China Should Adjust Its South China Sea Policy
Vietnamese protests during the South China Sea oil rig incident in May 2014.

China Should Adjust Its South China Sea Policy


South China Sea analysts know that the second and third quarters of each year, from April to September, are peak periods for disputes due to the climate as well as the political environment. But this year, external powers, such as India, the United States, and Japan have been actively involved in the South China Sea, while the claimants remain relatively calm.

Has the South China Sea issue entered a new period characterized not by the disputes between China and other claimants, but by the rivalries between China and great powers including the U.S., Japan, and India? China’s land reclamation in this area is causing more and more concern from external powers. Could it fuel the possibility of a U.S.-China military conflict? And will it contradict with China’s One Belt, One Road (OBOR) strategy?

Evolving Behavior Patterns

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To answer those questions, we must first analyze the behavior of the various stakeholders in the South China Sea. And the behavioral patterns of these key players are changing.

In the past, China generally emphasized developing trade and economic relations in its interactions with Southeast Asian claimants, adopting a reactive stance to incidents in the South China Sea. However, in the last two years, Beijing has become proactive and begun counterattacking in an aggressive way, as it believes that time is on its side.

Today, China has reclaimed land on a large scale for the construction of buildings, airstrips, and ports in Spratly Islands, which has raised concerns from ASEAN claimants. What China has done so far is what Vietnam, the Philippines, and Malaysia did in the past, just more rapidly and on a larger scale. At the same time, China has strengthened its cooperation with ASEAN, including deepening political and economic relations with Vietnam, Indonesia and Malaysia. China has also showed flexibility toward drafting a Code of Conduct in the South China Sea.

Beijing keeps a low profile in disputed waters and has not directly harmed the other claimants’ interests, but these countries all know the strength of a potential Chinese counterattack. The statement issued after the April 2015 ASEAN summit expressed “serious concerns” over China’s reclamation in Spratly Islands. This is only the second time that ASEAN has made a statement on the South China Sea issue, following the statement from ASEAN foreign ministers after the HY-981 incident. Still, the ASEAN countries don’t have much room to maneuver. On security issues, they are increasingly reliant on external powers, and they would like these powers to speak up for them.

On the other side, other powers have their own agenda towards a rising China. U.S. specialists usually suggest that Asia-Pacific rebalance strategy doesn’t necessarily seek to contain China. Instead, it is a hedging strategy designed to restore the balance of power in the South China Sea region and to continue the United States’ role as a “off-shore balancer.”  This strategy includes both engaging and hedging. The U.S. approach of maintaining engagement while strengthening hedging has become the consensus of a group of powers, including the U.S., Europe, Japan, India, Australia, Canada, and South Korea – although the middle powers act in veiled and indirect ways.

Obviously, the United States is the most active non-claimant in this area. Obama accused China of “flexing its muscles” to advance its maritime claims against Asian neighbors in April. Secretary of Defense Ashton Cater also directly addressed the U.S. stand on South China Sea during his Asia tour in March. He expressed support for the peaceful resolution of the South China Sea disputes in Manila, yet at the same time pledged to increase military support and assistance to the Philippines and to train Philippines soldiers. In April, the two governments held a joint military exercise involving a larger than usual number of U.S. and Philippine troops.

In addition, Carter implicitly accused the Chinese of militarizing the South China Sea issue during his stop in South Korea while also saying that the United States would dispatch some of its most sophisticated weapons systems to Asia. Meanwhile, he warned against the militarization of territorial rows in Asia during his visits to Japan; however, the Japanese and U.S. governments have considered joint patrols and surveillance in these waters.

As a result, the South China Sea disputes have been complicated by a new factor: the balance between China and external powers, including the United States as well as Japan and India. Against this background, the ASEAN claimants are largely staying behind the scenes while external powers take center stage.

It should be noted that external factors (including the U.S. emphasis on balancing) do not replace the central question of the territorial disputes between China and the other claimants. Clearly the Chinese government strongly opposes external involvement in this dispute. However, the ASEAN claimants also have a dual attitude towards external powers’ involvement – they both hope for and hedge against it. For example, some of the Malacca Strait nations have strongly opposed U.S. air and naval anti-piracy patrols of the strait. We could say that the claimants would not depend on China for their security, but neither will they irritate Beijing.

External Involvement: Complicating and Stabilizing

While external power involvement has complicated the disputes in the South China Sea, it also has had a positive impact. Striking a balance among great powers requires sophisticated planning, which means all of the players are very cautious about the potential for conflict and will seek to strengthen their crisis management capabilities. From this perspective, the situation in the South China Sea is actually relatively stable.

The United States’ national interests in the South China Sea can be summarized in three points: maintaining peace and stability; assuring freedom of commercial navigation; and keeping the ability to conduct military activities (especially intelligence gathering) in other countries’ exclusive economic zones. The first point has moral high ground; no country would oppose it. The second point is also a shared interest for all regional countries that rely on U.S. hegemony. The third point is an extra requirement for the hegemonic power, a point which is accepted by some of the main powers in the South China Sea.

Importantly, along with its rapidly increasing naval power, Beijing has transformed its attitude toward military activities in exclusive economic zones (EEZs). Currently, China has expanded its naval presence in the EEZs around Australia, Guam, and Hawaii. In the future, we can’t rule out the possibility of a Chinese naval presence in the EEZ around continental U.S. naval bases (such as San Diego and Newport).

Further, China and Russia held a joint military exercise in the Mediterranean in May. The Mediterranean is an international maritime space where most of waters are part of the EEZs of coastal states. From this aspect, the Mediterranean is similar to the South China Sea. Therefore, the Mediterranean exercise hints that China could accept external countries conducting military exercises and general intelligence-gathering activities in its EEZ in the South China Sea. For example, the annual U.S.-Philippine “Balikatan” (meaning “shoulder-to-shoulder”) joint military exercise would be acceptable within the South China Sea if the players could reach an agreement on the range of their EEZs.

Currently, the situation is South China Sea could be summarized as follows. Japan and India play a limited role in the disputes, while the United States and China actually share similar stances on some fundamental points, with remaining differences on certain technical issues. After all, Washington doesn’t actually recognize the Philippines’ territorial claim over the Kalayaan Islands (part of the Spratly Islands). The balance between great powers is restricted by so many factors that the chance of conflict is largely reduced. If we add in the fact that China has begun transforming its South China Sea strategy and policy, guided by the OBOR agenda, then conflicts are even more unlikely to happen in this region.

China Should Speed Up Adjustments to Its South China Sea Policy

During this period of rebalancing between great powers, China needs to further clarify its South China Sea policy. This is also key for China’s OBOR strategy, which must be trusted and promoted by neighboring countries.

Beijing has long held the strategy that it’s not the right time for a proper resolution to the disputes, and that time is on its side. As part of strategy, China introduced the policy of shelving differences and seeking joint development — though in practice, claimants “shelved differences” without conducting joint development. Today, however, more and more evidence proves that time will not be necessarily on China’s side. As we saw from the HY-981 incident, China is unable to occupy several reefs at the same time as it did in 1988.

Looking more deeply, what kind of role does the South China Sea issue play in China’s national interests? Is it a core interest, like Taiwan and Xinjiang, or a key issue that’s still less significant than the former two issues? What kind of status does the South China Sea dispute have in China-ASEAN relations — does it override other issues or is it just one part of the relationship? When Beijing’s position on the South China Sea dispute is not compatible with its overall OBOR strategy, should it ignore the problem or adjust its South China Sea policy? If it is necessary to adjust the policy, what is the proper measure, time, and extent for the change?

We argue that the South China Sea, as one part of China-ASEAN relations, is less significant than Taiwan and Xinjiang. In implementing the OBOR strategy, it’s unlikely China can avoid problems arising from the disputes; hence, it is necessary for Beijing to adjust its South China Sea strategy and policies.

China is opposed to internationalizing the South China Sea dispute, as it only complicates the situation instead of solving the problem. As a result, it is practical for China to control the dispute rather than expanding it to a global level. China has long sent the message that ASEAN could play an important role in South China Sea and a multilateral framework could be considered in some disputed waters, but external powers cannot be involved. We saw this stance starting in August 2009, when the Senior Officials’ Meeting on the South China Sea Code of Conduct convened in Suzhou, and again in August 2014, when Foreign Minister Wang Yi put forward the dual-track approach. In November 2014, Premier Li Keqiang re-emphasized the dual-track approach and pledged that China would push for the implementation of a code of conduct for the South China Sea.

Given this, how should we understand China’s large-scale land reclamation and construction in the Spratly Islands, since ostensibly it seems to intensify the existing conflict? Commenters have given various answers. We argue that it is neither possible nor reasonable for China to give up its Nine-Dash Line and territorial claims to the Spratly Islands. It is thus pragmatic for China to strengthen its presence in this region to establish a basis for further negotiations and joint development. Despite years of declarations, the ASEAN claimants have yet to find a exploitation of oil and other resources in the South China Sea. If China does not have a firm presence in the South China Sea, it won’t be able to promote an eventual resolution of the disputes, seek to jointly develop or preserve natural resources (for example, by jointly establishing a marine park).

Clarifying China’s Policies

Though China is adjusting its overall strategy in the South China Sea, it needs to clarify its policy and to accelerate policy adjustments.

Generally, vague policy serves as a protection for weak powers to flexibly change their status and strategic agenda. China’s ambiguous policy on military power, especially regarding its nuclear deterrent capability, is a reflection of this tendency. On the other hand, a clear policy is designed by great powers to show confidence and friendliness toward allies and partners. From the United States’ containment policy during the Cold War to its hedging strategy targeted at China, Washington has explicitly declared and fully implemented its strategy.

Small countries are often very cautious of big ones. Thus they will seek security from external powers unless their big neighbor can ensure that it won’t challenge their security. China’s vague policy on the South China Sea will increase the concerns of ASEAN claimants, even pushing them to look for external partners to guarantee their security. Since China has already declared its agenda through the OBOR strategy and the “community of shared destiny” initiative, Beijing now much implement these pledges, especially on the security front. The Chinese government should send a message to ASEAN claimants that China can benefit these countries economically while on the other hand it will not harm their national security and thus it is not necessary for them to seek external support.

Since the construction in the Spratly Islands has provided China a foothold that is compatible with its strength, it is not necessary for Beijing to keep a vague policy. Instead, it laid a foundation for China to promote a transparent, pragmatic, and reasonable solution for the South China Sea disputes.

Additionally, it is worth noting that strategic vagueness is not compatible with the OBOR strategy. The South China Sea issue has great significance for ASEAN’s regional security. Without fully resolving this dispute, the China-ASEAN relationship will be limited to economics rather than expanding on the security and political level — not to mention creating a “community of shared destiny.” The National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce, issued an action plan on the China-proposed Belt and Road Initiative, with the State Council’s authorization. The plan emphasized that “China will follow the principle of wide consultation, joint contribution, and shared benefit” and will “help countries align their development strategies.” These pledges reflect that the OBOR is an opportunity rather than threat to countries along the routes, but China should admit that economics and security have different meanings to these countries, especially when it comes to territorial and maritime disputes.

Accounting for political psychology, China’s decision makers may not want to take responsibility for adjusting the South China Sea strategy during their time in office. Instead, they might be tempted to leave it to the next generation. In truth, during these early stages of implementing the OBOR initiative, adjusting its South China Sea strategy and clarifying its policy is the least bad choice for Beijing and one that is acceptable (if only barely) for ASEAN and the external players. There is no time to wait for tomorrow – if China acts decisively, it can make lemons into lemonade.

Dr. Xue Li is Director of the Department of International Strategy at the Institute of World Economics and Politics, Chinese Academy of Social Sciences. Xu Yanzhuo received her doctorate from Durham University (UK) in December 2014 and studies international responsibility, South China Sea disputes, and Chinese foreign policy.

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