Despite rising tensions over the South China Sea, conflict can and should be averted. It can be avoided because, even though conflicting interests exist, the shared interests at stake are more salient than the points of disagreement. It should be avoided because even a brief resort to force could trigger a downward spiral in China-US relations, fracture the region, and undermine the global economy.

Unfortunately wise statecraft should never be assumed. Even if political leaders wish to tamp down frictions, they must contend with the fact that nationalist fervor is running high in the region. It is easier to malign the intentions of others than it is to consider a dispute from multiple vantage points. While the vandal who ripped off the flag of the Japanese ambassador’s car in China did not precipitate a crisis, his misdeed is the kind of mindless action that could set in motion dangerous dynamics in the future.  Reining in distrust is necessary to calm the roiled waters of the South China Sea.

Nautical navigational rules offer insight into the diplomatic path ahead. Vessels at sea have no presumed right of way. All ships share the responsibility to avoid a collision. Likewise, all states have an obligation to avoid hostilities. The two largest powers, China and the United States, have a special duty to secure peace.

A good beginning would be to acknowledge that the South China Sea is part global good, part sovereign territory. Different national interpretations are inevitable, and being realistic about this fact is an essential beginning point for easing tensions.

Current trends strongly suggest that the Indo-Pacific region will provide the economic and political engine of the twenty-first century. Economic prosperity requires open commerce, the vast majority of which flows over the world’s oceans. The South China Sea joins the Indian and Pacific Oceans. Half of all global shipping tonnage passes through the Sea’s narrow southwestern chokepoint of the Strait of Malacca. In short, the South China Sea is a vital part of the global commons.

But the South China Sea is also the sovereign home to adjacent states. Because of the vagaries and complexities of history and international law, the precise ownership of territorial waters, specific land features, and underwater and seabed resources defies easy adjudication. No single state or institution can impose a resolution. There must be shared solutions.

Too many commentators appear to expect states to move from problem to grand bargain, for instance, through an almost magical binding code of conduct. Had a binding code of conduct been acceptable to all, it would have been fashioned far earlier in the process that is currently in its second decade, between the Association of Southeast Asian Nations (ASEAN) and China. Even if the parties could agree to the basic tenets of such a code in the near future, enforcing it would pose a whole other set of problems.

Meanwhile, tensions have outpaced cooperation. Over the past couple of years escalatory moves have created anxieties throughout the region. The recent standoff over Scarborough Shoal/Huangyan Island witnessed prolonged tit-for-tat actions and statements, developments that were punctuated with the largely unsuccessful ASEAN summit meeting in Cambodia.

China’s growing tensions with the Philippines, as well as with Vietnam, have been pitted against a more deeply engaged United States committed to rebalancing its influence to Southeast Asia in general and the South China Sea in particular.

Just as China may not want its claims to be ignored, China’s smaller neighbors are equally adamant about their claims. The Philippines, which is attempting to build a minimal naval capability to patrol its waters, is no threat to China. At worst, politicians in Manila can be accused of raising the profile of disputed claims to such a high level, that it appeared overly confrontational to Chinese leaders, who in turn decided that a stern response was necessary. While the United States stands for a peaceful resolution of these complex disputes, there is little doubt that Washington would assist Manila in a crisis.

Vietnam also wants a fair deal with respect to its claims, including its exclusive economic zone (EEZ). It does not want China selling oil-exploration rights in disputed waters within Vietnam’s EEZ. Nor does Vietnam want to accept Chinese claims to the Paracel Islands, which China occupied during Vietnam’s fragile, post-unification period in the 1970s. Once again, while the United States wants these disputes to be settled diplomatically, coercive measures would compel all actors in the region to recalibrate their security requirements. Regional polarization and a naval arms race could well be catalyzed.

Geostrategic and globalization interests will both persist, forcing an uncomfortable mixture of competition and cooperation.

Cooperative schemes have foundered on distrust, and can be viewed cynically as seeking to freeze an advantageous position. For instance, China’s failure to move beyond the expansive and ambiguous 9-dashed line covering 80 percent of the South China Sea, has the diplomatic effect of putting the whole area in dispute and thus, by the terms of the Declaration of Conduct, off limits to national occupation.
Because of distrust, some Chinese assume the United States is ‘rebalancing’ simply to hold onto power rather than to support a rules-based system. Meanwhile, the United States and other countries in the region are skeptical of the intentions of a rising China. Let’s admit that we cannot eradicate this distrust; but we can contain it.

What is needed moving forward is a mixture of realism, confidence-building measures, transparency, and restraint.

We should expect the United States to continue to place a general priority—in its diplomacy, trade, and military operations—on the increasingly powerful Indo-Pacific region. But the essence of US strategy is economic interests—maintaining freedom of the seas, and freedom throughout the global commons—and that calls for further China-US cooperation. The United States needs to treat China with respect and do more to foster cooperation. Areas most ripe for such cooperation include in the areas of humanitarian assistance and disaster relief, science and technology (especially, involving the resources of the South China Sea), and practical energy cooperation. As a model production-sharing accord between Brunei and Malaysia demonstrates, the resources of the South China Sea will only be harnessed when there is such cooperation.

China, for its part, can expect the United States to respect sovereign disputes, rather than to impose an arbitrary solution. But China should not expect the United States to stay aloof. The United States will ‘take sides’ when it comes to insisting on peacefully resolving disputes, whether with a treaty ally like the Philippines or a growing trading partner like Vietnam. And Chinese officials would be prudent not to test the commitment of the United States.  For instance, early next year, shortly after the US election, American officials might either over or under respond to a test of its resolve; over-responding would not be advantageous, but even a weak response might subsequently produce a harsh backlash. Restraint and measured steps are called for, even as both China and the United States expand their relations with countries in the region and with ASEAN as a whole.

A related but separate challenge, that transcends the South China Sea, deals with China’s rejection of America’s legal right of innocent naval passage within the 200 nautical mile exclusive economic zone of China. China seeks to end this practice and is building a capacity to repel or deny access to outside naval forces, most notably those of the United States, which seeks to safeguard the public good of freedom of navigation, both for global commerce but also to maintain openness with respect to security. China’s military modernization remains shrouded in far more secrecy than its neighbors think would be consistent with friendly intentions. 

The United States one day will no doubt learn to live with PLA Navy ships passing off America’s coasts. But for the foreseeable future, issues such as innocent naval passage through exclusive economic zones and territorial disputes in the South China Sea, must be managed rather than settled. Through greater dialogue, trust-building and transparency, informal rules of the sea can accommodate both a rising China and a strong America.

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