The South China Sea: A Strategic Powder Keg

The South China Sea stands as a critical nexus of global trade, natural resources and geopolitical tension. This vital maritime corridor facilitates over 3$ trillion in annual trade while harbouring vast untapped reserves of oil and natural gas. Estimates from the University of Leipzig suggest up to 11 billion barrels of oil and 190 trillion cubic feet of natural gas lie beneath its waters. Additionally, the region’s rich fisheries play a crucial role in ensuring food security and economic stability for surrounding nations. This article delves into the complex web of issues surrounding this strategically vital region, examining the historical context of colonial influence, the current tensions between major powers like the People’s Republic of China (hereinafter: China) and the United States of America (hereinafter: the USA), and the potential trajectories for the future. It explores the structural factors shaping state behaviour, the role of international norms and rules, and the challenges posed by competing territorial claims. The article will also address the environmental concerns facing the region, the influence of domestic politics and nationalism, and the potential for multilateral cooperation. By analysing these interconnected aspects, it aims to provide a comprehensive understanding of the South China Sea dispute, its implications for global stability, and possible pathways towards resolution.

Strategic Importance and Economic Significance

The Indonesian Archipelago and the South China Sea, particularly its three southern entrances – the Straits of Malacca, Sunda and Lombok – represent a maritime crossroads of paramount importance. Control over these waterways translates to significant geopolitical leverage, economic influence and security implications, making them a focal point of international attention. Many nations in this region, whether insular, peninsular, or simply blessed with extended coastlines, are intrinsically linked to the sea. With partially inefficient land transport infrastructure, maritime trade is not just an option; it is an economic lifeline. Nations like Singapore and Malaysia heavily rely on maritime trade for economic growth and employment. While alternative routes do exist, foregoing them comes at a steep price. Diverting nearly half the world’s fleet to these longer routes would necessitate a massive increase in vessel capacity, inevitably driving up freight rates by as much as 500 percent. Approximately 15.7 million barrels of oil pass through the Strait of Malacca daily, representing about a third of all seaborne oil.

The geopolitical dynamics of the Indonesian Archipelago and the South China Sea epitomise the enduring relevance of classical geopolitical theories in the modern era. This maritime crossroads aligns closely with Nicholas Spykman’s “Rimland” concept, which posits that control over the Eurasian periphery is crucial for global dominance. The strategic importance of these waterways demonstrates the continued validity of sea power as a cornerstone of national strength and international influence. The heavy reliance of regional nations on maritime trade underscores the interdependence theory in international relations. This theory assumes that economic interconnectedness, while fostering cooperation, also creates vulnerabilities that can be exploited for political leverage, as demonstrated by the potential economic disruption from route diversions. The theory picks up the complex interplay between economic interdependence and security concerns, a central theme in liberal international relations theory.

Colonial shadows

The geopolitical landscape of the South China Sea bears the indelible mark of European nations, particularly French and British influence. Foreign countries established borders with little regard for existing ethnic or historical claims, and their legal systems and treaties became the foundation for current international maritime law. A key colonial strategy was “divide and rule,” exploiting or creating divisions among local populations to maintain control; by doing so, European settlers could preserve their economic and military primacy in the region. In the South China Sea region, colonisers studied and manipulated existing social, ethnic, religious and political fault lines. Where clear divisions were absent, they often manufactured them by granting preferential treatment to certain groups, fostering resentment and mistrust. This approach intensified rivalries between different groups, making unified resistance against invasive nations difficult. The resulting atmosphere of suspicion still persists, hampering present-day cooperation and conflict resolution. Many countries in the region remain focused on historical grievances rather than finding common ground.

One prominent example of unclear maritime boundaries influenced by foreign intervention in the South China Sea is the dispute over the Paracel Islands. The Paracel Islands, known as Xisha Islands in China and Hoàng Sa Islands in Vietnam, are claimed by both China and Vietnam. During the French occupation of Vietnam, France claimed the Paracel Islands as part of a region named French Indochina. However, the extent of this claim and its legal status was not clearly defined or internationally recognised. After Vietnam gained independence, it inherited these unsettled claims. Meanwhile, China bases its claim on historical grounds predating foreign influence. The situation is further complicated by post-World War II treaties and declarations that did not explicitly address the status of these islands. This legacy of vague territorial definitions has contributed to ongoing tensions and occasional military confrontations between China and Vietnam over control of the Paracel Islands, exemplifying how colonial-era ambiguities continue to impact maritime boundary disputes in the South China Sea today.

The Elephants in the Room: China and the United States

The South China Sea has become a focal point of geopolitical tension, with China and the United States emerging as the primary actors shaping the region’s dynamics. Their strategic manoeuvring and conflicting interests have led to escalating tensions, particularly over territorial sovereignty. However, it is crucial to understand that both nations are acting within a global system that incentivises the pursuit of power and influence. In 2009, China declared the South China Sea a “core interest,” a term typically reserved for issues of national sovereignty. This declaration was based on the controversial “Nine-Dash Line,” a demarcation that encompasses approximately 90% of the South China Sea. This unilateral claim, which has not been internationally recognised, has become a major source of regional instability due to its multifaceted and far-reaching impact. The concept of “core interests” in Chinese foreign policy reflects the constructivist approach to international relations. By framing the South China Sea as integral to national identity and sovereignty, China is engaging in what the political scientist Alexander Wendt would describe as the “social construction of interests and security”. This narrative-building serves to legitimise China’s claims both domestically and internationally.

From China’s perspective, its claims in the South China Sea are rooted in historical rights and are crucial for its national security and economic development. However, the Nine-Dash Line overlaps with the exclusive economic zones (which are recognised and ratified under the law of the sea) of several Southeast Asian nations, including Vietnam, the Philippines, Malaysia and Brunei, leading to territorial disputes.

China’s enforcement of its claims raises concerns about the free passage of commercial and military vessels through these crucial waterways, impacting freedom of navigation. The line has led to increased militarisation of the area, with China constructing artificial islands and military installations within the claimed territory to underline its authoritative stance on this issue.

It is important to note that China’s actions, while controversial, are not occurring in a vacuum. They are a natural response to a global system that rewards military and economic might. China’s rapid economic growth and its desire to secure its interests in its near abroad are driving factors in its South China Sea policy. In response to China’s growing influence, the USA announced its “Pivot to Asia” policy in January 2012, a strategic political agenda that aims to counteract China’s expanding influence in the region. The USA has also taken a more interventionist stance in recent years, directly challenging China’s claims through regular naval patrols within the areas claimed by China under the pretext to assert the right of free passage (Freedom of Navigation Operations or FONOPs), providing equipment and training to regional allies, particularly the Philippines, to enhance their maritime capabilities and backing the 2016 ruling by the Permanent Court of Arbitration in The Hague, which rejected China’s claims to historic rights within the Nine-Dash Line.

While the USA presents its actions as defending international law and freedom of navigation, it is crucial to recognise that these actions serve the USA’s strategic interests in maintaining its global influence and containing China’s interests in return. The North American approach, like China’s, is shaped by its position in the international system and its perception of national interests. China-USA behaviour can be interpreted through the lens of power transition theory, developed by Abramo Fimo Kenneth Organski. As China’s economic and military capabilities grow, it challenges the established regional order, leading to increased tensions with the United States of America, the current hegemon. This dynamic mirrors historical patterns of rising powers confronting established ones, often resulting in conflict driven by change and preservation motives.

The actions of both China and the USA in the South China Sea are heavily influenced by structural factors within the international system. The current global order, established in the aftermath of World War II, places a premium on military and economic power as a means of ensuring national security and advancing state interests. The contemporary international state infrastructure incentivises states to pursue policies that enhance their relative power and influence, even when such actions may increase regional tensions. For China, asserting control over the South China Sea is seen as crucial for its economic development, energy security and strategic depth because it enhances its means of success in the context of the goals that are relevant within that infrastructure. For the USA, maintaining its naval presence and supporting regional allies is viewed as essential for preserving its global influence and success based on the same measurements of success within the existing international order. The lack of binding international mechanisms for resolving such complex territorial disputes further exacerbates the situation. While international law, such as the United Nations Convention on the Law of the Sea (hereinafter: UNCLOS), provides a framework for maritime claims, its enforcement remains a challenge, particularly when powerful states choose to interpret or disregard its provisions selectively.

Regional power dynamics

China’s strategy of engaging with the Association of Southeast Asian Nations (hereinafter: ASEAN) bilaterally, rather than as a collective bloc, further complicates the situation. This approach allows China to leverage its influence over individual nations, many of whom are hesitant to confront China directly due to economic dependencies. In 2022, China was the top trading partner for all ten ASEAN member states. This underscores the significant economic leverage China holds in the region, which inevitably plays a role in the complexities of the South China Sea disputes. Adding fuel to the fire, China’s actions in the region have undermined the sovereignty of several ASEAN countries, especially Vietnam and the Philippines. Deploying a billion-dollar oil drilling platform within Vietnam’s exclusive economic zone, ramming Vietnamese surveillance vessels and using water cannons against them are just a few examples. Similarly, near the Second Thomas Shoal, Chinese coast guard vessels have collided with Philippine counterparts, using water cannons and military-grade lasers against Philippine supply ships. These actions have significantly strained China’s relationships with Vietnam and the Philippines, pushing them to their lowest points in years.

The overlapping claims and resulting disputes with Southeast Asian nations underscore the complexities of maritime territorial sovereignty in international law. The persistent threat of conflict, coupled with various geopolitical and domestic factors, has driven ASEAN nations to bolster their military capabilities, as well. Key factors include economic growth enabling increased defence budgets, the need to modernise aging equipment, regional security concerns and the desire for strategic autonomy. Additionally, domestic political pressures and emerging non-traditional threats, like the use of artificial intelligence for military purposes, have contributed to this trend. Consequently, military analysts reported a 13.5% increase in defence spending among Southeast Asian nations last year, totalling 24,5$ billion, reflecting the complex security landscape in the region.

Despite its limitations, ASEAN remains crucial to maintaining regional stability. The organisation’s commitment to dialogue and cooperation, even without formal peacekeeping mechanisms, has been instrumental in preventing the escalation of conflict so far. However, ASEAN’s consensus-based decision-making process and the divergent interests of its members often limit its effectiveness in addressing the South China Sea disputes.

Resource Competition

As mentioned earlier, the South China Sea is becoming increasingly significant due to its potential reserves of rare earth elements, essential for developing sustainable technologies. As the world shifts toward renewable energy and green innovations, these resources are highly coveted. Key elements include neodymium, used in powerful magnets for wind turbines and electric vehicle motors, and lithium, crucial for batteries in electric vehicles and energy storage systems. China, which currently dominates the global rare earth supply chain, sees the potential reserves in the South China Sea as an opportunity to further consolidate its strategic position. By controlling these additional resources, China could strengthen its grip on the global market for these critical elements, potentially allowing it to influence technological development and international relations through supply chain leverage.

The USA, recognising the strategic importance of these resources, have been striving to secure their own access to rare earth elements. This effort is part of a broader strategy to reduce dependence on China for critical materials and to support the development of domestic high-tech and green energy industries. The presence of rare elements in the South China Sea is reshaping traditional notions of resource geopolitics. Unlike oil and gas, which have been the primary focus of resource-based conflicts, they represent a new frontier in strategic resources. This shift necessitates a re-evaluation of existing geopolitical theories and frameworks to account for the unique characteristics of these elements and their role in emerging technologies. Moreover, the potential for rare earth element extraction in the South China Sea has implications for environmental conservation. Seabed mining, if not carefully regulated, has severe impacts on marine ecosystems, including habitat destruction and chemical pollution. This environmental concern adds yet another dimension to the complex interplay of interests in the region, potentially involving international environmental organisations and affecting the policies of littoral states.

The rare earth element reserves in the South China Sea have significantly raised the stakes in this already volatile region. They have added an important economic and technological dimension to existing geopolitical tensions, intertwining issues of territorial sovereignty, economic development, environmental protection, technological advancement and global strategic competition. How these competing interests are balanced, and conflicts are managed will have far-reaching implications for global technological development and the broader geopolitical landscape.

South China Sea 2050: Potential conflict and cooperation

This final part is a projection of the potential geopolitical landscape of the South China Sea in 2050. It emphasises the importance of considering various scenarios based on current trends, potential interventions and unforeseen developments. While exact predictions are impossible, analysing existing dynamics and emerging factors provides valuable insights for strategic planning. The choice of 2050 as the focal point is explained through several key reasons: it allows for significant changes while remaining reasonably predictable, aligns with many climate change projections and models, corresponds with long-term strategic planning horizons of many countries and, as a round number, it is conceptually accessible for scenario planning. This timeframe enables a balanced approach to envisioning future scenarios, combining the potential for transformative changes with an analytical grounding in current trends.

Scenario 1: Intensified militarisation and strategic competition

In this scenario, the current trends of militarisation and strategic rivalry intensify. By 2050, China could have significantly expanded its military presence in the South China Sea, transforming its artificial islands into military bases. The USA and its allies, in response, might establish a more permanent and robust military presence in the region.

The intensified military standoff would likely have severe economic repercussions. Freedom of navigation could be significantly impaired, with commercial vessels forced to navigate through a complex maze of overlapping military exclusion zones and contested waters. This could lead to increased shipping costs, insurance premiums and potential supply chain disruptions, impacting global trade.

Scenario 2: Diplomatic renaissance and multilateral governance

In a more optimistic projection, diplomatic efforts could yield substantial breakthroughs in regional cooperation and dispute management. By 2050, a comprehensive and legally binding Code of Conduct for the South China Sea could be fully implemented, providing clear guidelines for military activities, resource exploitation and environmental protection.

This scenario might include the establishment of a sophisticated network of joint development zones, managed by a multilateral South China Sea Development Authority. This body could oversee equitable resource sharing, implement cutting-edge technologies for sustainable extraction, and ensure fair distribution of economic benefits among claimant states. This organisation might implement a tradable quota system, ensuring sustainable harvests while providing economic incentives for conservation.

Military tensions could significantly decrease, with China agreeing to partial demilitarisation of its artificial islands in exchange for recognition of certain historical claims. The United States and its allies might maintain a reduced but persistent naval presence, transitioning towards a role focused on ensuring freedom of navigation and supporting regional stability.

Scenario 3: Technological disruption and new strategic paradigms

By 2050, technological advancements could fundamentally alter the strategic calculus in the South China Sea. Breakthroughs in renewable energy, such as efficient deep-sea thermal energy conversion or advanced floating solar arrays, might diminish the strategic importance of hydrocarbon resources in the region.

Simultaneously, the development of economically viable deep-sea mining technologies could shift focus to the vast deposits of rare earth elements and other strategic minerals on the seafloor. This could lead to the emergence of new forms of resource competition, potentially centred around control mineral-rich areas.

Moreover, these developments could potentially lead to new forms of cooperation, as the scale and complexity of deep-sea operations might require collaborative efforts. Alternatively, they could exacerbate existing tensions if not managed carefully through robust international frameworks and diplomacy.

Conclusion

In conclusion, the South China Sea represents a microcosm of the broader challenges facing our interconnected world. It embodies the complex interplay between national sovereignty, economic interests, environmental stewardship and global cooperation. How we collectively address these challenges in this critical region may well serve as a blueprint for managing similar issues on a global scale. As such, the South China Sea remains not just a regional concern but a litmus test for our ability to navigate the complex geopolitical and environmental challenges of the 21st century.