Turbulent waters

Mark J. Valencia offers three scenarios for the South China Sea: the good, the bad and the ugly

“The future of each of our nations – and indeed the world – depends on a free and open Indo-Pacific enduring and flourishing in the decades ahead,” US President Joe Biden said last September.

The Indo-Pacific region extends from the Indian Ocean to the US Pacific coast, and from Japan to Australia and New Zealand. At its geopolitical core lies the South China Sea.

Here, the strategic and foreign policy interests of China and America collide, as do their definitions of the “international order”. Even regional disputes over rocks, maritime space and the resources therein have become fused with the US-China contest for regional dominance.

Currently, the situation in the South China Sea is a leaking status quo in which international incidents punctuate otherwise relative stability. But this status quo is fragile and under tremendous pressure from the US-China struggle. Will it hold?

I am not Nostradamus. But barring a paradigm-changing event and given the current situation and trends, I can sketch three possible scenarios in the South China Sea. I call them the “good”, the “bad” and the “ugly”.

In the “good” scenario, a largely united Association of Southeast Asian Nations (Asean) seizes the metaphorical bull by the horns and takes a stand against both the US and China’s military build-up and posturing. The main antagonists in the region, China and the US, negotiate a modus vivendi. The US dials back its military build-up and exercises, as well as its freedom of navigation operations and provocative intelligence, surveillance and reconnaissance probes targeting China. China and the US reinvigorate their military communication channels and negotiate an Incidents at Sea agreement. Given this foundation, they agree to peacefully coexist and share power in the region.

Meanwhile, China refrains from “intimidating” its rival claimants in the South China Sea and negotiates cooperative management of resources. Asean claimants and China cease construction and militarisation on their claimed or occupied features and China agrees not to declare an air defence identification zone over disputed waters. More significantly, China and Asean agree on a code of conduct for the South China Sea.

In this good scenario, Asean members are courted for their own value rather than as pawns in the US-China strategic contest. The US lightens up on its widely resented ideological approach and both China and the US compete in providing economic assistance to Asean countries.

In this scenario, they all live happily ever after. Or, at least, they get along better than they do now.

In the “ugly” scenario, the metaphorical bull is rampaging in a china shop destroying precious but fragile concepts – like peace, stability, good relations, the international order and cooperation.

China continues to “intimidate” its rival claimants. A nationalist Philippines leader provokes China into a military clash and asks its US ally for backup. The US responds militarily and a US-China clash ensues. Cooler heads prevail, preventing the situation from spiralling out of control. But US-China relations plunge deep into a cold war.

In this scenario, Asean countries are heavily pressured to choose sides. Some do, Asean is split and it becomes impotent in regional security matters. Both China and the US interfere in the affairs of key Asean states and proxy wars like that in Ukraine become a real possibility.

As US-China incidents over the South China Sea proliferate, Asean countries suffer the economic ramifications. Insurance rates for shipping through the region rise significantly. Foreign oil companies suspend their operations, and exploration and exploitation beyond nearshore waters almost ceases.

As fisheries become ever more stressed, clashes between foreign fishing fleets and national enforcement agencies become common. Negotiations for a code of conduct collapse and the Declaration on the Conduct of Parties in the South China Sea becomes meaningless. Basically, the South China Sea becomes a sea of anarchy where might makes right.

In the “bad” scenario, the metaphorical bull is corralled. It is manageable but still dangerous and could break out at any time.

This scenario is more of the same: a leaking status quo. The US and China continue their military build-ups. They also step up their diplomatic and economic contest for the hearts and minds of Asean countries. Code of conduct negotiations drag on indefinitely – partly because of the continued China-US struggle to influence the content.

Asean members lean more heavily on the UN Convention on the Law of the Sea and the arbitration decision against China, but largely to no avail. They also strengthen their opposition to outside military intervention – again with limited success.

So, which of these scenarios is more likely? The good scenario is a bridge too far, although some elements may serve as goals. The ugly scenario is so disastrous that it will probably be avoided.

But unmanaged incidents could cause the situation to quickly transition from bad to ugly – the bull may break out of the corral and into the china shop.

In the long term, if the US wants to avoid direct conflict with China in the South China Sea, it must to a certain degree accommodate China’s aspirations and interests there. Moreover, for stability in the region, China must accommodate some of the interests of Asean members – particularly those of its rival claimants.

In both cases, the what, when, how and how much regarding these interests are to be negotiated. Only then can there be lasting peace and stability in the South China Sea.

Moreover, for stability in the region, China must accommodate some of the interests of Asean members

Mark J. Valencia is an adjunct senior scholar at the National Institute for South China Sea Studies, Haikou, China. This article is based on a presentation to the Closed Door Session on the South China Sea at the Boao Forum for Asia Annual Conference 2022