Reports of aggressive and dangerous conduct by Chinese vessels in the fiercely contested South China Sea have surged over the past 17 months.
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Recently, China has demanded Malaysia to immediately halt all activities in an oil-rich area off Sarawak waters.
This is despite the fact that the reefs are only 100 km from Malaysia and almost 2,000 km from mainland China.
About South China Sea (SCS)
Geographical location of SCS
The SCS is an arm of the western Pacific Ocean around Southeast Asia.
It is located in south of China, east and south of Vietnam, west of the Philippines, and north of Borneo.
It contains more than 200 mostly uninhabitable small islands, rocks and reefs.
The Conflict
1992: China lays claim to the entire SCS based on its historical right to the area dating from the Western Han dynasty.
2016: Permanent Court of Arbitration rules in favor of Philippines and finds “nine-dash line” has no legal basis.
Importance for Global Trade
About a third of global maritime trade passes through the 3.5 million square kilometer seaway annually.
Around 40% of petroleum products traded globally are delivered via the sea every year.
Reasons for the conflict in South China Sea (SCS)
Territorial disputes: China’s assertiveness in the SCS has steadily increased, resulting in heightened tensions with Southeast Asian claimant states.
Between 2013-2015: China built artificial islands with a total area of close to 3,000 acres on seven coral reefs it occupies in the Spratly Islands.
China has fully militarized three islands in SCS.
Resource competition: Approximately 3.6 billion barrels of petroleum and other liquids and 40.3 trillion cubic feet of natural gas in the SCS; Competition for rare-earth mineral wealth on the seafloor.
The South China Sea’s fisheries generate $100 billion annually. They account for about 12 percent of global fish catches.
Nationalism and domestic politics: One of the most important factors in the SCS conflict has been the accentuation of nationalism in claimant countries. E.g., both China and Vietnam have used nationalistic rhetoric to posture their claims in SCS.
Besides, entry of the US as a player in the conflict (Philippines and US defence pact) has been an irritant to China.
Strategic interests: The SCS is the shortest way to get from the Pacific to the Indian Ocean, and is host to some of the busiest shipping lanes in the world. It connects East Asia with India, Western Asia, Europe, and Africa.
How SCS dispute pose threat to global trade?
Chinese aggression: The Chinese military has staged increasingly aggressive actions in the seaway recently, including clashes with Filipino ships, fueling fears of a full-scale conflict.
The United States: It has repeatedly warned that it is obligated to defend the Philippines if they were to be attacked, including in SCS.
Taiwan issue: Beijing’s use of military force to bring the democratic island under its control could further raise tensions in SCS.
Potential blockade of Malacca Strait during China-Taiwan conflict: It could severely disrupt global trade while exacerbating existing congestion and security issues.
Increased Shipping costs: Escalating tensions in the SCS could create a third global shipping crisis front (other being Red Sea and the Strait of Hormuz), potentially causing maritime rerouting, delays, price increases, shortages, and revenue losses for key Asian ports.
India & South China Sea
India's Involvement: India has expanded its influence in the SCS through its Look East Policy, focusing on economic and strategic engagement with Southeast Asian nations, despite China's disapproval.
Strategic Importance for India:
Waterways: The SCS connects the Indian Ocean with the East China Sea via the Malacca Strait, a crucial waterway for global trade.
Trade: Majority of India's international trade is sea-borne, with half passing through the Malacca Straits, making the region vital for India’s economy and national security.
Significant potential energy reserves, which are of interest to India as it seeks to secure energy sources to meet growing domestic demand.
Maritime assets such as Oil Exploration Block 128, off the coast of Vietnam that the two countries are jointly exploring.
India's Objectives in the SCS: India holds a principled position when it comes to using the global commons such as maritime domains that it should be free, open and “inclusive”.
India's Strategy:
Deepen economic and strategic ties with ASEAN countries.
Conduct joint naval exercises, military training, and arms sales with regional states (BrahMos to Philippines).
Engage in offshore energy development projects in the SCS.
Policy Initiatives: Act East, Neighbourhood First and Security and Growth of All in the Region (SAGAR) policies, along with strategic alignment by joining QUAD.
Way Forward
Diplomatic Engagement: Involvement in candid and productive discussions among the contending parties, integrating impartial arbitrators if required.
Confidence-Building Measures: Application of procedures to augment transparency, communication, and mutual confidence among regional entities.
Compliance with International Norms: Observance and fortification of the United Nations Convention on the Law of the Sea (UNCLOS) and corresponding international standards.
Regional Collaboration: Reinforcement of regional organizations and frameworks to encourage cooperation and the peaceful arbitration of disputes.
