The South China Sea: Future Source of Prosperity or Conflict in South East Asia?

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Conclusions The existence of oil and gas deposits in the South China Sea and overlapping claims of sovereignty over the many mid-ocean land features and surrounding waters cause a risk of military confrontation among the claimants. It is currently unlikely that China will interfere with freedom of navigation on the strategic sea lanes of the South China Sea or attempt to force other claimant nations from the Spratlys. But neither of these possibilities can be ruled out in the longer run. Maintaining the status quo without an overall settlement of conflicting sovereignty claims would increase the risk of confrontation as military and commercial activities increase in this area. Uncertainty over China's long-term objectives complicates the task of formulating an overall settlement, but all claimants must be prepared to make substantial compromises for the sake of reaching agreement. Although binding arbitration by the International Court of Justice, or a similar impartial body, would be the best means of assuring that a settlement conforms with current international law, the claimants are unlikely to agree to submit to arbitration at this time. ASEAN nations view the United States as the principal military deterrent to the use of force. The United States has a vital interest in keeping the South China Sea open to ships of all nations. However, settlement of conflicting sovereignty claims is a regional issue which can be peacefully resolved only by the claimants. Background The South China Sea, an area of 648,000 square nautical miles between the coast of Asia and the islands of Taiwan, the Philippines, Malaysia and Indonesia, is dotted with hundreds of islets, reefs, rocks and shoals, which are the subject of conflicting territorial claims. The presumed existence of large oil and gas deposits in these waters and the strategic importance of shipping lanes between East Asia and South Asia, the Middle East and Europe have increased the risk of confrontations over disputed areas of the South China Sea and the urgency of averting these possible confrontations through a peaceful settlement. Complex and Overlapping Claims To the north, the Pratas Island and the submerged Macclesfield Bank are claimed by Taiwan and China. China and Taiwan have tacitly tolerated each other's identical claim to practically the entire South China Sea because both base their claim on the same historic grounds. All the Paracel Islands are claimed by Vietnam, Taiwan and China, on historic grounds, although these have been occupied exclusively by China since 1974. China and Vietnam disagree over their maritime boundary in the Gulf of Tonkin. Further south, the Spratly Islands are spread astride strategic sea lanes and are claimed by: China, Taiwan, Vietnam, the Philippines, Malaysia, and Brunei. Of the six, all but Brunei, have sought to strengthen their claims by establishing a military presence on at least one of the Spratlys. Although their claims overlap, all six allege that their claims are fully supported under international law and under the 1982 United Nations Convention on the Law of the Sea (1982 UNCLOS) which entered into force in 1994. Finally, the claims of China, Taiwan and Vietnam, overlap portions of Indonesia's claim in the Natuna area. China's Policy China has pursued an assertive policy of sovereignty claims which, if fully recognized, would extend its jurisdiction over practically the entire South China Sea. However, since a brief clash with Vietnam at Johnson Reef in 1988, China's use of military force has been limited to occupying previously uninhabited islands and reefs or erecting structures on these. In February 1995, China erected permanent structures on Mischief Reef, an area claimed, although not occupied, by the Philippines. China's pattern may best be described as thrust and reassure--a steady sequence of small encroachments, each followed by protestations of peaceful intentions. …