By David Brown
The dispute over sovereignty of the South China Sea that has flared up in recent weeks has become more than a neighborhood spat - it's also shaping up into a practical test of the notion that the United States and China can evolve a relationship that is "positive, cooperative and comprehensive".
The territorial dispute has festered for years for the 10-member Association of Southeast Asian Nations (ASEAN) as a chronic but not crippling disability. Now, China's harassment of oil and gas survey ships in Vietnamese and Philippine claimed waters has returned the South China Sea issues to a critical state. And Beijing's brazen challenge to a code of conduct agreement concluded by ASEAN in 2002 tests the grouping's continued relevance in regional security matters.
The interplay of these circumstances frames the agenda and underlines the importance of pending multilateral meetings. On the near term horizon is the Asian Regional Forum in Bali, Indonesia, which will bring together ASEAN and other countries' foreign ministers from July 22-23. Indonesia will also host regional and global leaders at the East Asia Summit in mid-November.
That's a dicey proposition, according to Indonesia researcher Maria Monica Wihardja. "While the US wants nothing less than to bring hard security issues to the table - including free navigation and the avoidance of hegemonic dominance over the South China Sea - China will do anything to avoid this," she wrote for the East Asia Forum website, noting that Chinese premier Wen Jiabao, during a recent visit to Indonesia, reiterated that ASEAN should remain in the East Asian Summit's "driver's seat".
Last year's Asian Regional Forum featured a dramatic clash between China and the US. US Secretary of State Hillary Clinton reemphasized the US's strategic interests in the South China Sea. Her statement was praised by six of the 10 ASEAN members; and Chinese minister Yang Jiechi correctly sensed that he had been ambushed.
China has since seemed intent on demonstrating its growing capacity to challenge oil and gas exploration by neighboring nations, both in waters contested with Japan as well as in the South China Sea. On June 15, the day its newest patrol ship, the 3,000 ton, helicopter-toting Haisun 31, left Guangzhou on a high-profile visit to Singapore, Maritime Surveillance Force (CMS) officials briefed plans to expand by another two-thirds from its current 260 vessels and nine aircraft by 2020.
In the recent clashes in the South China Sea, China contended that its forces were the victims of Philippine and Vietnamese aggression, a claim refuted by video of some incidents. Questioned about the incidents, Chinese naval officers disclaimed responsibility; it was a police (CMS) matter, they said. Meanwhile, central government spokesmen insisted that the CMS was engaged in "normal law enforcement ... in China's jurisdictional sea area" and remained committed to "work together with interested parties to seek a solution to related disputes".
The more charitable explanation of China's behavior came from analysts who said they saw evidence of policy incoherence. No further clashes have been reported since June 9. Chinese accounts of meetings on June 25 in Honolulu with senior US diplomats and in Beijing with a special emissary from Hanoi suggested that the crisis is over for the time being.
The US reportedly agreed that the one-day Honolulu consultation, an exchange on policies and objectives looking toward the July 22-23 regional forum, the East Asia Summit and other multilateral meetings, was "friendly, candid and constructive". Meanwhile, Chinese state counselor Dai Bingguo and Vietnamese deputy foreign minister Ho Xuan Son "agreed to speed up consultations over a pact regarding fundamental principles to direct solving maritime disputes between Vietnam and China," according to a joint press release.
The upbeat report from Honolulu is not surprising, notwithstanding blunt warnings by Beijing before the meeting that - other than questions about freedom of navigation - the US should leave South China Sea matters to claimant states lest it "get burned by the fire".
Following sharp verbal clashes with China in 2010, including exchanges at the regional forum in Hanoi, Washington has invested heavily in resetting the bilateral relationship. President Hu Jintao's state visit in January capped the reconciliation. Chinese participants declared that the Hu-Obama meetings opened a new chapter in the bilateral relationship and that constructive relations between the two powers are essential.
China's ambitions in the South China Sea were, the New York Times noted at the time, "conspicuously absent" from Hu's agenda during his US state visit. The Times concluded that Chinese leaders were "happy to let the issue quiet down, perhaps for sake of smoothing over relations with the Obama administration". However, China's muscle-flexing in the South China Sea beginning in March challenged the assumptions on which the Sino-US detente was built.
The acts included harassment of Vietnamese fishermen (now a routine seasonal occurrence), planting "no trespassing" markers on reefs near the Philippines and harassment of oil and gas survey ships. These last incidents, involving attempts to cut the tow cables of two vessels belonging to Vietnam's national oil company and a third under contract to a Philippine firm, all well within the 200-mile (321-kilometer) exclusive economic zones (EEZs) claimed by Hanoi and Manila, were without precedent.
Soft language, hard agenda
With their gaze fixed on the bigger picture, US officials in Washington have not exactly backed away from the robust principles voiced by Clinton at last year's Asian Regional Forum, including US readiness to facilitate negotiations towards a peaceful resolution to the conflicting claims.
Still, the tone of official American comment has been distinctly low-key. Chinese moves have been characterized as "troubling" when dozens of stronger adjectives - "egregious" or "provocative" - would have better served.
Washington has taken pains to emphasize that the US "doesn't take sides" in the territorial dispute. The "take no sides" point is disingenuous provided the US continues to hold that the competing national claims must be reconciled with reference to "customary international law".
By this, Washington means the rules for fixing the boundaries of an exclusive economic zone (EEZ) and a territorial sea that are laid down in UNCLOS, the United Nations' Law of the Sea Treaty that came into force in 1994 and has been ratified by 161 nations.
Application of UNCLOS rules to the sea area claimed by China, a vast expanse stretching 1,000 kilometers south from Hainan Island, would by most calculations leave it with the northeastern two-thirds of the waters around the Paracels - the group of islets and reefs in the northern half of the South China Sea - and none of the waters around the Spratly Islands to the south.
Nor would UNCLOS rules likely allow China to use baselines drawn from Paracels islets to expand its EEZ. China grounds its claim on evidence of historic exploitation, implicitly backed up by the fast-growing capabilities of its naval and maritime security forces.
In the current context, what US diplomats are saying to reporters is not particularly important if backstage they are busy stiffening ASEAN backbones and dissuading China from giving in to its worst impulses. Meanwhile, Vietnam and China have agreed to restart negotiations of a bilateral "agreement on basic principles guiding the settlement of sea issues", despite the fact Hanoi's oft-expressed preference is for a multilateral framework.
There is a great deal of institutionalized contact between Chinese and Vietnamese elites - party to party, ministry to ministry, mass organization to mass organization, province to adjacent province - and a fair number of leaders on both sides who have invested in a healthy and stable relationship.
Since early 2010, working level officials have held six rounds of talks aimed at clarifying positions on sea jurisdiction in the Paracels area, the part of the South China Sea where only China and Vietnam claim ownership. These talks - which seem so far to have made little substantive progress - were interrupted by the current crisis, a coincidence that lends some support to the theory that the incidents show Beijing's true objectives being undercut by a cabal of Chinese super-patriots.
True or not, it is unlikely that Beijing will repudiate incidents perpetrated by its maritime security forces after the fact. Indeed, Chinese spokesmen have been at pains to portray the recent clashes as justified reactions to provocations by Vietnam or the Philippines. Thus China has de facto moved toward a doctrine of intervention to ensure a monopoly right to exploit the South China Sea's resources anywhere within its notorious "nine dash line" encompassing the area.
So what can be done to put the tangled claims on a track toward an equitable resolution grounded in international law? It's up to Indonesia to prove ASEAN's continued relevance to the disputes by managing the coming Asian Regional Forum and East Asia Summit meetings to bring about a result, if not a consensus. Beyond November, ASEAN's chairmanship passes to Cambodia, then to Myanmar and after that Laos - all perceived as China client states which would be unlikely to stand up to Beijing's pressure.
A recent editorial in the Jakarta Post suggested a new direction. It argued that after 10 years of straining to find a lowest common denominator consensus, ASEAN members ought first come to a common platform on a code of conduct, thus placing pressure on China to act responsibly as a regional superpower.
As long as ASEAN members cannot agree among themselves, China will find it hard to resist the temptation to pick off rival claimants one by one. Once the Philippines and Vietnam have been brought to heel, in divide and rule fashion, Malaysia and Brunei will be easier to press. Conversely, if the four ASEAN claimants can settle territorial claims amongst themselves, they will be in a considerably stronger negotiating position vis-a-vis China. Nor, except for foot-dragging by China's clients within ASEAN, should dividing up the portion of the South China Sea that includes the sprawling Spratly archipelago prove so difficult. All four ASEAN claimants have indicated their willingness to apply UNCLOS rules; China continues to resist.
The 11-day exercises, known as Cooperation Afloat Readiness and Training (CARAT), commenced earlier this week and trainings will cover maritime interdiction, patrol operations and gunnery exercises. Philippine Foreign Secretary Albert del Rosario told reporters that the US also vowed to extend intelligence assistance to the Philippine navy for areas in the South China Sea.
Behind this cooperation, however, are Philippine concerns the US has not lived up to its end of their strategic bargain, including delays in promised arms transfers. The US has a history of broken military equipment promises to the Armed Forces of the Philippines (AFP), which have become glaringly apparent as China flexes its naval muscle in the South China Sea.
Those upgrades were supposed to come in exchange for Manila agreeing to bilateral defense accords with the United States, including enhanced cooperation in the fight against global terrorism. Beyond the 1951 Mutual Defense Treaty (MDT), the Philippines agreed to the Visiting Forces Agreement (VFA) with the US in 1999.
That deal has opened the way for joint initiatives aimed at regional terror groups and the use of Philippine territory for so-called "revolving" bases, where US personnel frequently move in and out of the country. The two sides have together neutralized the Abu Sayyaf terror organization, which has been linked in the past with al-Qadea.
Under both the MDT and VFA, the US committed to upgrade the Philippine military with modern armaments. However, the Philippines armed forces has fallen behind the strategic times as the least equipped among the six claimant nations to the South China Sea.
Except for Brunei, all claimants - including Malaysia, Taiwan, Vietnam and China - have established military garrisons on outcrop of isles and islets they claim. Although the US allocates hardware to the Philippines military annually , the bulk of the weapons is delivered second-hand after being used extensively in Thailand and South Korea under the US foreign military sales program.
In 2003, Thailand turned over eight US-supplied F-5 fighter jets, two from its air force arsenal, to the Philippines and South Korea to help Manila in its US-backed fight against Muslim and communist insurgents. The aircraft have since been retired by Manila for lack of spare parts.
The Rajah Humabon, a warship which was junked by the US navy after World War II ended, is still in use by the Philippines. Security analysts estimate just one Chinese torpedo would sink it.
United States President Barack Obama has reiterated Washington's pledge, as allowed under the defense treaty and Visiting Forces Agreement, to provide the weapons Manila needs to modernize and protect national interests.
While Manila has already submitted its "wish list," including the urgent need for naval frigates, long-range fighter aircraft and a couple of submarines, it's still unclear whether the US will grant any of them.
In the face of that uncertainty, Manila has even mulled the idea of paying the US to lease patrol boats in a bid to expedite Washington's bureaucracy. However, US Navy Task Force commander Rear Admiral Tom Carney has said that the US is not in the business of leasing its patrol boats.
Manila is wary that Beijing is poised to assert more forcefully its claims in what Philippine officials refer to as the West Philippine Sea, part of the vast body of water more commonly known as the South China Sea. In March, a Philippine Department of Energy seismic vessel was harassed by a Chinese navy vessel in a contested maritime area.
Another nagging concern for Manila about future US commitment surrounds the MDT's provision for mutual defense and whether it would apply in the case of Chinese aggression in the disputed waters.
While the treaty stipulates that both the US and Philippines will aid each other in repelling external aggression, Manila is concerned by a provision that any US response must be subject to US "constitutional" processes, including the potential for lengthy debate in the US congress at a time of national crisis.
Filipino defense and military officials say they will press for "a flexible and timely" response from the US in the event a shooting war breaks out with China. Proposed changes to the MDT's "constitutional" provision will be high on Manila's agenda at the next meeting of the MDT board in August in Honolulu, Hawaii.
Lawmakers like Tony Alvarez, representative for the island of Palawan, believe that the joint US-Philippine naval exercises, which will include two US guided missile destroyers, will send a strong message to China. However, aides to President Benigno Aquino have urged him against "over reliance" on the US to meet Manila's fast rising defense requirements and to look for a more diplomatic solution to the confrontation.
Voices on the political Left, meanwhile, fear any US aid may entrap the Philippines into fighting a "proxy war" between the two superpowers with the Philippine sea as their battleground. On his own, Aquino has already released an initial 14 billion pesos (US$318 million) from the national budget to kick start the Armed Forces of the Philippine's long-overdue modernization program.
History shows that seeking American aid, whether political or economic, seldom comes cheap and without substantial strings attached. Some analysts suggest that the US has been slow to supply arms because it still harbors ill-will towards the Philippines for booting US troops from the Subic and Clark military bases in 1991.
The strategic relationship came under more recent strain when the Philippines hastily pulled out its army contingent from the US-led "coalition of the willing: in the early stages of the Iraq war in 2003. The then president, Gloria Macapagal Arroyo took the bold decision in response to public opinion after Iraqi insurgents kidnapped two Filipino contract workers and demanded the withdrawal of Filipino troops from Iraq.
Some believe that war-time turn of events, which drew a flurry of criticism from policy makers in Washington that the Philippines was an "unreliable" ally, represented a turning point in strategic ties for the two allies. Washington later tightened the screws on its annual military aid, reallocating funds to other regional allies including Thailand, Indonesia and Vietnam.
Amid strained strategic ties with the US, Arroyo turned to long-time suitor China for assistance, and got it - including enhanced joint training exercises.
Like a pendulum, under Aquino Manila's foreign policy has now swung back to its previous pro-US and anti-China position.
Chinese President Hu Jintao has invited Aquino for talks in Beijing to ease tensions raised by recent events in the South China Sea. Part of Aquino's proposed itinerary would have included a sentimental whirlwind tour of Fujian province, formerly called Amoy, hometown of his great, great grandparents on his maternal side, the late president Corazon Cojuangco Aquino.
But so far Aquino has shrugged off Hu's invitation, while waiting for the US to make good on its promise to deliver modern arms to point in Beijing's direction....
By David Brown
Many observers, including the writer , have speculated that China's drive for sole sovereignty over the South China Sea is driven mainly by belief that the sea bottom is rich in hydrocarbon resources.
Tensions between rival claimants to all or part of the 1.5 million square-kilometer sea that is enclosed by the Philippines, Malaysia, Brunei, Vietnam and China have eased in recent weeks after peaking in early June, but very likely only for a while. While, perhaps, diplomats labor behind the scenes for an accommodation, it's useful to look at the evidence for what might be called the energy-centric explanation of Chinese behavior in the South China Sea.
Before global markets took over the job of distributing resources, states vied for control of territory in order to control resources. For
By the 1970s, the colonial empires had crumbled and Third World oil-producing nations formed the Organization of Petroleum Exporting Countries (OPEC) cartel, aiming to establish countervailing market power. The "oil shocks" of the 1970s resulted; their legacy was de facto agreement among big producers and consumers on "increased oil investment generally and a more flexible and integrated global oil market as the basis for energy security, rather than continued national competition to control supplies.''
Now let's cut to East Asia. China, though Asia's rising superpower, is relatively oil-poor. The authoritative BP statistical energy review says that its territory holds only 1.1% of the world's known reserves, about 11 years' domestic supply at current rates of production.
Because until the 1980s China adhered to Mao Zedong's doctrine of self-reliance, it is a relative newcomer to international energy markets. It wasn't until 1993 that China became a net importer of oil, or 2007 that it became a net importer of natural gas. Now, however, it is daily more dependent on imported energy to fuel its rapid economic growth. China's consumption of oil doubled from 1990 to 1999, and doubled again from 2000 to 2009. The International Energy Agency (IEA) projects China's oil consumption will double yet again by 2035 and imports will triple. Five-sixths of its oil will be imported.
Even if China shared other states' vision of collective, market-based energy security, its thirst for oil and gas would still be roiling world markets. Analyst Mikkal Herberg says:
Beijing's political leaders seem to have their own distinct vision, one that sees energy security in distinctly national terms of establishing national control over energy resources and transportation routes.
It is a decidedly "19th Century", mercantilist agenda. Maintaining adequate, reliable, and growing supplies of energy is viewed as indispensable for ensuring rapid economic growth, job creation and social and political stability, ie the continued claim to legitimacy to rule by the Communist Party. Beijing's political leaders have little faith in global energy markets to ensure adequate, reliable and affordable energy to China: energy is simply too important to be left to the markets.
All this considered, Beijing's quest for mastery of the South China Sea is not surprising.
It's anyone's guess how much oil and gas is actually locked up in the buried carbonate reefs beneath the 1.5 million square-kilometer expanse of sea between Hong Kong to Singapore. Nearly all the drilling so far has been on the periphery - in the Gulf of Thailand by Malaysia, off the mouths of the Mekong River by Vietnam, off the north coast of Borneo by Brunei and off the Pearl River Delta by China. Few seismic surveys, let along test drilling, have been attempted in the vast contested middle of the South China Sea.
Chinese petroleum geologists are thinking big, however. Luo Donghong, a senior manager of the China National Offshore Oil Corporation (CNOOC), predicts that China will confirm reserves of 22 billion barrels of oil in South China Sea deepwater fields by 2020, according to Bloomberg. That's half again the size of Daqing, China's largest onshore oilfield - which is now nearly depleted. CNOOC's Zhang Gongcheng says upwards of 200 trillion cubic meters of natural gas are in the South China Sea seabed as well, the Economist reports.
Talk of a "second Daqing" is just an understatement according to other Chinese geologists. Chinese estimates cited by US Government analysts put the potential hydrocarbon bounty of the South China Sea area at 14 times China's current oil reserves and 10 times its gas reserves.
Whatever oil and gas turns out to be beneath the waves, hard evidence is mounting that China aims to find and secure by far the lion's share.
Deputy director Zhong Ziran of the national Geological Survey told reporters in January that his agency's annual spending for oil and gas exploration will rise tenfold, to 500 million yuan ($60 million). Sixty percent of that amount will support offshore projects, he adds. That's money to deploy platoons of scientists or defray the cost of dives by China's Jiaolong, a submersible capable of exploring to 5,000 meters' depth. A year ago the Jiaolong planted a Chinese flag in a South China Sea canyon 3,759 meters below sea level.
Another 30 billion yuan annually for "domestic" exploration is reportedly funneled through the national oil companies - CNOOC, Sinopec and PetroChina.
In November 2010, CNOOC told reporters that it has budgeted 200 billion yuan for development in the South China Sea. Leveraging the skills of foreign partners Devon Energy, Husky Energy and Anadarko Petroleum, CNOOC explained, it aimed to build up its capacity to drill in ever deeper water.
Up until now, China's offshore drilling has been limited to relatively shallow waters near its coast, employing 'jack-up rigs' that are planted on the seabed. In May, however, CNOOC announced plans to deploy its first floating drilling platform to waters within the exclusive economic zone (EEZ) claimed by the Philippines. Xinhua said that the $30 billion behemoth, Marine Oil 981, is designed to drill 800 deepwater wells that will produce $50 billion worth of oil annually by 2020. A similar floating rig is being built for PetroChina.
Meanwhile, Beijing has warned Exxon-Mobil and BP to give up any thought of drilling in concessions granted by Vietnam close to the Spratly or Paracel archipelagos - though well within Vietnam's EEZ. BP chose not to drill; Exxon says it is going ahead.
Not content with verbal admonition, Beijing in May and June deployed Maritime Security Agency (CMS) patrol boats to harass survey ships working for Vietnam's national oil company and the Philippine-owned firm Forum Energy. The Chinese vessels, some ostensibly fishing boats, attempted to cut cables of sonar rigs under tow by the survey ships. Though justified by Beijing as "normal law enforcement" in defense of its own "indisputable sovereignty", China's provocative moves brought tensions over South China Sea territorial claims near to the flash point.
Another very public event, the deployment of the CMS's new flagship on a goodwill visit to Singapore, underscored the rapid buildup of China's coast guard and naval strength in the area. According to People's Daily, the helicopter toting, 3000-ton Haixun 31 carried out checks on "oil rigs, stationary ships' operations in constructions and surveys ... and foreign ships navigating, anchored and operating in Chinese waters'' while en route to and from Singapore.
Having ostentatiously flexed its muscles vis-a-vis Hanoi and Manila again this year, is there still reason to believe that China is interested in sharing out the rights to the South China Sea sea bottom according to the UN Law of the Sea Convention (UNCLOS) or any other rules grounded in international law? China's foreign ministry spokesmen insist that Beijing wants to negotiate bilateral settlements. Don't bet that Beijing can be induced to negotiate its sweeping territorial claim, however. The most the Chinese will admit to considering is joint development of resources in contested sectors.
Yang Fang, a researcher at Singapore's S Rajaratnam School of International Studies, says that the hydrocarbons extracted by Vietnam, the Philippines or Malaysia from waters off their coasts - some 20 million tons annually - are "perceived by China as a loss of oil and gas to foreign countries".
Then there's the lure of methane hydrates, the so-called "ice that burns", what the US Department of Energy calls "the gas resource of the future".
Since the 1970s there's been excitement in scientific circles about deposits that have been found plentifully so far under Arctic permafrost and frozen beneath the ocean floor in dozens of locations. Heated, they release methane, ie, natural gas.
No one pretends that it will be easy to produce commercial quantities of gas from the methane hydrate deposits without causing an environmental catastrophe. Many technical hurdles remain to be overcome. Still, with estimates of potentially exploitable deposits of methane hydrates now equal to all the known reserves of coal, oil and gas, it's a good bet that those hurdles will be overcome in the next couple of decades.
Vigorous prospecting by Chinese scientists since 1999 has confirmed that the northern sector of the South China Sea - the part closest to the Chinese mainland - is rich in methane hydrates. Areas further south are described as promising but have not yet been tested. A 2007 Chinese report estimated that the methane hydrate deposits found so far in the South China Sea may hold as much exploitable energy as 10 billion tons of oil.
China can hardly be faulted for wanting to see the hydrocarbon resources of the South China Sea exploited as soon as possible. Where it errs - or at least a substantial section of the nation's leadership and population errs - is in thinking that it has natural ownership rights to virtually all of the oil, gas and methane hydrates that may be found and developed there.
Beijing seems charmed by the notion that it can secure and develop these resources without having to compete with larger and/or more experienced foreign firms by virtue of asserting ownership of virtually the entire South China Sea. China's ambitions in this regard not only run counter to other states' vision of collective, global market-based energy security but also to customary international law, eg, UNCLOS, and to the cooperative relationships it has labored to build with the Association of Southeast Asian Nations (ASEAN) on one hand, and with the US and its allies on the other.
Legal scholars who have examined the tangle of overlapping claims to the sea area of the South China Sea have tended to conclude that the only feasible course is to set the claims aside and focus instead on working out mechanisms for joint development of seabed resources. That seductive thought could be the height of folly. Walden Bello, a Filipino thinker who's no fan of globalization per se, regards "joint development without clear delineation of borders as a recipe for future conflicts". Where claims intersect, he adds, "multilateral negotiations are the only viable solution".
It seems possible that the four ASEAN nations that claim parts of the South China Sea could sort things out amongst themselves. All have said that the UNCLOS principles should be the basis of such a negotiation. Under those principles, moreover, China has no valid claim to the southern two-thirds of the South China Sea.
Predictably Beijing would throw a tantrum if, for once, ASEAN were to do more than kick the can further down the road. That's why, at the same time, particular care should be taken to reassure China that it will not be excluded from participation in oil and gas development activities anywhere in the South China Sea area. It might even make sense to accord Chinese companies some priority access, just as long as they play by the world's rules instead of the ones that they've made up.
1. Fight or flight in the South China Sea, Asia Times Online, June 9, 2011.