China steals the South China Sea

China’s most audacious initiative to assert itself in East Asia has been its seizure of the South China Sea.

China's nine-dash-line

Myriad countries surround the South China Sea, namely China, the Philippines, Vietnam, Brunei, Malaysia and Taiwan. It is thus not surprising that since time immemorial these same countries should have had overlapping claims to these waters, their reefs, islands and atolls, including the Spratly Islands, Paracel Islands and Scarborough Shoal. The South China Sea is a massive 1.4 square million miles, an area the size of Mexico and larger than the Mediterranean Sea.

In 1947, China issued a map of its claims, which encompassed about 90% of the entire South China Sea. This claim has come to be known as the "nine-dash-line", which reflects the pictorial representation of China's claim. According to the United Nations Convention on the Law of the Sea (UNCLOS), to which China is a signatory, countries have special access to marine resources, including fisheries, oil and gas, in the area up to 200 nautical miles from their shores, called exclusive economic zones.

Most of the South China Sea is very much further from China than that distance. In 2009, China submitted a diplomatic note to the UN including the nine-dash-line on a map. This overlaps with claims by the Philippines, Vietnam, Malaysia, Indonesia and Brunei.

China seizes Scarborough Shoal

In 2012, China forcibly seized control of the previously unoccupied Scarborough Shoal during a standoff with the Philippine Navy. The Scarborough Shoal is only 100 miles from the Philippines, but 500 miles from China. Under a 2012 deal mediated by the United States, China and the Philippines promised to withdraw their forces from the shoal until a deal over its ownership could be reached. The Philippines complied with the agreement and withdrew. China, however, did not abide by the agreement and maintained its presence at the shoal, effectively militarizing it. Then Philippine president Benigno S. Aquino III later compared China's behavior to Nazi Germany's annexation of Czechoslovakia.

With no other recourse, the Philippines took China to a UNCLOS tribunal. China boycotted the tribunal's proceedings, on the basis that it had indisputable sovereignty over its claimed area and that the tribunal did not have the authority to deal with this matter. Reflecting its indignation and contempt for the Philippine challenge, China embarked on massive construction exercise in the South China Sea, building or expanding at least seven artificial islands, some with airports on which military aircraft can land.

This is clearly a ploy to create “facts on the water”, which are irreversible. It is dubbed the great wall of sand by senior US officials. In 2014, China also deployed a deep-sea oil rig within Vietnam’s exclusive economic zone, leading to a drawn out dispute. The US has responded by conducting freedom of navigation exercises and by flying military aircraft over the area. The US also has a mutual defense treaty with the Philippines, and the US is developing a close strategic partnership with Vietnam. But at no point did the US openly confront China’s construction activities in the South China Sea.

What is at stake in the South China Sea?

According to the US Department of Energy, there would be 11 billion barrels of oil in the South China Sea, and 190 trillion cubic feet of natural gas. It is also a very rich fishing ground, which is now most regrettably being depleted. Some $5.3 trillion worth of international trade passes through the South China Sea, about 30% of global maritime trade. And $1.2 trillion of this is US trade.

Japan and Korea also rely heavily on the South China Sea for their supply of energy and other raw materials, and also as an export route. Some 60% of Australia’s trade passes through the South China Sea. Not surprisingly, non-claimants want the South China Sea to remain as international waters, rather than being privatized by China. Circumnavigating the South China Sea would drive up commercial shipping costs.

More fundamentally, the international rule of law is at stake. China is a country that has benefited from the multilateral system, but is now seen by most to be flagrantly flouting this very system. As French Defence Minister, Jean-Yves Le Drian said: “If the Law of the Sea is not respected today in the South China Sea, it will be threatened tomorrow in the Arctic, the Mediterranean or elsewhere”. Vladimir Putin and other authoritarians are watching.

UNCLOS judgment

The UNCLOS arbitration tribunal accepted 14 of the 15 claims by the Philippines. In particular, it ruled that there is no legal basis for any Chinese historic rights within the nine-dash line. The tribunal also ruled that none of the disputed maritime features in the Spratly Islands, including Scarborough Shoal, Gaven Reef and Fiery Cross Reef, are islands under the law of the sea (they are instead “rocks”). Thus, they do not result in entitlements to a 200 mile exclusive economic zone or continental shelf. In other words, Mischief Reef -- the scene of the standoff between the Philippine Navy and China -- is within the Philippines’ maritime domain, rather than China’s. The tribunal also found that China’s land reclamation and island-building activities had caused irreparable damage to the coral reef ecosystem and breached the UNCLOS treaty. And in the case of Mischief Reef, China breached the treaty by undertaking land reclamation without the authorization of the Philippines.

China is legally bound by the UNCLOS decision, by virtue of being a signatory to the treaty. But there are no enforcement mechanisms, and China never had any intention of respecting the judgment. The Chinese government lambasted the tribunal’s judgment, claiming that it is part of an American conspiracy. On the Philippine side, there were great public celebrations in this nation that is tired of being bullied by more powerful nations.

Philippines changes tack under Duterte

But the UNCLOS decision was delivered just a matter of days after Rodrigo Duterte assumed the presidency of the Philippines, following the six-year term of Benigno Aquino III. While Aquino’s foreign policy was closely aligned with the US, its treaty ally, Duterte has shifted course to an “independent” foreign policy. His firebrand and colourful personality was in evidence when he visited China in 2016 and said "I announce my separation from the United States, both in military but economics also … America has lost it". He announced the Philippines would align itself with China and Russia.

Duterte’s approach has been to seek cooperation rather than conflict with China over the South China Sea. Indeed, as he garnered $24 billion worth of investment and financing agreements from China, he has clearly sought to use the South China Sea as a bargaining chip with China. China has allowed Philippine fishermen to return to the Scarborough Shoal. Meanwhile, China has only accelerated its constructions and militarisation of its artificial islands.

Perhaps realistically, Duterte has said “We cannot stop China from doing its thing. Even the Americans were not able to stop them …So what do you want me to do? Declare war against China?”. The Chinese government is surely celebrating that this Scarborough Shoal incident has enabled it to drive a wedge between the Philippines and the US which had hitherto been the closest of allies. Malaysia, another important claimant to the South China Sea, has also been silent following another large signing of trade deals. The only Asian country left challenging China in the South China Sea seems to be Vietnam.

Trump and the South China Sea

The new US administration of President Trump has made many feisty comments regarding China’s actions in the South China Sea. Secretary of State Rex Tillerson even said that U.S. would prevent China from accessing its own artificial islands in the South China Sea. And even though this region is a long, long way from Washington, the US does have enduring interests in the dispute, namely, freedom of navigation and overflight, support for the rules-based international order, and the peaceful resolution of disputes. But it seems hardly likely that President Trump will invest too much political capital in this dispute, when most of the claimants are no longer fighting for the issue, and when he has other fish to fry with China.

In sum, China has achieved a stunning victory in the South China Sea over its Southeast Asian neighbours. And while the US may have kept its powder dry for possible future conflicts, its inaction seems to have only emboldened China and weakened the credibility of the US as a security partner in East Asia.