High Tension on the High Seas

China is feuding with its neighbours in the South China Sea. Is accommodation possible? By Meredith Kravitz.
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June 25, 2014
Japan's Prime Minister Shinzo Abe waits to deliver the opening keynote address at the 13th International Institute for Strategic Studies (IISS) Asia Security Summit: The Shangri-La Dialogue, in Singapore May 30, 2014.

Last week a group of Philippine troops joined their Vietnamese counterparts on a sandy isle in the South China Sea to drink beer, eat food, play sports and enjoy cultural performances. This seemingly lighthearted rendezvous — with its games of volleyball, soccer and tug-of-war on teams of mixed nationality — was anything but. The military outpost where they met is at the heart of a brewing maritime conflict that has pitted China against its Southeast Asian neighbours. And Vietnam and the Philippines were there to make a point.

This display of Vietnamese and Philippine unity on Southwest Cay in the Spratly archipelago was a clear rebuke to Beijing for its recent confrontational behaviour in the South China Sea. Last month China inflamed regional tensions by towing a state-owned oil rig into disputed waters off the coast of Vietnam. Weeks later, Hanoi released a video of a Chinese ship ramming and sinking a nearby Vietnamese fishing boat.

A spokesperson from the Chinese Foreign Ministry called the Vietnamese-Philippine romp a “clumsy farce” and accused Manila and Hanoi of escalating the South China Sea dispute, a farcical statement in itself given that all regional players – save China – have displayed intentions to resolve their differences peaceably. Indeed, this was probably Manila and Hanoi’s main point: to show the world that they are willing to negotiate with one another in good faith – that, and to make China look like a bully. It worked.

It also points to something that often goes unremarked in discussions on the South China Sea dispute, particularly those that tend to frame the issue as a simple conflict over resources. The truth is that China’s goals and interests in the South China Sea differ considerably from its regional neighbours. And understanding China’s unique concerns is necessary for finding potential political solutions to the conflict.

The South China Sea dispute is not just your classic resource conflict in which each party is jostling for the largest piece of the pie. Sure, Vietnam, the Philippines, Malaysia, Indonesia, Taiwan and Brunei all want their fair share of the sea’s riches – its islands, fisheries, and the oil and gas deposits that lie offshore. But these sorts of disputes are amenable to compromises, concessions, quid pro quos and other negotiated solutions. Beijing is not merely interested in the South China Sea’s natural resources; if it were, this would be a much easier conflict to resolve.

What China is primarily concerned with is control over the strategic maritime routes that run through the South China Sea and bring with it a whopping 80 per cent of Chinese oil imports – the lifeblood of its economy. And who currently underwrites the security of these strategic sea-lanes? The U.S. Navy, of course.

China’s Malacca Dilemma

The South China Sea is the world’s foremost maritime artery for international commerce and energy supply. Over half of the world’s seaborne trade passes through its waters. Its major chokepoint, the Malacca Strait, connects the petroleum-rich Arabian Peninsula to the west with the emerging Asia-Pacific economies in the east. Nearly all of China’s imported energy travels along this narrow channel of water. Each year, as China grows hungrier for the oil that passes through, the stakes become higher.

China has long recognized this strategic risk, commonly referred to as the “Malacca Dilemma.” In a 2003 speech to the Communist Party leadership, President Hu Jintao identified China’s dependence on the Malacca Strait as a critical threat, and called for new strategies to hedge against the vulnerability. It should come as no surprise, then, to find that over the past decade China has been attempting to diversify its energy supply channels and solidify its presence in the South China Sea.

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In 2009, China and Myanmar inked a deal to put down more than 500 miles of oil and gas pipelines from Myanmar’s western coast to China’s southwestern Yunnan province, effectively bypassing the Malacca Strait. The gas pipeline was completed in 2013, but the oil pipeline, meant to be operational by July 2014, has been put on hold. It is one of China’s many recent cutbacks in energy development due to decreased demand. Still, capacity will surely rise in the future, and while China may no longer grow as hastily, diversifying its energy supply routes is a prudent and logical move.

Also logical is Beijing’s attempt to plant its flag in the midst of its most critical waterway. That is why, as antagonistic as it may seem, moving an oil rig into the Paracel archipelago is hardly irrational. And it is also not China’s most ambitious move in the South China Sea to date. Last week, the Philippines revealed that China is in the process of building Dubai-style artificial islands near Johnson South Reef – a contested outcrop in the Spratly archipelago currently occupied by China. Philippine officials say that construction began in February 2014, and they speculate the artificial maritime outpost will serve as a Chinese military base and airstrip. Beijing justified its construction activity based on sovereignty claims, but the move purportedly violates a 2002 ASEAN agreement in which member states and China agreed to maintain the status quo in disputed areas until a settlement had been reached.

All of this suggests that, while the natural resources of region are undoubtedly attractive, they are not the sole, nor the most critical of Chinese interests in the South China Sea. And this makes finding a mutually agreeable solution to the conflict much more difficult. Territory is divisible; maritime boundaries can be negotiated and drawn. But the security of maritime trade and energy routes is far less tangible. Understanding China’s anxieties over its Malacca vulnerability goes a long way to explaining its recent behaviour in the South China Sea.

Not that this is any consolation to China’s neighbours. In fact, they are becoming ever more weary of China’s actions, and more vocal about it too.

A multipolar seascape

At last month’s annual Shangri-La Dialogue in Singapore, the United States, Japan, and the Southeast Asian nations were openly critical of Beijing’s recent activities in the South China Sea, which they view as destabilizing the region. In his keynote address, Japanese Prime Minister Shinzo Abe emphasized the importance of international law and saluted the “efforts of the countries of ASEAN as they work to ensure the security of the seas and the skies, and thoroughly maintain freedom of navigation and freedom of overflight” — a less-than-subtle jab at China’s blanket claims to the South China Sea and regular incursions into ASEAN exclusive economic zones. The United States and its Asian allies pledged stronger defense ties, and though the United States made powerful declarations in support of its commitment to Asian maritime security, many commentators were openly doubtful whether such pledges would hold up under more precarious circumstances. How much longer can the United States play balancer in the region?

As Robert Kaplan points out in his new book on the conflict, Asia’s Cauldron: The South China Sea and the End of a Stable Pacific, the U.S. Navy is downshifting, at least relative to the dramatic growth of China’s People's Liberation Army (PLA) Navy. For China’s littoral neighbours in the South China Sea, it is an open question whether they can continue to rely on the United States to secure their maritime environment. That is not to say that China is poised to directly confront the United States or completely take control. A multipolar seascape in which no single state dominates, but where China may be able to effectively impinge upon U.S. naval access, is the more likely scenario, argues Kaplan — and a far more dangerous one, at that. While a new, multipolar balance of power in the South China Sea may be able to keep the shipping lanes open for business, it would also be inherently unstable.

Still, there are good reasons to take a less ominous view of the future. Though the PLA Navy is growing exponentially, its single, refurbished Ukrainian aircraft carrier is hardly a match for the U.S. Navy’s nineteen. It is also useful to remember that the notion of ‘decline’ has a stronger impact psychologically than it does materially. As Joseph Nye Jr. has pointed out, “the word ‘decline’ mixes up two different dimensions: absolute decline, in the sense of decay, and relative decline, in which the power resources of other states grow or are used more effectively.” Here we are talking about the latter. And China is not the only Asian state that is growing: India, and even the Philippines and Indonesia, may end up dampening China’s meteoric rise.

Let us also not forget that China, like all other nations, depends on peace and order in the global commons for the free flow of goods and resources for its continued growth. Regional harmony is essential to its economic development. Beijing has every financial incentive to ensure the stability of the South China Sea, given the economic and reputational costs of disruption. Even a short-term diversion of trade flows and interruption to supply chains would cost billions of dollars and have a cascading global impact, with China bearing the brunt of these.

Today, global economic interdependence impels cooperation in the Asian maritime environment, despite continuing challenges. And China’s current behaviour in the South China Sea is making cooperation amongst the Southeast Asian nations ever more attractive. The Vietnamese-Philippine rapprochement in the Spratlys is just the most recent case-in-point.

Sunday in the Spratlys

The Spratly archipelago, where Vietnamese and Philippine troops met last week, is a group of more than 100 islands and reefs in the southern South China Sea, portions of which are claimed by China, Taiwan, Vietnam, the Philippines, Malaysia and Brunei. The islet of Southwest Cay has particular historical salience.

Known as Đảo Song T Tây in Vietnamese, or Pugad in Tagalog, the scenic isle has changed hands numerous times over the past century. Before the Second World War France occupied the Spratlys, but lost them to Japanese control in 1939. More than a decade after the war ended, France transferred them to South Vietnam in the process of decolonization. In 1968, the Philippines took control of both Northeast Cay and Southwest Cay, but their occupation of the latter did not last long. In 1975, South Vietnam took over.

As the story goes, Philippine soldiers charged with guarding Southwest Cay ventured over to Northeast Cay to attend the birthday party of a commanding officer. Upon their return they discovered a South Vietnamese flag occupying their flagpole, along with a company of soldiers on the ground. Several months later Vietnam had unified, built up their defenses on the island, and any plans for Philippine re-occupation fell by the wayside.

That Hanoi and Manila would choose Southwest Cay as the location of their get-together speaks volumes. In a region where historical embarrassments regularly stymie viable solutions to stubborn political problems, this sort of level-headedness is refreshing indeed. But it isn’t all that surprising: Vietnam and the Philippines find strength in numbers. China has been following a divide-and-conquer strategy toward its Southeast Asian neighbours for some time now, shunning multilateral negotiations with ASEAN and insisting on dealing with territorial disputes bilaterally, knowing than none can compete on its own. Together, Hanoi and Manila at least stand a chance.

And there is another reason for this demonstration of unity – a wider global phenomenon independent of the ‘Rise of China’ context. Counterintuitive as it may seem, the resource abundance of the South China Sea itself provides Vietnam and the Philippines with some very clear incentives for cooperation over conflict.

Make oil, not war

With vast improvements in deep offshore oil and gas technology over the past decades, more and more long-standing maritime boundary disputes in resource-rich waters are being resolved – if only so the countries in question can start drilling.

Norway and Russia’s maritime border in the Barents Sea was settled in 2010, after decades of protracted disagreement; now, their national oil companies are exploiting the Arctic waters together. And despite speculation that the countries bordering the Caspian Sea would devolve into a Great Game-style rivalry over offshore oil and gas deposits, Russia, Kazakhstan, and Azerbaijan have agreed upon their mutual maritime boundaries, leaving Iran and Turkmenistan as the major holdouts. Even in the eastern Mediterranean, where Israeli and Lebanese waters meet, maps are being drawn up and submitted to the United Nations in lieu of duking it out militarily. This is almost shocking for two countries that have battled for decades over a scrap of land that most likely belongs to neither. It makes sense though, given the preponderance of Israeli naval power. The same type of asymmetric warfare that works for Lebanese-based forces on land has little effect at sea.

To The Hague

When confronted with a militarily superior force, appeals to international law are a natural recourse. To wit, the Philippines has taken China to The Hague over Beijing’s sweeping claims to the South China Sea.

Manila is seeking a ruling on China’s “nine-dash line” – the tongue-shaped lion’s share of the South China Sea over which Beijing claims it is inviolably sovereign. The area includes the entirety of the Paracel and Spratly island groups, and the Scarborough Shoal off the coast of the Philippine island of Luzon. Manila argues the nine-dash line is contrary to the United Nations Convention on the Law of the Sea (UNCLOS), and a majority of western legal scholars agree. But the issue has never been formally adjudicated until now.

The Permanent Court of Arbitration has given China a December 15, 2014 deadline to respond. Thus far, Beijing has simply stated that “it does not accept the arbitration initiated by the Philippines” and it will not be participating in the case. China’s refusal to participate does not, however, bar the court from proceeding with its judgment, and if Beijing fails to submit a response a decision may be made swiftly in Manila’s favour. For Manila, it would be a PR victory. But, politically, would it really matter?

One is tempted to fall back on the old Thucydidean refrain, “the strong do what they will and the weak suffer what they must.” Indeed, Robert Kaplan calls the Philippine appeal to international law “the ultimate demonstration of weakness.” But this is perhaps shortsighted. While it is true that the court’s ruling may have little, if any, impact on the ground, it would be imprudent to think China is immune to international opinion.

After Vietnam released the dramatic video of a Chinese vessel crashing into and sinking a Vietnamese ship, Beijing responded by appealing to UN Secretary General Ban Ki-Moon in a letter detailing China’s legal claims to the Paracel archipelago. Vietnam, for its part, rejects China’s claim, and argues that both the Chinese vessel and oil rig are within its UNCLOS-mandated 200 nautical-mile exclusive economic zone.

And the South China Sea is not Beijing’s only ongoing maritime dispute. In the East China Sea, Beijing is in a row with Tokyo over the Senkaku/Diaoyu Islands. As James Manicom notes in his new book, Bridging Troubled Waters: China, Japan and Maritime Order in the East China Sea, China claims that the Japanese-controlled islands fall within the natural prolongation of its continental shelf and thus within its jurisdiction, and has submitted evidence to this effect to the United Nations’ Commission on the Limits of the Continental Shelf (CLCS). While China and Japan differ on the fundamental legal principles that apply to their maritime border dispute, China still makes appeals to some aspect of existing, codified international law. Clearly Beijing sees some value in the international legal order.

Odd one out

It is easy to be pessimistic. The Philippines might win its case at The Hague, but to little effect. China may continue its oppositional behaviour by building military outposts, drilling oil wells in disputed waters, and needling its neighbours until one day when — by design, error or accident— the already simmering dispute boils over into violence.

But if last week’s Vietnamese-Philippine rapprochement in the Spratlys is any indication of the future of Southeast Asian international relations, we may very well see the littoral nations of the South China Sea pool their resources, settle their maritime boundaries, and along the way develop deeper political and economic ties, leaving China the odd one out.

And make no mistake; China is inherently the odd one out. Its energy needs far surpass any of its neighbours, and its near-total reliance on the South China Sea for its oil imports is a genuine, and understandably worrying vulnerability. Any political resolution to the South China Sea dispute must recognize China’s unique dilemma, and to a reasonable extent accommodate its concerns.

Of course, it is possible that China will decide that no amount of accommodation will suffice — this is a common prediction in the grand narrative of the future of Asia-Pacific, one in which China creates a new regional (or global) order, with a rulebook to its own liking.

But if Beijing truly sees itself as a revisionist power, it has a terribly long way to go. China may be on the rise, but a unipolar international system with China at its helm is nowhere on the horizon. And this bodes well for the littoral nations of the South China Sea. There is still time to strengthen ties, forge a stronger security community, piggyback on the still-hegemonic U.S. Navy, and sue China for a peaceful settlement. Disaster may yet be averted.