ASEAN Update: Understanding the Geopolitics of the South China Sea Dispute

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In recent years, the South China Sea has become a key area of concern for the ASEAN organization. In the face of an increasingly expansionary China, ASEAN has often seemed slow to react and unsure of what strategy it should pursue. While there are options in place, such as the Declaration on the Conduct of Parties in the South China Sea (DOC), there has been little unity in the actions of the ten member nations.

The DOC  was established in 2002 between ASEAN and China in order to help ensure peace and stability in the maritime territory. Over recent years, however, tension has escalated with China accused of repeatedly breaching the terms of the DOC.

While the South China Sea dispute has far-reaching consequences for international diplomacy, not least because of America’s conflicting ties to both Taiwan and China, this prolonged territorial dispute also poses grave threats to the ASEAN alliance.

China expansion

A key event in the recent South China Sea disputes was the Vietnamese and Chinese standoff in May – the most aggressive showdown of recent maritime confrontations. In early May, China placed the sizeable oilrig HYSY-981 in the Vietnamese Exclusive Economic Zone leading to a three-month skirmish between Vietnamese enforcement vessels and Chinese naval vessels. As well as disrupting trade routes, the venture also triggered violent anti-Chinese riots in Vietnam during which Chinese and Taiwanese-owned factories were torched and many other multinational businesses were forced to temporarily close.

Though the oilrig was moved to Hainan Island in July, the event typifies the Chinese pattern of encroachment and withdrawal, constantly jostling to throw cumulative doubt on the status quo established by the DOC. The visit of a Vietnamese military delegation to China last weekend seems to have smoothed ruffled feathers with both nations agreeing to resume military ties but this is by no means a lasting solution. China still intends to construct reinforced military bases and five lighthouses on disputed islets in order to facilitate their claims to the surrounding waters.

At the 47th ASEAN Foreign Ministers’ Meeting this August, the South China Sea disputes clearly remained a pressing issue with the final communiqué stressing, “We remained seriously concerned over recent developments which had increased tensions in the South China Sea and reaffirmed the importance of maintaining peace, stability, maritime security as well as freedom of navigation in and over-flight above the South China Sea.”

Despite this reassurance, however, ASEAN remained silent on any definitive moratorium on all activities in the disputed territory; though noted, both the proposals from the US’ “FREEZE” and the Philippines’ “Triple Action Plan” were rejected despite claims from all sides that the DOC has not been respected by China.

Typically, China attempted to downplay this issue with Chinese Foreign Minister Wang Yi claiming, “someone has been exaggerating or even playing up the so-called tension in the South China Sea.” In a noticeably tenacious reply, the Philippines Foreign Minister, Albert del Rosario criticized China of playing “deaf and blind.”

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ASEAN confusion

ASEAN has been unable to agree on a unified response to China’s perceived infringement leaving their commitment to regional coordinated support looking weak. Economically speaking, not only is the South China Sea resource rich, the protracted maritime standoffs have also disrupted several of ASEAN’s key trade routes which run through the territory.

During the 2012 ASEAN summit in Phnom Penh, four member nations – Malaysia, Vietnam, the Philippines, and Brunei – all declared there were conflicting territorial claims with China in the South China Sea. This did not include ongoing disputes with Taiwan, whose claims are generally excluded from ASEAN dialogue. Yet, the ASEAN states were unable to agree on an appropriate response. Internal squabbling reached new heights when, for the first time in the group’s 45-year history, they were not even able to agree on a language for the summit’s concluding communiqué.

Aside from creating antagonism internally, ASEAN’s response – or lack thereof – clearly signaled to China the alliance’s key shortcoming: the incompatibility of individual interests with regional loyalty. Indeed, in addition to diluting US influence, China’s insistence on bilateral resolution of the South China Sea disputes deliberately takes advantage of this vulnerability.

As Dan Blumenthal, director of Asian studies at the American Enterprise Institute, commented, “Southeast Asian nations have to come up with a common position. Anytime they don’t, it’s a victory for China.” The then Secretary-General of ASEAN, Surin Pitsuwan, also stressed this point saying, “ASEAN will need to learn how to consolidate and coordinate positions if it wants to take on the global community.” And the advice is as apt now as it was then.

China’s strategy of assertive land reclamation proceeded by bilateral de-escalation operates on the old tenet of divide and conquer. China is capitalizing on the reluctance of certain ASEAN member nations to identify the disputes as a group problem, shifting accountability to individual countries. Yet it is clear that if ASEAN is to realize its full potential, threatened resources and trade routes in the South China Sea can no longer be considered Vietnamese, Malaysian, or Bruneian, but must be regarded as ASEAN. For now, without an ASEAN moratorium, China’s strategy appears to be working.

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email asean@dezshira.com or visit www.dezshira.com.

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Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email asean@dezshira.com or visit www.dezshira.com.

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

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One response to “ASEAN Update: Understanding the Geopolitics of the South China Sea Dispute”

  1. Henry Nguyen says:

    Excellent summary and insightful analysis of this complex situation. However, the solution for Chinese territorial expansionist aggressions can’t be ASEAN based due to its obsolete “neutrality stand”, irrational “unanimous decision”, ceremonial position of “Secretary” and annual rotating power of “chair”… all institutionalized deficiencies, expertly and easily exploited by China.
    With external powers and interests recently gathering strength (Australia, Japan, India, S. Korea, the US and EU…), counter-measures against criminal and illegal Chinese acts require only an unified stand of 3 South China Sea claimants: Indonesia, the Philippines and Vietnam. Combined, they are 1/2 of population, 40% of economy and strategically, cover all SCS from narrow Malacca strait to both flanks of the open sea: direct threat to marine routes if ever a shut-down of Chinese economy is called for.
    The Philippines and Vietnam are almost there, awaiting Indonesia to realize its regional leadership by 1) accepts its claimant status. 2) accepts the reality that it will be targeted after the Philippines and Vietnam. 3) recognizes it has made good efforts without good results. 4) has political courage to stand up to China with some costs but, many more benefits.

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