Taming the South China Sea

Clare Schulte-Albert

Maritime disputes over access to resources will exacerbate incidents of naval brinkmanship in the South China Sea, agitating the framework of carefully-crafted strategic partnerships forged between South East Asian countries. The Association of South East Asian Nations (ASEAN) must find a way for all countries involved to save face through a call for restraint and dialogue regarding these sovereignty disputes.

Powder kegs and oil rigs

Though the islands in the South China Sea are little more than uninhabitable rocks, their wealth is found in the sub-oceanic pockets of oil and gas reserves, as well as the abundant fishing grounds nearby. More than 80 per cent of China’s trade goes through the sea lanes in the South China Sea, rendering it a geopolitical hotspot for potential cooperation or conflict.

In his recent book On China, Henry Kissinger compares the exercise of Chinese foreign policy to a game of weiqi – the art of preventing strategic encirclement. The Philippines’ recent withdrawal from the contested occupation of the Scarborough Shoal was largely claimed as a victory by the Chinese media for Beijing’s sovereign claims over the islands.

Meanwhile, the standoff with Vietnam over the Spratly Islands continues, with the China National Offshore Oil Corporation opening nine oil and gas lots for international bidders in response to Hanoi’s recent legislation which claimed China’s Xisha and Nansha Islands under Vietnam’s jurisdiction. Beijing also announced the establishment of a new prefectural-level district to replace three “administrative offices” that manage the disputed Paracel and Spratly archipelagos as well as the Macclesfield Bank. Both sides have stepped up their coastal patrols around the islands, providing ample opportunity for clashes.

As the most powerful country in the region, China does set the tone for the situation in the South China Sea. China’s modernization of its naval forces remains the top regional security concern, especially with China’s newly unveiled aircraft carrier. Still, Beijing continues to rely on diplomatic and commercial “soft” power bullying and civilian maritime law enforcement agencies to assert its claims over the islands.

Balance and counterbalance

Many believe that Washington has been using the South China Sea issue to justify increased security presence in the Asia Pacific through the Trans-Pacific Partnership. A recent CSIS report has proven otherwise, stipulating that this point of view was largely the product of realist perceptions by Chinese experts and state-owned media sources. A Wall Street Journal op-ed also confirmed that “the Obama administration walked a fine line between supporting its ally [the Philippines] and maintaining neutrality in the sovereignty debate”. Still, the US Navy has dispatched a nuclear-powered submarine to the former U.S. base at Subic in the north-western Philippines along with conducting several military drills with some of China’s neighbouring allies: Japan, South Korea, Indonesian and even Taiwan – almost too close for comfort for officials in Beijing.

Of course, China has joined its own “trade bloc”, the Association of Southeast Asian Nations (ASEAN), to counterbalance American influence in the region. Always urging its members to not be “the tools of major powers”, China has become a major growth driver and a stabilizing anchor for East Asian markets after the 2008 global financial crisis. At the same time, China’s tendency to forge strategic partnerships over alliances based on sharing common values means that Beijing’s national interests will always come first. Internationalizing the dispute will only drive China from the negotiating table, away from the meddling of “Western institutions” like the ICJ.

Finding a “win-win” solution

Global resources are seeing increased price volatility and overall price increases as scarcity, accessibility, and competition become major issues for developing countries, including the ASEAN member states. Wang Yingfan, a Chinese diplomat, has declared that all the interested parties should consider the “Deng Xiaoping Solution” – setting aside the territorial quarrel in favour of finding a mutually beneficial compromise.  Successful implementation of the 2002 Declaration on the Conduct of Parties in the South China Sea and a binding regional code of conduct accepted by China would prevent further intimidation of smaller parties.

Defining the ground rules of conduct would also make ASEAN member states more amenable to joint exploration and development of maritime resources in the South China Sea. Pursuing joint development would be consistent with the Chinese foreign policy maxim of “win-win economic cooperation.” Currently, the only initiative to tackle the disputes is the Canadian-funded, Indonesian-sponsored workshops on Managing Potential Conflicts in the South China Sea which encourages cooperation along areas of mutual agreement like scientific research and environmental protection.

China’s preference for bilateral agreements over multilateral treaties in recent years may become the primary tool to move along definitions of the legal status of the rocks before further exploration and drilling can begin. “Saving face” will be the ultimate goal of Chinese foreign policy with respect to territorial claims. The ASEAN Regional Forum should position itself as the key regional platform for dialogue on the disputes to ensure that all interested parties can come to a diplomatic arrangement without external pressures.