South China Sea Imbroglio: Policy Options

The South China Sea dispute is once again flaring up with serious consequences to the regional security order. While China has been exploring energy resources in the region, it has not been allowing other contestants in the region to do the same. China had been threatening recently both Vietnam and Malaysian oil exploration in the region. In 2011, China Marine Surveillance vessels cut the cables of Vietnamese vessels that were conducting legal exploration operations. Recently, Chinese coastguards began obstructing Vietnamese ships protecting Russian-company Rosneft leased Japan Drilling Company’s oil rig Hakuryu-5 in Vanguard Bank since mid-June 2019.Hakuryu-5 has been drilling Haiyang Dizhi 8 since May 15.

On July 3, 2019 a survey ship belonging to the government owned China Geological Survey, the (Marine Geology 8) with two heavily armed coast guard vessels of Haijing class entered into Vietnam claimed territories. Vietnam sent four coast guard vessels. In 2017, Vietnam-contracted Spanish company Repsol withdrew from energy exploration operations from South China Sea, under pressure from China. Previously, as well China made coercive diplomatic calls for other energy firms to withdraw from the region. Indian ONGC Videsh Limited, operating in Vietnam-held blocks, as well faced similar threats a decade ago. The region has an estimated 200 energy firms in the process of exploring energy resources.

The above incident has similarities with another incident about five years ago, with the exception that today Vietnam refuses to budge. The state-owned China National Offshore Oil Corporation deployment of $1 billion-worth oil rig Haiyang Shiyou 981 on May 2, 2014 (southeast of Zhongjian Island in the Paracels). This had resulted in the deterioration of relations between China and Vietnam. Vietnam accuses that this rig is in its 200-nautical mile exclusive economic zone and on its continental shelf; while China says it this area is about 32 km from the Paracels (Hoang Sa) which it controls but contested by Vietnam and Taiwan. By the first week of June, 2014 China completed the first phase of drilling and exploration at this site and by mid-August the second phase. China’s vessels have drowned nearly 21 Vietnamese boats. This was marred by anti-Chinese protests across Vietnam that saw four Chinese killed. Subsequently, China again deployed the rig in the same region.

On July 19, 2019 Vietnamese Foreign Ministry condemned China’s actions in the South China Sea. It mentioned that “Vietnam resolutely and persistently protects our sovereign rights … by peaceful means on the basis of international laws”. Vietnam has also suggested to a collective response in China violating international law. The next day, the US State Department was critical of “Chinese coercion on oil and gas activity in the South China Sea.” It also stated “China’s repeated provocative actions aimed at the offshore oil and gas development of other claimant states threaten regional energy security and undermine the free and open Indo-Pacific energy market… China’s reclamation and militarization of disputed outposts in the South China Sea, along with other efforts to assert its unlawful South China Sea maritime claims, including the use of maritime militia to intimidate, coerce, and threaten other nations, undermine the peace and security of the region.” The US is also contemplating imposing sanctions on Chinese individuals and institutions involving in “illegal and dangerous activities” in the South and East China Sea. China’s foreign ministry spokesman was critical of the US position and stated that “This is slander against Chinese and Southeast Asian countries’ efforts to uphold peace and stability in the South China Sea and properly manage differences”. Thus Vietnam today is not budging under China’s pressure, unlike the Malaysia and Philippine responses.

In the case of Philippines, the 2018 joint statement between the Philippines and China mentioned that “Both sides agree to exercise self-restraint in the conduct of activities in the South China Sea that would complicate or escalate disputes and affect peace and stability.” However, in June 2018, the Chinese Coast Guard was filmed for taking away the fish catch of Filipino fishermen at Panatag (Scarborough) Shoal off the coast of Zambales. Also, on June 9, 2019, a Chinese vessel had sunk a Filipino vessel near the Recto Bank in the West Philippine Sea. Later, the 22 crew of this vessel were rescued by the Vietnamese. While Philippines defence secretary criticized China, nothing substantial progress was made.

In the Spratlys, the Philippines occupies nine features, Malaysia controls five, Taiwan has one and Vietnam 27 and China has 7, although with huge resources Beijing was able to build more than 3,200 acres of built up area and significantly altered the regional balance by militarizing the occupied reefs.

The Philippines under Rodrigo Duterte says it does not challenge or provoke China, given the overwhelming military power of the latter. Manila also contends that it has not lost any island since 2016. In 2019, Philippines decided to upgrade 91-acre Pagasa (Thitu – about 280 nautical miles from the Filipino coast) with reconstructing the runway, deploying troops and hotel construction. However, it is noticeable that Philippines is approaching the US and Japan to wriggle out this quagmire.

Malaysian responses have been muted. In May 2019, the Haijing-class vessels of China’s coast guard also came close to the Malaysian oil and gas blocks. From July 1 and July 18, 2019 Malaysian navy conducted firing of anti-ship missiles in the region after the last such firing exercises in 2014.

The role of China

China’s role in the South China Sea has become crucial, if intractable. In the 1980s, China’s leader Deng Xiaoping offered to find a solution to the dispute and suggested “joint development”, although claiming sovereignty over the region based on historical claims. However, successive governments in China have escalated the matter and took the issue in their own hands and made efforts to dominate the region through economic, diplomatic and military means. With the rise of China, aided by the western help in dual-use technological upgradation, China was able today to build over 3,000 acres of concrete structures, including military ones, in the region.

Firstly, China reorganized its civilian and military, para-military agencies and brought the whole area under the control of Sansha. While Hainan island had been made the apex administrative body before, now Sansha acquired enormous clout with military and para-military paraphernalia.

Secondly, as mentioned above, China reclaimed reefs and artificial islands into concrete structures with land reclamation – thus destroying fragile ecological balance int h region – a factor the Permanent Court of Arbitration specifically mentioned. Land reclamation included construction of a number of dual-use facilities – initially focusing on civilian structures so as not to alert the concerned Southeast Asian claimants, but increasingly as well military facilities once the land reclamation became fait accompli. This happened as well under the tacit observation of the US and other powers.

Below are the details of the militarization efforts of the occupied reefs by China:

Subi [Zhubi] Reef which is about 14 nautical miles away from Filipino controlled Thitu, has more individual buildings than compared to other built-up reefs by China– estimated at about 400- and equipped with radar, hangars, runways and surface-to-air missiles.In July 2017, a specialized rescue vessel Nanhai Jiu 115 from the Nanhai Rescue Bureau of the Ministry of Transport was deployed on the Subi Reef for regional SAR missions; anti-ship cruise missiles YJ-12B and surface-to-air missile systems HQ-9B were deployed ; Y-8 transports have been spotted on the runways
Fiery Cross Reef [Yongshu] – China took over a UNESCO marine observation station in 1987; a hospital was built in June 2016; large runway, hangar space to accommodate multiple combat aircraft, and other radar, sensor, and communications facilities.; new maritime rescue center in January 2019; installation of jamming communications and radar systems; anti-ship cruise missiles YJ-12B and surface-to-air missile systems HQ-9B; Y-8 transports spotted
Mischief Reef [Meiji]- installation of jamming communications and radar systems; anti-ship cruise missiles YJ-12B and surface-to-air missile systems HQ-9B ; Y-7 transports
Yongxing [Woody]– China opened in 2016 civilian flights; deployed H-6K nuclear capable bombers
Scarborough Shoal (Huangyan) – China’s coast guard effective control since 2012. Since April 2012, Chinese maritime law enforcement vessels have maintained regular present near Huangyan Island. Chinese forces were ordered to bar Philippine fishermen from approaching Huangyan Island.In July 2016, PLA Air Force H-6K with other aircraft patrolled Huangyan Island.
Cuarteron Reef [Huayang]- China took control in 1988
Johnson Reef [Chiguo]
Gaven reef [Nanxun]

Thirdly, China began enforcing its claims through the militia and coastguard or even naval forces in one garb or the other. Most important of these is the deployment of anti-ship cruise missiles, Hongqi 9 surface to air missiles, fighter and bomber aircraft deployments on the runways and frequent military exercises in order to control the crucial passes. This recently provided enough confidence to China to dominate Bashi Channel and Miyako Striats, the entry points for China into the Pacific and the Indian Ocean. Hence soon China’s design in the South China Sea construction activities became domination over the two oceans – a factor other powers are now ruing.

Finally, while China threatened any other disputants to explore energy resources in the region, its China National Offshore Oil Company and other State-owned agencies have not only surveyed the region but actually deployed more sophisticated oil rigs for exploration. In July 2019, China dispatched an ocean survey ship DaYang Hao to the South China Sea. These suggest that China has been making concerted efforts at the diplomatic, political and military levels and currently – given the disunity among the ASEAN countries- was able to push through its agenda concertedly. Lest the ASEAN countries make a united opposition to China, Beijing had followed a divide and rule policy and invoked one of its 24 ancient stratagems of qianyi mohua [潜移默化 ] – creep silently. At the diplomatic level, it had proposed a “dual track” approach of only discussing about the dispute (not in any concrete manner!) with the concerned. Its 2002 Declaration of Conduct has been ineffective in controlling China’s militarization. It has now been discussing a Code of Conduct to lull the ASEAN members into complacency once again.

This is here that the role of the other countries becomes crucial. Below are the brief responses from the US, Japan, Australia, France and UK and India.

Role of other countries

After the March 2009 incident in which the Chinese naval vessels trailed USS Impeccable the role of the United States became crucial and active. China was critical of the US Secretary of State Clinton’s July 2010 statement at Hanoi on support to “collaborative diplomatic process by all claimants”. China also became wary after the former US President Obama and ASEAN members concluded the joint declaration in September 2010 in which they stated “the importance of peaceful resolution of disputes, freedom of navigation, regional stability, and respect for international law, including in the South China Sea”. United States had stated since 2010 that the South China Sea is a part of its “national interests” given over $1 trillion in its trade passing through the region, besides a string of alliances and arrangements with Malaysia, Philippines, Singapore and others. China’s pro-active position with many ASEAN countries could undercut the US influence in the region and has long-term consequences to the leadership issues, besides rule of law. The US suggests to FONOPS and other measures. Since then the US carried several freedom of navigation missions. For instance the U.S. has conducted, as reported in its publications:

thirteen publicized FONOPs to challenge China’s excessive maritime claims in the South China Sea since October 2015
USSLassen(October 2015),
Five FONOPs in the Paracels were carried out by the USSCurtis Wilbur (January 2016), the USSWilliam P. Lawrence (May 2016),the USS Decatur (October 2016),
the USS Dewey(May 2017), the USSStethem(July 2017), the USS John S. McCain(August 2017), the USS Chafee (October 2017)
the first-ever joint operation by the USSHiggins and USSAntietam (May 2018); the USS Mustin (March 2018) conducted the five FONOPs in the Spratlys. The FONOP by the USS Hopper in January 2018 was undertaken at Scarborough Shoal.

The US also has upgraded relations with Vietnam, Philippines and other countries in the region. The US wanted to have a “strategic partnership” with Vietnam since 2013 although the latter settled for “comprehensive partnership.” In 2014, both issued a Joint Vision Statement on enhancing defence cooperation. In 2016, the US lifted its arms ban to Vietnam and included the latter in Southeast Asia Maritime Security Initiative for maritime capacity building. In 2017 Trump had chosen Vietnam for his first visit to Asia-Pacific region. The USS Carl Vinson visited Da Nang in 2018. However, Vietnam reportedly cancelled 15 defence engagement activities with the US slated for 2019.

Other countries as well are realizing the dangers of the militarization of the South China Sea. France sailed five ships in 2017 in South China sea and in June 2018, along with UK, it had conducted a joint freedom of navigation patrol through Mischief, Subi and Fiery Cross Reefs in the Spratly islands. In August 2018, United Kingdom’s 22,000 tonne amphibious vessel HMS Albion conducted freedom of navigation operations in Paracels.

Japan has been terming the South China Sea also as part of its national interests given over 75 percent of its energy passing through the region and China’s “territorial sea” concept could disturb such flows given the on-and off spats between China and Japan in the recent times on historical issues, nationalism, Yasukuni shrine visits, banning rare earth metal exports to Japan and others. Japan had been at the forefront on the rule of law issue. In 2018, it had dispatched its largest ship Izumo to the region and has been expanding relations with Manila and Hanoi.

Australia appears to be walking a nuanced line on the South China Sea given its free trade arrangement with Beijing, China’s growing economic and political influence in the backdrop of the bribery cases etc and the alliance arrangements with the US. Australia is also concerned about escalation in the region in the light of some coercive diplomatic threats from Beijing based.

India is also a concerned party to the South China Sea dispute as nearly half of its trade passes through the region. The new government in New Delhi since 2014 had upgraded the 1991 Look East policy into Act East policy, the latter formally announced by Prime Minister Narendra Modi in his speeches at Naypyidaw in November 2014. During President Obama’s visit to New Delhi in January 2015, both countries proposed a joint strategic vision for the Indian Ocean and South China Sea. Although Act East policy was mentioned by various others before, after the implementation of the Look East policy for over two decades, a mid-course correction towards an action-oriented outlook, regional demands and aspirations and change in the context have all necessitated the new initiatives by India. With over 7 percent economic growth rates, and prospects for sustaining such growth rates, the new leadership had announced a change in policy from being reactive to one of aspiring to be the “leading power” in global affairs as India’s foreign secretary S.Jaishankar suggested in a speech at Singapore in 2015. This necessitates a shift in focus and policy and to provide public goods and services to the neighbourhood and beyond. To cushion such a policy is to invoke the diplomatic, commercial and military resources of the country in a coordinated manner.

Vietnam is considered to be the “central pillar” in India’s Act East policy, specifically in defence ties. Both countries embarked on a comprehensive mutual support with Vietnam providing urban counter-terrorism training to the Indian forces, while India assisting Vietnam in training in Kilo-class submarine operations, Su-30 aircraft and other platforms, in addition to planning to supply Vietnam Brahmos cruise missiles and fast attack craft. Also, Vietnam granted the Indian naval forces berthing facilities for visiting ships at Haiphong and Nha Trang in Vietnam. During the PM Modi’s visit to Hanoi in late 2016, it was agreed that India will provide Vietnam with a credit line, expanded from the September 2014 figure of $100 million, to over $500 million. Vietnam also agreed to provide facilities for satellite link-up facilities for India. In addition to the energy sector cooperation where both the state-owned ONGC Videsh Limited and private sector ESSAR companies have entered drilling operations in South China Sea, bilateral cooperation fields are expanding substantially between India and Vietnam.

India has over 55 percent of its trade passing through the South China Sea, suggesting to the vital nature of these seas for India’s rise. It also has several energy interests in the region. In October 2011 – India’s ONGC Videsh Limited (OVL) invested $2.2 billion for oil and gas exploration projects in the South China Sea by signing a joint venture with Petro Vietnam. OVL also has a Block 06.1 in the Nam Con Son basin off Vietnam’s south coast—in a joint venture with TNK-BP and PetroVietnam. China did not protest these contracts. However, the OVL entered into a contract in 2006 to jointly explore with PetroVietnam in Blocks 127 (abandoned due to hard rock) and 128 in the Phu Khanh basin further north after Vietnam stated that it is well within 200nm of its claimed area. China protested these and warned “all foreign companies” to withdraw from its 9-dashed line in the region. An Indian company, Essar Group also has a production-sharing contract for a petroleum block off Vietnam’s coast, although not in the 9-dashed line. Despite its initial reluctance, India today has joined the Quadrilateral Security Dialogue and the Indo-Pacific strategy. Despite also its initial reluctance, Indian navy participated in intensive naval exercises in the South China Sea.

Policy Options

South China Sea emerged as the 3^rd largest maritime trade area, serving China, US, Japan, South Korea, the South East Asian economies, India and Australia. Over $6 trillion in goods pass through this region annually. Besides, the region reportedly has huge resources: Energy – including over 11billion barrels of oil and an estimated 190 trillion cubic feet of natural gas – is a major resource that many a country is eyeing for. The region boasts of nearly 10 percent global production of fisheries. Vital energy supply routes pass through this region. Given such a profile and implications for the regional order and international economic relations, all concerned parties should discuss issues for mutual benefit and maintenance of peace and stability in the region.
The Permanent Court of Arbitration ruling in July 2016 has become a fact on the ground, despite China walking away and taking diametrically opposite actions in this regard. China’s initial promise under Deng Xiaoping for joint exploration of resources in the 1980s has been disregarded by the governments in China, as with the promise not to militarize the region. Hence, Vietnam and other directly concerned parties to the dispute need to initiate an international arbitration procedure on energy exploration and other aspects.
Concerning regional security aspects, ASEAN needs to discuss this issue in conjunction with the other Indo-Pacific countries.
As China’s ambitions have now unveiled in its Two Ocean strategy (towards Pacific and the Indian Oceans), there is a need for all the concerned countries to usher in mechanisms for peace and stability in the region.

(Prof. Srikanth Kondapalli is Professor in Chinese Studies at Jawaharlal Nehru University. He is Chairman of the Centre for East Asian Studies, SIS, JNU. The views expressed in this article are solely those of the author, and not that of the publisher)