Thayer Consultancy

ABN # 65 648 097 123

Background Briefing: South China Sea: Prospects for Armed Conflict Carlyle A. Thayer June 28, 2011

[clientnamedeleted] RegardingtherecentskirmishesindisputedSouthChinaSeaareasliketheSpratlys, pleaseprovideyourassessmentofthefollowing: 1. Are the recent skirmishes involving China on one side and the Philippines and VietnamontheotherindisputedSouthChinaSeaareas,specificallyintheSpratlys, another seasonal flareup that we've seen in the past and which will eventually ease? Or is it a dangerous escalation to another level that could bring the region closertotheprospectsofamajorarmedconflictthere,perhapsbetweenChinaand theU.S.?Isthatalikelyscenario? ANSWER:ThethreemajorincidentsthattookplacethisyearinvolvingChineseships disrupting the commercial activities of Filipino and Vietnamese oil exploration vesselsrepresentsanescalationofChineseassertiveness.Theyarenotseasonalbut directedspecificallyatcurtailingtheoperationsofthesevessels.Chineseactionsfall shortofaskirmish. The only live firing incident this year involved a Chinese PLAN [Peoples Liberation ArmyNavy]frigate.Itreportedlyfiredthreeroundsthatlandedapproximately550 metresawayfromaFilipinofishingboatinFebruary. ItisunlikelythatChinawillresorttoarmedforceorprovokeamajorarmedconflict. With the exception of the February live firing, all other incidents have involved civilianshipsbelongingtoChinaMaritmeSurveillance. ArmedconflictbetweenChinaandtheUnitedStatesishighlyunlikelyasaresultof current tensions over the South China Sea. U.S. military officials have noted a tapering off in incidents involving U.S. surveillance ships. The U.S. and China have resumed militarytomilitary relations and discussions are underway. China is not beingverycooperative,however. It is not entirely clearly whether China will persist with its assertiveness. It has certainly suffered a diplomatic backlash. I would say Chinese assertiveness is in temporaryremission. 2.IsthereanydifferenceinthewayChinaisassertingitsclaimsinthedisputedareas nowthaninpastyears?Somepeoplearesayingtheyhavegrownmoreaggressive recently.

2 ANSWER:IhavecharacterizedChineseactionsthisyearasaggressiveassertiveness because of the two cable cutting incidents involving Vietnam. The first incident is quite clear. Chinese ships deliberately and with premeditation used force to interrupt lawful commercial activities in Vietnams exclusive economic zone. The second incident is less clear but there was prior harassment of the Viking 2 explorationshipintheweekbeforetheallegedcablecuttingincidenttookplace.In thecaseoftheFilipinoexplorationvessel,atleastoneChineseshipmaneuveredin such a way that its actions were perceived as a threat to ram. The live firing at Filipinofishingboatsstandsoutasasingularactofaggression.Thefishermenwere unarmedanddidnotposeathreattoaChinesefrigate. In addition to the incidents, Chinese reaction to protests by Vietnam and the Philippineshasbeendismissiveandbelligerent.Chinaisbasingitsactionsonitsself perception that it has the right to manage the South China Sea and exercise jurisdictionoverthemaritimedomain.Chinasuseofheightenedrhetoricisanew andworryingfeature. 3. What may be the motive behind China's assertive stance in the disputed areas recently?HowfardoyouthinkwillChinagoinassertingitsclaimsintheSouthChina Sea? Is this Chinese assertiveness fueled by its need for resource as it's poised to become the world's primary economic power? Does it treat the Philippines, a U.S. ally,morecarefullyfromotherclaimantslikeVietnam? ANSWER:ThereareatleastthreemotivesbehindChinesebehavior.First,Chinafeels compelledtoexercisejurisdictionintheSouthChinaSeaafteritofficiallytabledthe nine dotted line ushape make to the United Nations Commission on the Limits of the Continental Shelf. Second, China seeks to gain control over the hydrocarbon reserves thought to be in Spratly area. China routinely provides estimates that are eight to nine time greater to those of western oil companies. . Third, China is reacting to the award of exploration contracts by the Philippines and Vietnam and thecommencementofoilexplorationactivities. Chinawillcontinuetoemployamixofdiplomacyandphysicalpressuretoassertits claimsovertheSouthChinaSeawithintheninedottedlines.Chinawillcontinueto insist on resolving territorial disputes on a bilateral basis with the claimant states directlyconcerned.Chinesediplomacyisaimedatgettingoneoftheclaimantstates tobuckleandtoexacerbatedifferenceswithinASEAN.Chinesephysicalpressureis aimed at causing foreign oil companies to reevaluate the risk of oil exploration in disputedwaters.PhysicalpressureisalsoaimedatconvincingManilaandHanoithat the costs of opposing China outweigh the gains. The gains in question are Chinese participationinjointdevelopment. 4.WhatdoyouthinkaretheintentionsoftheU.S.intheSouthChinaSeadisputes andhowdoyouthinkitwillplayarole? ANSWER:TheU.S.,alongwithallothermaritimestates,hasanimmediateinterestin dampening tensions and preventing armed clashes from occurring. In the longer term,theU.S.hasadirectinterestinpreventingChinafromestablishinghegemonic controloverthemaritimedomainandrocks/isletswithinitsninedashedline.

3 Further,theU.S.mustmaintainitsprimacyinthefaceofChineseactions.TheU.S. mustsupportthePhilippinesasatreatyally.Otherwisethevalueofanalliancewith theU.S.isdepreciated.TheU.S.intendstodemonstratethatitsstabilizingrolewill continue. The U.S. will deploy naval warships to the South China Sea and step up navalengagementactivities. TheU.S.intendstounderscoreitsrelevancytoregionalsecuritybyrespondingtothe concernsofregionalstatesonabilateralbasis,andthroughsupportofASEANona multilateralbasis.TheultimateU.S.intentionistopersuadearisingChinathatithas astakeinastableandsecureSouthChinaSeabasedoninternationallaw,andthat ChinaisbestservedbycooperatingwiththeUnitedStatesratherthanchallengingit. TheU.S.mustexerciseitsleadershipdeftlyandsupportASEAN.TheU.S.cannottake the lead otherwise it will be seen as part of the problem. The U.S. must balance ChinabutsupportASEANatthesametime. 5.ThePhilippinesandVietnamarenowseparatelyproceedingwiththeiroilandgas explorations in specific areas like the Reed Bank for the Philippines, provoking Chineseactions.Howwillthissituationplayoutandhowdangerousisit? ANSWER:BoththePhilippinesandVietnamneedtoexploithydrocarbonresources intheirEEZstosupportnationaldevelopment.Bothcountrieshaveavitalnational interest in this regard. So far China has responded verbally. China is presently implementing plans to increase the capacity of its civilian agencies to enforce maritime jurisdiction. This has provoked both Vietnam and the Philippines to undertake selfhelp measures by bolstering their ability to defend national sovereignty. Unless there is agreement on guidelines to implement the 2002 DeclarationonConductofPartiesintheSouthChinaSea(DOC),andagreementona codeofconduct(COC)toregulatestatebehavior,furtherincidentswilloccur. The next five months is crucial as ASEAN is set to convene its annual summit and relatedmeetings,suchastheASEANRegionalForum.Agreementmustbereached ontheguidelinestoimplementtheDOCandtheCOCbyNovemberwhentheEast AsiaSummitconvenesorChinaislikelytoupthestakesbydeployingPLANwarships to protect its civilian surveillance and fishery administration vessels. In this eventuality,tlikelihoodofarmedclasheswillincrease.