In recent weeks, the maritime dispute in the South China Sea has taken a backseat to nuclear tensions on the Korean peninsula.
But the South China Sea dispute remains an ongoing challenge for the region, despite renewed efforts by China and the ten ASEAN countries to agree on a framework for a South China Sea code of conduct. After a temporary hiatus in US ‘freedom of navigation’ (FONOPs) patrols, the Trump Administration undertook its first FONOP patrol on 24 May, when the USS Dewey sailed within 12 nautical miles of Mischief Reef.
The South China Sea dispute has many dimensions, including rival sovereignty claims, competition for access to fisheries and other sea-bed resources, and the security of China’s second-strike nuclear deterrent capability.
But at its heart, the South China Sea dispute symbolises the deeper contest between the US and China over the shape and leadership of Asia’s regional order.
For the United States, a key feature of this order is the principle of freedom of navigation. As Evelyn Goh explains, as the regional hegemon, the United States regards itself as chiefly responsible for providing this security public good.
The United States argues that all vessels have the right to free passage within maritime exclusive economic zones (EEZs), including military vessels undertaking military exercises and surveillance activities. By contrast, China contends that the principle extends only to commercial vessels, and that military vessels must not conduct exercises or surveillance in the EEZ.
A second challenge is that despite China’s public statements of support, the pace and scale of China’s land reclamation and military activities in the South China Sea signify the possibility that China could take steps in future to undermine freedom of navigation in vitally important commercial shipping lanes.
Underpinning this argument are statistics frequently cited by the US and its allies that more than US$5 trillion in trade passes through the South China Sea each year, and that countries like Australia and Japan are highly dependent on these waters for their trade.
In our lead piece this week, economist James Laurenceson looks behind these oft-quoted statistics to determine the actual proportion and direction of trade that passes through the South China Sea.
Laurenceson shows that the US$5 trillion dollar figure is inflated, and that a blockade by China would have only a minimal impact on economic growth in other countries. This is because other countries are able to divert their trade at limited cost when necessary, and because the majority of existing regional trade does not in fact flow through the South China Sea.
Instead, ‘shipping density maps show that Vietnam, Indonesia, Taiwan and the Philippines are largely served by merchant vessels that take coast hugging routes outside China’s nine dash line’. In the case of Australia, apart from trade with China — which is very unlikely to be disrupted by China — ‘just 5.5 per cent of Australia’s total goods exports’ go through the South China Sea, and Australia’s sizeable exports to Japan and South Korea either travel east of the Philippines or through the Lombok Strait.
Similarly, in the case of Japan, Laurenceson cites evidence from US Naval War College studies which demonstrate that for Japan to reroute its oil imports through the Sunda, Lombok or other passages would only cost 0.2 percent of Japan’s annual oil import bill.
Indeed, the country most vulnerable to a disruption in shipping in the South China Sea is China itself. This vulnerability is a function of the intensity of China’s trade with Asia, and ASEAN countries in particular, and of China’s dependence on seaborne supplies of vital energy imports.
More importantly, China’s vulnerability also stems from the fact that it is a late rising power that is rising within a US-led order. That order is one in which, as Llewelyn Hughes and Austin Long remind us, the dominance of the United States and its allies in air and naval power gives Washington ‘substantial coercive capability’ against countries like China ‘that depend on maritime transport of oil and that are potential adversaries of the United States’. Unsurprisingly, as Laurenceson argues, ‘a wide variety of Chinese experts worry that in the event of a crisis the United States could sever [China’s supplies of energy] at will’.
Author: Editors, East Asia Forum
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