Grey-zone friction over fisheries and maritime access currently poses the greatest risk of escalation in the South China Sea. Southeast Asian states should prioritise technology-enabled, issue-specific maritime governance and selectively partner with non-escalatory external actors, like the European Union (EU), to strengthen surveillance and enforcement capacity without attempting to resolve sovereignty disputes.
The South China Sea (SCS) sustains vital trade routes worth three trillion dollars annually and supports hundreds of millions of people through fisheries. Today, the most acute danger in the region is the growing risk of day-to-day incidents involving fishing fleets, coast guards, and miscalculations that could unintentionally escalate into broader conflict. Existing responses remain inadequately suited. ASEAN diplomacy and international law provide essential normative foundations but struggle to manage “grey-zone” dynamics. Meanwhile, deterrence-focused approaches risk amplifying tensions.
Why Current Approaches Are Reaching Their Limits
First, ASEAN’s consensus-based decision-making constrains timely action. While ASEAN-led forums have achieved some success in managing regional tensions, they frequently produce diluted outcomes shaped by divergent threat perceptions. China’s preference for bilateral engagement further weakens ASEAN’s collective leverage. Second, international legal mechanisms, though normatively vital, are operationally limited. UNCLOS clarifies entitlements but lacks real-time monitoring or enforcement tools. As maritime law scholars note, legality alone cannot prevent confrontations in contested waters. Third, deterrence-centric strategies risk being counterproductive. Research consistently shows that “the most dangerous element is not island-building but competition over rapidly declining fishery resources,” and that most destabilising interactions occur below the threshold of armed conflict precisely where shows of force offer the least control over escalation dynamics.
The Core Challenge: Maritime Grey-Zone Governance
In April 2024, a Chinese Coast Guard (CCG) vessel water-cannoned a Philippine supply boat near Second Thomas Shoal. No shots were fired, yet regional tensions escalated. This illustrates the SCS’s real flashpoint: persistent friction in the grey zone between peace and conflict.
The most dangerous dynamics are driven less by territorial claims than by resource competition. Illegal, Unreported, and Unregulated (IUU) fishing represents the clearest example. Declining fish stocks have intensified competition among state-backed fleets, creating a primary driver of friction. CCG patrols totalled 1939 ship-days in 2024, a pattern of persistent presence enabling grey-zone coercion.
Crucially, these challenges are not only problems of deterrence but also of information, monitoring, and coordination. Grey-zone operations rely on ambiguity: vessels operate without clear identification, enforcement actions are selectively applied, and attribution remains contested. Southeast Asian states face a persistent governance problem requiring continuous management rather than episodic diplomacy.
A Strategy for Technology-Enabled Maritime Governance
To address these challenges, Southeast Asian states should adopt technology-enabled, issue-specific maritime governance focused on managing risk where escalation is most likely. It comprises three components.
Enhanced Maritime Domain Awareness (MDA). MDA integrates satellite imagery, automatic identification system (AIS) data, and vessel-tracking technologies to provide real-time situational awareness. Importantly, MDA is not merely a technical tool but also a governance mechanism: improved information reduces uncertainty, enables proportionate responses, and lowers the risk of escalation. New technologies, including commercial satellites and low-cost drones, now bring MDA within reach of smaller states at achievable prices. Once detected by MDA, states can respond with coordinated coast guard patrols, diplomatic démarches, or enforcement actions against IUU vessels. This evidence-based approach enables proportionate responses and establishes accountability mechanisms, thereby reducing opportunities for deniability. The Indo-Pacific Partnership for Maritime Domain Awareness (IPMDA) initiative demonstrates how modular cooperation can enhance capabilities while preserving trust among states with diverse security priorities.
Modular and flexible cooperation. Given ASEAN’s diversity, cooperation should be voluntary and functional rather than consensus driven. Groups of willing states can share data or coordinate patrols without requiring region-wide agreement. The ASEAN Coast Guard Forum offers a natural platform for this modular collaboration.
Separating governance from sovereignty. Rather than resolving territorial disputes, this strategy deliberately decouples day-to-day maritime governance from questions of legal ownership. By focusing on fisheries management, environmental protection, and maritime safety, states can cooperate even while maintaining divergent sovereignty positions. Functional governance arrangements have proven more effective at reducing tension than coercive attempts to enforce territorial claims.
Strategic passivity is not neutrality but a path to instability. Critics might argue that technology sharing could enable surveillance overreach, but MDA systems addressing external maritime threats differ fundamentally from domestic surveillance. Territorial disputes cannot be resolved within any foreseeable timeframe, but the risk of escalation can be actively managed. Notably, by avoiding questions of sovereignty altogether, this approach may also prove acceptable to Beijing, as it does not challenge China’s claims while addressing shared maritime safety concerns.
The Rule of the European Union: Enabler, Not Strategic Actor
External partners can support this strategy in carefully defined roles. The EU is particularly well-suited to serve as a non-escalatory enabler. The EU is not a claimant and does not seek to act as a regional military power. Its 2021 Indo-Pacific Strategy explicitly calls for freedom of navigation and peaceful dispute resolution, positioning it as a credible partner in capacity building. The EU’s comparative advantage relative to the United States, whose engagement is inevitably viewed through a lens of strategic competition, lies in maritime surveillance technology and regulatory standards. European firms such as Airbus Defence and Space and Thales provide civilian-oriented naval surveillance systems, satellite imagery analytics, and coastal radar technologies that are distinct from the military-focused AI platforms offered by U.S. firms. This civilian-oriented technology transfer is more politically acceptable to ASEAN states with diverse threat perceptions.
Crucially, this model preserves Southeast Asian agency. External actors provide tools and expertise while regional states define priorities and remain in the driver’s seat. The EU’s distance from territorial disputes and lack of alliance commitments make it a more politically acceptable partner for ASEAN states, balancing competing external pressures.
Critics may question the EU's credibility in light of alternatives such as Japan and Australia. However, this misunderstands the proposal. While Japan and Australia offer valuable capabilities, their security treaties with the United States inevitably link their assistance to broader alliance politics. The EU's value lies not in military deterrence but in providing civilian surveillance technology and institutional expertise without strategic strings attached. The EU's experience supporting civilian maritime governance through its Critical Maritime Routes Programme in the Indian Ocean and the EU-ASEAN Plan of Action (2023-2027) demonstrates the viability of this model. By enabling ASEAN states to manage grey-zone challenges without forcing them into a strategic camp, the EU offers a politically acceptable pathway that traditional security partners cannot.
Policy Recommendations
To operationalise this approach, Southeast Asian states should pursue three measures:
First, establish shared maritime data and MDA hubs among willing ASEAN states, integrating satellite, AIS, and national surveillance data for real-time monitoring. The ASEAN Coast Guard Forum should serve as the anchor for this infrastructure. The Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) offers a proven model: a multilateral information-sharing centre that operates voluntarily, without requiring consensus on broader political questions. ReCAAP’s success in addressing piracy incidents in Southeast Asia declined by 65 percent between 2015 and 2016, demonstrating the effectiveness of functional cooperation.
Second, partner with non-escalatory external actors, such as the EU, for data analytics, technology transfer, and coast guard capacity-building. This partnership should prioritise functional cooperation over military deployments. A concrete starting point would be a joint pilot programme integrating Copernicus satellite data into national MDA systems, beginning with two or three willing ASEAN states.
Third, decouple day-to-day maritime governance from sovereignty disputes, allowing functional cooperation on fisheries, environmental protection, and maritime safety to proceed independently. Combating IUU fishing is the most viable entry point: politically least sensitive, yet operationally one of the most urgent drivers of grey-zone friction.
Conclusion
Three caveats merit emphasis. First, this strategy addresses unintended escalation rather than deliberate aggression. Like the Organization for Security and Cooperation in Europe (OSCE) in Cold War Europe, maritime governance mechanisms can prevent miscalculation but cannot deter determined aggression. The comparison is illustrative rather than prescriptive. If China were determined to initiate deliberate military conflict, no maritime governance mechanism could stop it, but such mechanisms can significantly reduce the risk of unintended escalation.
Second, while Beijing might accept functional cooperation that avoids questions of sovereignty, China may view EU involvement with scepticism. However, ASEAN states with diverse threat perceptions may welcome non-escalatory partners that provide capacity without requiring strategic commitments.
Third, success depends on sustained political will. The transparency mechanisms and data-sharing infrastructure proposed here are effective only when states commit to using them consistently and act on the information gathered to coordinate enforcement, issue evidence-based diplomatic protests, and hold violators accountable.
The South China Sea dispute is unlikely to be resolved through a final legal or political settlement in the near term. For Southeast Asian policymakers, the priority is to reduce the risk of maritime escalation. By reframing the challenge as daily risk management, Southeast Asian states can protect resources and strengthen strategic autonomy. Technology-enabled, issue-specific maritime governance offers a pragmatic path forward. Strategic autonomy will ultimately be built not through alignment with external powers, but through the ability to govern one’s own waters effectively. And that ability begins with knowing what is happening there.
This piece was originally written for the Counterpoint Southeast Asia series, published by the Centre on Asia and Globalisation. It received 3rd prize in the Counterpoint Southeast Asia Student Competition organised by the Centre on Asia and Globalisation (CAG).