The Strategic Importance of the South China Sea for Trade, Energy, and Security
The South China Sea holds immense importance as a crucial area with far-reaching consequences for worldwide commerce, energy, and safety. The region is subject to significant dispute, with numerous parties asserting ownership and escalating levels of strain. The present study aims to investigate the significance of the South China Sea and identify the primary obstacles and prospects for collaboration and stability within this area.
Trade: The South China Sea plays a significant role as a crucial maritime pathway for international trade, serving as a vital link between the Pacific and Indian Oceans. The South China Sea facilitates the transportation of goods worth over $5 trillion annually, constituting approximately 33% of the world’s maritime trade, as per certain approximations. Several of the most heavily trafficked ports globally, including Singapore, Hong Kong, Shanghai, and Manila, are situated along or in proximity to the South China Sea. The area additionally accommodates significant fisheries that offer sustenance and means of subsistence for millions of individuals.
Marine Resources: The South China Sea is a significant marine ecosystem globally, characterised by a diverse range of flora and fauna and plentiful natural resources. The region in question encompasses a landmass of approximately 3.5 million square kilometres and is comprised of over 250 islands, reefs, and shoals. The South China Sea is a significant source of marine resources for the countries and regions in its vicinity, including fishery, minerals, and tourism. As per certain approximations, the fish catch originating from the South China Sea constitutes approximately 12% of the worldwide total.
Energy: The South China Sea is abundant in natural resources, particularly in the form of oil and gas. As per the report by the U.S. Energy Information Administration (EIA), the area under consideration has proven reserves of approximately 11 billion barrels of oil and 190 trillion cubic feet of natural gas. The statistics are prone to being significantly greater due to the hindrances posed by territorial conflicts and ecological apprehensions on exploration and advancement. The South China Sea presents opportunities for the development of sustainable energy resources, including wind, solar, and tidal power.
Security: The South China Sea is a significant area of concern for both regional and global security, given the presence of competing territorial claims by six nations, namely China, Taiwan, Vietnam, the Philippines, Malaysia, and Brunei. China asserts its sovereignty over a significant portion of the sea, citing its historical entitlements and the delineation of its maritime territory through the use of a nine-dash line map. However, this claim was invalidated by an international tribunal in 2016. The claims of other parties are founded upon the United Nations Convention on the Law of the Sea (UNCLOS), which accords them with exclusive economic zones (EEZs) extending up to 200 nautical miles from their respective coastlines. The disagreements have resulted in recurrent occurrences and clashes among the parties making claims, as well as between the claimants and external actors, such as the United States and Japan, who possess stakes in upholding the ‘freedom of navigation’ and aerial transit in the area.
The South China Sea presents a multitude of challenges, however, it also offers prospects for constructive discourse, fostering trust, collaborative advancement, and the avoidance of hostilities. The South China Sea presents itself as a potential avenue for both cooperation and peace, in addition to being a site of competition and conflict.
The Territorial Disputes and Maritime Claims
The South China Sea is a region that has been subject to significant disputes, primarily concerning the issue of sovereignty over the Paracel and Spratly islands. These islands are claimed, either wholly or partially, by multiple countries including China, Taiwan, Vietnam, the Philippines, Malaysia, and Brunei. Additionally, there are disagreements regarding the maritime boundaries and Exclusive Economic Zones (EEZs) that each country asserts, which are based on their respective interpretations of international law and historical evidence.
China asserts a sizeable portion of the South China Sea through its “nine-dash line” cartographic representation, initially released in 1947 and subsequently updated in 2009. The map exhibits an overlap with the Exclusive Economic Zones (EEZs), which are likewise subject to the construal of the United Nations Convention on the Law of the Sea (UNCLOS), as well as other claimants. China asserts that its territorial claim is founded on historical entitlements and substantiated by evidence of its longstanding presence and governance in the area spanning several centuries. China maintains that it possesses undeniable sovereignty over the islands and reefs situated in the South China Sea, which it regards as an inherent part of its territory.
Taiwan’s territorial claim is congruent with that of China, as it has inherited the “nine-dash line” cartographic representation from the Republic of China administration that relocated to Taiwan subsequent to its defeat in the civil war against the Communist Party of China in 1949. Taiwan maintains control over Itu Aba (Taiping) Island, the most sizable landmass in the Spratly archipelago, as well as Pratas (Dongsha) Island, situated to the north of the primary contested region. Taiwan asserts its sovereignty over all islands and reefs situated in the South China Sea and demands that its maritime entitlements be duly observed in compliance with established principles of international law.
Vietnam asserts its ownership of the Paracels and the Spratlys on the grounds of its historical occupancy and governance of these islands dating back to the 17th century. Vietnam has officially repudiated China’s “nine-dash line” map, citing its lack of legal foundation and infringement upon Vietnam’s exclusive economic zone (EEZ) and continental shelf rights as stipulated by the United Nations Convention on the Law of the Sea (UNCLOS). Vietnam currently holds 21 features within the Spratly Islands and has undertaken the construction of various artificial islands in order to enhance its territorial claims in the region.
The Philippines asserts its jurisdiction over a portion of the Spratly Islands, referred to as the Kalayaan Island Group, encompassing nine distinct features that are under its occupation and administration. The Philippines asserts its territorial claim over Scarborough Shoal (Huangyan Island), a contested coral reef situated near its coastline, which was taken over by China in 2012. The Philippines asserts its claim on the basis of its geographical proximity to said features, as well as its successful occupation and administration thereof. The Philippines contests China’s “nine-dash line” map on the grounds of its inconsistency with the United Nations Convention on the Law of the Sea (UNCLOS), which the Philippines acceded to in 1984.
Malaysia asserts its jurisdiction over a total of 12 geographical features located in the Spratly Islands, which are situated within its Exclusive Economic Zone (EEZ). This claim is based on the provisions outlined in the United Nations Convention on the Law of the Sea (UNCLOS), which serves as the defining framework for Malaysia’s EEZ. Malaysia currently holds dominion over five of these geographic entities and has undertaken the construction of man-made islets on select locations. Malaysia contests China’s “nine-dash line” map, asserting that it encroaches upon its maritime rights and interests.
Brunei asserts its Exclusive Economic Zone (EEZ) to encompass a southern region of the South China Sea, wherein the country conducts exploration operations for oil and gas resources. Brunei refrains from asserting ownership over any of the islands or reefs situated in the South China Sea. However, it raises objections against China’s “nine-dash line” map, as it infringes upon its Exclusive Economic Zone (EEZ).
Indonesia, while not asserting any ownership claims over the islands or reefs in the South China Sea, is embroiled in a maritime conflict with China concerning a segment of its Exclusive Economic Zone (EEZ) that encompasses the Natuna Islands. This area is situated to the south of the primary disputed region. The Indonesian government has officially repudiated China’s “nine-dash line” map, citing its lack of legal foundation and infringement upon Indonesia’s sovereign rights as stipulated by the United Nations Convention on the Law of the Sea (UNCLOS).
The South China Sea’s territorial disputes and maritime claims have been a persistent cause of tension and conflict for several decades. These disputes revolve around matters of national identity, sovereignty, security, and resources. The conflicts have garnered global recognition and participation due to their impact on the stability of the region, the concept of unhindered maritime passage in order to curb China’s ascension, and worldwide commerce. The claimants have endeavoured to address their divergences through a range of mechanisms, including but not limited to bilateral discussions, multilateral consultations, arbitration proceedings, collaborative development initiatives, measures aimed at fostering trust, and military deterrence. Nevertheless, the existing methodologies have not succeeded in comprehensively resolving the intricate and interrelated contentions in the South China Sea.
The Role of ASEAN as a Regional Bloc and other Regional Associations
The Association of Southeast Asian Nations (ASEAN) is a regional organisation comprising ten member states, four of which assert territorial claims in the South China Sea. These member states are Vietnam, the Philippines, Malaysia, and Brunei. Since the 1990s, ASEAN has been engaged in the matter concerning the South China Sea, having established a shared stance on the amicable resolution of conflicts and the observance of global regulations, particularly the United Nations Convention on the Law of the Sea (UNCLOS).
The year 2002 saw the issuance of the Declaration on the Conduct (DOC) of Parties in the South China Sea by ASEAN and China. This document reflects the mutual agreement of the parties involved to pursue peaceful resolutions and maritime cooperation as a means of preserving stability within the region. As per the DOC, it is imperative for ASEAN and China to strive towards establishing a more obligatory Code of Conduct (COC) in the South China Sea. The COC would delineate regional standards and regulations aimed at averting conflicts and regulating occurrences in the contested waters. The progress of the COC discussions has been hindered by a multitude of factors, including but not limited to conflicting interests, stances, and methodologies among the ASEAN member states and China.
In addition to ASEAN, various regional associations have been actively engaged in facilitating discourse and collaboration among the claimants and other relevant parties with regards to the South China Sea. The ASEAN Regional Forum (ARF) is a platform for multilateral security dialogue that comprises 27 participants, including but not limited to China, Japan, India, Australia, Russia, and the United States. The ASEAN Regional Forum (ARF) serves as a platform for deliberating on confidence-building measures and preventive diplomacy concerning the South China Sea (SCS) matter. The East Asia Summit (EAS) is a forum at the level of leaders that consists of 18 countries, encompassing all members of ASEAN and China. The East Asia Summit (EAS) has taken measures to tackle the matter concerning the South China Sea and has given its approval to a number of principles aimed at upholding tranquilly and steadiness in the area.
Involvements of the Major and Regional Powers
The South China Sea is an area of significant interest and involvement for major powers such as the United States, Japan, India, and Australia. The individuals in question express apprehension regarding China’s expanding influence, assertiveness, and security presence within the region. They perceive these developments as a potential challenge to their current approach of upholding hegemony in the South China Sea vicinity. Nonetheless, the utilisation of the concepts of freedom of navigation and regional stability is frequently employed to assert their significance in the geopolitical landscape of the South China Sea. Additionally, there exist economic and security linkages between the nation in question and select Southeast Asian nations who hold membership within the Association of Southeast Asian Nations (ASEAN).
The United States has been engaging in naval and air patrols within the South China Sea with the aim of motivating regional allies to contest China’s territorial assertions. Furthermore, it has extended military aid and facilitated the development of military capabilities to certain claimant nations, including but not limited to the Philippines and Vietnam. The United States has been advocating for a peaceful resolution of maritime disputes based on international law and norms, while also urging China to exercise restraint in these matters.
Japan has demonstrated an augmented level of involvement and collaboration with Southeast Asian nations, primarily in the domains of maritime security, infrastructure advancement, and calamity mitigation. Japan has been providing support to the efforts led by the United States to monitor China in the region. Japan is engaged in a territorial dispute with China concerning the Senkaku/Diaoyu Islands located in the East China Sea, which contributes to its participation in the South China Sea.
India has been pursuing an expansion of its strategic and economic interests in the Indo-Pacific region, encompassing the South China Sea. India has engaged in collaborative naval drills with select Southeast Asian nations, including Singapore, Indonesia, and Vietnam. India has been fostering its diplomatic ties with Australia, Japan, and the United States through a range of dialogues and initiatives, including the Quadrilateral Security Dialogue (Quad) and the Malabar naval exercise.
The Australian government has been providing support to the United States-led initiatives aimed at preserving a free and unobstructed Indo-Pacific region. The nation has been augmenting its defence and security collaboration with select Southeast Asian nations, including Indonesia, Malaysia, and Vietnam. Australia has been engaging in multilateral forums and mechanisms, including the ASEAN Regional Forum (ARF) and the ASEAN Defence Ministers Meeting Plus (ADMM+).
China has implemented heightened security measures and defence operations in the South China Sea by constructing artificial islands, deploying military resources, and conducting naval drills. The Belt and Road Initiative (BRI) is a strategic plan by China to enhance connectivity across Asia, Africa, and Europe through infrastructure development. Several of the projects pertain to nations that are embroiled in territorial conflicts with China within the South China Sea, namely Malaysia and the Philippines.
The Challenges and Opportunities for Managing the Tensions and Conflicts in the South China Sea
Effectively addressing the tensions and conflicts present in the South China Sea is a multifaceted and arduous undertaking that necessitates the utilisation of diplomatic, legal, and military strategies. In order to establish trust and minimise misunderstandings, it is imperative for the claimants and other stakeholders to engage in diplomatic dialogue and cooperation. The ASEAN has been instrumental in facilitating dialogue and cooperation. An amended international law and arbitration can serve as a legal framework and mechanism for the peaceful and equitable resolution of disputes. As an external actor, the United States has been consistently executing “Freedom of Navigation Operations (FONOPs)” and other military manoeuvres in the region. In response, China has increased its military presence and conducted additional exercises in the sea, occasionally leading to near encounters and events that have the potential to incite a crisis or conflict. The United States has endeavoured to strengthen its security collaboration with its regional allies and partners by means of joint military drills, arms trade, skill development, and exchange of intelligence. The progress made in this regard has been impeded by political sensitivities, limited resources, and varying threat perceptions among the nations concerned. The complex and enduring issue of tensions in the South China Sea necessitates a comprehensive approach that involves diplomatic, legal, and military measures among the nations in the region. The overarching objective is to establish a state of tranquilly and consistency within the region by curtailing the involvement of external forces.
China’s Geoeconomic Strategies on ASEAN and South China Sea Neighbouring Countries
China holds the position of being the primary trading partner of ASEAN and a significant contributor to investment and infrastructure financing. The nation has been actively advocating for regional economic integration endeavours, including the Belt and Road Initiative (BRI) and the Regional Comprehensive Economic Partnership (RCEP). These initiatives have the objective of augmenting connectivity, commerce, and progress within the region. China has been involved in discussions and consultations with ASEAN on a range of topics, including the finalisation of the Code of Conduct (COC) for the South China Sea, anticipated to be completed by the end of the current year.
China’s geoeconomic strategy has yielded favourable outcomes for the surrounding area. Initially, it has made a significant contribution towards the advancement and expansion of the regional economy. As per a recent study conducted by the Pacific Review, it has been observed that the annual increase in ASEAN’s GDP per capita was 5.6% from 2000 to 2019. In comparison, China’s GDP per capita witnessed an annual increase of 9.8% during the same period. According to the findings of the study, the annual increase in ASEAN-China trade from 2000 to 2019 was 14.5%, while the annual increase in ASEAN-US trade during the same period was only 4.7%. Furthermore, it has mitigated the potential for hostilities and fostered collaboration within the region of the South China Sea. Despite occasional tensions and incidents, there has not been a significant escalation or outbreak of armed conflict in the contested maritime territories. Conversely, confidence-building measures and collaborative endeavours have been implemented among the concerned parties, including but not limited to maritime exercises, fisheries cooperation, and joint oil and gas exploration.
China’s geoeconomic approach has positively changed its standing among ASEAN and neighbouring countries in the South China Sea region through the promotion of economic collaboration and communication. Nonetheless, the endeavour encounters certain obstacles and opposition from certain nations backed by the United States, who are echoing the Western approach of discrediting China’s motives and conduct.
Geoeconomics of the Regional Comprehensive Economic Partnership (RCEP)
Fifteen nations in the Asia-Pacific region signed the historic RCEP trade agreement in November 2020. The largest trade bloc in the world, it accounts for 30% of all commerce, production, and people. It is also the first trilateral trade agreement between China, Japan, and South Korea, as well as China’s first multilateral trade agreement.
China hopes to achieve a number of geoeconomic objectives through RCEP, including the following, which may be summed up as follows: – RCEP will open up a sizable market for Chinese imports and exports, lower tariffs and non-tariff barriers, harmonize rules of origin, and facilitate regional supply chains. Additionally, the RCEP will assist China in diversifying its trading partners and lowering its reliance on the US market.
– To increase its influence and leadership in the region. RCEP will increase China’s economic reliance on its neighbours, particularly ASEAN, which makes up most of the group. The first trade pact between the three largest economies in Asia—China, Japan, and South Korea—will also be advantageous for China. China will be able to project its soft power and image as a responsible partner through the RCEP while also influencing the rules and standards of trade and investment in the area.
– To act as a check against US-led alliances and efforts. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), supported by the US and excludes China and includes stricter requirements for labour, the environment, intellectual property, and state-owned businesses, will be replaced by the Regional Comprehensive Economic Partnership (RCEP). The US-led Quad alliance, which comprises Australia, India, Japan, and the US and seeks to curb China’s expansion in the Indo-Pacific, will be challenged by RCEP as well. China’s ability to create multilateral cooperation without US involvement or influence will be demonstrated through the RCEP.
This article has provided an analysis of China’s geoeconomic strategies centring ASEAN and boosted up by RECP and their impacts on the South China Sea dispute, highlighting the country’s increasing dominance in the region. Meanwhile, the United States’ influence in the area is seen to be diminishing. These findings suggest that China’s approach has been successful in achieving its geopolitical objectives. China has employed its economic influence to gain cooperation from other claimants, including the Philippines and Vietnam, while also challenging the regional order led by the United States. In contrast, the United States has met difficulties in reconciling its strategic objectives and economic relationships with China, while simultaneously upholding its reputation and dedication to its allies and associates, in order to motivate them to confront China. While certain individuals have contended that the United States has encountered obstacles stemming from internal political factors, financial limitations, and conflicting objectives in other regions such as Ukraine. China’s geoeconomic power has afforded it a comparative advantage over the United States in influencing the trajectory of the South China Sea in a certain timeframe.
Written By Rajeev Ahmed
Illustrations: MidJourney AI, and Other online sources