that only the trusted officer from the Central Guard Regiment heard him.
TWO
Well before dawn on the second day of Operation Dragonstrike China deployed the three Russian-built Kilo (Granay) class SSK attack submarines at the chokepoints of the South China Sea. Capable of travelling at 17 knots, they were the cream of China's modern diesel-electric submarine fleet, the most exported of all of Russia's submarines. Each vessel had hull-mounted medium-frequency Shark Teeth sonar for both passive and active searches and high frequency Mouse Roar sonar for active attack. Once the enemy was identified, the hunter-killers of the Chinese navy would track and destroy. Those were the orders of engagement. Each submarine had thirteen officers; many had been trained in Russia in a special programme launched by the PLA-N to put its submariners onto a war footing. Only a few years earlier, Chinese submarines were unable to stay at sea for more than a week at a time because of inadequate training. That problem was now solved.
At 0300 the Xinhua (New China) News Agency released a statement:
The Chinese government hereby gives notice that all international shipping is banned from the area commonly known as the South China Sea (longitude 110g to 120g east of Greenwich and 5g to 22g of north latitude) until further notice.
The People's Navy and Air Force are patrolling the South (China) Sea and will prevent all ships from entering this exclusion zone. International airlines are also warned not to overfly the area. Ships will be prevented from entering the sea through the Bashi Channel and the Luzon Strait, as well as through the Mindoro Strait and the Balabac Strait. Although the Straits of Malacca fall outside Chinese sovereign waters, international shipping companies are advised to avoid these straits as shipping leaving them will not be permitted to enter the South Sea.
The State Council said that China's armed forces would enforce the nation's sovereignty in the South Sea and called on all fair-minded and peace-loving nations in the region to recognize the justness of China's claim. The State Council said it was not the Chinese government's intention to restrict access to the South Sea indefinitely and that shipping lanes would be reopened in due course.
The Philippine Navy Whidbey Island class dock-landing ship Cagayan de Oro and the supporting corvette Cebu stopped 5 nautical miles off Mischief Reef, far enough to be out of range of Chinese heavy machine-gun fire. The moon dipped in and out of cloud cover. Four fibreglass rigid raiding craft, carrying thirty-six Marines, left the safety of the ship and moved off quietly towards the reef. Their destination was a grey metal and wooden structure which had been built by occupying Chinese troops in 1995 claiming they were shelters for fishermen.
The Marines were the most highly trained and motivated men in the Philippine military. Their orders were to go in under darkness, establish a foothold on the island, and observe enemy movement before being reinforced. A heli-borne platoon and more amphibious troops would come in at dawn to reclaim the territory. The Marines landed quietly among the rocks. Using dead ground, where they couldn't be seen from the main building, they found their positions and reported no enemy movement. The windows of the building were without glass. Polythene flapped in the frames, some of it torn by the strong winds. The whole place looked battered and weather-beaten, apart from the Chinese flag which flew pristine from a turret at the top of the building. There were no lights, no sign of life at all. An hour later, in that hazy period when the tropical daylight arrived, a Sikorsky Sea Stallion troop-carrying helicopter took off from the Cagayan de Oro.
More raiding craft sped from the ship, this time with engines at full throttle. Four American-built F5A fighter aircraft screamed overhead, coming in from their base on Palawan Island 130 kilometres away. The F5As descended low over the structure, then two broke away from the formation and climbed high to give cover to the approaching Marines.
The Sikorsky was directed in by the troops already there, who had set up three fields of interlocking fire to cover the Marines now arriving. Two at a time fast-roped down from the helicopter. Others from the raiding craft ran up to predetermined assault positions. They had expected to have secured the whole reef, torn down the enemy's colours, and replaced it with the Philippine national flag within ten minutes.
The Marine corporal led his men forward. There was enough light to see the hazards among the rocks. Soon they were crouched up against the walls. Using mirrors they covertly looked through the windows, satisfying themselves that the structure had been abandoned. But this was a dangerous mission. Even several of the most highly skilled men hadn't seen action of this kind before. They continued with caution according to their training. They threw hand grenades through the windows and waited for the deafening noise to settle before bursting through the main door, firing their M-16 automatic rifles. The room was empty. They hung Philippine ensigns from the two windows nearest the door to indicate to the covering troops outside that those rooms were cleared. The corporal reported back on the radio the signs of habitation. A Chinese magazine, exalting the leadership of President Wang; a PLA cookbook; a printed canvas board for playing Chinese chess, crumpled and torn on the floor. The Marine corporal moved towards the next room.