The New Geopolitics of Energy
On January 30, 2016, the United States sent a navy destroyer within 12 nautical miles of one of China’s outposts in the South China Sea. Days later, satellite images revealed that China had installed surface-to-air missiles on an outpost around the same time that United States President Barack Obama met with the ten leaders of the Association of Southeast Asian Nations (ASEAN) to discuss the South China Sea. The clash of interests between China and the United States in the South China Sea has become more direct, and the situation is only going to get worse.
For years, the United States has tried to foster an environment that would provide incentives for countries with sovereignty claims to South China Sea islands to reach compromises. The United States has led efforts to uphold international law and support multilateral diplomatic processes, and it has taken steps to defend its allies and partners in Southeast Asia, which are increasingly nervous about Beijing’s presence near their outposts. Many of these actions have been undertaken with the goal of encouraging countries around the region to push back against China’s assertive actions. Pursuing this strategy has limited the need for the United States to play a more direct role.
But it is time to accept that this approach alone is insufficient and won’t lead to a sustainable solution. Beijing has made it clear that this constellation of factors will not deter it from asserting its perceived rights in the South China Sea. If the United States wants to change China’s political calculus in the South China Sea, it must cut to the chase and pursue a bilateral agreement with Beijing to stabilize the security situation—only that can freeze the disputes over sovereignty in the South China Sea and prevent them from spiraling.
THE STAKES ARE HIGH
Brunei, China, Malaysia, the Philippines, Taiwan, and Vietnam all share competing territorial and maritime claims in the sea, through which $5.3 trillion of trade passes annually and under which lie vast oil and gas reserves. In the last couple of years, China has acted quickly to construct on 2,900 acres of land throughout the Spratly Islands as a way to advance sovereignty claims and control over adjacent waters. China’s assertive behavior has attempted to prevent other countries from being able to navigate near Chinese-claimed islands without the threat of interference from Chinese vessels.
The United States has a direct stake in the South China Sea’s stability, which has been underpinned by the Asia-Pacific security framework. The strength of the U.S. Navy in the Western Pacific—bolstered by U.S. alliances—has provided stability that has allowed the free flow of commerce and contributed to extraordinary economic growth across the region. And although Beijing has benefited economically perhaps more than any other country from this stability, it has increasingly chafed at the presence of the U.S. military in the Asia-Pacific, and growing Chinese capabilities enable Beijing to take more steps to defend its perceived interests. As evidenced by the recent Freedom of Navigation exercises, Beijing has attempted to restrict the freedom of navigation and overflight for U.S. warships and aircraft, undermining the principles of international law that have helped keep the region peaceful and prosperous.
One of the most fundamental disagreements between the United States and China is the nations’ differing interpretation of what rights the United Nations Convention on the Law of the Sea (UNCLOS) affords. The United States contends that sovereignty claims must be derived from land features, and that all vessels have the right of innocent passage through territorial waters. China has yet to clarify how its nine-dash line claim (the nation’s vague claim to most of the South China Sea, based on a map from 1947) comports with UNCLOS, and believes that countries must receive permission to enter territorial waters for any purpose. The latest instance occurred as U.S. sailing ships traveled within 12 nautical miles of Chinese-claimed features, which set off alarms and warnings from the Chinese navy.
Beijing’s growing ability to assert itself in the South China Sea, combined with an approach that appears at odds with international law, could increasingly restrict other Southeast Asian nations from pursuing their own foreign policies. China has military superiority over every other claimant in the South China Sea, and knows that it can get what it wants without much compromise. In other words, the adoption of foreign policy positions by others in Southeast Asia that do not favor China could be met with retaliation—restrictions on resource exploitation, impeding naval or commercial transit, or using bilateral economic leverage.
The United States’ more deliberative approach leaves its allies and partners with the uncomfortable choice of clashing with Beijing or accommodating China’s interests. Neither is good for the United States. In the meantime, the South China Sea remains one incident away from spiraling out of control, and such an event would have devastating consequences on the global economy.
A SLIPPERY SLOPE—WITH AN OFF-RAMP
For now, China continues building on its outposts and intimidating foreign ships. The United States continues to stand up for its interests by conducting freedom of navigation exercises and bolstering alliances. These passive-aggressive approaches have driven both countries toward escalation: each side believes it is acting out of its own national interests, while the other views its behavior as provocative. The only real result is that the two countries are increasingly at odds. As the United States and China poke and prod one another, even incidents that don’t involve the United States could have a serious impact on U.S. interests in the region. Every incident between coast guards, complaint by a fisherman, and movement of Chinese oil rigs into disputed waters frays the fabric of regional security and leads one to wonder whether or not any resolution is possible.
The first step toward easing tensions in the South China Sea is, somewhat paradoxically, acknowledging that there are few ways to ease the region’s tensions. There is no viable solution to address issues of national sovereignty: China is steadfast in its adherence to the nine-dash line. The process of developing an ASEAN–China Code of Conduct—the only formal talks attempting to craft a solution that would ease tensions between ASEAN member nations and Beijing—has stalled in negotiations. Recognizing that countries will not fundamentally alter their claims or change their behavior in the current environment will force all sides to look harder at more difficult—and perhaps more controversial—approaches.
The United States and China must meet at the negotiating table to hammer out a security arrangement for the South China Sea that can allow both sides to maintain their interests while also de-escalating tensions. To meet with China at the bargaining table, Washington must change its approach. Namely, it must do more than operate on the periphery in order to shape the region. It must reframe the South China Sea issue as a conflict that directly involves the United States and requires Beijing to act as such. Making this a bilateral U.S.–China issue would lead Beijing to question its strategy, because China’s relationship with the United States and its role in the Asia-Pacific is the biggest regional factor affecting Beijing’s foreign security policy.
There is precedent for negotiations of this kind. China and the United States have handled Taiwan peacefully by finding a bilateral compromise that froze their disagreement on the island’s status; Beijing put aside its stance on a core interest in order to improve its relationship with the United States, and Washington was rewarded for softening its own stance with improved economic ties and a strategic partnership with China during Cold War competition with the Soviet Union. And for more than forty years now, it has stabilized what was previously a deeply worrying security challenge.
If this model was applied to the South China Sea disputes, the end result could be a bilateral security compromise in which China halts construction on its outposts and refrains from harassing ships from neighboring countries, and the United States does not protest certain increased Chinese activity in the region and potentially reduces the volume or frequency of its defense activities in the South China Sea. There are many options available to consider here, but details could only be hashed out between the two sides.
None of these actions would require either side to concede rights or interests because China could change behavior without changing its claims, and the United States could alter specific defense activities without harming its force posture or the credibility of its alliances. And although a bilateral agreement would not solve the problem, it would lower tensions, freeze an escalatory cycle, and open the path to a true multilateral diplomatic process.
But in order for this plan to work, Beijing will need to be convinced to come to the negotiating table. Here, too, there are some precedents for success: the U.S. approach to cybersecurity and alleged Chinese hacking resulted in a high-level agreement that these activities would not be conducted by either side, and it created a diplomatic path to address future challenges. Although cybersecurity was not a “core interest” to Chinese security, there was willingness to compromise on a sensitive issue when the right conditions were created. This means there is a strong likelihood that South China Sea negotiations could follow a similar path.
The United States could deliver a frank, private message to China that its assertive actions in the South China Sea will result in a significant ramping-up of the U.S. defense posture and activities in the region, under the guise of helping the United States protect its interests in the region. If paired with an invitation to discuss a frozen conflict agreement, this message would be hard to misinterpret, and even harder not to think twice about. Washington could also pursue secret diplomacy to jump-start the process. Indeed, the South China Sea issue may be controversial enough to require this type of conversation.
There have been signs that China might be open to a less assertive path. When Chinese President Xi Jinping visited the White House in September 2015, he stated—to the surprise of everyone listening—that “China does not intend to pursue militarization” of its outposts in the Spratly Islands. Since then, the rest of the region’s actors have diplomatically pressured China into living up to its commitment. And if Xi does make good on his statement, it could provide the United States with an opening for a broader agreement.
Once the United States and China lower tensions and stabilize the region’s security, a wider multilateral agreement among the wider region becomes possible. Claimant countries could then negotiate a deal to halt further militarization of China’s outposts, an approach to handling incidents at sea, a framework for the exploration of regional resources (including oil, gas, and fishing) until a final determination of sovereignty is made, and a prohibition against the use of force. This agreement could eventually underpin a more permanent diplomatic process to deal with the underlying maritime boundary issues.
There are few options for resolving the current deadlock in the South China Sea. But past precedent demonstrates how the United States and China can come together to work on an agreement that benefits the entire region. If Washington and Beijing come to the negotiating table ready to compromise, they could leave with a deal that provides each country involved in South China Sea disputes with opportunities to save face—China could portray itself as a defender of sovereignty and an equal to the United States, the United States could continue to defend its allies and the freedom of navigation in the region, and Southeast Asian countries could maintain their sovereignty claims while standing up to expanding Chinese influence. Turning the South China Sea into another frozen conflict would be a win for everyone involved.