The three million square kilometres of the South China Sea are of par- ticular strategic importance. Sovereignty over a plethora of small islands, atolls, rocks and coral reefs, including the two main island groupings of the Spratlys and the Paracels, is contested through overlapping claims by Brunei, China, Malaysia, the Philippines, Taiwan and Vietnam. While China has, over the past two decades, made impressive overall progress towards improving relations with its Southeast Asian neighbours, mount- ing tensions over these competing claims threaten to undermine its charm offensive. Following the aggressive manoeuvres by five Chinese vessels against the US ocean surveillance ship USNS Impeccable in March 2009 in the South China Sea, developments in those waters have attracted greater diplomatic and press attention. Many observers see China’s behaviour in the South China Sea as symptomatic of an increasingly ‘assertive’ diplo- macy. And despite the common interest of the littoral states of Southeast and East Asia in the security, stability and free transit of maritime com- merce through the South China Sea, in practice they differ significantly over how these interests should be best protected, and by whom.

The sovereignty disputes are about more than simply who owns par- ticular features. They involve major themes of grand strategy and territorial defence, including the protection of sea lines of communication, energy, food and environmental security. They may also be linked to rising populist nationalism. The stakes are too high for imminent resolution; the rulers of

Beijing’s South China Sea Debate

Sarah Raine

Sarah Raine is Research Fellow for Chinese Foreign and Security Policy at the IISS.

Survival | vol. 53 no. 5 | October–November 2011 | pp. 69–88 DOI 10.1080/00396338.2011.621633

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states with maritime territorial claims in the South China Sea are convinced that compromise is not in their national interest.1 Rather, they (along with states without claims and non-state actors, such as energy companies) focus not so much on dispute resolution as on dispute management, with the aim of preventing conflict and preserving freedom of navigation and over-flight.

The states with claims have belatedly recognised that the disputes are not being managed effectively. The non-binding Declaration on the Conduct of Parties in the South China Sea, signed in November 2002 by China and the 10 ASEAN member states, committed parties to work towards adopt- ing a legally binding code of conduct whilst exercising ‘self-restraint in the conduct of activities that would complicate or escalate disputes’. But while there has been no further occupation of disputed territory since the declara- tion was signed, the theoretical commitment to self-restraint has not put an end to unannounced and potentially provocative reinforcement of already occupied islands. While diplomats on all sides made increasingly vacuous reiterations of fealty to the weakening 2002 declaration, several states undertook unilateral military, bureaucratic and jurisdictional initiatives in the South China Sea, with the aim of changing the political and military dynamics of the disputed claims. China’s initiatives have been particularly prominent. China and ASEAN signed the Implementation Guidelines for the declaration in Bali in July 2011 as a step (albeit a small one) towards agreeing the code of conduct the declaration had promised. The guide- lines, however, do little to bolster the effectiveness of the declaration, which remains non-binding.

Following the Impeccable incident, and against the backdrop of American concern over the nature of China’s military build-up, Washington has been paying increased attention to developments in the South China Sea. Though careful to reiterate its neutrality regarding sovereignty disputes, the United States has more assertively highlighted its interest in protect- ing the free transit of vessels, both commercial and military. Such passage is vital for America’s self-ascribed position as a resident power in Asia, for the credibility of its regional security umbrella, and for its ability to monitor Chinese military developments. Indeed, the US desire to retain this ability to monitor Chinese military advancements, including the developing Chinese

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naval base on Hainan, and the Chinese rejection of this right, is a major factor behind the rising tensions. In testimony to the Senate Armed Services Committee in March 2009, the commander of the US Pacific Command, Admiral Timothy Keating, argued that the Impeccable incident was a ‘trou- bling indicator that China, particularly in the South China Sea, is behaving in an aggressive and troublesome manner, and they’re not willing to abide

VIETNAM

C H I N A

M A L A Y S I A

BRUNEI

TAIWAN

PHILIPPINES

Hainan

S O U T H

C H I N A

S E A

Woody Island

Paracel Islands

Sanya naval base

Bach Long Vi Island

S p r a t l y I s l a n d s

Malacca Strait China’s ‘nine-dashed line’

Mindoro Strait

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by acceptable standards of behaviour or rules of the road’. In July 2009, the US Senate Committee on Foreign Relations held hearings on ‘Maritime disputes and sovereignty issues in East Asia’ to monitor how these were impacting on the region and US interests there. In January 2010, the new commander of the Pacific Command, Admiral Robert F. Willard, high- lighted to Congress how Chinese naval patrols in the South China Sea had shown an ‘increased willingness to confront regional nations on the high seas and within the contested island chains’. In February, the US–China Economic and Security Review Commission held an all-day hearing on China’s activities in Southeast Asia, with experts testifying about China’s increasing assertiveness in the South China Sea and advising that the United States needed to engage more with the region to protect its interests, includ- ing taking a more active interest in dispute management.2 Attention to and concern over China’s activities in these waters continued to grow through 2010. At the ASEAN Regional Forum in Hanoi in July 2010, US Secretary of State Hillary Clinton made the strongest and most direct public statement of US engagement on the issue to date, declaring that the United States had a ‘national interest’ in ‘open access to Asia’s maritime commons and respect for international law in the South China Sea’. Calling for a ‘collaborative diplomatic process’, she highlighted US opposition to ‘the use or threat of force by any claimant’, a remark aimed primarily at China. Chinese Foreign Minister Yang Jiechi, present at the meeting, was clearly unhappy, making it plain in his response that Beijing strongly opposed any effort to ‘interna- tionalise’ the issue.

Assertive activities While preparing for a Taiwan crisis remains the priority for China’s People’s Liberation Army Navy (PLAN), concerns about challenges to Chinese sov- ereignty in the South and East China Seas and access to vital sea lanes have led to substantial improvements in China’s naval posture. The South Sea Fleet, the first PLA unit Hu Jintao chose to inspect upon his appointment as secretary-general of the Chinese Communist Party in 2003, has been a par- ticular beneficiary of this build-up.3 China has built a large naval base near Sanya on the island of Hainan, some 1,200 nautical miles from the Malacca

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Strait, through which about a quarter of the world’s trade passes. Satellite imagery from February 2011 showed a Shang-class submarine and surface combatants including frigates and destroyers based at Sanya, an indica- tion of efforts to improve power projection in the region. Military facilities on Chinese-occupied features such as Mischief Reef in the South China Sea have been developed and upgraded.4 In 2010 an impressive series of PLA naval and air exercises in and around the South China Sea served as a forceful reminder of Chinese sovereignty claims and demonstrated China’s increasing power-projection capacity. Australian National University Asian security expert Carlyle Thayer concluded that ‘it is clear that China is developing the capacity to sustain larger naval deployments in the Spratly archipelago and further south in the eastern approaches to the Straits of Malacca for longer periods’.5 China is also setting the pace through deploy- ment of better-equipped maritime police forces, building up its observation systems, and emphasising its territorial rights in part through intensified maritime surveillance. This includes the increased use of satellite surveil- lance systems, which combine with ground-based over-the-horizon radars to increase China’s capacity both to monitor and to conduct military opera- tions in the sea.6 In May 2011, for example, the China Marine Surveillance service (China’s maritime law enforcement agency) announced it would expand by 1,000 officers, to more than 10,000. When China’s first aircraft carrier, which began sea trials in April 2011, is deployed operationally towards the middle of the decade Beijing’s range of policy options in the South China Sea will broaden further.

As the PLA builds up its capacity in these waters, Chinese bureaucrats continue their efforts to entrench sovereignty claims. In November 2009, for example, China established local government bodies known as ‘hamlet com- mittees’ on Woody Island. In December 2009, the Standing Committee of the National People’s Congress approved the Law on Sea Island Protection, establishing broad administrative responsibilities over all claimed offshore islands for the nominal purpose of protecting their eco-systems and pro- moting sustainable development, and strengthened the role of the State Oceanic Administration in monitoring compliance. Such jurisdictional and institutional frameworks provide convenient pretexts for China to

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bolster its presence and thereby promote its claims in contested waters. In January 2010, China’s State Council issued guidelines on developing the tourism industry in Hainan province, including the promotion of tourism to the Paracels. Moreover, since 1999 China has imposed unilateral fishing bans over some 128,000 km2 of waters it disputes with Vietnam, enforcing these with increasingly frequent and lengthy patrols. Encounters between Vietnamese fishing boats and Chinese enforcement vessels, and Chinese fishing vessels and the Vietnamese Coast Guard, are all too regular, with the potential for unintended and undesirable consequences. In March 2010, for example, Vietnamese fishing boats surrounded two Chinese fishery administration vessels, and China ordered warships to the area to protect its vessels. That the confrontation had ended by the time the warships reached the area does not detract from the potentially dangerous nature of such encounters.7 Likewise, in March 2011 the Philippine government responded to Chinese harassment of a Forum Energy survey ship by deploying military aircraft in its support. The Chinese vessels again departed the area by the time the military planes arrived, but the dangers of escalation were evident.

With the deployment in September 2010 of China’s newest and fastest fishery administration vessel, equipped to carry a helicopter, and the announcement in October 2010 that China would build 36 more vessels for maritime law enforcement under the auspices of the Chinese Marine Surveillance agency over the next five years, it seems unlikely that this pattern of activity will change.8 Further steps to ‘protect’ Chinese fisher- men have been advocated. For example, Wu Zhuang, the director of the Administration of Fishery and Fishing Harbour Supervision of the South China Sea, was already arguing in July 2009 that China should build fishery administration bases on occupied reefs and islands to respond quicker to foreign fishermen who ‘invade’ Chinese waters.9

Nor has China been shy about protesting vigorously at perceived infringements of its claims to maritime territory in the South China Sea and the mineral resources that might lie under the seabed. In 2007–08, Vietnam’s dealings with the international oil companies ExxonMobil and BP incurred China’s particular wrath.10 At a July 2009 hearing of the Senate Subcommittee on Foreign Relations, US State Department Deputy Assistant

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Secretary Scot Marciel objected to China’s reported efforts to derail these agreements, noting that ‘we have raised our concerns with China directly. Sovereignty disputes between nations should not be addressed by attempt- ing to pressure companies that are not party to the dispute.’11 In March 2011, however, two Chinese patrol boats forced the withdrawal of a survey ship chartered by Forum Energy, a UK-based oil and gas company. The ship was under contract to the Philippine government, conducting seismic studies on a gas field inside Reed Bank (which is claimed by Manila). In May, Chinese patrol boats severed the cables of a Vietnamese exploration ship, the Binh Minh, in waters near Cam Ranh Bay. In June, three Chinese maritime security vessels sliced the cables of another Vietnamese exploration ship operating within Vietnam’s 200 nautical mile exclusive economic zone. The US Senate led in voicing international concern at Chinese aggression, unanimously approving a resolu- tion that ‘deplored’ China’s ‘use of force’ in the South China Sea.12

China’s stance on discussing competing sovereignty claims in the South China Sea has hardened since 2009. Although Beijing had long been reluctant to engage with ASEAN either as a party to the disputes or as a facilitator of negotiations, the declaration of conduct appeared, briefly, to signal a willingness to relax this stance. But when Vietnam became chair of ASEAN in 2010 and pushed to place the disputes on the ASEAN–China agenda, Chinese diplomacy retreated to old ground. China’s first ambassador to ASEAN, Xue Hanqin, appointed in December 2008 amidst proclamations by Beijing of a ‘new era’ in Sino- ASEAN relations, has highlighted China’s intention to continue discussing these disputes bilaterally. Arguing against ASEAN involvement on the grounds that the association includes countries without relevant maritime claims, she effectively discounts the interests those countries might have in the manner and form of any resolution.13 Often, even China’s diplomatic statements on the matter are not particularly diplomatic. At the July 2010 ASEAN Regional Forum, Chinese Foreign Minister Yang Jiechi reacted to US expressions of a ‘national interest’ in the South China Sea by implic-

China’s diplomatic

statements are not particularly

diplomatic

76 | Sarah Raine

itly demanding that Southeast Asian countries do nothing to encourage such interest, pointedly reminding them of China’s presence in the region. Staring straight at Singapore’s foreign minister, George Yeo, Yang observed: ‘China is a big country and other countries are small countries and that is just a fact’.14 In December 2010 the Chinese ambassador to the Philippines, Liu Jianchao, followed his boss’s example, warning that the disputes were and should remain a bilateral issue, in this case between China and the Philippines. Any attempts to involve a third party such as the United States would result in ‘a situation that neither country would like to see’.15 To be sure, it seems likely that China’s desire to deter this third-party interest played an important role in its decision to choose between the lesser of two evils and negotiate the new guidelines with ASEAN. Yet its underlying distaste for such talks has not disappeared; the guidelines do not presage a substantive recalibration by China of its preferred bilateral approach to dealing with sovereignty issues in the South China Sea.

It would be unfair to portray China as the only state taking concrete mili- tary and political steps to promote its territorial claims in ways contrary to the spirit, if not the letter, of the declaration of conduct. China is not alone, for example, in having sent high-profile visitors to contested islands. In March 2009 Malaysian Prime Minister Abdullah Badawi visited Swallow Reef in support of Malaysia’s claim to the feature. In April 2010, Vietnamese President Nguyen Minh Triet visited Bach Long Vi island in the Gulf of Tonkin, declaring that ‘Vietnam would not let anyone infringe on our terri- tory, our sea, and islands’.16 In January 2011, Philippine President Benigno Aquino III pledged to upgrade the navy’s resources to better equip it to protect ‘our seas’, explicitly including disputed claims in the South China Sea.17 He reiterated these promises in his 25 July National Day address. Moreover, it is not just China which is reluctant to discuss these issues mul- tilaterally. ASEAN members disagree with each other about how to handle which claims, and in what forum.

There have also been external triggers beyond the control of any single state for the assertion of further claims. One was the May 2009 deadline for the submission of claims to an extended continental shelf, with accordant sovereign rights, to the UN Commission on the Limits of the Continental

Beijing’s South China Sea Debate | 77

Shelf.18 With the commission lacking a mandate to rule on conflicting sov- ereignty claims, and little reason not to make the strongest plausible claims, this deadline prompted a flurry of activity, protest and counter-protest as states filed their submissions (or, in China’s case, preliminary information on their forthcoming submission, which is all the law required).

It is, nevertheless, fair to say that China’s more controversial activities leave other claimants scrambling in its wake. Moreover, as the most power- ful country in what is becoming something of a prisoner’s dilemma, China will be a key shaper of the environment in which these disputes will be managed.

Debate in Beijing Understanding the Chinese decision-making process is difficult at the best of times. Yet with so many different interests at stake, including territorial defence, energy security, food security and the management of domestic nationalism, assessing the relative influence of individuals and interest groups engaged with South China Sea issues is particularly challenging. But it seems evident, from the range of public statements on the waters in question and from private conversations with Chinese government officials and think-tank scholars, that, alongside the usual bureaucratic disconnect in dealings between the various interest groups, there is also a degree of genuine disagreement within China’s policymaking community over how to handle its maritime claims.

At its crudest, this disagreement can be characterised by two camps. The first believes that, after centuries of humiliation, China has earned the right to push its claims forcefully and, now that it has the diplomatic and mili- tary means to do so, it need no longer stand idly by while its interests are undermined by weaker neighbours. The second camp consists of those who are not yet ready to abandon Deng Xiaoping’s 1978 dictum shelving sov- ereignty disputes in favour of joint development.19 While members of this group are no less adamant on the end result China should aim for, they are more patient and more flexible with regard to means. Indeed, since both camps are broadly confident that time is on China’s side, this more liberal group warns that too forceful a play by China now might actually damage

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its long-term interests, precipitating reactions from the United States and its allies that more patient diplomacy might reasonably be expected to circumvent.

Confusion over whether Beijing has officially promoted Chinese inter- ests in the South China Sea to the status of a ‘core national interest’ (on a par with its stake in Tibet and Taiwan) provides a public example of the ongoing debate between these two camps. In March 2010 an article appeared in the New York Times suggesting that Chinese officials had told two visiting senior Obama administration officials that the South China Sea was a ‘core

interest’ for China. What the Chinese officials actually said, whether they intended to change Beijing’s policy by elevating the status of their country’s interests there, and whether they were authorised to do so, remain unclear. What is clear is that the report of this apparent escala- tion quickly turned the question into a political football in China, with arguments developing between liberals and hardliners across the party and government over whether China should stand by this intended or inadvertent escala- tion, stand by it only as a diplomatic gambit, try to ignore

the issue by not repeating it, or clearly back away from it. It is reasonable to infer from the public silence of Beijing’s top leadership that there was little enthusiasm for prolonging such a contentious debate or for assessing the credentials of the South China Sea as a ‘core interest’. With the United States quick to recognise that forcing the issue was in neither its own nor China’s national interests, the Chinese leadership appears to be taking the opportu- nity to let the matter rest, at least for the moment.

It is perhaps no surprise that PLA voices appear to be louder within the first camp, whilst the voices of Chinese diplomats are more likely to be heard in the second. As China has grown as an economic power, the military has been given greater responsibility and funding intended to help it protect expanding economic interests overseas. In turn, senior military officials have become more confident about commenting publicly not just on defence or national security matters but also on other strategic matters, including energy security and US–China relations. While there naturally

The report turned the question into a political football

Beijing’s South China Sea Debate | 79

remains some difference of opinion within the PLA itself, the strengthening of its influence in the policymaking process and the harder line it generally promotes seems to be a key factor in the hardening of China’s positions on security issues.

In February 2009, PLA Air Force Colonel and strategist Dai Xu published an article arguing for China’s development of overseas bases to ‘safeguard commercial interests and world peace’, suggesting it start with a ‘test’ base in the South China Sea.20 In March 2009, Rear Admiral Yang Yi of China’s National Defense University, argued that any discussions with countries with claims in the South China Sea that overlapped China’s ‘must be based on the premise that sovereignty [over disputed areas] belongs to China’. China’s desire for a stable periphery or a positive international image would not, he warned, constrain its willingness to use force if required.21 In mid- 2009, the recently retired deputy chief of the General Staff Department of the PLA’s Central Military Commission, General Zhang Li, attracted consider- able attention with his recommendation to the Chinese People’s Political Consultative Conference that China should defend its interests in the South China Sea through a three-stage programme that would culminate in even greater investment in infrastructure such as ports and airstrips in the Spratly Island chain, and in particular on Mischief Reef. Although there are obvious challenges involved in constructing an airstrip on what is essentially a largely submerged sand bank, the construction of such a facility would, amongst other advantages, give China a staging point in the southern reaches of the South China Sea to complement its existing airbase on Woody Island in the Paracel Islands to the north, improve Chinese surveillance capabilities in the Malacca Strait, and place PLA air forces in the immediate vicinity of one of the most important sea lanes in Asia, the Mindoro Strait.

The assertive attitude of the PLA could also be seen in a dubious argu- ment that came out of Beijing in early 2010: the need for China’s programme of military acquisitions was blamed on arms purchases by its Asian (and particularly Southeast Asian) neighbours. In February, for example, Rear Admiral Yin Zhou proclaimed that such acquisitions posed a threat to China’s sovereignty claims in the South China Sea, arguing that ‘if this continues at the current rate, in several years ASEAN countries will create

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powerful naval forces. This is naturally becoming a challenge to neighbour- ing countries, including China’.22 Beijing appeared particularly exercised by the contract that Vietnam signed in December 2009 to purchase six Kilo- class submarines from Russia, conveniently ignoring China’s own, far more impressive submarine build-up and the long lag time before Vietnam can develop any significant capability to use these submarines.

Even when Chinese statements on national defence are not specifically connected to the South China Sea, but are, for example, more strategic in

nature, the region continues to provide much of the subtext for the commentary, with the same hawkish overtones.23 In 2009, one PLA strategist, Huang Kunlun, advocated moving from defending territorial bounda- ries to ‘boundaries of national interests’: ‘We need to safeguard not only national-security interests but also interests relating to [future] national development.’24 In December 2010, Defence Minister Liang Guanglie com- mented in an interview that ‘in the coming five years our military will push forward preparations for military con-

flict in every strategic direction ... We may be living in peaceful times but we can never forget war.’25

In private, Chinese civilian experts are prone to dismiss the more hawkish statements made by PLA commentators as the result of internal jockeying both within the military and between military and civilian interests. There is, to be sure, only limited evidence that the more bellicose statements are representative of the views of the top Chinese leadership. Yet PLA officers require prior authorisation from the Central Military Commission before talking to the media on policy issues. What we are hearing is either gov- ernment sanctioned and intended to help the leadership deniably explore China’s more hawkish options, or evidence of a growing gap between civil- ian and military interpretations of Chinese interests in the South China Sea. Both alternatives are unappealing for the West and for Southeast Asia alike.

Even allowing for the substantial overlap between the civilian and mili- tary leadership, there are differences of opinion within as well as between these groups, as well as between the central and local governments. In view

Civilian experts dismiss the more hawkish statements

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of China’s growing dependence on imported oil and expanding concerns over energy security, resource nationalists in and out of government have been advocating a more interventionist approach towards the exploration for hydrocarbons and the protection of fisheries in the South China Sea. China’s fishing resources in its immediate littoral have become heavily depleted through overfishing, and the fisheries industries in provinces such as Guangdong, Shandong, Fujian and Zhejiang are being forced to look further afield.26 Local administrations have developed their own interests in protecting their fishermen and fishing rights in these areas, undertaking their own initiatives, not all of which can be assumed to have prior approval from the central government. Some tension between the aims of central and regional government and initiatives should not, therefore, be surprising. One example could perhaps be the furore surrounding the leaking of plans in late 2007 to create a new city-level administration on Hainan province responsible for the Paracels and Spratlys.27 The report, which brought pro- testers to the streets of Vietnam, was based on communications from the Chinese Communist Party’s propaganda office in Hainan, but there is little evidence to suggest that Beijing played anything other than an ameliorative role, intervening to quash the provocative plans, or at least ensure that they were shelved for the time being.28

The central leadership has its own distinct interests in the South China Sea aside from questions of grand strategy. It is finding the dynamic of rising nationalism among the country’s fenqing (‘angry young men’), which it long tried to ferment to its domestic advantage, difficult to manage. China may not be a democracy, but its leaders know they need to react to popular opinion as well as mould it if they are to remain in control. In 2009, China’s Global Times published an article which suggested that 92% of Chinese Internet users believed the dispute in the South China Sea would need to be resolved by force. Nationalist feeling was on full display again in the popular reaction to the New York Times story over China labelling its interests in the South China Sea as ‘core national interests’. The Internet was abuzz with nationalist statements of support for this escalation. Academics who publicly tried to suggest that a less confrontational approach might in fact be wiser were denounced as Western puppets; some even received death

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threats.29 Despite the obvious downsides, in the event of serious domestic discontent military action in the disputed waters could be one way the lead- ership could re-assert its populist credentials.30 Moreover, with the selection of a fifth generation of party leadership approaching in 2012, any sign of concessions on these points is likely to be taken as a sign of weakness. At least in the short term, we are unlikely to see the government counteract the more provocative claims of popular nationalists, and the pressures these bring.

But despite the powerful limitations imposed by the influence of the military, popular nationalism and the impending leadership change, some fealty to Deng Xiaoping’s 30-year old advice to shelve sovereignty disputes remains.31. China’s Foreign Ministry, in particular, is trying to leverage the Ministry of Commerce’s success in building economic ties with Southeast Asia to advance Beijing’s soft power. It repeatedly warns the central lead- ership of the counter-productive effect that more assertive statements of Chinese rights in the South China Sea may have on Chinese relations with Asia, and by extension the United States.32 By 2009, China had become ASEAN’s largest trading partner, accounting for 11.6% of ASEAN’s total trade of $1.54 trillion.33 In 2010, a China–ASEAN free-trade agreement aimed at creating a unified market of some 1.9 billion people with a trade volume of around $4.5tr came into force.34 And while these trading rela- tions are not without irritations of their own, the economic attractions of close ties with China are a powerful lure to Southeast Asian states. This is a remarkable achievement by China, given the legacy of historical mistrust combined with contemporary concerns over how China might ultimately seek to use its growing economic leverage to promote its national interests, and whether this might be at the cost of Southeast Asian states’ international autonomy.

But even the traditionally more liberal Foreign Ministry’s actions have not been without a harder edge. China’s submission of a protest note to the UN secretary-general arguing that claims in Malaysia and Vietnam’s joint 6 May 2009 submission to the Commission on the Limits of the Continental Shelf ‘seriously infringed China’s sovereignty, sovereign rights and jurisdic- tion’ was predictable and arguably even legally advisable to demonstrate a

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consistent rejection of other’s claims. More surprising was the decision to attach to this note a 1947 map of the South China Sea demarcating China’s claimed territory with a dashed line descending in a U-shape from China’s coastline into Southeast Asia and incorporating nearly all of the South China Sea.35 This was the first time this map, which was originally produced by the Nationalist Kuomintang, had ever been used in official correspondence. Whilst observers remain unsure about the significance of this submission and indeed the true significance of the map, it is difficult to see this as other than a further assertive move, delivered this time not by China’s military but by its diplomats.

* * *

The decisions that China’s leadership makes about how it should behave with regard to the South China Sea, and whether these decisions are made in conflict or in partnership with other interested state actors, has considerable significance. This is about more than who ends up owning what territory. It is even about more than how the successful claimants treat freedom of navigation and over-flight for the foreign commercial and military vessels in that territory, as important as this will be. Rather, it is about what sort of power China will become. As Chinese vessels increase their presence in the South China Sea and as states in the region become more dependent on their trade with China, Beijing will have an increasing array of policy options. Not just what decisions it makes, but how it makes those decisions – whether alone, in consultation with friendly states in Southeast Asia, in some sort of condominium with the United States, or both – will be key. The choices China’s leaders make will help others determine whether China is likely to deploy its increasingly dominant power in Asia towards more cooperative or more selfish ends.

The backdrop of US–China relations, and in particular arguments over the transparency and logic behind China’s military developments and the right of the United States to monitor them (including at close quarters in the South China Sea), provides a crucial context for the management of various national interests in these waters. As both China and the US are forced by

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circumstances into dealing increasingly with each other in the South China Sea and beyond, clues are beginning to emerge as to the possibilities, if not for partnership, then at least for working alongside each other relatively har- moniously. Can mutual interests be respected and some sort of implicit deal be struck? And if so, to what extent will this deal be negotiated with or take account of the interests of the smaller and weaker states of Southeast Asia?

While US–China military-to-military relations continue to lag signifi- cantly behind non-military elements of the broader bilateral relationship, and while even Washington and Beijing continue to talk past each other in a context of significant mutual distrust (for example on negotiations for an incidents-at-sea agreement), the signs for a grand deal between China and the United States or the development of a more collaborative, inclu- sive approach are unpromising. Some fundamental tensions between the countries are unlikely to disappear. Their systems of government will remain starkly contrasting, as will their definition and prioritisation of human rights. Their geographical areas of influence and interest are likely to overlap further. Southeast Asian states, in particular, will need to exercise skilful diplomacy to protect their relations with both.

The strategic and commercial significance of the South China Sea to Japan, South Korea and the United States means that tensions over com- peting sovereignty claims will be internationalised whether China likes it or not. Indeed, the best strategy for Beijing to avoid internationalising these tensions is not for it to deny these interests but to focus more on understanding US concerns with regard to China’s military build-up and to respond more effectively to US efforts to improve bilateral military-to- military relations. This would buy China greater breathing space to nego- tiate with its ASEAN colleagues without the United States looking over ASEAN’s shoulder. ASEAN states should remain similarly committed to multilateral negotiations, whilst trying to minimise differences among themselves. Attempts to develop such multilateralism may be slow, frus- trating and at times painful. Yet as states in the West and Southeast Asia seek to manage the consequences of China’s rise, Beijing’s handling of the South China Sea disputes in particular and its rise as a naval superpower more generally are set to serve as something of a weathervane.

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1 For example, if Vietnam was to sur- render its foothold in the Spratlys, it would find itself further encircled by its historical enemy, China. If the Philippines gave up its stake in the Spratlys, it would effectively invite Chinese power closer to its main islands. China meanwhile worries about leaving its trading and energy routes exposed to powers it does not yet believe are comfortable with the country’s rise.

2 See, for example, the testimony of Bronson Percival, senior adviser to CNA’s Center for Strategic Studies. US–China Economic and Security Review Commission, ‘China’s Activities in Southeast Asia and Implications for U.S. Interests’, 4 Februay 2010, http://www. uscc.gov/hearings/2010hearings/ written_testimonies/10_02_04_ wrt/10_02_04_percival_statement.pdf.

3 Nan Li, ‘Scanning the Horizon for “New Historical Missions”’, US Naval Institute Proceedings, vol. 136, no. 4, April 2010, p. 21, http://www.usni. org/magazines/proceedings/2010-04/ scanning-horizon-new-historical- missions.

4 Facilities on Mischief Reef have been upgraded from stilt-mounted metal and wood platforms in 1995 to con- crete buildings including a tower with a covered dome characteristic of a radar facility by 2007. Richard Fisher Jr, ‘South China Sea Competition: China contemplates more Mischief’, Strategycenter.net, 28 June 2009, http://www.strategycenter.net/ research/pubID.209/pub_detail.asp.

5 Carlyle Thayer, ‘Recent Developments in the South China Sea: Grounds for Cautious Optimism?’, working paper no. 220, S. Rajaratnam School of International Studies, 14 December 2010, http://www.rsis.edu.sg/publica- tions/WorkingPapers/WP220.pdf.

6 See, for example, the launch of five Yaogan satellites (which China refers to as earth observation satellites but are understood to have a dual use as military reconnaissance satellites) in the five months from December 2009– March 2010. Peter J Brown, ‘China’s Navy Cruises into Pacific Ascendancy’, Asia Times, 22 April 2010.

7 Carlyle Thayer, ‘The Tyranny of Geography: Vietnamese Strategies to Constrain China in the South China Sea’, paper presented at the 52nd Annual Convention of International Studies Association, Montreal, Quebec, 16–19 March 2011.

8 Edward Wong, ‘China: Plans to Build 30 Sea Vessels’, New York Times, 4 October 2010.

9 ‘China Charts Course Toward Secure South China Sea’, China Daily, 1 July 2009.

10 ‘China Confirms Telling Exxon to End Vietnam Oil Deal’, Reuters, 22 July 2008.

11 Scot Marciel, Testimony before the Subcommittee on East Asian and Pacific Affairs, Committee on Foreign Relations, US Senate, 15 July 2009.

12 Senate Resolution 217. For full text see http://webb.senate.gov/newsroom/ pressreleases/06-27-2011.cfm.

13 ‘China’s First ASEAN Ambassador Seeks Closer Ties’, Xinhua, 15

Notes

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January 2009; Stephanie Ho, ‘South China Sea Territorial Disputes not on ASEAN agenda’, Voice of America, 21 October 2009; see also comments by Xue Hanqin at the Institute of South East Asian Studies, Singapore, 19 November 2009.

14 ‘China’s Aggressive New Diplomacy’, Wall Street Journal, 1 October 2010.

15 ‘China Envoy to Philippines Airs Views on Spratlys’, Manila Bulletin, 23 December 2010.

16 On South China Sea Island, Vietnam Leader Vows to Protect Territory’, Earth Times, 2 April 2010.

17 ‘Philippines Pledge Navy Upgrade to Guard Resources’, Reuters, 4 January 2011.

18 The commission is a specialist UN body tasked under Article 76 of the UN Commission of the Law of the Sea with scrutinising claims of an extended continental shelf beyond the standard 200nm limit from the main- land and qualifying islands allowed for an exclusive economic zone.

19 Deng initially offered this advice in relation to China–Japan relations and their disputed sovereignty claims over the Senkaku/Diaoyu islands.

20 Michael Chase and Andrew Erickson, ‘Changes in Beijing’s Approach to Overseas Basing?’, China Brief, 24 September 2009.

21 Willy Lam, ‘PLA’s Absolute Loyalty to the Party in doubt’, China Brief, 30 April 2009.

22 ‘China Concerned on Build-up of ASEAN Submarine Fleets’, RIA Novosti, 27 February 2010.

23 See, for example, China’s 2010 Defence White Paper, released March 2011.

24 Huang Kunlun, Liberation Army Daily, 4 December 2008. See also ‘China Flaunts Growing Naval Capability’, China Brief, 12 January 2009.

25 Peter Foster, ‘China Preparing for Armed Conflict in Every Direction’, Daily Telegraph, 29 December 2010.

26 Lyle Goldstein, ‘Strategic Implications of Chinese Fisheries Development’, China Brief, 5 August 2009.

27 This was first reported by the Hong Kong newspaper Ming Pao. The Paracels and Spratlys remain a ‘ban- shichu’ – the same administrative category as before this story broke.

28 Author interview, Chinese Academy of Social Sciences official, Beijing, 22 January 2010.

29 Author interview, Peking University, Beijing, 19 January 2010.

30 Micah Springut, ‘Managing China’s Growing Assertiveness in the South China Sea’, World Politics Review, 27 July 2009.

31 Although enthusiasm for the second part of his advice – ‘to focus on joint development’ – has waned since the failure of the one and only collab- orative effort since the declaration of conduct, the 2005 Joint Marine Seismic Undertaking between China, the Philippines and Vietnam.

32 Author interview, Ministry of Foreign Affairs official, Beijing, 20 January 2010.

33 ‘Top Ten ASEAN Trade Partner Countries/Regions, 2009’, ASEAN sta- tistics, July 2010, http://www.aseansec. org/stat/Table20.pdf.

34 ‘China-ASEAN Free Trade Area Starts Operation’, China View, 1 January 2010, http://news.xinhuanet.com/eng- lish/2010-01/01/content_12739017.htm.

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35 Note from the PRC’s permanent mis- sion to the UN, 7 May 2009, http:// www.un.org/Depts/los/clcs_new/ submissions_files/mysvnm33_09/ chn_2009re_mys_vnm_e.pdf. See

also the comments made by Foreign Ministry spokesman Ma Zhaoxu describing Vietnam’s submission as ‘illegal and invalid’.

88 | Sarah Raine