11 Oct 2016

As part of a newly initiated series of public lectures, which house the Lee Kuan Yew School of Public Policy’s senior faculty members to discuss challenging issues, the School hosted an evening lecture entitled – In Search of Solutions for the South China Sea (SCS). The discussion was held by Professor Kishore Mahbubani, the School’s Dean; Prof Huang Jing Lee Foundation Professor on U.S. – China Relations; Prof Kanti Bajpai, Wilmar Professor on Asian Studies; and Prof Khong Yuen Foong, Li Ka Shing Professor of Political Science.

In July this year, an international tribunal at The Hague passed a judgement over the dispute of the South China Sea, in favour of the Philippines, claiming that China has no legal or historical rights over the waters by its means of a nine-dash line. The judgement was welcomed by the Philippines but rejected by China. The SCS is an important international trade route for the United States (US) and other regional powers. According to an estimate, the sea supports trade facilitation of nearly $4.5 trillion per year. China, through its nine-dash line, claims rights over a majority of the sea, which has overlapping claims by Brunei, Malaysia, Philippines and Vietnam. The speakers presented their points on the ruling and how the situation might play out in the near future.

Prof Mahbubani commenced the lecture with three important points which set the narrative of the lecture. The possibility of a war over the SCS is unlikely, he mentioned, because despite the military supremacy that China and the US have, waging a war will mean loss for every nation, including the claimant states. Today, China has global interests aligned in all its partnerships with countries across the globe, and going into war will not serve its economic interests.

Additionally, the SCS issue will not be resolved through a legal solution such as the tribunal ruling. The reason for this, he cited, is that China will continue to pursue its national interests, which involve claiming sovereignty over those waters regardless of the ruling. Therefore, a political solution between China and amongst the rival claimant states seems to be the most likely option that will settle the issue with a positive outcome.

Prof Kanti echoed the Dean’s thoughts, and gave further insight into the issue. He noted that that China’s rejection of tribunal ruling is permanent. There is no going back, as China has already disputed out of Section II of the United Nations Convention on the Law of the Sea (UNCLOS), not binding it to any third-party settlement. This highlights that the tribunal stands null and void for the Chinese authorities. Any political solution from ASEAN also seems a far-fetched dream.

At the same time, there are reasons to believe that not all is doom and gloom, for the use of force would not make sense for China from a cost-benefit analysis standpoint. The diplomatic costs of overtaking a few inhabitable islands into the sea are high and exercising navy controls over 3.5 million small patches of land , often submerged underwater, would not do much good for China.

At the same time, he pointed out, China has not escalated the issue since the ruling. At this juncture, China could either retain the status quo and stop further construction of artificial islands as it has done previously, or, it could work out a shared incentive among the claimants concerning the waters, like fish catchment, apart from oil and natural gas. As a fact, the SCS covers only 2% of the earth’s surface but house 12% of the fish catch, implying a future fisheries management agreement among the claimant nations.

Prof Huang presented a new scope of discussion by highlighting that the ruling undermines the present political situation in the region. While the SCS issue is full of grey areas, the ruling makes the situation look like an end between two extremes for China, making it a take it or leave it situation. The need of the hour is political engagement with claimants to discuss various issues surrounding the SCS dispute.

Another solution is a possible negotiation between China and the ASEAN to work on the Code of Conduct (COC) so as to prevent further escalation. For China, there are many factors at stake including national identity, sovereignty, future economic interests, and based on these commitments, a realization of who is the leader of the region. Nevertheless, he noted, that in considering the political approach, the final solution lies on the shoulders of China and the US.

In his final contribution, Prof Khong offered his perspective into China’s current disposition and highlighted the importance of understanding it through the lens of historical decisions taken by other superpowers. Powerful nations have historically followed international law to prevent reputational damage and this stands important in the context of China as a rising global power. China’s present steps in dealing with the SCS issue will determine its future status within the international system.

Power transition dynamics also play a role, given that it will not be in the interest of the US to witness the rise of a super power in the East, Prof Khong added. The test for resisting the rise of a hostile hegemon will set the stage for the US foreign policy in this part of the world, and the SCS issue plays a role. Possession is nine-tenths of the law, implying that ownership is easier if one has possession of a property, and that is an interesting proposition to observe. Further, the introduction of the Trans-Pacific Partnership into the region (of which China is not a signatory yet), might indicate a subtle shift of regional countries over to the US. The session concluded into the existing discussion over the ruling, and gave scope for further thought and analysis.

This article was written as an event coverage piece for an expert panel session entitled “In Search of Solutions for the South China Sea” which took place at the Lee Kuan Yew School of Public Policy on 11 August 2016. The full panel session can be viewed here.

Mariyam Raza Haider, a student of Master in Public Policy at the Lee Kuan Yew School of Public Policy (2016-2017), contributed to the development of this article.