South China Sea Conflict? No Way

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South China Sea Conflict? No Way

Some are urging India to play a more active role in the South China Sea. There’s no need – China has too much to lose by escalating territorial disputes.

The South China Sea issue – and China’s position on it – have been the subject of much deliberation, especially since the ASEAN Regional Forum Meeting in Hanoi last July. Indeed, it’s widely believed that the South China Sea will likely emerge as a conflict hotspot in the coming years.

Evidence of this can be found in the heated rhetoric exchanged between parties to the dispute – most notably, China, Vietnam and the Philippines. A declaration by the United States that it has a ‘national interest’ in the region, meanwhile, was seen as a commitment to take an active part, much to Chinese chagrin. In recent weeks, statements by Chinese officials reasserting China’s ‘indisputable sovereignty’ over the South China Sea, and warnings for India against investing in the region, are seen as signs of Chinese aggressiveness that could precipitate conflict.

Suggestions for greater Indian involvement in the South China Sea disputes are made on the grounds that India must be forceful in its dealings with China. The continuation of ONGC Videsh Limited’s (OVL) investments in Vietnamese energy fields is certainly advisable. In fact, there’s nothing to indicate that the Indian government is thinking otherwise. OVL’s presence in Vietnam isn’t a recent phenomenon. Its first joint venture for offshore oil and natural gas exploration in Vietnam’s Lan Tay field, along with Petro Vietnam and BP, became functional in 2003. Deals for the investments now in the headlines were signed in May 2006; this is a project that won’t be halted because of oblique Chinese statements.

But what’s worrying is the suggestion that Indian involvement should extend to taking an active part in the territorial disputes themselves, and that India should actively extend its naval presence – either to protect OVL’s investments or to protect the sea lines of communication. A closer bilateral relationship with Vietnam, Vietnamese rhetoric on the South China Sea disputes and its history of standing up to big powers are offered as the rationale for India to engage and arm Vietnam to win a war in the South China Sea.

These suggestions to recalibrate Indian policy towards the South China Sea and its relationship with Vietnam are premature at best. Despite the rhetoric, conflict in the South China Sea may well not be inevitable. If the history of dialogue between the parties is any indication, then current tensions are likely to result in forward movement. In the aftermath of statements by the United States, and skirmishes over fishing vessels, ASEAN and China agreed upon the Guidelines on the Implementation of the Declaration on the Conduct of Parties in the South China Sea at the Bali Summit in July 2010. And recent tensions may well prod the parties towards a more binding code of conduct. This isn’t to suggest that territorial claims and sovereignty issues will be resolved, but certainly they can become more manageable to prevent military conflict.

There’s a common interest in making the disputes more manageable, essentially because, nationalistic rhetoric notwithstanding, the parties to the dispute recognize that there are real material benefits at stake. A disruption of maritime trade through the South China Sea would entail economic losses – and not only for the littoral states. No party to the dispute, including China, has thus far challenged the principle of freedom of navigation for global trade through the South China Sea. The states of the region are signatories to the UNCLOS, which provides that ‘Coastal States have sovereign rights in a 200-nautical mile exclusive economic zone (EEZ) with respect to natural resources and certain economic activities, and exercise jurisdiction over marine science research and environmental protection’ but that ‘All other States have freedom of navigation and over flight in the EEZ, as well as freedom to lay submarine cables and pipelines.’ The prospect of threats to SLOCS thus seems somewhat exaggerated.

It will also be pertinent to remember that the states involved deem the dispute as only one element of larger bilateral relationships. The South China Sea is by no means the only calculus through which smaller countries view their relationship with China. Philippine President Benigno Aquino, for example, has stated that the dispute in the South China Sea is but one aspect of the relationship with China.

Vietnam, too, hasn’t let its relationship with China be stymied by the disputes over the South China Sea. The General Secretary of Vietnam’s ruling Communist Party, Nguyen Phu Trong, visited Beijing this month, with the joint statement issued there stating that the two sides would ‘actively boost co-operation’ in offshore oil and gas exploration and exploitation. It was also agreed that negotiations towards a peaceful settlement of the territorial disputes in the South China Sea would be speeded up, military cooperation between China and Vietnam would be strengthened, a hotline between defence ministers established and contacts between high-level officials would be increased. As of July 2011, China, ranking 14th among Vietnam’s foreign investors, had 805 operational projects in Vietnam with a capitalized value of $4.2 billion. Furthermore, China has been Vietnam’s largest trading partner since 2004. Bilateral trade between the two was valued at $27 billion in 2010. In the event of military hostilities, the first casualty would be the economic relationship, an outcome both countries are keen to avoid.

Despite what opinion pieces in the Global Times may say, there’s reason to suspect that China doesn’t want to escalate conflict in the region. Although commentary from the United States has suggested that China considers the South China Sea a ‘core interest,’ no official Chinese writing can be found to corroborate this. In addition, China’s caution can also be seen as a reflection on Chinese military capabilities, which aren’t seen as strong enough to win a war over the South China Sea. In fact, the China National Defence News, published by the Chinese People’s Liberation Army’s General Political Department, has likened the use of force by China in the South China Sea to shooting one’s own foot. Not only would the use of force bring ASEAN together on the issue, it could conceivably involve the United States and Japan, derail China’s plans for continued economic growth and undo China’s diplomacy. Chinese declarations on the South China Sea can therefore be seen as attempts to exaggerate claims so as to secure a better negotiating stance.

For India to revise its policy on the South China Sea against such a backdrop would be foolhardy, especially as it’s unclear how willing partner a partner Vietnam would be in an escalation of any conflict with China. Given that escalation isn’t in China’s interests either, it remains unlikely that China will use military force to disrupt OVL’s operations.

All this means that there’s no need for India to take positions on territorial disputes in which it is not involved. Perhaps India could take a page out of the US book on this matter. Despite claiming a ‘national interest’ on the issue, the United States has categorically stated that it won’t take sides on the territorial disputes. A revision of Indian policy on the issue should be based on a clear understanding of what India stands to gain, and how Indian national interest is best strengthened. India’s relationships with Southeast Asian countries aren’t uni-dimensional, and aren’t geared only towards checking the Chinese imprint in the region.

As regards to military support for OVL’s operations, the issue should be reflected upon seriously. It’s one thing to build capabilities in order to deter misadventure, quite another to back investment with military might. This is a matter that will affect Indian ventures globally. Is India prepared – both in terms of military and policy implications – to send military backing for all such ventures? This is a point that’s bigger than India’s relationship with Vietnam or China – it’s a question of Indian values and vision.

Rukmani Gupta is an Associate Fellow at the Institute for Defence Studies and Analyses (www.idsa.in) in New Delhi. This is an edited and abridged version of an article that was originally published by the organization here.