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Stirring up the South China Sea (II): Regional Responses
Stirring up the South China Sea (II): Regional Responses
Table of Contents
  1. Executive Summary
Report 229 / Asia

Stirring up the South China Sea (II): Regional Responses

The long-simmering South China Sea dispute is doomed to escalate if the countries contesting its waters fail to take steps to reduce tensions.

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Executive Summary

The South China Sea dispute between China and some of its South East Asian neighbours – Vietnam, the Philippines, Malaysia and Brunei – has reached an impasse. Increasingly assertive positions among claimants have pushed regional tensions to new heights. Driven by potential hydrocarbon reserves and declining fish stocks, Vietnam and the Philippines in particular are taking a more confrontational posture with China. All claimants are expanding their military and law enforcement capabilities, while growing nationalism at home is empowering hardliners pushing for a tougher stance on territorial claims. In addition, claimants are pursuing divergent resolution mechanisms; Beijing insists on resolving the disputes bilaterally, while Vietnam and the Philippines are actively engaging the U.S. and the Association of Southeast Asian Nations (ASEAN). To counter diminishing prospects of resolution of the conflicts, the countries should strengthen efforts to promote joint development of hydrocarbon and fish resources and adopt a binding code of conduct for all parties to the dispute.

The extent and vagueness of China’s claims to the South China Sea, along with its assertive approach, have rattled other claimants. But China is not stoking tensions on its own. South East Asian claimants, with Vietnam and the Philippines in the forefront, are now more forcefully defending their claims – and enlisting outside allies – with considerable energy. Crisis Group’s first report in this two-part series, Stirring up the South China Sea (I), described how China’s internal dynamics shape its actions in the region. This second report focuses on factors in the other regional countries that are aggravating tensions.

South China Sea claimants are all anxious to pursue oil and gas exploration in the portions of the sea that they claim, and are concerned with protecting their claimed fishing grounds as coastal waters become depleted. This makes skirmishes more likely. Further complicating matters, control over resources in the sea is a nationalist issue for all claimants, making it more difficult for governments to de-escalate incidents and restricting their ability to cooperate on initiatives that could lessen tensions. Among those in South East Asia, the Vietnamese government is under the most domestic pressure to defend the country’s territorial claims against China.

Although China and many other South East Asian states have embarked on modernisation programs for their navies, it is the increasing number of civilian vessels patrolling disputed waters that presents the greatest potential for conflict. They have been involved in recent incidents. In spite of being more lightly armed and less threatening than navy ships, civilian law enforcement vessels are easier to deploy, operate under looser chains of command and engage more readily in skirmishes.

While incidents in the sea have not led to actual armed conflict since 1988, they have crystallised anxiety about the shifting balance of power in the region. South East Asian claimants feel that their options are limited to bilateral discussions with China; attempts to include other actors such as the U.S. and ASEAN; and arbitration provided by the UN Convention on the Law of the Sea (UNCLOS). South East Asian states know they lack the clout to face China one-on-one. Vietnam and the Philippines in particular are seeking to increase their leverage vis-à-vis China by internationalising the issue. Beijing insists on resolving disputes bilaterally, where its economic and political clout carry the most weight. It strongly opposes efforts of South East Asian countries to deepen cooperation with outside actors, and perceives the U.S. strategic shift towards Asia as purposely containing its rise.

A lack of unity among China’s rival claimants, coupled with the weakness of the regional multilateral framework, has hampered the search for a solution. International law has been used selectively by claimants to justify assertive actions in the sea, instead of as a means to resolve disputes. ASEAN, the leading multilateral forum for discussing the issue, has also proven ineffective in reducing tensions. Divisions between member states, stemming from different perspectives on the South China Sea and differences in the value each member places on their relations with China, have prevented ASEAN from coming to a consensus on the issue. China has worked actively to exploit these divisions, offering preferential treatment to ASEAN members that do not side with its rival claimants. As a result, no code of conduct on the management of South China Sea disputes has been agreed, and ASEAN is increasingly divided.

While the likelihood of major conflict remains low, all of the trends are in the wrong direction, and prospects of resolution are diminishing. Joint management of resources in the disputed areas could help reduce tensions among claimants, but the only attempt so far by China, Vietnam and the Philippines to jointly conduct seismic survey in disputed areas failed in 2008. Since then, claimants have strongly resisted compromising their territorial sovereignty and maritime rights, which would be necessary to undertake such projects. In the absence of regional agreement on policy options or an effective mechanism to mitigate and de-escalate incidents, this strategically important maritime domain will remain unstable.

Beijing/Jakarta/Brussels, 24 July 2012

Report 223 / Asia

Stirring up the South China Sea (I)

China is one of its own worst enemies in the South China Sea, as its local governments and agencies struggle for power and money, inflaming tensions with its neighbours, illustrated by Beijing’s latest standoff with the Philippines.

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Executive Summary

The conflicting mandates and lack of coordination among Chinese government agencies, many of which strive to increase their power and budget, have stoked tensions in the South China Sea. Repeated proposals to establish a more centralised mechanism have foundered while the only agency with a coordinating mandate, the foreign ministry, does not have the authority or resources to manage other actors. The Chinese navy’s use of maritime tensions to justify its modernisation, and nationalist sentiment around territorial claims, further compound the problem. But more immediate conflict risks lie in the growing number of law enforcement and paramilitary vessels playing an increasing role in disputed territories without a clear legal framework. They have been involved in most of the recent incidents, including the prolonged standoff between China and the Philippines in April 2012 in Scarborough Reef. Any future solution to the South China Sea disputes will require a consistent policy from China executed uniformly throughout the different levels of government along with the authority to enforce it.

China’s maritime policy circles use the term “Nine dragons stirring up the sea” to describe the lack of coordination among the various government agencies involved in the South China Sea. Most of them have traditionally been domestic policy actors with little experience in foreign affairs. While some agencies act aggressively to compete with one another for greater portions of the budget pie, others (primarily local governments) attempt to expand their economic activities in disputed areas due to their single-minded focus on economic growth. Yet despite the domestic nature of their motivations, the implications of their activities are increasingly international. Other factors – both internal and external to China – have also been responsible for increasing tensions, but they are beyond the scope of this study. Regional dynamics, including arms build-ups, competition for resources and increasing nationalist sentiment in other claimant countries are the subject of a separate report.

Effective coordination of actors is also hampered by a lack of clarity over precisely what is supposed to be defended. China has yet to publicly clarify the legal status of the so-called nine-dashed line that appears on most Chinese maps, encompassing most of the South China Sea. While the foreign ministry has taken steps to try to reassure its neighbours that Beijing does not claim the entire South China Sea and has at least partially justified its claims on the basis of the United Nations Convention on the Law of the Sea (UNCLOS), the government cannot easily back down from claims to significant portions of the sea that are based on historical presence in the region. Local government agencies take advantage of this lack of legal clarity when engaging in activities in disputed areas.

Beijing has deliberately imbued the South China Sea disputes with nationalist sentiment by perpetually highlighting China’s historical claims. This policy has led to a growing domestic demand for assertive action. While Beijing has been able to rein in nationalist sentiment over the South China Sea when it adopts a specific policy, this heated environment still limits its policy options and its ability to manage the issue.

In mid-2011, as tensions in the sea led to neighbouring countries seeking closer military ties with the U.S., China adopted a less assertive approach. While Beijing’s overall emphasis on maintaining the status quo still includes a preference for bilateral negotiations, it is strengthening regional relations through high-level visits and multilateral engagement by signing with the Association of South East Asian Nations (ASEAN) the Guidelines for the Implementation of the Declaration of Conduct (DOC) in the South China Sea.

Internally, China has taken measures to calm nationalist sentiment and discourage aggressive actions by local agencies. However, China’s current approach remains characterised by numerous ministerial-level actors and law enforcement agencies with no effective coordinating authority and no high-level long-term policy. While repeated and failed attempts to establish a centralised mechanism on maritime management show a lack of political will to address the coordination issue, Beijing might also see benefit in ambiguity. As long as this situation exists, however, its new conciliatory approach is unlikely to be sustainable. Ultimately, the ability to manage relations in the South China Sea and resolve disputes will present a major test of China’s peaceful rise.

Beijing/Brussels, 23 April 2012