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Asia Report N°229 24 Jul 2012
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