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As US-China tensions rise, what is the outlook on the South China Sea dispute in 2020-21?

As US-China tensions rise what is the outlook on the South China Sea dispute in 202021Since the onset of the Covid-19 pandemic in March, tensions in the South China Sea have surged. This is mainly the result of China’s continued assertiveness coupled with the sharp deterioration in US-China relations over a variety of issues including the South China Sea itself.

Actions undertaken by Beijing to assert its jurisdictional claims, and demonstrate that the pandemic has not undermined its political resolve or the operational readiness of the People’s Liberation Army (PLA), have been counterproductive.

These include employing the PLA Navy, China Coast Guard and maritime militia in pursuit of these goals, surging fishing boats into the waters adjacent to Indonesia’s Natuna Islands as well as deploying survey vessels into the exclusive economic zones (EEZs) of Brunei, Malaysia, Vietnam and the Philippines. China has also created two new administrative districts to cover the Paracels and Spratlys and named 80 geographical features, while also conducting missile tests in the disputed waterway.

In response, the United States has stepped up its military presence in the South China Sea as well as its criticism of China’s actions. Most importantly, in support of the Southeast Asian claimants, Washington has aligned its South China Sea policy with the 2016 arbitral tribunal ruling, which declared Beijing’s “historic rights” incompatible with the 1982 United Nations Convention on the Law of the Sea (Unclos). On June 1, the US submitted a letter to the UN laying out its stance in that regard, while on July 13 US Secretary of State Mike Pompeo issued a major statement endorsing the arbitral ruling and rejecting most of China’s claims.

On August 26, the US State Department imposed sanctions on an undisclosed number of Chinese citizens “responsible or, or complicit in, either the large-scale reclamation, construction, or militarisation of disputed outposts in the South China Sea”, while the US Department of Commerce blacklisted 24 state-owned companies involved in the construction of China’s seven artificial islands in the Spratlys.

China and the US accuse each other of provoking tensions and militarising the dispute. The Pentagon has increased the frequency of Freedom of Navigation Operations (FONOPs) in the South China Sea. In the first seven months of 2020, the US Navy conducted seven FONOPs in the Paracels and Spratlys, compared with eight in 2019, five in 2018 and four in 2017. The US Navy has also conducted a series of high-profile exercises in the South China Sea, including dual aircraft carrier operations for the first time since 2014,-and increased submarine deployments and maritime air patrols.

The Southeast Asian claimants believe that Beijing has taken advantage of the pandemic to advance its claims, and have responded by hardening their positions. Since December last year, Malaysia, Vietnam, Indonesia and the Philippines have all submitted notes verbale to the UN rejecting China’s nine-dash line and its claims to “historic rights” in the South China Sea to be inconsistent with Unclos.

More significantly, in rejecting China’s claims, Vietnam, Indonesia and the Philippines explicitly referred to the 2016 arbitral tribunal ruling, thereby effectively resurrecting the award after four years of it being put to one side. Even Brunei, long considered the “silent claimant”, issued its first unilateral statement on the South China Sea on July 20, which referenced the ruling.

Under Vietnam’s chairmanship this year, the Association of Southeast Asian Nations (Asean) has also placed greater emphasis on Unclos as the “basis for determining maritime entitlements, sovereign rights, jurisdiction and legitimate interests over maritime zones”. However, to avoid antagonising China, none of the Asean countries explicitly endorsed Pompeo’s statement, though Vietnam came the closest.

Over the next 18 months, a let-up in tensions is unlikely. US-China relations will worsen irrespective of which candidate wins the November presidential election. China and the US will increase their military activities in the South China Sea, raising the risk of a confrontation. Rising tensions in the Taiwan Strait will have a spillover effect on the South China Sea dispute. Southeast Asian attempts to protect their sovereign rights by emphasising the importance of international law and through negotiations with China for a code of conduct for the South China Sea will do little to change the central dynamics of the dispute.

WHAT HAPPENS NEXT?

Worsening US-China Rivalry

The escalating strategic rivalry between the US and China will continue to inflame tensions in the South China Sea. Discord between Beijing and Washington could increase markedly in the run-up to the November 2020 US presidential election. Given the bipartisan consensus in America over China, a future administration led by Joe Biden would be unlikely to adopt a more conciliatory policy on the South China Sea. If President Donald Trump wins re-election, his administration will continue its hardline policy towards China in the waterway. In 2020-21, therefore, we can expect to see a higher tempo of US military operations in the South China Sea, including presence missions, overflights, exercises and FONOPs. Further US sanctions can be expected to be imposed on individuals and companies from China that Washington accuses of implementing Beijing’s policies in the South China Sea.

Through its naval deployments in Malaysia’s EEZ and Pompeo’s statement, the US has shown that it intends to increase support for the Southeast Asian claimants. This is likely to include the transfer of equipment such as radar, drones and patrol boats so they can better monitor China’s activities in their EEZs, specifically illegal fishing and the presence of Chinese government vessels. Pompeo has also indicated that the US might be willing to provide legal support to the Southeast Asian claimants.

China will double down on its territorial and jurisdictional claims in the South China Sea and ramp up pressure on Taiwan. This is designed to bolster President Xi Jinping’s nationalist credentials and divert attention away from China’s economic problems. As such, the size and frequency of PLA Navy exercises in the South China Sea will grow. China will not be deterred by US military activities, including FONOPs. As the frequency of FONOPs in the South China Sea increases, the PLA Navy might adopt a more confrontational response to US Navy vessels that transit through the Spratlys and Paracels, raising the risk of an incident at sea that could trigger a political-military crisis in US-China relations.

China will continue to deploy survey vessels into the EEZs of the Southeast Asian claimants and harass vessels chartered by those countries to engage in exploration and drilling activities. The purpose of this harassment is to coerce Southeast Asian governments into signing joint development agreements with China while discouraging international energy corporations from participating in offshore oil and gas projects with Southeast Asian energy corporations without Beijing’s approval.

Southeast Asian Options

The Southeast Asian claimants are determined to uphold their territorial claims and sovereign rights in their EEZs. They are equally determined not to be drawn into a spat between the US and China over the contested waters. Due to massive asymmetries in power, the Southeast Asian disputants cannot use their navies or coastguards to confront the PLA Navy or China Coast Guard – they can only monitor their activities. Going forward, their ability to do so may be further reduced as regional governments are forced to cut defence spending due to the Covid-19-induced economic crisis, and divert limited naval and maritime law enforcement assets to tackle rising piracy and sea robbery attacks.

The Southeast Asian claimants are left with two policy options, neither of which is likely to deter Chinese assertiveness. The first is to continue emphasising that their maritime rights are determined by Unclos, rights that were upheld by the 2016 arbitral tribunal ruling. China, however, considers that its so-called historic rights in the South China Sea trump Unclos and that the ruling is invalid. Southeast Asian strategies that seek to shame China into bringing its claims into line with Unclos will not succeed and Beijing will be prepared to absorb the reputational damage.

The second is to negotiate a code of conduct between Asean and China in the hope that it will mitigate Beijing’s behaviour and reduce tensions. However, due to the pandemic, so far this year officials from the 10 Asean member states and China have been unable to meet to continue negotiations for the code. In July last year, officials agreed on the first draft, while the last meeting of the Asean-China Joint Working Group on the code was in Da Lat, Vietnam, in October last year. Two working group meetings scheduled for early this year were cancelled due to the pandemic.

The sensitive nature of negotiations has not allowed for talks to be conducted by videoconferencing. This situation may change later in the year and virtual talks on less sensitive aspects of the code of conduct may occur. Beijing seems keen to resume talks. However, even if discussions do resume, the hiatus in the working group’s work means that China’s unilaterally imposed deadline of finalising the code in 2021 will not be met. Even before the onset of the pandemic, several Asean members had already expressed doubts about the likelihood of meeting this goal, given the complexity of the issues under discussion. As such, the code may not be signed until 2022 or 2023, by which time China will have greatly consolidated its position in the South China Sea.

POSSIBLE BUT UNLIKELY SCENARIOS

There are several possible though unlikely courses of action that China and Vietnam might undertake in the South China Sea over the next 18 months.

China Turns Scarborough Shoal into an Artificial Island

Antonio Carpio, retired chief justice of the Supreme Court of the Philippines, has predicted that Beijing will terraform Philippine-claimed but Chinese-occupied Scarborough Shoal into its eighth artificial island in the South China Sea before President Rodrigo Duterte leaves office in 2022. Carpio has claimed that China needs to build military facilities on Scarborough Shoal – such as radar, communications equipment and a landing strip – before it can establish a comprehensive air defence identification zone (ADIZ) over the waterway.

However, China is unlikely to reclaim Scarborough Shoal before Duterte’s term ends due to the severe damage this would inflict on Sino-Philippines relations – which, notwithstanding a slight hardening of Manila’s position, have improved significantly since 2016. Moreover, any move by China to send a fleet of dredging vessels to Scarborough Shoal would likely provoke a strong counter-response from the US, possibly including intervention by the US Navy to prevent reclamation work from taking place.

China Establishes an ADIZ over the South China Sea

In May, Taiwan’s Ministry of National Defence suggested that China was preparing to announce the establishment of an ADIZ over the whole or parts of the South China Sea. While China has undoubtedly prepared plans for a South China Sea ADIZ, it has refrained from implementing them for two reasons. First, an ADIZ would lead to a significant escalation in tensions with the Southeast Asian claimants – especially Vietnam – and the US, Japan and European countries.

Second, and perhaps more importantly, an ADIZ would be largely symbolic as China would face severe difficulties enforcing it over such a wide area. Although China has built extensive military facilities on its seven artificial islands in the Spratlys since they were completed in 2016, the PLA Air Force has not deployed combat jets to the three features that host air strips (Fiery Cross Reef, Mischief Reef and Subi Reef).

One possible reason is that the structural integrity of the runways is suboptimal and the PLA Air Force does not want to risk an embarrassing mishap involving one of its fighter jets taking off or landing. Without utilising the airstrips on its artificial islands, China’s air force cannot sustain combat patrols over the South China Sea for extended periods of time due to a shortage of heavy aerial refuelling tankers. Over the medium to long term, however, a Chinese ADIZ over the South China Sea remains a strong possibility.

Vietnam Takes Legal Action against China

Over the past few months there has been speculation that Vietnam is considering launching legal action against China over its jurisdictional claims and activities in the South China Sea under Annex VII of Unclos, as the Philippines did in 2013. Vietnam has never ruled out legal action against China, and in November last year deputy foreign minister Le Hoai Trung told an academic conference that it remained one of several options open to the government.

Vietnam’s case would be different from the Philippines’ in that it would probably challenge China’s straight baselines around the Paracels and violations of Vietnam’s sovereign rights in its EEZ. Although it remains an option, Hanoi is unlikely to pursue it for several reasons. First, China would consider it an extremely hostile act and impose punitive measures against Vietnam – economically, along their joint land border, and in the South China Sea.

Second, the Vietnamese leadership will be preoccupied in the run-up to the 13th National Congress of the Communist Party of Vietnam, which will take place in early 2021. Third, as with the Philippine case, China would refuse to participate in the hearings and reject any legal ruling.

CONCLUSION

There are few grounds for optimism that there will be an alleviation in tensions in the South China Sea in 2020-21. The central dynamic is the US-China rivalry, which looks set to escalate. Faced with this hard reality, Southeast Asian states will have few tools at their disposal to mitigate the dispute beyond recourse to international law and multilateralism.

As such, the South China Sea dispute will remain at the top of Southeast Asia’s security agenda for the foreseeable future.

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