High-Stakes Drama: The South China Sea Disputes – by Mark J. Valencia | Global Asia

06 September 2012

by Mark J. Valencia | Global Asia – The latest act in the long-running saga of the South China Sea has seen China moving aggressively to enforce its claim to most of the features of the potentially oil-rich sea while the US ‘rebalanced’ its defense and foreign policy toward Asia. As a partial result of US-China rivalry, ASEAN’s unity and its centrality to security issues are facing a severe crisis. The drama is far from over, writes Mark J. Valencia, and the road to a satisfactory management of the South China Sea conflicts is fraught with peril. 

THERE HAVE BEEN numerous significant developments in the South China Sea disputes over the past year.1 At the end of 2011 there was in place a weak and leaking Declaration on Conduct (DoC) for activities in the sea as well as vague and general guidelines for its implementation. The bilateral/multilateral conundrum regarding the process of negotiations between China and ASEAN loomed large. The Philippines was mounting a campaign to get China to clarify its nine-dashed line claim (see map on page 60) and pushing a proposal for a Zone of Peace, Freedom, Friendship and Co-operation designed to separate “disputed” from “non-disputed” areas in the South China Sea. China had warned Vietnam, the Philippines and India (its national oil company ONGC was operating in the sea under license from Vietnam) against exploring for hydrocarbons within its claim line. Yet both ONGC and Forum Energy/Philex Petroleum had announced plans to drill in 2012 in areas claimed by China — the latter on Reed Bank. India had entered the mix not only via its national oil company but by insisting that it has a rightful naval interest in the South China Sea.
Most significant, the US-China rivalry in the region was intensifying, sucking ASEAN and its members into its turbulent political wake. Indeed the disputes had become a new cockpit of China-US competition, distorting and overshadowing the intra-ASEAN and ASEAN-China disputes. The US-China rivalry was driving the issues forward and creating pressure on ASEAN and China to make progress or at least put together a temporary arrangement regarding the disputes.

This paper covers developments from the November 2011 Bali summits through the July 2012 Phnom Penh ASEAN meetings and their immediate aftermath. It summarizes the current political and strategic context, significant developments and the current situation, and then sketches several alternative futures.

The Political And Strategic Context

The tectonic plates of the international political system are inexorably grinding against one another, and the US and China are on opposite sides of the divide — and perhaps history. The US is yesterday’s and today’s sole superpower, but its credibility, legitimacy and ability to enforce its will are fast eroding.2 China’s leaders believe China represents the future, not just in hard power but also in economy, culture and values. Indeed, China’s leaders believe it is China’s destiny to regain its prominence — if not pre-eminence — in the region and perhaps eventually the world.

In classic realist theory, established powers strive to preserve the status quo that assures their position at the top of the hierarchy and view emerging powers as potential threats. Rising powers feel constrained by the status quo and naturally strive to stretch the sinews of the international system. They fear that the dominant power will try to snuff them out before they become an existential threat. These are the primordial political dynamics of the US-China struggle.

Their rivalry is fast becoming a zero-sum game, and both are extremely suspicious of each other’s intentions. Indeed, both countries “see deep dangers and threatening motivations in the policies of the others.”3 It does not help that leadership transitions are under way in both countries, and no candidate for leadership in either country can afford to be seen as weak on such security issues. Some US analysts even see an incipient Chinese “Monroe Doctrine” that would attempt to push the US out of the region.4 Worse, the US and China are tacitly forcing Asian countries to choose between them.

It would appear that the region is now at several tipping points regarding regional security architecture. Key questions include:

• Can ASEAN maintain unity by resolving its internal differences on these issues or is ASEAN unity in security a myth and an impossible dream in an era of competing big power strategic concepts and capabilities?

• Will ASEAN maintain its centrality in its own creations like the East Asia Summit and the ASEAN Regional Forum?5

• Will US-China rivalry dominate these and other ASEAN “Plus” forums?

• Will the US attempt to drive the agenda of these forums and to emphasize negotiations and deliverables as opposed to ASEAN’s more laissez- faire approach?

• Will robust US participation in Asian political and military affairs survive looming defense budget cuts and the coming change of administrations or key personnel?6

The strategic goal of the US in Asia — besides spreading its values and way of life, including to China — is to maintain stability and the status quo by deterring Chinese aggression or coercion against its Asian “allies.” The conceptual intent is to encourage China to buy into existing international law and the order built by the West after World War II. US Defense Secretary Leon Panetta said at the June 2012 Shangri-la Dialogue, “If both of us abide by international rules and international order, if both of us can work together to promote peace and prosperity and resolve disputes in this region, then both of us will benefit.”7

Panetta also has said that “the United States will renew its naval power across the Asia-Pacific region and stay ‘vigilant’ in the face of China’s growing military,”8 adding that “the key to that region is to develop a new era of defense co-operation between our countries, one in which our militaries share security burdens in order to advance peace in the Asia-Pacific and around the world.”

However, US reassurance of its allies and friends may have emboldened some to confront China. Further, US attempts to control regional institutions are likely to be perceived by some Southeast Asian countries as upsetting an already delicate geopolitical balance. For them, how the US behaves regarding the South China Sea disputes will say quite a bit about the future geopolitical environment.

China basically believes that Southeast Asian claimants to various islands are nibbling away at its legacy and rightful ownership of islands and resources in the South China Sea and that they are colluding with the US against China.

Moreover, China is gaining confidence as its economic and military might grow. However, China is facing a strategic dilemma in that its efforts to defend its maritime claims and interests are conflicting with its policy to improve relations with Southeast Asian countries. Its goal is to restore its “tarnished image in East Asia and to reduce the rationale for a more active US role there.” It recognizes that Western “soft power”9 has an advantage in the region and that it needs to “fight back” in kind.10

But China also continues to hint at its hard power. Indeed, Defense Ministry spokesman Geng Yansheng has said that the armed forces have vowed to “fulfill their duty” to safeguard China’s territory, rights and interests in the South China Sea.11 China is rapidly developing the unmanned aerial vehicles and littoral combat ships that it would need to confront the US Navy. Meanwhile, Chinese policy-makers “talk openly about their intent to oppose American unipolarity, revise the global order and command a greater share of global prestige and influence.”12

The current US “rebalancing” in Asia has disturbed Beijing’s military strategic planning.13 One Chinese strategic analyst sees the US balancing as a cover for “forging its alliances into the first island chain … while retreating its own military to the second island chain.” China’s leaders increasingly view the US alliance system in Asia as a relic of the Cold War,14 and they argue that the trend in Asia is toward peace and co-operation, not military alliance-building and the continuation of Cold War thinking.15

Some US conservatives argue that China is seeking to take advantage of the US preoccupation with this November’s elections to push hard in the South China Sea.16 Others say that China seeks to advance its cause incrementally, its policy-makers “extending and strengthening their influence wherever possible, while working quietly to weaken Washington’s position.”17

China clearly realizes that the US is not going to go away on its own nor reduce the pressure of its presence in the region. Indeed, contrary to China’s characterization of it as an “outside power,” the US says it is part of the Pacific family of nations and that it has a valid interest in freedom of navigation and access to the international commons in the South China Sea. The eventual result may be the pitting of China’s “denial of access” against US “assurance of access.” However, some Chinese strategists have warned their government that the South China Sea could become a trap that will divert and waste China’s economic and political capital.

One possibility — though unlikely — is the US and China agreeing to “deal with one another as equals.”18 Some suggest a grand bargain “centered around a Sino-US condominium — with the (tacit) approval of other major powers such as India, Japan and Australia.”19 Such an order would “establish principles or ‘red lines’ that the US and China would agree not to cross — most notably a guarantee not to use force without the other’s permission, or [except] in clear self-defense.” The fundamental challenge for the US is to discourage China’s aggressiveness while convincing China that the US is not its enemy — a rather delicate task. One interesting twist has been to argue that the US presence provides reassurance to smaller nations so that China can continue its rise without appearing to threaten them. Others suggest that China’s increasing dependence on raw material imports will inevitably lead it to challenge the US role in Asia, resulting in security competition.

US-China military relations are already poor and deteriorating. “The PLA is quite transparent about intentions, but opaque about their capabilities. The United States is the reverse … transparent about capabilities but ambiguous about intentions,” as one analyst put it.20 The two have been unable to agree even on an agenda for military talks. China insists that the US stop arms sales to Taiwan, cease “close-in” maritime and aerial surveillance of China, and remove restrictions on exporting American military technology to China.21 Although their May Strategic and Security Dialogue was marred by the case of rights activist Chen Guangcheng, who sought refuge in the US Embassy in Beijing and eventually was allowed to resettle in New York, the defense chiefs of the two countries subsequently met in Washington and US Secretary of Defense Leon Panetta visited China.22 It was hoped that these meetings would lead to a lowering of tension between the two powers. But this appears not to have followed.

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