Recent Developments in the South China Sea Dispute

The Prospect of a Joint Development Regime

Wu Shicun, Nong Hong

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781317817635
• Edition: 1
• Topic: Law
• Subtopic: Law Theory & Practice
• Index: Law

The South China Sea region contains potentially huge deposits of petroleum and natural gas, important shipping lanes and fishing areas, and is subject to a number of maritime territorial disputes. This edited volume analyzes the most recent development in the South China Sea dispute looking at the positions taken by China, the ASEAN countries, and the US. In recent years maritime joint development zones have emerged as an important means to overcome deadlock in relation to maritime jurisdictional claims. This book tests the applicability of joint development regime in this region and explores the prospect of joint development of resources as a way to successfully manage the conflict in the South China Sea. Eminent scholars in the field of South China Sea studies have contributed original chapters to the volume covering such issues as: the legal framework for joint development; how joint development might work in practice; the challenges faced by and the prospects arising from joint development; and the way forward for the region.

I Recent developments in the South China Sea

1 The South China Sea disputes

Recent developments

Mark J. Valencia

DOI: 10.4324/9781315818696-2

A diplomatic Rubik's cube

In November 2012 there were two important summit meetings in Phnom Penh – the 21st ASEAN Summit, followed by the East Asia Summit – involving China, the U.S. and six other invited countries with interests in East Asia. It was clearly hoped by ASEAN and the U.S. that there would be agreement on a code of conduct (COC) for the South China Sea between ASEAN and China at this East Asia Summit. But this was not to be, despite extraordinary diplomatic efforts led by Indonesia’s Foreign Minister Marty Natalegawa. This development – or lack thereof – puts a spotlight on why the South China Sea disputes are so difficult to resolve or even manage.

The main reason an agreement has evaded the best efforts of seasoned negotiators is its political complexity – it is like a diplomatic Rubik’s cube – six sides, each with three layers. To paraphrase Winston Churchill’s immortal description of Russia in 1939, the solution ‘is a riddle wrapped in a mystery inside an enigma.’

At its core are disputes between several key ASEAN members – Malaysia, the Philippines and Vietnam. These disputes should be resolved or formally placed aside before moving on to the next layer of the puzzle. They involve both territory (islands) and maritime space. The good news is that Malaysia and Brunei – a claimant to maritime space and resources in the southern part of the South China Sea – have apparently resolved their differences regarding their overlapping maritime claims in a still secret pact. Rumor has it that Malaysia relinquished its claim in exchange for a guaranteed share of petroleum in the former area of overlap. Malaysia has also reached agreement with Vietnam regarding their overlapping continental shelf and exclusive economic zone (EEZ) claims. They also made a joint submission to the UN claiming an extended continental shelf.

The bad news is that the dispute between Malaysia and the Philippines over maritime space derives in part from a territorial dispute over the present Malaysian state of Sabah. The Philippines claims Sabah as part of its sovereign territory and has incorporated its claim in its constitution. Malaysia claims a territorial sea, EEZ, continental shelf and extended continental shelf from Sabah. Malaysia, the Philippines and Vietnam also claim several of the same features in the Spratly Islands.

The second layer of the ‘cube’ involves the ASEAN claimants and their fellow ASEAN members. These issues are the enigma – veiled and subtle – but just as real and difficult as the first layer of the puzzle. Singapore, Thailand and supposedly Indonesia have no claims to the disputed area but are nevertheless significant players in the attempt to negotiate a COC for national behavior in the disputed areas for all of ASEAN as well as between ASEAN and China. Why are these non-claimants so intimately involved in trying to negotiate a COC, and why should China have to negotiate with non-claimants?

These are the questions asked by China, which is the prominent factor in the third layer of the ‘cube’. China claims all of the features and apparently most of the maritime space in the South China Sea. The mystery is what exactly China claims – as well as Taiwan, its alter ego in this dispute and a sixth side of the ‘cube’. What specifically is the meaning of the historic nine-dashed line? This is important to the negotiating process because until or unless this claim is specific, it must be assumed that it includes part of Indonesia’s EEZ. This means that in China’s eyes Indonesia is neither neutral nor credible as a mediator in the dispute or in its attempt to lead negotiations for a COC. The additional bad news is that China (and Taiwan) and Vietnam claim all the features. That means that some of them are claimed by five governments (China, Taiwan, Malaysia, the Philippines, and Vietnam).

As if matters are not complicated enough, these disputes – concerning both territory and maritime space – are infused with domestic nationalism that is putting pressure on leadership during a key transition in China. China has intensified the imbroglio by essentially putting on a ‘full court press’ – verbally threatening its rival claimants, enforcing a ban on fishing in its claimed waters, offering oil blocks for lease on Vietnam’s claimed continental shelf, designating a new administrative headquarters and garrison for the South China Sea, confronting the Philippines over the Scarborough Shoal, challenging petroleum exploration in waters claimed by the Philippines, Vietnam and Malaysia, and publicly thanking Cambodia for supporting China’s interests at the failed ASEAN meeting – all the while telling the U.S. to ‘butt out.’ China is apparently trying to establish its ‘effective control’ of the area and essentially establish a new status quo. To back up its claims, China is using its ‘civilian’ vessels such as maritime surveillance and fisheries enforcement ships in step by step progressive assertions that some call ‘salami tactics.’

Basically China sees itself as a victim – previously of colonial powers and currently of their successors – small Southeast Asian countries who are stealing its maritime resources and are backed by the U.S. The sense of victimization feeds its nationalist discourse and underpins its moral outrage and righteousness in foreign policy. Most importantly, it reinforces public demand for tough uncompromising positions that make management of the conflicts difficult and compromising on or resolving them near impossible.

ASEAN realized that its credibility might be severely damaged if it did not address the problem, and the ASEAN and East Asia summits were thus ‘the most critical gathering of regional leaders in years.’¹ ASEAN had to take a position which is neutral, forward-looking and encourages the peaceful resolution of the issues. Otherwise, according to Indonesian Foreign Minister Marty Natalegawa, deeper divisions could open between Southeast Asian claimants and China.

There is actually a fourth layer to this conundrum – a U.S.–China struggle for the ‘hearts and minds’ of Southeast Asians and ASEAN members. The U.S. is pressuring both China and ASEAN to negotiate a binding COC and is even prepared to accept a period of higher tensions no matter what progress is made. Indeed the U.S. thinks that tensions in the South China Sea are now the new ‘normal.’

Just before the contentious July 2012 ASEAN meeting, the U.S. stated its position on the issues and essentially encouraged ASEAN to stand up to China. Much to China’s chagrin, the U.S. administration also increased its activity behind the scenes, pressing some countries on the issue and trying to influence the content of the COC. China responded by accusing the U.S. of ‘meddling’ in the South China Sea disputes.

This diplomatic Rubik’s cube is why the disputes are so hard to resolve and why a robust COC will be so difficult to achieve. This issue will certainly continue to challenge ASEAN’s diplomatic skills as the organization strives to maintain its ‘centrality’ in the security of the region and maneuver between China and the U.S.

Recent developments: increasing entropy

In physics, in isolated systems, order tends toward disorder i.e. increased entropy. This is what appears to be happening politically in Southeast Asia as the U.S. and China have increased their roles in the regional security ‘system.’ Indeed, there is an ongoing action–reaction cycle of escalation as well as considerable maneuvering both in front of and behind the scenes regarding the South China Sea disputes that threatens to destabilize the region.

Moreover, the South China Sea situation is becoming a bellwether of the nature, style and tone of China’s rise. The U.S. presence and ‘rebalancing’ feeds and reinforces a hedging strategy by Southeast Asian countries should China become more ‘aggressive.’ Because the U.S. is a formal military ally of one of the claimants (the Philippines), it feels that China and others cannot assert that events in the South China Sea are ‘none of its business.’ Nevertheless, China argues that the U.S. is not naturally a western Pacific power and that beefing up its naval and intelligence presence in the South China Sea is provocative and unjustified by its public explanations.² In private, American officials admit that the planning for Air-Sea Battle ‘is designed for a possible conflict involving Taiwan or a dispute in the South China Sea.’³ In late September 2012, Chinese and U.S. military officials held their annual consultations under the Sino-U.S. military Maritime Consultative Agreement but not surprisingly no significant progress on core issues was reported.⁴ The U.S. has been encouraging the claimants to stand up to China. Moreover U.S. Secretary of State Clinton’s tour of the region reasserting American interests, and the late October cruise of a U.S. aircraft carrier group through the South China Sea⁵ have only confirmed Beijing’s worst fears. The George Washington Carrier Strike Group undertook joint operations with Malaysia, conducted live fire exercises off Vietnam, and made a port call in the Philippines. The U.S. is clearly determined to manage China’s rise in a manner that does not diminish vital American interests.⁶ But there continues to be some doubt that the U.S. can actually bear the economic and political cost of the containment of China.⁷

The U.S. intensified its attempts to influence the negotiations between ASEAN and China on a COC. Indeed, Clinton publicly ‘urged all parties to make “meaningful progress”’⁸ by the November East Asia Summit in Phnom Penh. It reportedly tried to influence the content as well. On 3 August 2012 the U.S. State Department issued a statement criticizing China’s ‘upgrading of the administrative level of Sansha City and its establishment of a new military garrison there covering disputed areas of the South China Sea.’⁹ China’s Ministry of Foreign Affairs responded the next day by reiterating its sovereignty over the South China Sea islands and adjacent waters as well as its right to administer them as it sees fit. More significantly, it criticized other countries for violating the Declaration on the Conduct of Parties in the South China Sea (DOC) and warned that ‘while being open to discussing a COC with ASEAN countries, China believes that all parties concerned must act in strict accordance with the DOC to create the necessary conditions and atmosphere for the discussion of a COC.’¹⁰ This indicated that China was having second thoughts about negotiating a COC, especially if the U.S. continues to ‘meddle.’

Nevertheless, the U.S. is likely to continue pressuring both China and ASEAN to negotiate a binding agreement. ‘We are not going to be able to go back to situations in which things were easy and that decisions were made without a certain amount of strain. All this requires hard work, heavy lifting and very challenging discussion. ASEAN has generally been content to sort of skate on the surface and to avoid debates. These issues are going to be much more difficult to deal with.’¹¹

The U.S. wants to maintain the existing status quo in Southeast Asia – a status quo in which it is the dominant actor and patron. ¹² This is essentially a continuation of its Cold War policy and posture in the region – a substantial forward deployed military presence and a hub-and-spoke alliance structure.¹³ The U.S. also has tactical objectives in mind to support this strategic goal. For example, it would like to place a high-tech radar system somewhere in Southeast Asia. More generally it would also like to improve its ‘maritime domain awareness’ by integrating Southeast Asian countries like the Philippines into a regional system. Further it wants to enhance the military power of allies like the Philippines and potential allies like Indonesia.¹⁴ In sum, the U.S. apparently expects Southeast Asian states to fear China and welcome U.S. power. This is not happening as quickly, broadly, or as clearly as hoped.¹⁵ Indeed American dominance may be beginning to reach its strategic limits.

Meanwhile, the Chinese leadership has shown no sign of complying with U.S. wishes or being more flexible regarding the maritime disputes. Moreover some think the issue touches on existential strategies in that China needs the South China Sea to hide and protect its new generation of nuclear powered nuclear armed submarines based at Sanya.¹⁶ China clearly does not think the U.S. is neutral in the disputes.¹⁷ Nor does it believe the U.S. rhetoric that claims it wants China to share responsibility and power to maintain stability in the region. In fact, China is not interested in ‘stability’ if it means the status quo with the U.S. being dominant in the security arena.

China has sought to simultaneousl...

Table of contents

• Cover
• Half Title Page
• Title Page
• Copyright Page
• Table of Contents
• Notes on contributors
• Preface
• Introduction
• PART I Recent developments in the South China Sea
• PART II Legal context of joint development in the South China Sea: legal framework, key issues, case studies, experiences and lessons
• PART III Joint development in the South China Sea: challenges and prospects
• PART IV Towards the future
• Index