Territorial Dispute in the South China Sea
Sonia Nellie Samuel, Creative Director (2020/21)
MACRO INSIGHTS 2020/21
The South China Sea dispute involve both island and maritime claims by the People's Republic of China (PRC), and several ASEAN members state, namely, Indonesia, Malaysia, the Philippines, Brunei and Vietnam.
For decades there have been competing claim over who controls the hundreds of tiny islands, reels, shoals, surrounding waters and other features of the South China Sea, including the Spratly Islands, Paracel Islands, Scarborough Shoal, and various boundaries in the Gulf of Tonkin. China’s historical claim to almost all the South China Sea is indicated by the nine-dash line area which covers most of the South China Sea. However, this claim lacks legal foundation.
Ever since China made the claim, China has resorted to island building in the Spratly and the Paracel Islands region and placed military equipment on its artificial islands.
Fiery Cross Reef is one of several fortified artificial islands in the Spratlys. The Chinese government has used land reclamation to build a runway, harbor, and military base at its western end.
Most of the area China’s claims sovereignty over, overlaps with the exclusive economic zone claims of Brunei, Indonesia, Malaysia, the Philippines, and Vietnam. Consequently, tension between these ASEAN countries and China escalation over the years.
United Nations Conference on the Law of the Sea, or UNCLOS, culminates in a resolution that defines the rights and responsibilities of nations in their use of surrounding waters based on exclusive economic zones and continental shelves. UNCLOS did not address sovereignty issues related to the South China Sea, and its vague wording has prevented it from serving as a credible body of law in resolving territorial disputes.
In 1974, Chinese forces occupied the western portion of the Paracel Islands, planting flags on several islands and seizing a South Vietnamese garrison. After the reunification of Vietnam, the newly formed Socialist Republic of Vietnam upholds the South’s former claims to the Spratlys and Paracels.
After roughly a decade of relative calm in the South China Sea, in 1988, China and Vietnam clash near the Johnson Reef. The Chinese navy sinks three Vietnamese vessels, killing seventy-four sailors in one of the most serious military confrontations in the South China Sea.
Malaysia and Vietnam in 2009 filed a joint submission to the UN Commission on the Limits of the Continental Shelf to extend their continental shelves beyond the standard two hundred nautical miles from their coastlines, renewing friction over maritime sovereignty in the South China Sea. China viewed this as a challenge to its territorial claims and objected the submission, saying it seriously infringed on China’s indisputable sovereignty over the islands in the South China Sea
Vietnam in 2012 passed a maritime law asserting its jurisdiction over the disputed Spratly and Paracel Islands, demanding notification from any foreign naval ships passing through the area. Two years later, Vietnam dispatches naval vessels in an attempt to stop China from establishing an oil rig in contested waters near the Paracel Islands. The encounter quickly escalates as China sends forty ships to protect the rig, and several vessels collide. Both China and Vietnam claim that the other rammed into their ships.
In 2011, The Philippines expresses its concern about naval incursions in its claimed territory after recording at least five incursions by Chinese ships in the past year near the Spratly Islands and the Amy Douglas Bank.
In response to a spate of conflicts with Chinese vessels, the Philippine government begins referring to the South China Sea as the West Philippine Sea in all official communications. At that time, U.S. Secretary of State Hillary Clinton also begins referring to the South China Sea as the West Philippine Sea.
Diplomatic relations between Manila and Beijing decline further after the Philippines dispatches a warship to confront Chinese fishing boats in the Scarborough Shoal. China subsequently dispatches its own surveillance vessels. Tensions built impeded economic relations between the two countries; Philippine losses in banana exports in May are estimated at $34 million and Beijing regular patrols that prevent Philippine fisherman from accessing these waters.
The Philippines initiates an international arbitration case under UNCLOS over Chinese claims of sovereignty to the Spratly Islands and Scarborough Shoal. China rejects the process, forcing the court and its arbitration to continue without its participation. The case marks the first time a country has brought a claim against China under UNCLOS regarding the issue. Philippine President Rodrigo Duterte announces the establishment of a no-fishing zone and marine sanctuary at a lagoon in the Scarborough Shoal. The shoal has been a focal point of tensions between the Philippines and China, but Duterte has broken with his predecessor Benigno S. Aquino III’s tough response to China’s actions. Instead, Duterte has signaled a warming of ties between Manila and Beijing, preferring to boost economic links and to resume bilateral dialogue with China on disputed territories.
Neither China nor the Philippines has relinquished its respective sovereignty claim, but the leaders of the two countries seem poised to take a more reconciliatory approach.
In 2020, the China coast guard ship 5402 stationed itself near Luconia Shoals in a sea tract north of Borneo that Malaysia says belongs to its maritime exclusive economic zone. In 2021, a controversial incident that saw 16 Chinese military aircraft near Malaysian air space in late May 2021 coincided with similar activity by Chinese coastguard vessels in the area and may have been part of “parallel escalation” efforts aimed at challenging energy exploration activities in the South China Sea.
Malaysia usually keeps silent about tiffs with China because of their strong economic relationship. Malaysia counts China as its top export market, and China became Malaysia’s biggest foreign investor in 2016. However, after the incident in May, the Foreign Minister Hishammuddin Hussein said the planes had entered the country's maritime zone and that a "breach of the Malaysian airspace and sovereignty". "Malaysia's stand is clear. Having friendly diplomatic relations with any countries does not mean that we will compromise on our national security," he said in a statement. Malaysia has increasingly found itself the subject of stand-offs with China, despite taking a less assertive public stance on its South China Sea claims than the likes of Vietnam and the Philippines.
Brunei has claims to Louisa Reef, Owen Shoal and Rifleman Bank, all of which Brunei declared in 1984 as features in its Exclusive Economic Zone (EEZ). However, Brunei is the only country among the claimant states that does not assert sovereignty over these islands, nor does it have any military presence there.
For decades, the tiny sultanate state has relied on oil reserves to sustain itself and the ruling monarchy. As its domestic reserves are not enough to sustain the country in the coming decades, however, Brunei must find new ways to secure its economy.
China intent to take advantage of Brunei’s declining economy through channeling investments and infrastructure projects in the country. “In exchange for US$6 billion of Chinese investment into an oil refinery and local infrastructure, along with promises to boost trade and agricultural cooperation”, China has effectively managed to buy Brunei’s silence on the South China Sea.
That changed in July this year when Brunei issued a statement that seems to present a unified front with the Philippines and Vietnam, in preparation for its ASEAN chairmanship in 2021. However, Brunei's insistence that specific issues in the maritime region should be addressed bilaterally syncs with Beijing's position, indicating that the country is still dependent on Chinese investment. As the second-wealthiest member of ASEAN, it is paramount for Sultan Hassanal Bolkiah to maintain the economic status quo to ensure the stability of the Sultanate.
At the dawn of the South China Sea dispute, Indonesia has repeatedly asserted its position as a non-claimant state in the South China Sea dispute. However, parts of China's unilaterally claimed nine-dash line overlap Indonesia's exclusive economic zone near the Natuna islands. Although China has acknowledged Indonesia's sovereignty over the Natuna islands, China has argued that the waters around the Natuna islands are Chinese "traditional fishing grounds". Indonesia quickly dismissed China's claim, asserting that China's nine-dash line claim over parts of the Natuna islands has no legal basis.
Chinese fishing vessels often escorted by Chinese coastguard ships have repeatedly been reported to have breached Indonesian waters near the Natuna islands. In 2016, Indonesian authorities captured a Chinese trawler accused of illegal fishing in Indonesian waters and arrested the Chinese crew.
Indonesia insists that they have the right to prosecute the Chinese trawler crew, despite Beijing's demand to release their eight fishermen. Indonesia challenged the Chinese nine-dash historical claim by arguing that if the historical claims can be used on presenting the territorial naval claims, Indonesia might also use its historical claims on the South China Sea by referring to the ancient influence of the Srivijaya and Majapahit empires.
Importance of the South China Sea
An estimated US$3.37 trillion worth of global trade passes through the South China Sea annually, which accounts for a third of the global maritime trade. The South China Sea contains some of the world’s most important shipping lanes. The main route to and from Pacific and Indian ocean ports is through the Strait of Malacca and the South China Sea. Generally, oil and minerals move north, and food and manufactured goods move south.
OIL AND NATURAL GAS
The U.S. Energy Information Agency estimates that the South China Sea holds about 190 trillion cubic feet of natural gas and 11 billion barrels of oil in proved and probable reserves.
The South China Sea is rich in marine life. The sea is heavily fished, and is the main source of animal protein for the densely populated Southeast Asian area. Most abundant are the various species of tuna, mackerel, croaker, anchovy, shrimp, and shellfish. Nearly the entire catch is consumed locally.
In 2002 China and the ten ASEAN states reach an agreement in Phnom Penh on the ASEAN-China Declaration on the Conduct of Parties in the South China Sea, a code of conduct that seeks to ease tensions and creates guidelines for conflict resolution. The agreement comes after six years of negotiations. Though the declaration falls short of a binding code of conduct, as the Philippines had sought, it signals China’s recognition that such an agreement could work in its favor by limiting the risk of conflict in the area. But in 2012, For the first time in its forty-five-year history, ASEAN fails to issue a communiqué at the conclusion of its annual meeting in Cambodia. Its ten members reach an impasse over China’s claims in the South China Sea, and member countries disagree over whether to include the territorial issue in the joint statement.
This year ASEAN and China aims to draft the 2021 Code of Conduct for the South China Sea in the midst of several long-running and escalating disputes. The Code of Conduct is expected to be a regional framework establishing rules and standards for regional peace and stability. However, the lack of intra-ASEAN unanimity and the bloc’s bilateral engagements with China continue to remain key impediments. This commentary will suggest potential avenues ASEAN could explore to re-focus attention on the Code of Conduct, such as enforcing regional instruments to overcome disunity.
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