Special ReportAugust 1996 | Special Report No. 18 The South China Sea Dispute: Prospects for Preventive DiplomacyKey Points
Background and Significance of the South China Sea DisputeThe South China Sea dispute over territory and resources may foreshadow a new type of security challenge among Asian states. Within the South China Sea, the Paracel Islands and Macclesfield Bank have been sources of dispute, but the Spratly Islands area, contested by six claimants, has drawn the greatest attention. Recent tensions between Korea and Japan over Tokdo/Takeshima Island (and the renewal of the long-standing Senkaku/Diaoyutai Island disputes between Japan, the People's Republic of China (PRC), and Taiwan) demonstrate the complexity of sovereignty disputes, and their underlying resource potential, as sources of future confrontation among U.S. allies and friendly states. It is not difficult to imagine other maritime resource disputes coming to the fore in Asia during a global energy crunch or as regional fishing stocks are depleted. The unresolved question of whether the Spratly Islands area of the South China Sea is a significant source of energy and other resources is central to an examination of current tensions. Conflicting assessments have been made of the potential of the South China Sea as an unexplored source of oil and natural gas. A 1995 study by Russia's Research Institute of Geology of Foreign Countries estimates that the equivalent of 6 billion barrels of oil might be located in the Spratly Islands area, of which 70 percent would be natural gas. On the other hand, Chinese media outlets have referred to the South China Sea as "the second Persian Gulf," and some Chinese specialists have asserted that the South China Sea could contain as much as 130 billion barrels of oil and natural gas. Despite these optimistic assessments, the cost of drilling in deep-water areas of the South China Sea and assessments of the geochemistry of the Spratly Islands area suggest that, for the time being, the costs of exploration and low likelihood of substantial and easily exploitable yields will remain limiting factors. In any event, the fact that the area remains subject to dispute is likely to block most oil companies from taking the financial risk of carrying out the exploration necessary to determine whether the potential yields in the area are commercially viable. The importance of the South China Sea as a strategic passageway is unquestioned. It contains critical sea lanes through which oil and many other commercial resources flow from the Middle East and Southeast Asia to Japan, Korea, and China. Safety of navigation and overflight and the freedom of sea lanes of communication are critical strategic interests of the United States, which uses the South China Sea as a transit point and operating area for the U.S. Navy and Air Force between military bases in Asia and the Indian Ocean and Persian Gulf areas. Any military conflict in the South China Sea that threatens the strategic interests of the United States or the security and economic interests of Japan might be seen as sufficiently destabilizing to invite U.S. involvement to preserve navigational freedom in these critical sea lanes. Despite the overlapping jurisdictional and territorial claims at the heart of the Spratly Islands dispute, much of this vast area remains unregulated. Among the consequences of the lack of a clear jurisdiction are rapid environmental degradation, a lack of emergency procedures to deal with maritime or environmental crises, and depletion of fishing stocks--including tuna stocks that migrate to the South Pacific. Other factors in the calculus of the various claimants are the rise of nationalist political pressures and the complex challenges of governance that have accompanied rapid economic growth in the region. As states move from authoritarianism toward an atmosphere of greater political pluralism, the political leeway to resolve complex disputes involving issues of sovereignty may be constrained by domestic political processes, making it more difficult to avoid an international confrontation. The twin challenges of responding to nationalist sentiment and maintaining political legitimacy are major constraining factors that have grown more important as democratization has taken greater hold in the region. Nature and Status of the South China Sea ClaimsInternational Laws Related to the Dispute The question of who owns the 400-plus rocks, reefs, and islands (known as the Spratly Islands) that are scattered within an 800,000-square-kilometer area within the South China Sea was largely ignored until the 1970s. (The vast South China Sea region also includes other island chains and submerged reefs that have been the subject of disputes, including the Paracel Islands and Macclesfield Bank.) At that time, the area became a possible target for exploration by multinational oil companies. In addition, the likelihood of conflict has increased as international maritime laws have slowly been codified and institutionalized following World War II. Motivated by the desire to extend control over sea-based resources, neighboring states in the area have increasingly come into verbal conflict and even sporadic military confrontations over sovereignty, sovereign rights, jurisdiction, and arms control efforts in the South China Sea. During the 1980s and 1990s, most of the disputing states have found themselves in a race to bolster their claims to sovereignty by gaining occupation of the islands that can support a physical presence or by establishing markers on the islands where physical occupation is not feasible. In some cases claimants have even built structures on features that are completely submerged at high tide, maintaining a physical presence on these island specks under arduous and mind-numbing physical conditions. Currently, Vietnam occupies more than twenty islets or rocks, China occupies eight, Taiwan one, the Philippines eight, and Malaysia three to six. The race for occupation of the Spratly Islands has increased the likelihood of international conflict, resulting in three cases of military intimidation in recent years (setting aside China's use of military force against Vietnamese troops to enforce its claim to the Paracels in 1974), the first of which led to military conflict. This confrontation occurred between the Chinese and Vietnamese over the occupation of Fiery Cross Reef (Yung Shu Jiao) in 1988, at which time the PRC sank three Vietnamese vessels, killing seventy-two people. In 1992 the Chinese announcement of an oil exploration concession to the U.S. Crestone Company, combined with the occupation of Da Lac Reef and subsequent deployment of three Romeo-class conventional submarines to patrol the area, aroused alarms among the ASEAN states, which had just called for the nonuse of force in resolving the Spratly Islands dispute in the Manila Declaration on the South China Sea. The third incident began with the discovery that the Chinese had occupied Mischief Reef (Meijijiao/Panganiban), a circular reef well within the Exclusive Economic Zone (EEZ) of the Philippines (following the Philippines' announcement of a desktop oil exploration concession in the "Mischief Reef area"), and involved encounters between military vessels from the Philippines and the PRC in March and April 1995. It was the aptly named Mischief Reef confrontation that has catalyzed the most recent wave of interest and concern over the Spratly Islands issue. That concern was reinforced by PRC military pressures against Taiwan. International Laws Related to the DisputeThe documentary background for the various territorial claims in the South China Sea is quite thin, and the historical records are often contradictory. None of the claimants offers unassailable historical or legal claims. The International Court of Justice (ICJ) has used "effective occupation" and discovery as primary considerations in evaluating the legitimacy of island territorial claims, although a feature's location, its history, and whether other claimants have a record of protesting illegal occupation may be considered in determining the legitimacy of sovereignty claims to particular features. Separate from the issues of who owns the islands and rocks and whether the submerged reefs of the Spratly Islands can themselves generate maritime zones is the question of whether the islands can "sustain human habitation or economic life of their own," the minimum criterion for an island to generate its own continental shelf or EEZ. Even if human life can be sustained, islands carry less weight than continental borders in generating EEZs under the prevailing interpretations of the Law of the Sea. Artificial islands on which structures have been built are entitled to a 500-meter safety zone, but they cannot generate a territorial sea, much less a continental shelf or EEZ. Features that appear only at low tide can generate a partial twelve-mile territorial sea only if they are within twelve nautical miles of any feature that generates a territorial sea. Features submerged at low tide are not subject to sovereignty claims and generate no maritime zones at all. The acceptance by the disputing parties of the prevailing interpretation of these provisions to islands in the South China Sea has the potential to greatly reduce the area of overlapping claims, since some disputants have based their claims on an interpretation that the features themselves can generate an EEZ of up to 200 nautical miles. A strict interpretation of the Law of the Sea provision regarding a feature's ability to "sustain human habitation or economic life of their own" may well leave few if any of the features in the Spratly Islands able to generate an EEZ, greatly reducing the potential area of overlapping claims. Even if these islands were capable of generating an EEZ, it is unlikely that they would be considered able to generate one of 200 nautical miles. After sovereignty of the islands is decided, the question of how EEZs might be defined is critical to determining the size and scope of the areas where negotiations might be necessary to resolve territorial disputes. The Law of the Sea Convention stipulates that in areas where EEZs overlap, the dispute should be settled through peaceful negotiation among the parties concerned, or the parties might voluntarily agree to third-party mediation or to judicial consideration by the ICJ. There is a slowly evolving body of international legal precedents for evaluating the validity of various claims based on the Law of the Sea, and many disputants have found creative ways to avoid sensitive sovereignty issues through limited bilateral joint resource development schemes (for instance, the 1989 Timor Gap Treaty between Australia and Indonesia or arrangements to share jurisdiction over contested fisheries between Malaysia and Thailand). Summary of the ClaimsThe Chinese and Vietnamese claims to sovereignty in the South China Sea are both based on historical claims of discovery and occupation. The Chinese case is better documented, but the extent of the Chinese claims (and particularly the PRC's expansive and undefined "nine-dashed line" claim, which as shown on some maps includes waters, such as Natuna, not generally considered by others to be in the South China Sea) remains ambiguous and contradictory. The Japanese occupied the Spratly Islands during World War II and used the island of Itu Aba (Taiping Dao) as cover for surveillance and as a supply depot, but the Japanese claim lapsed with their defeat in World War II. Taiwan's claims to Chinese ownership of the South China Sea are similar to those of the PRC, and there has been some evidence of coordination of positions on the Chinese claims in the Indonesian Workshops on the South China Sea. The Philippine claim is based on the "discovery" of the unclaimed islands of "Kalayaan" (Freedomland) by an explorer, Tomas Cloma, in 1956. This is one of the most challenged claims, and the U.S.-Philippines security commitment has been consistently interpreted by the United States as excluding Kalayaan. The Malaysian claim is based on its continental shelf claim. The Bruneian claim is also based on a straight-line projection of its EEZ as stipulated by the UN Convention on the Law of the Sea. China's Claims and the Spratly IslandsRightly or wrongly, many Western editorial and opinion writers have emphasized China's approach to handling its claims in the East and South China Seas as a critical test of Beijing's role as a regional and global power in Asia in the twenty-first century. In particular, many ASEAN analysts worry that China has since the late 1980s been working to acquire a blue-water navy and other offensive force projection capabilities, such as longer-range aircraft, aerial refueling capabilities, and more modern, harder-to-detect submarine technology, with potential negative implications for the security interests of neighboring countries in Southeast Asia. The People's Liberation Army (PLA) navy has adopted a strategic doctrine of "offshore active defense." This doctrine envisions a midterm (10-15 years) ocean-going naval capability in which the PLA navy would be able to assert "effective control of the seas within the first island chain," presumably including Taiwan and the South China Sea. Although the Chinese navy is currently limited in its offshore capabilities and although development of indigenous production capability is taking place at a rather slow pace, concerns among Southeast Asian countries about the future development of the PLA's force projection capabilities have heightened ASEAN sensitivities to Chinese naval actions in the South China Sea region. Off-the-shelf purchases of foreign military technology such as SU-27s, Kilo-class submarines, and other military equipment from Russia that could speed up China's military development have attracted notice from China's neighbors; however, the time required to learn new technologies and integrate them into China's existing force structure and to make them operational suggests that any increase in China's military capacity will be incremental rather than dramatic. In response, some Southeast Asian countries have begun to take limited but significant military modernization steps of their own, meant to enhance their command and control capabilities, thereby creating the potential for a regional arms race around the South China Sea. There is conflicting analysis of China's strategy and tactics in pursuing its claims to the Spratly Islands area. Given the PRC's limited capability to take and hold the islands it claims, some see a pattern of hot-and-cold tactics by China that is intended to throw the other claimants off balance until the PRC is able to enforce its claim through intimidation or force. These analysts point to Chinese "salami tactics," in which China tests the other claimants through aggressive actions, then backs off when it meets significant resistance. China's ambiguity on the extent and nature of its claims is regarded as a tactical ploy to stall or defer any attempt to achieve a negotiated settlement until China is prepared to get what it wants through military strength. Other analysts emphasize that while the political issue of sovereignty is a particularly sensitive one during a period of political transition in Beijing, the top goal of the PRC leadership for the foreseeable future is to maintain a stable environment conducive to China's economic development. These analysts assert that China's defense strategy of "active defense" is still focused primarily on continental defense and the ability to react to localized conflicts. China's actions in the Spratly Islands area are seen as primarily defensive, preserving China's options vis-à-vis the other claimants as the Law of the Sea is applied. In addition, some experts have suggested that the South China Sea dispute cannot be solved in isolation from China's other maritime disputes in the East China Sea and the Yellow Sea. These experts suggest that China may feel hemmed in by its neighbors and therefore "geographically disadvantaged." Such a condition might make these maritime border disputes more difficult to settle because the strategic stakes for a China encircled by discrete maritime boundaries would be too high. Given the reverberations from sporadic military confrontations in the South China Sea in recent years, all parties have reason to be vigilant for opportunities to pursue progress on the Spratly Islands issue. Efforts to build confidence among the parties might serve as a buffer to the further escalation of tensions. One result of the Mischief Reef (Meijijiao/Panganiban) incident in February 1995 was to bring high-level attention to the dispute. It also catalyzed a united ASEAN reaction, to which China has responded in a cautious and seemingly conciliatory manner, and prompted the U.S. government to issue a policy statement (discussed below), which has been welcomed by ASEAN. In the latter half of 1995, China agreed in concept to establish bilateral "codes of conduct" in the Spratly Islands with both the Philippines and Vietnam that include pledges to resolve the Spratly Islands dispute peacefully, although the PRC has ignored Philippine requests to return to the status quo ante by vacating Mischief Reef. These new developments in the dispute may open the door for further progress. Currently no military in the region is capable of forcefully asserting its claims, relations in the region are generally cooperative, and assessments of the resource potential of the region show significant benefits only over the long term. All these positive factors are subject to change, but there may be a window of opportunity to pursue progress through political negotiations that forestall military escalation. On the other hand, an overemphasis on the South China Sea's current resource and strategic potential may force the Spratly Islands dispute to be seen in zero-sum terms. The heightened scrutiny resulting from the symbolic and psychological issues attached to the Spratly Islands raises questions about how one correctly identifies potential "winners" and "losers" in this dispute. China's preoccupation with its own political transition and increasing feelings of nationalism in the region are also complicating factors that increase the potential for conflict. Approaches to Resolving the DisputeMechanisms for Sustaining Dialogue The complexity and ambiguity of the conflicting claims in the South China Sea have been cited as factors that have frustrated previous attempts to arrive at a lasting solution, but the fact that not all positions are set in stone may allow flexibility in future negotiations. A wide variety of approaches have been presented for consideration if the parties can develop the political will to resolve the dispute through negotiations. Mechanisms for Sustaining Dialogue
Developing the Political Will to Sustain Peaceful SettlementMischief Reef marked a new phase in the South China Sea dispute. It mobilized the ASEAN claimants to pull together in response to China's occupation of a reef located well within the EEZ of the Philippines. The incident forced China's acquiescence in allowing the South China Sea dispute onto the formal agenda of the ASEAN Regional Forum held in Brunei in August 1995. At that meeting, PRC foreign minister Qian Qichen responded by declaring that the PRC would pursue a solution to the dispute consistent with the UN Convention on the Law of the Sea, declaring that the PRC's claim did not contradict the right of safe passage or freedom of navigation through international waterways in the South China Sea. The PRC has also acquiesced to bilateral talks with the Philippines and Vietnam to establish a "code of conduct" in the South China Sea, in effect building on ASEAN's Manila Declaration of 1992. Nevertheless, in the absence of a resolution of the dispute, the next phase could be much more volatile. Rather than seizing additional unoccupied features, claimants desiring to strengthen their claims might seek to play "king of the hill" by taking physical occupation of features currently occupied by other claimants. The current outposts in the South China Sea already pose a significant obstacle to resolving the dispute because a unilateral withdrawal from these features might represent a loss of face that would be much more difficult to negotiate. Competition for resources through oil exploration or fisheries disputes may constitute additional sources of conflict. Major oil companies may continue to be reluctant to invest money or other resources in the area of overlapping territorial claims. These potentially destabilizing factors serve only to emphasize that none of the mechanisms for achieving a lasting resolution of disputes in the South China Sea can be put in place if all the parties do not have the political will to come to the negotiating table and seek a peaceful settlement. The Mischief Reef incident crystallized regional concern about the dangers of a military confrontation in the South China Sea and heightened ASEAN's suspicions regarding China's long-term intentions and tactics. It also gave a clearer picture of the potential costs of a militarily imposed solution. But a comparison of the advantages of cooperation and the costs of confrontation is not necessarily sufficient to overcome the emotional response that is precipitated when core issues such as sovereignty are involved. Moreover, the immediate crisis in relations between the Philippines and the PRC has ebbed with the passage of time. Attention has shifted to the escalation of tensions between China and Taiwan, dissipating the momentum necessary to shape a negotiated settlement in the Spratly Islands. A failure to come to grips with the core issues increases the likelihood that another crisis will be necessary before the parties will find the political will to come to the negotiating table. Some analysts have suggested that there is no near-term evidence that the parties are ready to come to a negotiated settlement, given domestic political transitions in the PRC and the need to focus on the more urgent tensions in cross-straits relations. According to this analysis, the best hope under current circumstances is that any simmering potential disputes will stay beneath the surface and that the claimant states will be able to avoid aggressive actions or new crises that might cause renewed confrontation. Others argue that now is the time to pursue a political settlement. This analysis suggests that rising nationalism and the political transition from authoritarianism to democratic rule will make it even more difficult to muster political support for painful compromises on sensitive issues such as sovereignty. In addition, the discovery of new resource potential, negative long-term trends in the military balance in the area of the Spratly Islands, or tensions among claimants over unrelated side issues might emerge, setting the stage for a more far-reaching conflict than the current one. Regardless of whether the dispute will be easier or harder to resolve in the future, it is in the interest of all the parties to seek to create the political will necessary to reduce the likelihood of conflict in the South China Sea. |
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