A year ago, there were real fears that contested claims over tiny specks of coral in the South China Sea could spark a war in Southeast Asia involving China, the 10 ASEAN member states and the US. The risks greatly multiplied after a special tribunal convened in The Hague under the Law of the Sea ruled in July 2016 that China’s territorial claims in Philippine waters had no legal basis. What has transpired since then demonstrates the pragmatism of regional states, the limited extent of US influence in Asia, and says a lot about how China intends to wield power.
There was some dangerous brinkmanship in the lead-up to the July ruling. The US and China postured aggressively, using a mixture of rhetoric and sabre-rattling. China showed no sign of backing down from its claims, swiftly building runways and installing weaponry on some of the disputed islands. The US sailed warships and flew aircraft close to some of the islands, claiming the right to conduct freedom of navigation operations.
For ASEAN member states, these belligerent manoeuvres were deeply unsettling. Much as China’s militarisation of the South China Sea alarms the littoral states, there’s no desire to either pick a fight or choose sides. Nor was there much faith in the Obama administration’s much-touted pivot towards East Asia. The US expected ASEAN to stand up to China and wholeheartedly endorse the Law of the Sea tribunal’s ruling, but some governments were unsure whether the US had their back in case China refused to comply. Instead, under heavy pressure from Beijing, ASEAN blinked and issued a series of watered-down statements—or took no position at all.
Against this volatile background, there was considerable relief when towards the end of 2016 Rodrigo Duterte, the maverick newly elected President of the Philippines, who campaigned on taking a firm stand against China, unexpectedly decided to shelve the ruing and vie for better relations with Beijing.
What happened next was instructive about China’s behaviour towards the region. First, China’s belligerent tone subsided. Next, Chinese officials fanned out across the region, offering bilateral cooperation on maritime security. Then, to everyone’s surprise, Beijing promised progress on a code of conduct for the South China Sea—a quest that’s been languishing for more than a decade.
To some extent, China was lucky. The momentum against Beijing’s claims, spearheaded by the Hague ruling, started flagging as soon as the US election season got underway. One of the considerations driving Manila’s backdown from pressing its legal victory was a sense that Washington was distracted and that there was no certainty that the US would come to the defence of the Philippines, whatever the treaty guarantees. The pivot turned into a U-turn after President Trump took office in January 2017.
All this allowed China to make its own pivot to a more cooperative posture on the South China Sea. Towards the end of 2016, China’s coastguard, which is the most visible presence in disputed waters, offered bilateral agreements to Indonesia, Malaysia, Vietnam and the Philippines. In early 2017, Chinese Foreign Ministry officials made encouraging noises about completing a framework for the code of conduct.
Sure enough, by the end of April a draft framework of the code finally materialised. The framework is threadbare and doesn’t appear to be binding. The first of its general provisions states that the aim is to provide a ‘rules based framework containing a list of norms to guide the conduct of parties and promote maritime cooperation in the South China Sea’. However, the first item under the heading of ‘Principles’ states that the code is ‘not an instrument to settle territorial disputes or maritime delimitation issues’.
The code essentially preserves the status quo vis-a-vis territorial claims. At best, when completed, it might facilitate practical maritime cooperation and encourage the implementation of existing international agreements for managing incidents at sea. Most observers expect the completion of the code to take years, however.
Meanwhile, China has kept up construction activities in the disputed area of the South China Sea. Its vessels have even appeared in new areas to the east of the Philippines in a major shipping route, particularly for ore-bearing Australian vessels. What has changed is the appetite for challenging Beijing.
The Trump administration has shown little inclination to resume freedom of navigation operations—although this could reflect the vacuum in the chain of command because of the slow appointment of senior positions at the US Defense Department. A series of phone calls President Trump made to ASEAN leaders in late April suggest that Washington is reasserting its interests in Southeast Asia, but for now the main security challenge for the US is further north on the Korean peninsula.
ASEAN remains uncomfortable. Despite the Philippine government’ steering of a final statement that avoided any reference to China’s building activity in the South China Sea at the 28–29 April ASEAN summit in Manila, there was no real consensus on the issue. But the silence of objecting member states suggests that ASEAN has neither the stomach nor the means to challenge China’s strategic advance. Australia has come under pressure from Washington to fill the gap but, with so much trade at stake, Canberra favours a more balanced approach—much like its ASEAN neighbours.
China appears to have sensed an opportunity to modify its hard diplomatic posture, which did considerable damage to its image in the run-up to the Hague ruling. There was a palpable sense of relief in Beijing that constructive cooperation could replace harsh uncompromising rhetoric after President Duterte signalled his back-down from pressing compliance with the legal ruling.
Instead, Beijing swiftly deployed bilateral security engagement and smothered the region with the economic promise of the Belt and Road Initiative. Indonesia found itself being wooed by the Chinese coastguard months after a serious clash between its navy and the coastguard in the Natunas. The Philippines was told its fishermen could return to Scarborough Shoal, although there was no evidence that Chinese vessels were pulling back. Surprised Malaysian maritime law enforcement officials were presented with a draft agreement by their Chinese counterparts after a single meeting.
In sum, Chinese policymakers might well reflect on the year since the Hague ruling and consider the outcome a ‘win–win’. While it seems likely that Beijing’s more cooperative mood will generate modest progress on confidence building measures that will help lower tensions in the South China Sea, the net result is that China’s strategic position in the region has been strengthened and is unlikely to be challenged.
Michael Vatikiotis is Asia Director of the Centre for Humanitarian Dialogue. His new book, Blood and silk: power and conflict in modern Southeast Asia, is published by Weidenfeld and Nicolson in June.