Calming troubled waters

Ishan Joshi writes about recent troubles in the South China Sea. The South China Sea (SCS) strategies of China, the Philippines and Vietnam have in recent weeks seen the manifestation of subterranean factors at play. This is not to say the three main protagonists have changed their core stands or the long-running dispute is close […]


Activists holding placards hold a protest in front of the Chinese consulate in Manila on February 10, 2018, against Beijing's claims in the South China Sea after installing military facilities and equipment on them. The Philippines said in January it would lodge a diplomatic protest with China after Manila questioned if Beijing had reneged on a pledge not to militarise a disputed South China Sea reef. / AFP PHOTO / TED ALJIBE

September 2, 2019

Ishan Joshi writes about recent troubles in the South China Sea.

The South China Sea (SCS) strategies of China, the Philippines and Vietnam have in recent weeks seen the manifestation of subterranean factors at play.

This is not to say the three main protagonists have changed their core stands or the long-running dispute is close to a final settlement, but there are signs of a more accommodative approach to prevent an immediate crisis.

The above was evident during the visit of Philippines’ President Rodrigo Duterte to China last week in his bilateral with President Xi Jinping.

He was quoted by the Philippine Daily Inquirer to have “insisted that the 2016 Hague ruling on the South China Sea (West Philippine Sea) was final, binding and not subject to appeal” but the Chinese leader rejected this claim, indicating the firm positions of both sides on the issue.

Yet, the significance of an intensifying China-Philippines engagement – this was Duterte’s fifth visit – needs to be underlined.

As China Daily reported, Xi said after the meeting that China and the Philippines would commit themselves to pushing forward the Code of Conduct in the SCS so it can be finished as early as possible.

Both leaders said joint efforts to put aside differences and exclude external disturbances to focus on cooperation and development would be the priority.

The two countries also announced the establishment of an inter-governmental joint steering committee and an inter-enterprise work team on joint exploration for oil and gas in the South China Sea.

The dispute between China and South East Asian nations/Taiwan is essentially over the Spratly and Paracel groups of islands, the seas around which have some of the world’s busiest commercial shipping routes and are thought to have abundant oil and gas reserves.

While the other claimants over the Spratly islands are the Philippines, Vietnam, Brunei, Malaysia and Taiwan, the Paracel islands are also claimed by Vietnam and Taiwan.

Vietnam, by common consensus among experts and governments in the region alike, remains the most determined opponent of China in the SCS despite overtures from Beijing.

China’s alleged interference with the Philippines’ traditional fishing rights in Scarborough Shoal and the Vietnamese EEZ (Exclusive Economic Zone) are the more headline-grabbing rifts.

As recently, as last week, reported Viet Nam News (VNN), Vietnam’s foreign ministry demanded “China immediately withdraw all its vessels from Vietnam’s EEZ, stop violations and not raise tensions in the East Sea.”

The strong statement came in response to a Chinese survey vessel having returned to the waters where a stand-off has been brewing between the two countries since July.

Beijing invokes its so-called U-shaped “nine-dash line” to justify its historic rights to the waterway, including large swathes of Vietnam’s continental shelf where it has awarded oil concessions.


A lesser talked about impact in geostrategic terms of the China-US trade war has been its effect on Beijing’s positioning on the SCS of which China claims well over 80% as its territorial waters.

SCS sea lanes on these routes carry one-third of global shipping with an estimated value of over $3.4 trillion. Nearly 40 per cent of China’s total trade, 90 per cent of petroleum imports by China, Japan, and South Korea, close to 6 per cent of total US trade and 55 per cent of India’s trade pass through the South China Sea.

Washington’s tariff hikes on billions of dollars’ worth of Chinese goods have further stressed an already slowing Chinese economy which clocked its lowest GDP growth since the early 1990s in the second quarter of 2019 (6.2%).

Worse, as the BBC puts it quoting Louis Kuijs, head of Asia, Oxford Economics, “More harmful to businesses is the lack of clarity over when the long-running dispute will end… The one thing that is affecting business plans is the uncertainty of the US-China trade war.”

This, in turn, feeds into the strategic priorities adopted by China, which is very much a global power involved in multiple plays.

Akshay Mathur, Director of Research and CEO, Gateway House, Mumbai, told Asia News Network:

“It’s not disputed that the top two geostrategic priorities for Beijing are the West (USA/EU) and East (Japan/China). With the trade war, this focus has intensified. South East/South Asia come in much lower in the pecking order.

“Meanwhile, given how over the past two decades the Chinese economy has established supply chains across South East Asia to mutual economic benefit, disputes in the region such as those in the South China Sea have not come to a head despite occasional flare-ups.”

And that’s how Beijing would obviously like it for now while it deals with its major concerns.

In the recent past, the first qualitative – though by no means fundamental — change in the sovereignty-asserting claims from Vietnam and the Philippines on seas also claimed by China was the July 2016 ruling of the Permanent Court of Administration at The Hague under the UN Convention on the Law of the Seas in favour of the Philippines over China.

The impact of the China-US trade on the reordering of Beijing’s priorities including its strategy on the South China Sea is clearly the second.


The key factor in President Rodrigo Duterte’s China outreach which includes domestically controversial concessions on what Manila calls the West Philippine Sea is clearly the growing criticism of his administration on various fronts. This is highlighted by the pounding he’s taking on his rights record from the US/EU especially.

The mutual distaste with which Duterte and Western governments view each other is apparent and also has a role to play in the Philippines’ SCS strategy.

Beijing, too, clearly sees the Philippine president as a viable interlocuter on the SSC issue which is why it has gone the extra mile to help Duterte fend off “pro-China bias” accusations domestically.

On the eve of the Philippine president’s latest China visit, Beijing admitted its trawler was at fault in the sinking of a Philippine fishing boat at Recto Bank in June, the Philippine Department of Foreign Affairs announced.

The presidential spokesperson added that the owner of the trawler company had apologized for his vessel hitting and sinking the FB Gem-Ver 1 then abandoning the Philippine fishing boat’s crew in open waters.Much like other ‘strongman’ leaders across the globe, Duterte privileges fulfilling his campaign promises over all else. The biggest of them all has been ushering in prosperity and pulling millions out of poverty in the Philippines, for which he believes closer economic ties with China are key.

But it’s a fine balancing act for Duterte, who also has a populist-nationalist agenda to service.

So, a few days before the China visit, his administration announced that it would push for the passage of a measure intended to define maritime zones under Philippine jurisdiction.

A bill to that effect, scheduled to be finalised in early September after Duterte is back from China, would effectively negate the move by a fierce critic of the president, former senator Antonio Trillanes IV, to introduce a similar bill.

The Inquirer reported that the presidential spokesperson iterated this was “a separate bill which would seek to establish the Philippines’ archipelagic sea lanes… (and) pave the way for a clearer set of rules foreign vessels should adhere to when passing through Philippine waters.” Duterte also announced that all foreign vessels needed to notify and get clearance from the government before passing the Philippines’ territorial waters.

In a sense, Manila has leveraged what was a pretty strong Hague ruling against China for interfering with the Philippines’ fishing and petroleum exploration rights, building artificial islands in disputed waters and failing to prevent Chinese fishermen from fishing in the zone – specifically upholding the traditional fishing rights in the Scarborough Shoal of Filipino fishermen.

It has done so to serve a dual purpose – to deepen economic/investment ties with China, as well as to show up Washington. Beijing, given its own imperatives, has been happy to play along.


A report in the journal Stratfor last month pointed out:

“While some countries, such as the Philippines, have settled their disputes with China by choosing to work with Beijing, Vietnam has adopted the opposite approach, maintaining a harder-line stance and bringing in third parties to conduct energy exploration as it resists China.

“Hanoi is banking on the growing focus on the South China Sea by outside powers to bolster its resistance to China’s desires and force Beijing to adopt a less aggressive course.”

Vietnam has, for example, been attempting to leverage Japanese and Indian roles given their strategic interests and commercial ventures in the South China Sea.

It’s been drawing New Delhi’s attention to the fact that Chinese coast guard ships in Vietnamese waters are close to where the overseas arm of the Indian state-owned Oil and Natural Gas Corporation is involved in exploration.

Vietnam would also like Japan to have more skin the game as the two countries have begun a joint energy exploration effort around the energy-rich Vanguard Bank in waters that both Hanoi and Beijing claim.

At the end of July, Hanoi announced it would allow a Japanese exploratory oil rig to continue operations in contested waters beyond the originally planned completion date.

The decision came after Beijing reportedly asked Vietnam to withdraw the rig in exchange for China withdrawing the survey ship it sent into the region along with its accompanying flotilla of coast guard vessels.

These, however, are more illustrative as irritants in the China-Vietnam SCS tussle. The main outside player in the South China Sea remains the world’s only superpower, the US – and Vietnam has been careful not to bring in the Americans, which could lead to a serious escalation.

As an article earlier this month for a defence website by analyst Ravi Shankar states:

“China must calculate the risks of closer security relations between Hanoi and Washington. An escalation of the current dispute could well strengthen anti-China sentiment inside the Vietnamese Communist Party, sparking a call for increased security relations with the United States — a path Hanoi has so far been reluctant to take.

“In fact, last year Vietnam abruptly cancelled dozens of military engagement activities it had scheduled with the US. In addition, if China were to step up tactics of intimidation, it could push Vietnam to submit their maritime disputes to (international fora) further straining the relationship.”

That Beijing recognises this possibility better than most has been evident over the past three years after the Hague SCC ruling.

Of the many overtures it has made, perhaps the most significant has been its outreach to the Communist Party of Vietnam to prevent SCS tensions turning into a full-blown confrontation.

The effort has been visible from 2017, when the state visit of Vietnamese Communist Party chief Nguyen Phu Trong to China resulted, according to an official statement, in the two nations:

“…Reaching an important consensus in accordance with leaders of the two parties and countries to appropriately manage maritime issues, steadily advance all forms of maritime cooperation including joint development and jointly strive to uphold peace and stability in the South China Sea.”

The escalation in recent weeks is worrying many in the region. Stress points over the South China Sea include:

  • Hanoi accusing Beijing of violating its sovereignty by sending a survey ship to Vanguard Bank near a new Vietnamese drilling rig contracted from Russia to exploit oil and gas reserves;
  • Reports from July onwards which suggest periodic stand-offs between coastguard ships of both countries near the Spratly Islands
  • Allegations of Chinese naval/fishing vessels engaging in activities that Vietnam says violate its EEZ and continental shelf.

The silver lining is the current situation is far from that in 2014, when tensions between Vietnam and China had risen to their highest levels in decades as a Chinese oil rig started drilling in Vietnamese-claimed waters. The incident had triggered boat ramming by both sides and anti-China riots in Vietnam.

Given the history of conflict from the 1970s/80s between the two communist nations, and with South China Sea oil/gas exploration an emotive issue of sovereignty in both countries, that is no small recompense.

Also, not to be discounted is the fact as Andrew Sheng points out albeit in a different context in an article for ANN:

“Having touched 7.1% GDP growth in 2018, and with just under 100 million population, Vietnam has been a major beneficiary of China shedding her low-cost industries and the diversification of the Asian global supply chain.”

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