South China Sea Relationship Status? It’s Complicated

Posted on March 13, 2013

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The territorial claims in the South China Sea area remain like a bowl of noodles — crisscrossed, overlapping, and so intertwined that it is challenging to pinpoint a beginning and an end. Unraveling this web presents one of the most challenging international relations dilemmas of our present time and only a comprehensive approach is likely to get to the bottom of the bowl.

Amid heightened territorial tensions over the South China Sea, protestors shout anti-China slogans and hold banners as they march towards the Chinese embassy in downtown Hanoi on Dec. 9, 2012. (Hoang Dinh Nam/AFP/Getty Images)

Amid heightened territorial tensions over the South China Sea, protestors shout anti-China slogans and hold banners as they march towards the Chinese embassy in downtown Hanoi on Dec. 9, 2012. (Hoang Dinh Nam/AFP/Getty Images)

Recognizing that taking a holistic view is imperative for resolving this matter, Asia Society is convening leading academics and policy makers from all of these sectors. From Australia, to Beijing, to Washington, D.C., some of the leading authorities on the South China Sea dispute will spend two days in New York searching for a way forward.

The conference, co-organized with the Center on Asia and Globalization at the Lee Kuan Yew School of Public Policy in Singapore, recognizes that the endgame for states involved needn’t be feast or famine. An equitable solution can be devised, but a multi-pronged approach is required.

The fact is this: with Asia’s rapidly rising middle classes, and shifts toward domestic consumption, resources are quickly drying up. At the same time, Asian economies, like those around the world, are increasingly linked together and threatened by global recession. It is imperative that economic and political solutions — using diplomatic, legal, and, occasionally, military channels — are utilized, in order to exercise enforcement.

As a McKinsey report mentioned in 2011, “in the past ten years, demand from emerging markets, particularly in Asia, has erased all the price declines of the previous century.” Globally, “Up to three billion people could join the middle class, boosting demand at a time when obtaining new resources could become more difficult and costly,” leading to “environmental deterioration.”

Those warnings are no less stark today, as they were two years ago, particularly in Asia. We can only work toward solutions if the challenges are clearly identified.

The first challenge is in terms of law. China has been unwilling to discuss the issue through any legal apparatus, since, they argue, nearly the entirety of the sea belongs to them.

This was recently evidenced in China’s refusal to honor the Philippines’ request for arbitration of the dispute with the UN Convention on the Law of the Seas. While China is party to UNCLOS, it rejected the Philippines request to bring the dispute to arbitration, stating that it “contains many grave errors both in fact and in law, and includes many false accusations against China.”

At the regional level, there exists the ASEAN Declaration on the Conduct of Parties in the South China Sea. But negotiations toward a full-fledged Code of Conduct — a step beyond the current “declaration” — have been hampered by China’s economic and political influence on several of the ASEAN states. This manifested itself last July when ASEAN failed to issue a joint communiqué at its annual regional upon the insistence of Cambodia that any mention of the South China Sea conflict be left out.

Cambodia’s stubbornness on this matter, are linked to the second challenge: economics.

Overall Imports and exports between China and ASEAN grew in double digit percentage points over the 2010-2012 period.

But the cozy relationship between China and three ASEAN states in particular, is threatening to the regional trade bloc’s stability. The first, Myanmar, has received $14 billion in foreign direct investment from China since 1989, and China remains its second-largest export partner. Cambodia has received nearly $6 billion in foreign direct investment since 1994, and Laos, although receiving more FDI from Viet Nam and Thailand, receives considerable support from China for its infrastructure. Laos in particular has been caught up in an ASEAN-China “tug-of-war.”

For the most vociferous South China Sea claimants, Viet Nam and the Philippines, economic relations seem to be less of an impediment to sharp rhetoric directed at their northern neighbor. China is Viet Nam’s largest trading partner, and the Philippines’ third largest.

While trade provides an incentive for keeping relations cordial, ultimately economic degradation would be devastating not only for Asia, but for the international community that sees Asia as one of the few economic bright spots.

The third challenge is on the political front. Regional and global rules and norms provide a legal structure for relations between Southeast Asia and China, but domestic political pressures can cause additional strain. This is particularly true in an era of weakening economies and young democracies, with institutions that are not fully developed. Once-successful, iron-fisted, top-down leadership — a hallmark of success in the region — is no longer the soup du jour, and civil societies are testing the capacity of leadership to adapt.

Internationally, political relations are similarly complex. The shared histories of the Communist Parties of China and Viet Nam — in spite of centuries of mistrust — provide a foundational level of allegiance, even if the relationship is less positive behind closed doors. ASEAN countries further to the south, including Brunei which chairs ASEAN this year, Malaysia — which has stressed that “ASEAN must show its united voice” — and Indonesia, Southeast Asia’s largest economy, have all been more tempered in their approach to the issue.

The final challenge comes on the defense side. China’s defense spending is increasing rapidly, while the U.S.’s is being curtailed. Although the capacities of both militaries are still vastly different, the South China Sea is viewed by China as sovereign territory. In other words, China is staying put and has a strong imperative to defend its — albeit disputed — sovereignty.

All of this leads to a final conclusion. International law, rules, and norms will be manipulated by those states that have the military, as well economic, might to do so. For this reason, we need to examine most closely how China and the U.S. can act as responsible parties in this.

After the conference, I am unsure whether I will be more or less optimistic about resolution. But some of the best minds will be collaborating on this issue, and that’s reason to see the glass half full.

Asia Society

China using Senkakus dispute to test Japan, U.S.

SINGAPORE – Almost a year ago, China and the Philippines were at loggerheads over their conflicting claims to ownership of the Scarborough Shoal fishing grounds and anchorage in the South China Sea, setting alarm bells ringing about a possible grab for control by Beijing in the maritime heart of Southeast Asia.

Japan Coast Guard cutters keep a close watch on Chinese surveillance ships near the Senkaku Islands in September 2012. (Asahi Shimbun file photo)

Japan Coast Guard cutters keep a close watch on Chinese surveillance ships near the Senkaku Islands in September 2012. (Asahi Shimbun file photo)

Today, the dispute still simmers, but the main zone of contention between China and its neighbors has moved to the East China Sea, where Beijing is contesting Tokyo’s sovereignty and administration over the Senkaku islands.

The confrontation between China and Japan, a key ally of the United States, has become one of East Asia’s most dangerous flash points. China says it was provoked to take strong retaliatory action after the Japanese government of Prime Minister Yoshihiko Noda bought three of the five uninhabited islands in the contested group from their private Japanese owner in September.

Japan had rented the three islands but banned landings or development on them to avoid antagonizing Beijing. But this arrangement was threatened by moves led by Shintaro Ishihara, the ultranationalist Tokyo governor at the time, to buy the islands and build fishing and other facilities there.

The intensifying struggle between Asia’s two top economies for control of the islands helped bring a conservative government under Prime Minister Shinzo Abe to power in December elections on a platform to strengthen Japan’s economy and defenses.

Since the “nationalization” of the islands, China has sought to portray Japan, despite its pacificism since 1945, as a threat to the region and a country intent on reviving its militarist past when it invaded much of Asia before and during World War II.

Yet the areas Beijing claims in the South China Sea are certainly far more valuable in the fisheries, energy and mineral resources they contain than the parts of the East China Sea contested with Japan.

Beijing’s claims in the South China Sea are also much more extensive than its claims in the East China Sea. The island and maritime zone disputed between China and Japan amounts to around 68,000 sq. km.

However, Beijing asserts sovereignty and other forms of jurisdiction over approximately 3 million sq. km, or about 80 percent, of the semi-enclosed South China Sea. This is nearly the size of India’s land territory (3.3 million sq. km).

The potential commercial and strategic value of the South China Sea is many times greater for Beijing than its relatively small claim against Japan in the East China Sea.

Why, then, has China been pursuing its claims against Japan over the disputed East China Sea islands in a much more muscular way in late 2012 and early 2013 than its case involving Southeast Asian claimants in the South China Sea?

It is evidently testing Japan and the U.S. at a time when each appears relatively weak and hesitant. Beijing knows that if it can make headway with its East China Sea island claim against two big allied powers like the U.S. and Japan, it will be easier in future to overawe its smaller Southeast Asian rival claimants in the South China Sea.

But Beijing also decided to intensify para-military and other operations against Japan, a nation whose wartime aggression is seared into Asian historical memory, because confrontations with smaller neighbors in the past few years have led to a regional backlash against China.

The result has been a rising mistrust of China, increased defense spending to guard against Chinese assertiveness, a turn to the U.S. as a counterbalance to Chinese power, the strengthening of U.S. alliances in Asia and development of security partnerships as a hedge against Chinese coercion.

Beijing faces an awkward propaganda problem in the South China Sea. Its claims are not against an original imperial or colonial power, as with Japan in the East China Sea.

Vietnam, the Philippines and Malaysia are Southeast Asia’s chief claimants to land features (islands, atolls and reefs) in the South China Sea. Tiny Brunei has a minor claim. Indonesia’s Exclusive Economic Zone — extending northwards from Natuna, the main Indonesian island territory in the South China Sea — overlaps in a substantial way with China’s far-flung claims.

Beijing’s claims in the South China Sea are against states that either fought or campaigned peacefully against colonial powers. In the case of Malaysia and Brunei, the colonial power was Britain. For the Philippines, it was the U.S. For Vietnam it is was France. For Indonesia, it was the Netherlands.

All these Southeast Asian countries have been proudly independent for decades. Many of them have demonstrated the same kind of stellar economic growth and competent government as China in recent years.

Like China, they have taken their place in the ranks of progressive developing and industrializing nations. They are universally acknowledged to be postcolonial successor states, as well as success stories.

These Southeast Asian nations with maritime claims in the South China Sea that overlap with those of China place a high premium on sovereignty and national rights, just as China does.

However, all the Southeast Asian countries involved are far smaller in population size, economic strength and military power than China. By these measures, Vietnam, the Philippines, Malaysia and Brunei are dwarfed by China, the world’s most populous nation and second-biggest economy and military spender. Even Indonesia, the fourth most-populous nation and Southeast Asia’s largest economy, is heavily outweighed by China.

China is therefore in an exposed propaganda position in the South China Sea. It can easily be portrayed as a regional bully. Indeed, it is cast in an aggressive light in countless news media reports, and government and nongovernment analyses, that circulate widely outside China.

The reputational damage to China’s international image and its self-proclaimed “peaceful rise” doctrine is already serious. It will get worse for as long as Beijing maintains what appears to most of the outside world to be a policy of overweening power and sabre-rattling.

Michael Richardson

Posted in: Economy, Politics