China’s incentives and policy choices on joint development in the South China Sea

Abstract

Since 2017, China has actively proposed a number of joint development schemes in the South China Sea (SCS) with the Philippines and Vietnam. Both economic and strategic incentives lie behind China’s development of these schemes. China’s economic incentives include its domestic demand for energy, the construction of a “21st-Century Maritime Silk Road,” the Hainan pilot free trade zone, construction of a common market, and future economic integration among the SCS coastal States. China’s strategic incentives include achieving its goal of becoming a leading maritime power, playing a constructive role in maintaining a peaceful and stable SCS, developing good relations with other coastal States, and reducing the intensity of competition between China and the United States in the SCS. China’s policy choices on SCS joint development are as follows: (1) to promote good faith in the SCS; (2) to limit unilateral activities in disputed areas; (3) to focus on less sensitive areas of the SCS; (4) to reach joint development arrangements by establishing a relevant working mechanism; (5) to begin the process in areas where there are only two claimants; and (6) to define sea areas for joint development by seeking consensus.