Will China Change its South China Sea Approach in 2015?

Jan 8, 2015 | Prashanth Parameswaran
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Given the litany of surprises we have witnessed in the South China Sea over the past few years, it would be a fool’s errand to make grand predictions about what we might see in 2015. Nonetheless, there has been a flurry of discussions over the past few months among the chattering classes about whether we are likely to see a change in China’s approach to the South China Sea in 2015, and the implications that would have for Southeast Asia and beyond. It is worth briefly considering whether this may indeed occur and what it would signify.

Since Xi Jinping’s ascension to power, we have witnessed China employ what I would call a strategy of “incremental assertiveness” in the South China Sea. That incremental assertiveness approach has two parts, often pursued together in a calibrated manner. The first part is to change facts on the water in China’s favor where possible to advance its claims as set out in the infamous nine-dash line. The range of activities could range from land reclamation activities in the Spratlys to outright seizures of features as occurred before with the Scarborough Shoal. But the real emphasis here is on working incrementally, such that no single action is egregious enough to draw the United States into a conflict or unite ASEAN claimants with Washington or other actors against Beijing, but all of them combine to shore up China’s position further down the line.

The second part is to simultaneously continue to cement economic ties with Southeast Asian states in order to draw them closer into China’s orbit. Doing so not only advances China’s own objectives of economic development and regional leadership, it also makes ASEAN states think twice about challenging Beijing on the South China Sea. This strategy has the added utility of perpetuating divisions within ASEAN between those who are more pliable to Beijing’s wishes, such as Cambodia, and others who are less so. Keeping ASEAN divided is crucial to advancing China’s preference for resolving disputes bilaterally rather than with ASEAN as a whole. That is why, to take just one example, Beijing has isolated the Philippines in the past for its very public filing of an arbitration case at The Hague while it has praised Malaysia’s ‘quiet diplomacy’ approach.

The assumption of the two-part strategy of incremental assertiveness is that with time (read to be on China’s side), an even stronger China will have both changed the status quo to be much more in its favor as well as drastically reduced the leverage of ASEAN states to do anything about it. In other words, far from seeing a contradiction between seeking close economic ties with Southeast Asia and assertively advancing its sovereignty claims at the expense of ASEAN claimants, as many observers do, Beijing actually views these policies as two sides of the same coin.

Yet some say we could get a period beginning in 2015 where Beijing might try to change tactics, or at the very least, cool things down a little in the South China Sea. At the recently concluded Central Work Conference on Foreign Relations in December 2014, Chinese leaders confirmed their decision to focus more on solidifying ties with countries in the neighborhood than with other major powers. While it is far from clear what that means, one interpretation, as China expert Bonnie Glaser told an audience at the Center for Strategic and International Studies earlier this week, is that Beijing has recognized that its provocative behavior in the South China Sea has resulted in a deterioration of relations with neighboring countries. In response, China may be “adjusting” its foreign policy to mend ties, which could potentially include reducing tensions in the South China Sea in 2015. This would allow it to improve relations with some ASEAN countries as well as leave some time for its “win-win” economic initiatives, like the Asian Infrastructure Investment Bank and the 21st Century Maritime Silk Road.

The signs of such a shift are there for those looking for them. China – no stranger to bombast – has declared 2015 “the year of ASEAN-China maritime cooperation.” More specifically, Premier Li Keqiang said in November 2014 that China would use 2015 to implement projects under the China-ASEAN Maritime Cooperation Fund, which Beijing initially set up in 2012. That is significant because such projects are tied to the declaration of the code of conduct (DoC) on the South China Sea with ASEAN. Advancing them would enable Beijing to make the case that it is in fact sincere about implementing the DoC, even if it continues to stonewall negotiations on a more binding code of conduct (CoC). While ASEAN countries would prefer the CoC to be concluded as soon as possible, some, like Malaysia, have also welcomed China’s efforts to implement the DoC through specific projects even if such progress is glacial.

Bilaterally, Beijing has spent quite some time patching up things with Vietnam in late 2014, after the deployment of an oil rig near the Paracels caused controversy earlier in the year. Things have also been relatively less hostile with the Philippines of late, with China going out of its way to clarify that it had in fact not left Manila out of its 21st century Maritime Silk Road as some had claimed. More generally, China’s soft power diplomacy during the lead up to and following the latest round of ASEAN summitry in November 2014 – from high level Chinese officials strategically placing op-eds in several Southeast Asian newspapers on ASEAN-China ties to a raft of economic agreements signed with Cambodia, Myanmar and Thailand– was quite impressive in spite of the structural constraints it continues to face in some of these countries. It is clear that Beijing recognizes that 2015 will be a key year for regional economic integration – with the expected conclusion of the mammoth Regional Comprehensive Economic Partnership and (potentially) the U.S.-led Trans-Pacific Partnership – and that it is adjusting its diplomacy accordingly.

Nonetheless, given China’s conduct in the past, one can be forgiven for being skeptical that all this heralds anything more than a temporary tactical shift. In October 2013, as part of the 10th anniversary of the ASEAN-China strategic partnership, China unveiled, to great fanfare, what it termed a new strategy for ASEAN-China relations for the next decade: the rather unwieldy “two plus seven cooperation framework.” The publicity push was part of a headline-filled regional tour by Xi Jinping and Li Keqiang. At the time, it was seen as a great victory for China’s then-new leadership, particularly given U.S. President Barack Obama’s absence with the government shutdown in Washington. Much ink was also spilled on the two-day foreign policy work conference China convened that same month, which was the first ever focused on Chinese foreign policy toward its periphery. Some speculated at the time that this might herald a new charm offensive by China’s new leadership in Southeast Asia.

Yet seven months after this alleged “charm offensive”, which included a newly proposed working group on consultations on joint maritime development with Vietnam, China moved an oil rig into Hanoi’s exclusive economic zone (EEZ). As Tung Nguyen, a Vietnamese diplomat now at the esteemed Diplomatic Academy of Vietnam, put it then, the switch from a Chinese olive branch to a stab in the back poses serious questions about both the extent to which ASEAN countries can trust Chinese words as well as what Beijing’s long-term intentions might be. More broadly, Chinese behavior towards Southeast Asia from late 2013 to the first part of 2014 is a cautionary tale to those looking for change in its South China Sea approach. It suggests that in employing a strategy of incremental assertiveness, China under Xi, as was stressed earlier, is perfectly comfortable rolling out new economic incentives while continuing, or even increasing, its assertiveness in the South China Sea after a certain period of time.

Even if we were to entertain the possibility that China is actually serious about initially trying to cool things down in the South China Sea in 2015, developments on the water during the year could also push Beijing toward a more assertive posture, either reactively or proactively. For example, it will be interesting to see how Beijing and other claimants respond to the arbitration tribunal’s decision on the Philippines’ case against China, which will probably be issued before the end of 2015.

Beyond that, incursions of Chinese vessels or fishermen into the waters of Southeast Asian nations could also spark a crisis as they have threatened to do in the past. This applies not only to Vietnam and the Philippines, which are building up their own capabilities, but Malaysia and Indonesia as well since Beijing’s assertiveness has recently expanded to include the outermost parts of its nine-dash line. The latter two ASEAN states have traditionally tried to downplay such incidents while dealing with Beijing privately, and Malaysia especially would prefer that its ASEAN chairmanship year be focused squarely on the ASEAN community, which will be declared at the end of the year. But Indonesia and Malaysia are also vigilant about safeguarding their own sovereignty, and it is no secret that both have grown increasingly frustrated with Beijing’s behavior. The reaction of the Jokowi administration to any Chinese incursion will be particularly interesting to watch given the bold foreign policy statements coming from some of his advisers of late.

And while China might choose to focus more on its neighborhood rather than on major powers, it cannot simply wish away America’s role in the South China Sea and its potential impact on Beijing’s own behavior. The Obama administration has been and is still committed to working with China where possible, as the climate and military deals late last year illustrated. But 2014 suggests that Washington is wading more deeply into the South China Sea issue, with steps taken such as inking the Enhanced Defense Cooperation Agreement with the Philippines, easing an arms embargo on Vietnam, signing a comprehensive partnership with Malaysia which involves cooperation on maritime security, and publishing a study on the nine-dash line through the State Department. Other quiet measures are also underway or are being mulled for 2015 and beyond. As the United States becomes more involved in the South China Sea issue, and as we move closer to presidential elections in 2016, there is a heightened chance of Beijing reacting adversely to U.S. actions or proactively testing the Obama administration’s mettle.

All this suggests that irrespective of whether China adjusts its approach, we are likely in for yet another interesting year on the South China Sea issue.