As 2017 draws to an end, its an appropriate time for South China Sea observers to reflect on the happenings in one of the most contested waters in today’s world. In contrast to mounting tension in the past few years in the run-up to the July 2016 Permanent Court of Arbitration (PCA) ruling, this year was marked by the relative thawing of relations in the South China Sea. Most observers generally agree that the agreement between ASEAN and China at the recently concluded 31st ASEAN Summit to begin negotiations on the fine print of a Code of Conduct (COC) was a step in the right direction, despite reservations over the final content and nature of the document.
There has also been a concerted effort in negotiating various maritime cooperation and confidence-building measures in the region. At the 19th ASEAN-China Summit in September 2016, the parties formally “adopted the Joint Statement on the Application of the Code for Unplanned Encounters at Sea (CUES) in the South China Sea,” in the first official statement identifying the South China Sea as a zone of application for the code. Active progress has also been made toward the establishment of hotline communications between ASEAN member states and China to respond to maritime emergencies.
Fiery diplomatic exchanges between China and its ASEAN neighbors have disappeared from the headlines, with leaders from both sides eager to frame an environment of calm and cooperativeness. Since coming into power, Philippine President Rodrigo Duterte on more than one occasion has expressed his willingness to put aside the PCA ruling in exchange for deeper economic cooperation with China. On December 15, closed door talks between senior defense and security officials were held between Manila and Beijing to boost cooperation in the South China Sea.
Vietnam, the other major claimant country, also show signs of improving relations with China. Both sides issued a joint statement agreeing to peacefully handle their disputes in the South China Sea following Xi’s visit to Vietnam in November. At the same time, Beijing has actively worked to repair its image as a responsible regional power. Taking advantage of its economic prowess, Beijing has sought to woo its Southeast Asian neighbors through economic cooperation and aid via its flagship Belt and Road Initiative.
Chinese construction in the South China Sea and Beijing’s maritime ambitions
Beyond the South China Sea, China has also made progress in its maritime disputes with Japan over the Senkaku/Diaoyu Islands in the East China Sea. In early December, it was reported that Beijing and Tokyo had reached agreement on establishing a hotline to deal with unintended clashes in and above the East China Sea, after a decade of negotiations. Some have argued that recent breakthroughs in both the South and East China Sea suggest Beijing’s sincerity in mending previously strained relations with its neighbors.
Despite warming relations and an atmosphere of restrain surrounding the COC agreement, recent reports appear to paint a less rosy picture. According to satellite images released by the Asia Maritime Transparency Initiative (AMTI) at the Center for Strategic and International Studies (CSIS), construction activities continue to occur on Chinese outpost on both the Spratly and Paracel Islands. According to AMTI, although Beijing has not engaged in new island-building activities since mid-2017, there continues to be dual-use infrastructure construction on existing outposts.
Beijing’s construction activities should not come as a surprise. Experts have long argued that the securing and construction of naval and air bases on the Spratly and Paracel Islands forms a crucial part of China’s Anti-Access/Area-Denial (A2/AD) strategy in the South China Sea. Such infrastructure facilities are also crucial for China’s blue-water naval ambitions as the People’s Liberation Army Navy (PLAN) seeks to project its capabilities outside of the first island chain and beyond. From an economic standpoint, securing this key waterway is also extremely important as over 60 percent of Chinese maritime trade transits through the South China Sea. This has become ever more crucial with China’s ambitious BRI plan.
Meanwhile, China’s state news agency, Xinhua, also reported plans for a satellite launch program to begin in 2019, for remote sensing covering the South China Sea. Yang Tianlin, director of the Sanyan Institute of Remote Sensing, the institute responsible for the Satellite Constellation Program, was quoted by Xinhua as saying that the program would provide scientific support for China’s 21st Century Maritime Silk Road and emergency response efforts at sea. The same argument about providing public goods for the global commons has been repeatedly used by Chinese officials to justify Chinese expansion of islets and infrastructure build-ups in the South China Sea.
Whether Beijing’s claim of the peaceful purposes behind its South China Sea expansion and construction holds true remains to be seen. However, suspicion of Chinese intentions will not disappear. The dual-use nature of many of the infrastructure Beijing has installed on its controlled islets will continue to raise eyebrows among regional countries.
ASEAN Needs to Remain Watchful of Chinese Maneuvers
Unlike previous episodes of Chinese infrastructure construction in the South China Sea, the recent report has been met with relative silence from China’s Southeast Asian neighbors. So far, no ASEAN country has openly voiced objection or concern, although Vietnam, on its part, has also engaged in construction of its own. ASEAN countries’ silence in many ways reflects the reconciliatory attitude toward Beijing adopted in exchange for economic cooperation under the Belt and Road Initiative. Despite the current thaw in relations, Southeast Asian countries need to remain mindful of Beijing’s actions for a number of reasons.
First, Beijing’s promise of win-win economic development under the BRI is not as rosy as it seems. Last month, Pakistan requested the removal of the Diamer-Bhasha Dam project from the China-Pakistan Economic Corridor, citing an inability to accept Beijing funding conditions for the project. Earlier this month, on December 9, Sri Lanka officially handed over control of the strategic Hambantota Port to China on a 99-year lease through a concession agreement. According to reports, the lease agreement was made to help Colombo repay $8 billion in debt owed to Beijing. Opposition politicians in Sri Lanka have condemned the agreement as a loss of sovereignty for the country.
These incidents should raise flags for leaders in Southeast Asia. While working to cooperate with China economically, countries in the regions need to be wary of cooperation projects which involve huge loans from China, as the inability to repay debt could potentially result in larger leverage for Beijing, including in the South China Sea. Philippine President Rodrigo Duterte’s order to stop construction work on a sandbar at Sandy Cay following objections from China is seen by some as a display of China’s growing influence, if not leverage, over its smaller ASEAN neighbors.
Second, Beijing’s agreement to start negotiations on the COC can be seen as a delaying tactic. China’s continued infrastructure construction on islets in the South China Sea seems to confirm some analysts’ suspicion that Beijing to exploiting the ASEAN goodwill surrounding the COC negotiations to realize its ambitions. Should the COC negotiations turn out to become a long, drawn-out process, with the final product being a non-legally binding framework, as some experts anticipate, ASEAN claimant countries could be left with an “empty carrot” dangled by China, while China would have managed to alter the status quo in its favor.
Distracted Regional Players
Meanwhile, the international community has found itself caught up with rising tensions in the Korean Peninsula. For the United States, China is a crucial partner in managing the rising tensions and nuclear threats from North Korea, despite the Trump administration labeling China (alongside Russia) as “challenge(rs) to American power, influence, and interest,” in its latest National Security Strategy. For President Donald Trump, his main grievance toward Beijing remains the large trade deficit. Although the United States has conducted a few Freedom of Navigation Operations (FONOPs) in the South China Sea since Trump became president, his “America First” policy has raised concern in the region with regards to U.S. commitment in Asia.
Like the United States, Japan is also concerned with the North Korea nuclear threat. Furthermore, Tokyo has improved relations significantly with Beijing in recent months. Following a meeting between the two leaders in Vietnam earlier in November, President Xi Jinping and Prime Minister Shinzo Abe hailed a fresh start in relations between the two countries, long strained by historical grievances. This was quickly followed by an agreement to establish hotlines to manage unintended clashes in the East China Sea.
The South China Sea has very much disappeared from the radar of the two largest regional players over the past year. ASEAN countries cannot and should not rely solely on external players to balance China in the South China Sea. Although the current thaw in relations is much welcomed, it should not be taken for granted and ASEAN countries should remain united in order to prevent a repeat of Phnom Penh 2012.
Lee YingHui is Senior Analyst with the Maritime Security Program at the S. Rajaratnam School of International Studies, Nanyang Technological University.