South China Sea Tensions Threaten Global Maritime Trade.

SOUTH CHINA SEA TENSIONS

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Context: South China Sea tensions threaten international trade by disrupting crucial maritime routes and escalating security risks.

South China Sea

The South China Sea is located in the Western Pacific Ocean.
It is bordered by: China to the north, Vietnam to the west, the Philippines to the east, and Malaysia and Brunei to the south.
Approximately one-third of global maritime trade passes through this area each year, according to the United Nations Conference on Trade and Development (UNCTAD).
- - This includes critical supplies such as petroleum, with around 40% of the global petroleum trade transported through these waters.

Territorial Disputes

China: China claims approximately 80% of the South China Sea based on the "Nine-Dash Line," a vague demarcation line first drawn by the Chinese government in the 1940s. This claim is rooted in historical maps and records, but it has been widely disputed.
Vietnam: Vietnam asserts sovereignty over the Paracel and Spratly Islands. It bases its claims on historical usage and administration of these islands.
The Philippines: The Philippines claims the Spratly Islands and the Scarborough Shoal, emphasizing their proximity to its coastline.
Malaysia and Brunei: Both countries claim parts of the southern Spratlys, focusing on their Exclusive Economic Zones (EEZs).
Taiwan: Taiwan's claim is similar to China's, based on historical evidence and the same Nine-Dash Line.

Complex territorial disputes

●Spratly Islands: Claimed by China, Vietnam, the Philippines, Malaysia, and Brunei, this archipelago is a hotspot for conflict. The dispute involves competing claims over islands, reefs, and waters.

●Paracel Islands: Disputed mainly between China and Vietnam, this group of islands has seen past conflicts and remains a contentious area.

●Scarborough Shoal: Claimed by China and the Philippines, tensions have risen since China’s takeover in 2012.

●China’s “Nine-Dash Line” claim overlaps with the maritime territories of other nations, complicating the dispute and leading to regional instability.

Significance of the South China Sea

Economic

●Global Trade: The sea carried about one-third of global shipping, amounting to $3.4 trillion in trade, including 40% of China's total trade and 6% of the United States' global trade.

90% of the petroleum imported by major economies like China, Japan, and South Korea transits through this sea.

●Marine Resources: The South China Sea is rich in marine biodiversity and fisheries, contributing significantly to regional food security.

It hosts about one-third of the world’s biodiversity and 10% of global fishery resources, which are vital for the economies of Southeast Asian countries.

●Hydrocarbons: The seabed of the South China Sea is believed to hold significant reserves of oil and natural gas.

Estimates suggest up to 213 billion barrels of oil and 266 trillion cubic feet of natural gas.
These resources are critical for energy security and economic development, adding to the sea’s geopolitical importance.

●Rare Earth Metals: The region also contains rare earth metals essential for modern technology, including hybrid cars, smartphones, and flat-screen TVs.

These resources have substantial economic value and are strategically important for technological advancement and industrial production.

Defence

●Militarization: China has heavily militarized islands within the South China Sea, such as the Spratlys, since 2014.

This militarization includes constructing airstrips, deploying advanced weaponry, and establishing strategic military bases. These developments enhance China's defensive and offensive capabilities in the region.

●Strategic Military Value: For China, islands in the South China Sea provide essential strategic advantages.

They can be used to control access to key maritime routes, launch anti-ship and anti-air missiles, and serve as a base for China’s ballistic missile submarines.
The islands' strategic positioning enables China to project power and influence in the region, and potentially deter adversaries.

●US Presence and Freedom of Navigation: The United States conducts Freedom of Navigation operations to challenge China’s expansive claims and ensure the security of international maritime routes.

The US Navy's regular presence in the region underscores the sea's strategic importance for global military operations and the need to counterbalance China’s influence.

Geopolitical

●Superpower Rivalry: The South China Sea has become a battleground for influence between the US and China.

The US, advocating for the enforcement of international maritime laws, has challenged China’s claims and militarization of the sea.
The US’s role as an offshore balancer and its alliances with regional states like the Philippines, Singapore, and Vietnam illustrate its commitment to countering China's expanding influence.

●Risk of Conflict: The ongoing tension has heightened the risk of military confrontation.

Incidents such as verbal disputes between the US Navy and Chinese military forces reflect the potential for escalation.
The presence of both nuclear-armed superpowers in the region adds to the stakes and the possibility of a major conflict.

Contemporary Scenario

Chinese Militarization: China has expanded its presence in the South China Sea by constructing artificial islands and fortifying them with military infrastructure. This has included advanced weaponry and surveillance systems, signalling a clear intention to dominate the region and deter adversaries.
US Hedging Strategy: In response, the US has pursued a strategy of strengthening regional alliances and enhancing military capabilities to counterbalance China’s power.
- - This involves providing defence aid to allies and maintaining a robust military presence in the region to ensure freedom of navigation and counteract Chinese influence.

Impact of Tensions on Global Trade

Disruption of Shipping Routes

The South China Sea is a crucial corridor for global shipping. Any conflict or military activity in the area could lead to significant disruptions in maritime traffic.
- - This could force shipping companies to reroute their vessels, adding extra days to journeys and increasing costs.
During heightened tensions, ships may avoid the South China Sea, opting for longer routes like those around the Cape of Good Hope. This not only increases shipping costs but also delays the delivery of goods, affecting global supply chains.
Similar to the impact of the Suez Canal blockage, disruptions in the South China Sea could lead to significant delays in the delivery of goods, affecting industries worldwide and driving up prices for consumers.

Rising Costs

If tensions escalate, insurance costs for shipping companies could rise due to the increased risk of attacks or damage. This would be passed on to consumers in the form of higher prices for goods and services.
The rerouting of ships due to attacks in the Red Sea has already led to increased shipping costs. A similar escalation in the South China Sea could compound these issues, leading to even higher costs for global trade.

Potential for Convergence with Other Global Tensions

Broader Geopolitical Risks: The South China Sea is not an isolated issue; it intersects with other global geopolitical concerns.
- - For example, ongoing conflicts in the Middle East, such as the Israel-Hamas war, have already impacted global trade routes. A convergence of tensions in both the South China Sea and the Middle East could exacerbate the challenges faced by international trade.
  - If Iran escalates its actions in the Strait of Hormuz, which is already a critical choke point for oil trade, and if South China Sea tensions continue to rise, the combined impact on global trade could be severe.
Strategic Chokepoints: The Malacca Strait, a narrow and congested waterway, could become another flashpoint if tensions in the South China Sea escalate. This strait is a major choke point for global oil and goods trade and is already vulnerable to congestion and piracy.
- - The Malacca Strait handles a large volume of oil and petroleum products, and any disruptions here could have a profound impact on global energy supplies and trade routes.
  - Geopolitical analysts have warned that a potential military conflict involving China could lead to blockades or disruptions in the Malacca Strait, further complicating global trade and energy security.

Major Disputes and Incidents

●1974: China seized the Paracel Islands from Vietnam after a brief but deadly conflict.

●1988: A clash between Vietnam and China over the Spratly Islands resulted in the loss of Vietnamese sailors.

●2012: A prolonged maritime stand-off occurred between China and the Philippines at Scarborough Shoal.

●2014: China’s installation of a drilling rig near the Paracel Islands led to confrontations with Vietnamese ships.

●2023: Reports emerged of Chinese vessels using lasers against Filipino boats, escalating tensions further.

Efforts to resolve the dispute

Bilateral Negotiations: China prefers to negotiate directly with individual claimants, arguing that it provides a more controlled environment for resolution.
ASEAN Involvement: Some Southeast Asian countries advocate for a collective approach through the Association of Southeast Asian Nations (ASEAN), though this has been hampered by differing national interests and China’s reluctance.
International Arbitration: The Philippines took China to an international arbitration tribunal in 2013 under the United Nations Convention on the Law of the Sea (UNCLOS).
- - In 2016, the tribunal ruled in favour of the Philippines, stating that China's claims were inconsistent with international law. China rejected the ruling and has continued its activities in the region.

Role of India in the South China Sea Disputes

India’s involvement in the South China Sea disputes has been expanding.
India’s increasing engagement in this region, especially through military cooperation and diplomatic support, marks a significant shift in its foreign policy.

Why Is India Getting Involved?
Strategic Interests and Regional Influence	●India views Southeast Asia as a crucial area that links to its strategic interests. ●South China Sea being a key route for global trade, India is concerned that conflicts in this area could disrupt trade flows through the Malacca Strait, which is vital for India’s trade security. ●By participating more actively in the South China Sea, India aims to ensure that these sea lanes remain open and secure, which is essential for its own economic stability. ●The Indian Navy conducted joint exercises with the navies of several Southeast Asian countries including Vietnam and the Philippines. This was not only a show of military capability but also a way to strengthen regional partnerships.
Balancing China’s Influence	●India’s increased involvement is also a response to China’s expanding influence in the Indian Ocean and along its border with India. ●By engaging in the South China Sea disputes, India seeks to counterbalance China’s growing regional dominance and assert its own influence in the area. ●Following the clashes between India and China in the Galwan Valley in May 2020, India’s military activities in the South China Sea ramped up. This shift can be seen as a strategy to offset China's advantages on the Sino-Indian border.
Economic and Energy Interests	●India has been involved in oil and gas exploration in the South China Sea since the early 2000s, particularly in partnership with Vietnam. ●This involvement serves two purposes: diversifying India’s energy sources and strengthening its strategic presence in the region. ●India’s energy exploration in the South China Sea has faced criticism from China, which claims much of the area. Despite this, India has continued its activities, demonstrating its commitment to securing energy resources and asserting its presence.
Partnership with the United States	●The United States and India share mutual interests in countering China’s dominance. ●The Quad alliance, which includes the U.S., India, Japan, and Australia, represents a collective effort to address regional security challenges, including those in the South China Sea. ●The U.S. has encouraged India to play a more active role in the South China Sea, aligning with Washington’s broader strategy to counter China. ●In June 2023, The U.S. Assistant Secretary of State announced plans for deeper cooperation between the U.S. and India on South China Sea issues, highlighting the strategic partnership between the two countries.

How Is India Involved?

Military Cooperation: India has been expanding its military presence in the South China Sea through joint exercises with other countries and increased military sales to claimant states.
- - India has conducted naval exercises with the Philippines, Vietnam, and other ASEAN countries to bolster maritime security and demonstrate its support for regional claimants.
Diplomatic Support: India’s diplomatic stance has evolved from neutrality to active support for international law, including the 2016 arbitral tribunal award that rejected China’s extensive claims in the South China Sea.
- - The joint statement from the India-Philippines Foreign Ministers’ Meeting in June 2023 marked India’s first formal endorsement of the arbitral award, a significant departure from its previous neutral stance.
Military Aid and Sales: India has increased its military aid to countries involved in the South China Sea disputes.
- - This includes providing helicopters to the Philippine Coast Guard and exporting missiles and frigates to Vietnam. These actions are intended to enhance the defensive capabilities of India’s regional partners.
  - India agreed to supply the Philippines with 100 BrahMos supersonic anti-ship missiles, boosting the country’s maritime defence.

India is likely to continue expanding its involvement in the South China Sea, driven by strategic interests, regional partnerships, and geopolitical considerations. However, its influence will be limited compared to major players like the United States.

India’s involvement is more about balancing regional dynamics and securing its interests rather than directly challenging China’s claims.

Challenges in the South China Sea Dispute

Conflicting Territorial Claims

The South China Sea is claimed in full or in part by several countries, with China asserting the most extensive claims.
- - Beijing’s “Nine-Dash Line” includes nearly the entire sea, overlapping with claims from the Philippines, Vietnam, Malaysia, and Brunei.
  - These conflicting claims create a situation where multiple nations assert sovereignty over the same areas, leading to heightened tensions and occasional confrontations.
In 2012, the Philippines and China faced off over the Scarborough Shoal, a rocky outcrop claimed by both nations. The standoff lasted for months and highlighted the risks of escalating conflicts over territorial claims.

Militarization and Security Concerns

China’s extensive militarization of the South China Sea, including the construction of artificial islands with military facilities, has significantly increased regional tensions.
This militarization erodes trust and increases the risk of accidental confrontations between military forces from different countries.
The construction of military airstrips on the Spratly Islands by China has led to increased military activity and patrols by the U.S. and other countries, raising concerns about potential conflicts in the region.

Environmental Degradation

The South China Sea is home to rich marine biodiversity, but overfishing and habitat destruction caused by land reclamation projects have had severe environmental impacts.
The destruction of coral reefs and other marine ecosystems threatens not only local biodiversity but also the livelihoods of communities dependent on these resources.
The large-scale land reclamation activities by China in the South China Sea have led to significant coral reef damage, affecting fish populations and disrupting local fishing communities in neighbouring countries.

Legal and Diplomatic Challenges

The 2016 arbitration ruling by the Permanent Court of Arbitration in The Hague invalidated China’s expansive claims under international law, specifically the United Nations Convention on the Law of the Sea (UNCLOS). However, China has rejected this ruling, complicating diplomatic efforts to resolve the dispute.
- - The lack of a binding agreement and the non-recognition of the ruling by China have stalled progress in negotiations.
Despite the arbitration ruling, China has continued its assertive stance in the South China Sea, building infrastructure and asserting control over contested waters, which undermines efforts to reach a peaceful resolution.

Economic and Strategic Interests

The South China Sea is a vital route for global trade, with a significant portion of the world’s maritime traffic passing through the Malacca Strait. The area is also believed to contain substantial oil and natural gas reserves.
- - These economic and strategic interests exacerbate the dispute, as nations are reluctant to compromise on their claims due to the potential economic benefits.
Vietnam’s joint oil drilling projects with foreign companies in the South China Sea have faced opposition from China, which claims these activities as illegal. This has led to tensions and confrontations between the two countries.

Way Forward

Strengthening Multilateral Cooperation

To address the South China Sea dispute effectively, multilateral cooperation among the claimant states and key stakeholders, including the Association of Southeast Asian Nations (ASEAN) and international organizations, is essential.
- - Collaborative efforts can help establish a code of conduct and promote dialogue to manage disputes peacefully.
The Code of Conduct (COC) in the South China Sea, led by ASEAN and China, aims to create a framework for managing conflicts and enhancing cooperation in the region. A comprehensive COC could help mitigate tensions and provide a structured approach to resolving disputes.

Promoting Diplomatic Engagement

Continuous diplomatic engagement and dialogue between the claimant countries are crucial for de-escalating tensions and finding common ground.
Regular high-level meetings and negotiations can help build trust and address misunderstandings.
The Philippines and China have engaged in bilateral talks to manage their disputes and seek cooperative solutions.
- - The diplomatic engagement has led to some improvements in managing maritime incidents and promoting mutual understanding.

Enhancing Environmental Protection

Addressing environmental degradation in the South China Sea requires collaborative efforts to protect marine ecosystems and regulate fishing activities.
International cooperation and enforcement of environmental regulations can help mitigate the impact of human activities on the region’s biodiversity.
Initiatives like the Coral Triangle Initiative, which involves countries in the Indo-Pacific region, aim to protect marine biodiversity and promote sustainable fishing practices. Similar regional efforts could be applied to the South China Sea to address environmental challenges.

Supporting International Law

Upholding international law, including UNCLOS and the arbitral ruling, is essential for resolving the South China Sea dispute. Encouraging all parties to respect and adhere to international legal frameworks can provide a basis for peaceful conflict resolution.
The 2016 arbitral ruling provided a legal basis for resolving disputes, and supporting its implementation can reinforce the rule of law in the South China Sea. Encouraging China and other claimant states to respect international rulings is crucial for achieving long-term stability.

Promoting Economic Cooperation

Promoting economic cooperation and joint development projects can help reduce tensions and create mutual benefits for the claimant countries. Collaborative efforts in resource management and economic activities can provide incentives for peaceful resolution.
The joint development of oil and gas resources between Vietnam and China in the early 2000s was a step towards managing competing interests and sharing economic benefits. Expanding such collaborative initiatives could help ease tensions in the South China Sea.

Conclusion

The South China Sea dispute presents complex challenges, including conflicting territorial claims, militarization, environmental degradation, and legal hurdles. Addressing these challenges requires a combination of diplomatic engagement, regional cooperation, sustainable practices, international support, and confidence-building measures.

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PRACTICE QUESTION

Q. Examine the strategic importance of the South China Sea for regional and global powers. How do competing territorial claims and the presence of significant natural resources exacerbate tensions among the claimant countries?