US Sanctions Against China Over the East and South China Seas: A Serious Proposal?

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US Sanctions Against China Over the East and South China Seas: A Serious Proposal?

U.S. Senator Marco Rubio introduced a bill that would force U.S. sanctions against China over its maritime behavior.

US Sanctions Against China Over the East and South China Seas: A Serious Proposal?
Credit: Wikimedia Commons/CIA

Earlier this week, U.S. Senator Marco Rubio (R-FL) introduced a bill in the Senate Foreign Relations committee that proposes punitive sanctions against China over its activities in maritime disputes in the East and South China Seas. The bill, called the “South China Sea and East China Sea Sanctions Act of 2016” (PDF), proffers a plan to sanction Chinese individuals and entities “that participate in Beijing’s illegitimate operations in the South China Sea and East China Sea,” according to a release by Rubio’s office.

“China’s aggressive actions in the South China Sea are illegitimate and threaten the region’s security and American commerce, with reverberations that can be felt here at home, including Florida’s ports and throughout our state’s shipping and cargo economy,” Rubio noted. “The security of our allies in the region and our own economic livelihoods cannot be endangered by Beijing’s ongoing, flagrant violations of international norms in its pursuit of dominance in the South China Sea and East China Sea.”

The bill would represent an ambitious change in U.S. policy. If it becomes law, it would require the U.S. president to execute a range of punitive sanctions against Chinese individuals and entities for activities in the South China Sea and in turn sanction third-party financial institutions that interact with those entities knowingly. Rubio’s proposals also contain important changes to U.S. policy, such as restricting foreign aid to states that may side with China’s position on disputes in the East and South China Seas and, more importantly, shifting the long-standing U.S. position on not taking sides in questions of territorial sovereignty in maritime disputes (with some exceptions).

As a South China Sea-watcher, there’s no doubt that the changes proposed here, if enacted, would represent an immense shift in U.S. policy to these disputes. The Obama administration, for example, emphasized the importance of freedom of navigation and overflight in the South China Sea and asserted this through carrying out freedom of navigation operations and expanding its cooperation with Southeast Asian claimant states like Vietnam and the Philippines on security matters. Punitive sanctions against China over its behavior in maritime disputes was not a policy proposal that was seriously on the menu of options under consideration by the outgoing administration.

Interestingly, Rubio’s proposal may have the effect of turning the proposed sanctions regime into the de facto enforcement tool for the July 12, 2016, international ruling by a five-judge tribunal at the Permanent Court of Arbitration in The Hague, which unanimously ruled in favor of almost all of the Philippines’ submissions against China in a 2013 case concerning their disputes in the Spratly Islands. (See here and here for a refresher of the outcomes and strategic consequences of that immensely significant ruling.)

In line with the Obama administration’s policy, Rubio’s proposed bill acknowledges the July 12 ruling and describes it as “final and binding” under the United Nations Convention on the Law of the Sea. Both China and the Philippines have signed and ratified the convention while the United States has not ratified it, even though it treats UNCLOS as the basis of customary international law and the U.S. Navy abides by the agreement in practice. Though ratification would fall to the Senate, this is not something that was proposed by Rubio as a corollary to this bill that otherwise appears to place great value on the findings of the tribunal.

Sanctions would represent an important tactical shift by the United States in approaching the South China Sea. What would their effects be, if implemented? First, U.S.-China cooperation and the general bilateral relationship would suffer. Territorial sovereignty and integrity are a Chinese “core interest” and facing unilateral U.S. sanctions for activities in what China sees as its sovereign territory would likely fan the flames of nationalism in China, forcing the Chinese government to take a cold turn against Washington.

The sanctions, as outlined by Rubio, contain provisions for escalating punitive measures under certain conditions, including the declaration of an air defense identification zone (ADIZ) by China in the South China Sea — it already has one in the East China Sea — and carrying out further land reclamation work (at Scarborough Shoal, for example). The bill, in this sense, lays out certain “red lines” for China beyond the status quo.

Rubio’s proposals will no doubt spur debate among Asia maritime watchers, some of whom have recommended adding sanctions to the U.S. toolkit in reacting to Chinese behavior in the East and South China Seas. The Rubio bill, in my view, has an important shortcoming in blurring the lines on important trigger points for U.S. action on sanctions. For instance, the Senkaku Islands (administered by Japan, claimed by China) and Scarborough Shoal (currently in flux, but largely in Chinese control while claimed by the Philippines) have in the past been acknowledged by the U.S. government as covered by the defense treaties that govern them.

To the contrary, a range of features in the Spratly Islands claimed by the Philippines are not explicitly regarded as Philippine outposts that would be covered by the United States in the event of a conflict. The Rubio bill effectively dichotomizes disputed features along the lines of those administered and controlled by China and those claimed by non-China states. Among the latter, the bill also uses the language of delineating features “contested by one or more members 16 of the Association of Southeast Asian Nations.”

As some readers of The Diplomat will be aware, though China’s claims in the South China Sea are by far the most capacious among claimants under the nine-dashed line and its reclamation activities the most audacious in recent years, Beijing is neither the first nor the last claimant state to reclaim land, fortify military installations, or engage in activities questionable under international law in these waters. A benefit of U.S. policy in the status quo is that, without resolving questions of territorial sovereignty, Washington asserts freedom of navigation around all features that merit such assertions — even ones controlled by Vietnam and the Philippines. Even Taiwan, a close U.S. partner that was the progenitor of the maps that China now uses to justify its “historic” claims to the South China Sea, receives an exception from the foreign assistance scrutiny included in the bill for states that decide to acknowledge China’s view of sovereignty in the South China Sea.

Of course, the strategic shift that seems to be central to this proposed legislation is by design. The core purpose of this bill is to constrain Chinese behavior by setting out the conditions under which punitive U.S. sanctions would take effect against Chinese individuals and entities. Even though the July 12 ruling is cited as an important precedent, the overarching objective isn’t to uphold UNCLOS — which the U.S. hasn’t ratified — or encourage respect for freedom of navigation and overflight among all South China Sea claimants.

What’s still unclear is the extent to which this bill is intended as muscular legislative messaging or a serious attempt at reforging U.S. policy, starting in the Senate. With signs that the incoming Trump administration may pursue a more hawkish and forward-leaning policy on moderating China’s assertive impulses in Asia, there certainly is the possibility that the proposals espoused here could find their way into U.S. policy. Rubio isn’t the first legislator to turn hawkish on the South China Sea via proposed legislation, either. Earlier this year, Mike Pompeo, a Republican Kansas representative and Trump’s Central Intelligence Agency director designate, proposed a resolution to recognize the July 12 ruling as binding and oppose China’s activities in the East and South China Seas.

The Obama administration, of course, hasn’t stricken sanctions from its China policy toolkit. Instead of deploying it for ends in moderating Chinese behavior in disputed maritime territories, the administration had chosen to save diplomatic capital to expend in enacting sanctions over cyberespionage and North Korea. Either way, with the new administration incoming, the proposals outlined by Rubio in this latest bill may live to see the light of day, bringing great change to how the United States acts and reacts in the South China Sea.