In 1980 I attended a graduate seminar focussing on rival claims over the Spratly and Paracel islands in the South China Sea, and recall the professor suggesting that there was little to worry about for the next few decades. It turns out he had it right, but now there is a lot to worry about. An energy-hungry China with strategic naval ambitions is upping the ante in the South China Sea, raising concerns both in the region and in the US about its intentions.
The Chinese government recently warned the US to stay out of the simmering dispute between China and its neighbours over conflicting claims in the South China Sea. Vice-Foreign Minister Cui Tiankai said: "The US is not a claimant state to the dispute. So it is better for the US to leave the dispute to be sorted out between the claimant states." Not everyone agrees.
In July 2010 on a visit to Hanoi, Secretary of State Hillary Clinton asserted unequivocally that the US had a national interest in freedom of navigation in the disputed areas, while urging Beijing to abide by a 2002 ASEAN agreement calling for a peaceful resolution of the rival claims. China remains adamantly opposed to multilateral negotiations and prefers a bilateral approach. The south-east Asian states naturally see this as an intimidating tactic inconsistent with the 2002 agreement and want to negotiate a binding code of conduct with China as specified in the accord.
Vietnam and China have been sparring over the Spratly Islands and tensions escalated when Chinese ships rammed and cut survey cables of Vietnamese oil exploration vessels in May and June this year. China claims about 80 per cent of the South China Sea and defends its actions as routine enforcement of maritime law and surveillance of waters under its jurisdiction. But storm clouds are building over "Lake China". Hanoi sees a pattern of increasingly aggressive harassment as Beijing focuses on the Spratly Islands that lie close to Vietnam's coast, quite far from the Chinese mainland. The situation has also deteriorated over reports that China will soon dispatch a giant oil rig to southern "Lake China". This pre-emptive approach of creating "facts on the seafloor" (drill first, negotiate later) has set off alarm bells, because none of the other claimants can contest China's naval power.
Countering the "might makes right" approach, Vietnam and the US issued a joint statement in mid-June this year stating: "All territorial disputes in the South China Sea should be resolved through a collaborative, diplomatic process without coercion or the use of force." Promoting closer Vietnam-US relations might not be high on Beijing's diplomatic priorities, but Beijing's recent actions have certainly helped.
Beijing's desires notwithstanding, the US Pacific Command head, Admiral Robert Willard, has reminded everyone in recent speeches and testimony that the US is concerned about rising tensions in this strategic area. There is a danger that Vietnam, emboldened by US support, might miscalculate and overplay its hand. But so far, China has been responsible for stoking frictions that are discrediting its "smile diplomacy" and repeated reassurances that its economic rise poses no threat.
Admiral Willard has also emphasised the importance of the US-Philippine alliance to US strategy in the Asia Pacific. This is an unmistakable, but oblique reference to Chinese harassment of Philippine vessels in disputed areas. In late June, the US signalled its willingness to help Manila upgrade and modernise its security forces. Secretary of State Hillary Clinton stated: "We are determined and committed to supporting the defence of the Philippines."
Analysts suggest that China has its eyes on Reed Bank, a shallow part of the South China Sea, 100 kilometres west of the Philippines, with high potential for substantial oil and gas deposits. In addition, the two nations claim Scarborough Reef, the largest atoll in the South China Sea, one suitable for a forward Chinese naval base that is just over 200 kilometres from Luzon, the Philippines' main island. This reef is adjacent to an important oil tanker route vital to Japan, another US ally.
Former Defence Secretary Robert Gates, attending his final Shangri-La security dialogue in early June, was upbeat about US-People's Liberation Army (PLA) relations overall, but expressed concern about sabre rattling in the South China Sea. Gates said: "There are increasing concerns. I think we should not lose any time in trying to strengthen these mechanisms that I've been talking about for dealing with competing claims in the South China Sea. I fear that without rules of the road, without agreed approaches to deal with these problems, there will be clashes. I think that serves nobody's interests."
Gates had a long discussion with China's Defence Minister Liang Guanglie, in sharp contrast to the frosty exchanges he had with PLA general staff deputy head Ma Xiaotian at last year's talks. Gates sought to reassure Asian nations that pending defence budget cuts did not signal a US withdrawal from the region. The different trajectories of the two giants however are raising questions about Washington's staying power and who will be calling the shots down the road.
In a June 9 editorial, the China Daily warned: "The US has to learn to get along with China if it wants its position in Asia to be stable and sound. As a major power leading Asia's economic development, China has created unprecedented win-win opportunities for the region's countries. The US has to respect China's core interests and handle them with discretion. Any US act that harms China's core interests would not only damage regional stability, but also ruin the hard-won mutual development." What those win-win opportunities are remains uncertain.
China has called for joint development of oil and gas fields in the disputed territories, a formula it has also proposed to Japan in dealing with similar rival claims in the East China Sea. Throughout the region however, Beijing's growing assertiveness and muscle-flexing have undermined trust and heightened suspicions about its intentions. The ramming of a Japanese coast guard boat in September 2010 near the disputed Senkaku Islands ignited a tense standoff, which had China resorting to threatening rhetoric and economic sanctions to get its way.
As I wrote in my last column, Indonesia hosts the East Asian Summit (EAS) in November, where the US will participate as a member for the first time. The US seeks open discussions about thorny security issues that China will try to avoid. Beijing wants to focus on a connectivity agenda—improving transport, institutional and educational links in the region. ASEAN will seek to retain the driver's seat in the EAS and promote peaceful dispute resolution based on the 2002 South China Sea accord and the 1982 UN Convention on the Law of the Sea. It will seek a binding regional code of conduct in the South China Sea and push the US to ratify the Law of the Sea. The packed EAS agenda will also focus on energy security, a timely topic given brewing disputes.