July 12, 2017 8:30 pm JST
Bill Hayton

Beijing shifts strategy in South China Sea

Authorities modify legal position after last year's tribunal defeat

Demonstrators at the Chinese consulate in Makati, a Metro Manila city, protest China's island-building in the South China Sea on June 12. © AP

One year ago, China suffered a massive legal defeat when an international tribunal based in The Hague ruled that the vast majority of Beijing's extensive claims to maritime rights and resources in the South China Sea were not compatible with international law. Beijing was furious.

At an official briefing immediately after the ruling, Vice Foreign Minister Liu Zhenmin twice called it "nothing more than a piece of waste paper," and one that "will not be enforced by anyone." And yet, one year on, China is, in many ways, abiding by it.

The South China Sea covers about 3.5 million sq. km from Singapore to Taiwan, and is home to the region's most intractable disputes, involving competing claims from China, Taiwan, the Philippines, Vietnam and others. The Hague tribunal last year backed Manila's claim that there was no evidence that China had historically exercised exclusive control over the contested waters. There was therefore no legal basis for its claim to all the marine resources within the "U-shaped line" encompassing the Paracel and Spratly archipelagoes, which has been printed on Chinese maps since 1948.

China is not fully complying with the ruling -- far from it. On May 1, China imposed a three-and-a-half-month ban on fishing across the northern part of the South China Sea, as it has done each year since 1995. While the ban may help conserve fish stocks, its unilateral imposition in wide areas of the sea violates the ruling. Further south, China's occupation of Mischief Reef, a feature that is submerged at high tide and the tribunal ruled was part of the Philippines' continental shelf, endures. Having built a vast naval base and runway here, China looks like it will remain in violation of that part of the ruling for the foreseeable future.

But there is evidence that the Chinese authorities, despite their rhetoric, have already changed their behavior. In October 2016, three months after the ruling, Beijing allowed Philippine and Vietnamese boats to resume fishing at Scarborough Shoal, west of the Philippines. A China Coast Guard ship still blocks the entrance to the lagoon, but boats can still fish the rich waters around it. The situation is not perfect but neither is China flaunting its defiance.

Political embarrassment

Much more significantly, China has avoided drilling for oil and gas on the wrong side of the invisible lines prescribed by the United Nations Convention on the Law of the Sea (UNCLOS). Although the 2016 tribunal award is only binding on China and the Philippines, China's behavior toward Vietnam has also modified. Its last attempt to move an oil rig into an area claimed by Vietnam, in 2014, ended in political embarrassment, anti-Chinese rioting and a major setback for Beijing's regional diplomacy. Ever since, Chinese rigs have remained out of harm's way.

The ruling was long and complex, but the most important conclusions were, first, that the U-shaped line could not represent a legitimate claim on the resources of the sea. Second, it concluded that none of the Spratly Islands, in the south of the contested area, nor Scarborough Shoal, were full "islands." Since they cannot support permanent human habitation in their natural state, they cannot be used to generate an exclusive economic zone. Put another way, the ruling means China has no claim to the fish, oil or gas more than 12 nautical miles from any of the Spratlys or Scarborough Shoal.

The Chinese authorities appear not to accept this. They continue to intercept and intimidate Philippine fishing boats in the Spratlys. One sailor I spoke to described a tense encounter near the reefs late last year with a Chinese coast guard vessel. Its crew spoke only one word of English (it began with an "f") and used it repeatedly. They even threw overboard the small bucket of fish that the sailors had caught for their own consumption.

In a more serious incident, a boat assumed to belong to the China Coast Guard on March 27 opened fire on a Philippine trawler near Gaven Reef, the location of one of China's newly built artificial islands. It was a potentially deadly incident, but not one that directly violates the arbitration ruling. It is still not clear exactly where the incident took place, but if it was within 12 nautical miles of the rock at Gaven Reef, it was inside the territorial waters of one of the claimant countries. Since the tribunal made no decision about which country (China, the Philippines or Vietnam) is the rightful claimant to Gaven Reef, China can claim that it is within its rights to defend its territorial waters.

There are clear signs from both China's words and deeds that Beijing has quietly modified its overall legal position in the South China Sea. Australian researcher Andrew Chubb noted a significant article in the Chinese press in July last year outlining the new view. Authored by Communist Party legal theoreticians, this new exposition of China's claims comes in three parts: a claim to all the rocks and reefs within the U-shaped line; a claim to "historic title" to all the sea inside lines drawn around "close-together" island groups (that is, small groups of features within the Spratly archipelago); and a claim to non-exclusive rights to fish in places where Chinese fishers traditionally did.

International law

The claim to all the rocks and reefs is clearly disputed by the other claimants, but is at least asserted within the rubric of commonly understood international law. However, in the eyes of most non-Chinese observers, the last two parts of the claim are not: They continue to violate UNCLOS. The whole point of negotiating UNCLOS from 1973 to 1982 was to eliminate such "historic" claims. China ratified that agreement in 1996.

Nonetheless, China's new position seems to represent a major step towards compliance with UNCLOS and, therefore, the ruling. Most significantly, it removes the grounds for Chinese objections to other countries fishing and drilling in wide areas of the South China Sea. Vietnam has already taken advantage of this by authorizing Talisman Vietnam to drill for oil at the very southeastern edge of the country's claimed exclusive economic zone.

However, President Rodrigo Duterte of the Philippines told journalists in May that his Chinese counterpart Xi Jinping had warned there would be "war" if the Manila government authorized drilling in the large gas field known to exist under the Reed Bank -- between the Spratlys and the main islands of the Philippines. This threat appears to violate both the tribunal ruling and China's new definition of its own claim. Duterte might consider why Vietnam is prepared to take such a risk and he is not.

Overall, the picture is of a China attempting to bring its vision of the rightful regional order (as the legitimate owner of every rock and reef inside the U-shaped line) within commonly understood international rules. Far from being "waste paper," China is taking the tribunal ruling very seriously. It is still some way from total compliance but it is clearly not deliberately flouting the ruling.

What happens next will depend on whether the Philippines, and other governments in the region and those around the world that care about the rule of international law, will do enough to keep the region moving toward the peaceful resolution of disputes.

Bill Hayton is an associate fellow at Chatham House and author of "The South China Sea: The Struggle for Power in Asia."

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