Tensions over South China Sea territorial disputes dominated relations throughout the summer months of 2016. Fearing that the UNCLOS Arbitral Tribunal case would go against China, Beijing took remedial steps in the lead-up to the July 12 ruling to show resolve to domestic Chinese constituencies and to counter international pressures. With the Tribunal’s award even more negative for China than most anticipated, Beijing’s attacks on the arbitral panel and warnings to neighbors and the US intensified. They were accompanied by shows of force in the South China Sea.  Given the restraint of others, after a few weeks registering intense indignation, Chinese officials and commentary also moderated their rhetoric. Whether the Chinese shift to moderation was tactical or strategic remains to be seen.

The Chinese onslaught was met with restraint and moderation in the region and on the part of other concerned powers. In contrast to the high tempo of large-scale US and US led-naval exercises and other military maneuvers in the South China Sea prior to the decision, there were no military actions signaling pressure on China in the weeks following the decision. Japan and Australia joined the US in restricting reactions mainly to official statements approving of the tribunal’s decision. The Philippines, the initiator of the case, inaugurated a new government on June 30 that was much more interested in seeking common ground with China.

Given the restraint of others, after a few weeks registering intense indignation, Chinese officials and commentary also moderated their rhetoric. Whether the Chinese shift to moderation was tactical or strategic remains to be seen. Construction of hangers that could be used by military as well as civilian aircraft continued on the newly created land features now hosting modern aircraft landing strips on Chinese-controlled rocks and reefs in the Spratly Islands. Other infrastructure for Chinese occupation continued to be built. Chinese leaders from President Xi Jinping on down strongly reaffirmed China’s determination to defend its territorial claims, with China’s most senior foreign policy spokesperson, State Councilor Yang Jiechi telling Chinese media on July 14 that China “cannot lose one centimeter of inheritance left by ancestors.”

The Shangri-La Forum and lead-up to July 12 

As reviewed in the China-US relations chapter of this issue of Comparative Connections, China’s calculations toward relations with Southeast Asia and the South China Sea disputes were heavily influenced by US behavior. US armed fighter jet patrols over Chinese occupied Scarborough Shoal in April showed strong resolve to check Chinese expansion of control at the expense of the Philippines. There followed in June a firm presentation against Chinese policies and practices by Secretary of Defense Ashton Carter at the annual Shangri-La Forum in Singapore; Carter led a large delegation of  US executive branch and senior congressional officials, some of whom also spoke out strongly against Chinese behavior in the South China Sea. Carter’s concern with the South China Sea was supported by defense leaders from, among others, Japan, India, Malaysia, New Zealand and Vietnam. Remarkably, the French defense minister announced at the Shangri-La Forum that France would coordinate European Union freedom of navigation operations in the South China Sea.

The rhetoric at Shangri-La put Chinese delegates on the defensive, with some reports suggesting Chinese expansion in the disputed territories faced widespread international opposition; Carter warned that Beijing risked isolation if it continued recent practice. That China faced a serious challenge from US-led efforts was underlined with impressive shows of force including two US aircraft carrier battle groups exercising with Japanese and Indian forces in the annual Malabar exercises held in June in the northern part of the Philippine Sea and the same two US carrier battle groups exercising again later in June in the southern part of the Philippine Sea.

Anticipating more international pressure in case the arbitral tribunal decided against China, China’s response had three main tracks.

1. Discredit the tribunal and the Philippines’ case. China’s strong opposition to the Philippine case and the tribunal was summarized as the “four nons”: non-acceptance, non-participation, non-recognition, and non-implementation. China insisted that its position complied with international law and indeed was designed to defend the proper conduct of international law. China’s argument had several charges, notably:

• The case involves territorial disputes that are beyond the scope of UNCLOS. China argued that the Philippines was using the case to, among other things, justify its “illegal” occupation of Chinese territory in the South China Sea.
• China’s long history of “exercising jurisdiction” over the South China provides a solid foundation for its claims, whereas Philippines claims are undercut by historic treaties defining the country’s territory in ways that do not support its current South China Sea claims; the Philippines advancing its control into the South China Seas since the 1970s violated UNCLOS and international law.
• When China signed UNCLOS in 2006 it declared that it would not accept compulsory arbitration and it repeated that declaration when the Philippines introduced the case in 2013, but the Philippines unfairly went ahead with its case requiring compulsory arbitration anyway.
• China and the Philippines in the recent past committed to resolving their disputes through bilateral talks and the 2002 Declaration of the Conduct (DOC) of the Parties in the South China, which included China and the Philippines, pledged that such issues are to be discussed by the parties directly concerned. China argued that Manila’s resort to third party arbitration was a violation of these pacts.

As the polemics against the tribunal and the Philippines escalated in the weeks ahead of the July 12 ruling, Chinese officials and official media raised a variety of other charges against the tribunal and the Philippines. For example, of the five judges selected for the tribunal, four were from Europe and one from Africa; some Chinese commentary saw them as biased against China because of their national backgrounds. Moreover, a Japanese national was the head of the International Tribunal of the Law of the Sea (ITLOS) who appointed one judge to the arbitral panel and then, because of China’s non-participation, appointed two other judges that China should have selected in order to fill the five-member arbitral tribunal, adding to the two judges chosen by the Philippines. Chinese commentary saw these circumstances as creating another bias against China. Meanwhile, with the costs for the work of the arbitral tribunal reportedly well over $30 million, the Chinese media argued on the one hand that the tribunal was responsive to its benefactor, the Philippines, and on the other hand argued that the Philippines probably got covert economic support from the US and Japan.

The main Chinese diplomatic effort against the Philippines and the tribunal represented what in basketball is called a full court press. Chinese officials throughout the world were mustered into service to support China’s position. Since only the government in Taipei is known to come close to supporting the broad scope of Chinese territorial claims in the South China Sea, the Chinese government defined support for its position in a vague way that could elicit wider international support. At bottom, it appeared that if a government or organization stated that it preferred that territorial disputes in the South China Sea should be settled through talks with the parties concerned, that was construed by Beijing as support for its position. In any event, the Chinese government began keeping score of a growing number of governments supporting its position said to be at odds with the arbitral tribunal and the Philippines. In late June, the number was said to be over 60. Western specialists keeping track of such support saw no basis for many of the Chinese claimed supporters. Meanwhile, Chinese ambassadors throughout the world were tasked with giving speeches and writing editorials in support of China’s position.

2. Prevent unwanted ASEAN involvement in South China issues. Chinese officials, with Foreign Minister Wang Yi most recently in the lead, have been working for many years to shape ASEAN opinion to deal with South China Sea disputes in ways compatible with China’s interest that ASEAN not play a direct role in the disputes. Since 2014, Wang has emphasized getting ASEAN members to agree to what he calls China’s “dual track approach,” which endorses the handling of disputes by the directly affected countries, with ASEAN and China being responsible for maintaining regional peace and stability. As Beijing prepared for the July 12 arbitral tribunal ruling, Wang strengthened Chinese efforts to keep ASEAN from involvement in the disputes by reaching an agreement with Brunei, a South China Sea claimant, and China-leaning governments in Cambodia and Laos that became known as the four point consensus.

• Disputes over the Spratly Islands are not an ASEAN-China issue and should not have any implications for China-ASEAN relations;
• Every sovereign state is free to choose their own way to resolve differences and no unilateral decision should be imposed on them.
• ]Dialogues and consultations under Article 4 of the 2002 Declaration of Conduct (DOC) of the Parties in the South China Sea are the best way to solve South China Sea disputes.
• China and ASEAN together can effectively maintain peace and security in the region.

Against that background, China exploited differences within ASEAN to prevent the issuance of a proposed ASEAN statement (not, as usual, a joint statement with China)  following a special ASEAN-China Foreign Ministers meeting in June that said the South China Sea disputes were negatively impacting ASEAN-China relations. The absence of the joint statement with China reflected resistance by some in ASEAN regarding China’s reported “heavy-handed pressure,” with Foreign Minister Wang warning ASEAN not to issue a statement following the arbitral tribunal ruling and calling into question ASEAN’s role in such regional affairs. Wang belatedly proposed instead a 10-point consensus statement that merely restated general principles without addressing concerns with China’s behavior. This 11th hour initiative was not acceptable to ASEAN members concerned with China’s South China Sea behavior, but opposition from Beijing and from Cambodia and Laos precluded release of a consensus ASEAN statement mentioning China and the South China Sea disputes.

In fact, there was an agreed ASEAN statement. Malaysia decided to release it, but the statement was subsequently retracted for “urgent amendments” when Cambodia and Laos overturned their earlier decision. Frustrated with the diplomatic fiasco, Singapore Foreign Minister Vivian Balakrishnan, whose country holds the coordinating role for ASEAN-China relations, decided not to show up for a scheduled joint press conference with Wang after the meeting. South China Sea and Vietnam expert Bill Hayton pointed out that, “What’s remarkable is not so much that China wanted to suppress a strong statement on the South China Sea but that ASEAN was prepared to disrupt a major event, the 25th anniversary of China-ASEAN relations, in order to send a message to the Chinese government.”

3. Expose the “hidden hand” of the United States and Japan. A major theme in the Chinese complaints about the arbitral tribunal and South China Sea disputes was that China was the “victim” of other powers’ machinations. While the Philippines was sometimes accused of “bullying” China, the optics of such a charge were not persuasive. The propaganda campaign found better targets for such charges in the US and its ally Japan as culprits responsible for the rise in tensions in the South China Sea. In May, a long explanation of China’s view on South China Sea issues by its most prominent South China Sea specialist, Wu Shicun, and National People’s Congress spokesperson Fu Ying highlighted the widespread judgment in China that the reason there are troubles today is because “the US is the invisible hand behind the rising tensions in the South China Sea.” Fu repeated the charge in a presentation to Royal Institute of International Affairs in early July.

Meanwhile, Dai Bingguo, now retired state councilor and the senior Chinese official with the most experience in dealing with leading US officials earlier in the Obama administration, traveled to Washington in early July to deliver a speech at the Carnegie Endowment. It was anticipated that Dai, with his reputation from years of pragmatic cooperation with the US, would offer a moderate approach. While there were some moderate elements in his speech, Chinese media rightfully labeled the address a “sledgehammer speech.” Dai warned that the heavy- handed US intervention in the South China Seas issues is viewed as trying to intimidate China. He advised that “China would not be intimidated by U.S. actions, not even if the U.S. sent all 10 aircraft carriers to the South China Sea.”

Japan for its part continued to be treated harshly by Chinese officials and media for its involvement with South China Sea issues. Routine Chinese commentary warning against Japanese stirring up trouble in the South China Sea included a critique in early July that marked Japan’s start on July 1 as the one-month head of the UN Security Council. It sharply attacked an alleged Japanese effort to raise the South China Sea issues before the council. Unlike the moderate Chinese treatment of top-level China-US meetings, Prime Minister Li Keqiang sharply rebuked Japanese Prime Minister Abe Shinzo in a meeting on the sidelines of the Asian-European (ASEM) Summit on July 15. Li told Abe that “Japan is not a state directly involved in the South China Sea issue, and thus should exercise caution in its own words and deeds, and stop hyping up and interfering.”

 Arbitral Tribunal award – China loses to the Philippines

The unanimous ruling of the five-judge tribunal supported nearly all of the 15 claims made by the Philippines. According to UNCLOS Annex VII (article 11) the award “shall be final and without appeal.” However, the award has no enforcement mechanism, and China has the power and determination to ignore it. Nonetheless, it represents the most serious international legal rebuke of the Chinese government since the Cold War.  Systematically dismantling and undermining China’s claims in the South China Sea, the tribunal ruled that:

• China’s claims to historic rights, other sovereign rights, and jurisdiction in the South China Sea enclosed by its nine-dash line are contrary to UNCLOS and “without lawful effect.”
• None of the China claimed land features in the Spratly Islands, including the Taiwan government outpost on the largest natural land feature in the Spratly Islands, Itu Aba (Taiping Island), are islands as defined by UNCLOS capable of generating a 200nm Exclusive Economic Zone (EEZ).
• China violated the Philippines’ sovereign rights in its EEZ by interfering with Philippine oil exploration activities, notably in Reed Bank, a submerged reef formation that falls within the Philippine EEZ, by prohibiting Philippine fishing vessels from operating and failing to prevent Chinese fishing vessels from operating in the Philippine EEZ; and by conducting land reclamation in the Philippine EEZ.
• China violated its maritime environmental protection obligations under UNCLOS by causing “severe harm to coral reef environment” with its land reclamation activities and harvesting of endangered species.

Among notable implications, the award undercut the international legal foundation of recent Chinese efforts to depict the Spratly Islands – in the words of the Chinese Foreign Ministry “as a whole” – using a claim to the islands as a unit to determine what China sees as very wide ranging Chinese territorial and maritime rights in the South China Sea.

China reacts

Chinese leaders including President Xi Jinping and Prime Minister Le Keqiang said little about the arbitral tribunal decision other than to reaffirm China’s commitment to ignore the decision and to defend its territorial rights. China’s official reaction to the ruling was led by a rare government statement – only a few such authoritative statements have been issued since the end of the Cold War – reaffirming in measured terms China’s territorial rights and maritime rights in the South China Sea and expressing China’s desire to resolve disputes peacefully without making explicit reference to either the Philippines or the arbitration proceedings.

More indignation and vitriol showed in a formal statement by the Chinese Foreign Ministry; a lengthy State Council Information Office White Paper giving China’s side of the story regarding the long history of Sino-Philippines disputes over the South China Sea; lengthy remarks by the two most senior government officials responsible for foreign affairs, State Councilor Yang Jiechi and Foreign Minister Wang Yi; a statement by the National People’s Congress Foreign Affairs Committee; and extensive commentary by various lesser ranking foreign policy officials and authoritative media. Overall, China doubled down on efforts prior to the tribunal’s decision to emphasize the righteousness of China’s “four nons” policy, to discredit the tribunal and the Philippines case, to forestall involvement of ASEAN and related multilateral bodies in the South China Sea dispute, and to rebuke the United States, Japan and other powers taking positions on and seen involved in South China Sea disputes in ways contrary to Chinese interests.

China reinforced its propaganda onslaught with military exercises in the South China Sea off the southeast coast of Hainan Island in July and announced planned military exercises with Russia in the South China Sea in September. In July, Beijing conducted combat air patrols over the South China Sea including sorties of bombers over disputed Scarborough Shoal, and conducted civilian aircraft landings on the new Chinese airfields in the South China Seas. A vice foreign minister warned on July 13 that China if threatened had the right to create an air defense identification zone in the South China Sea, a move strongly opposed by Secretary of State John Kerry and other senior US officials.

The Chinese foreign minister and his lieutenants along with official Chinese commentary took aim at the United States, Japan and Australia for statements supporting the tribunal decision deemed offensive to China. The Chinese diplomats were successful in applying pressure on ASEAN to prevent the ASEAN Foreign Ministers Meeting in Laos prior to the ASEAN Regional Forum in late July from including explicit mention of China’s role in the South China Sea disputes or the arbitral tribunal ruling in the ASEAN statement discussing the meeting’s results. Meanwhile, working behind the scenes, Prime Minister Li Keqiang, Foreign Minister Wang Yi, and other Chinese officials were successful in keeping mention of the arbitral tribunal decision out of the July 16 final statement marking the end of the ASEM Summit in Mongolia. China continued to keep count of countries that allegedly endorsed China’s position on the South China Sea, with the number 71 reported by China Daily in late July to a chorus of critiques from foreign specialists citing poor research and dubious evidence.

One change in China’s approach saw Beijing pull its punches in attacking the Philippines government and its newly installed President Rodrigo Duterte. The president and his foreign minister were seen in official Chinese media as vacillating on how to handle the arbitration ruling in hopes for negotiations with China to improve relations. Beijing was encouraging about improved relations but made clear that negotiations to do so could not go forward unless Manila dropped any reference to the arbitration decision. In August, former President Fidel Ramos was selected as a special envoy for the new government and he traveled to Hong Kong for talks with Chinese representatives that reportedly would avoid mention of the tribunal ruling and serve as “an icebreaker” to improve relations between the two countries. A signed communiqué reported in Philippine media on Aug. 11 showed that Ramos met in Hong Kong with National People’s Congress spokesperson and former Ambassador to the Philippines Fu Ying and South China Sea expert Wu Shicun “in their personal capacities,” with both sides looking forward to beginning formal talks to improve Sino-Philippines relations. There was no mention of the arbitral tribunal ruling or South China Sea disputes.

Foreign reactions

The US and its allies Japan, Australia, and the Philippines issued low-keyed statements that welcomed the arbitral tribunal ruling. The US, Japanese, and Australian foreign ministers met on the sidelines of the ASEAN Regional Forum and related meetings in Laos in late July and issued a trilateral statement that called on China to abide by the tribunal’s ruling. Several US allies and partners like South Korea and Singapore only went so far as to take note of the July 12 decision. More widespread in the region were calls to exercise restraint and for peaceful resolution of disputes. Though US and allied forces were present in the South China Sea and nearby territory, they avoided actions that could be seen as pressuring China after the ruling or responding to China’s military power demonstrations after the ruling.

Convergence in Chinese and US positions showed in official Chinese media. Reporting on the meeting between Secretary Kerry and Foreign Minister Wang on the sidelines of the ASEAN-led sessions in Laos on July 25, Kerry, according to Xinhua, was depicted as in favor of Chinese efforts to “turn the page” over the controversy surrounding the tribunal decision and seek to “cool down” the South China Sea situation. The report said he was urged by Wang to support the resumption of China-Philippines talks and support efforts by China and ASEAN in maintaining regional peace, and it said that Kerry endorsed Chinese-ASEAN resolve for peace and supported resumption of China-Philippines bilateral talks.

Taiwan’s strong reaction         

The Republic of China government in Taipei, now under the leadership of President and Democratic Progressive Party Chair Tsai Ing-wen, was more in line with Beijing’s critical reaction and at odds with others’ moderation as it responded harshly to key aspects of the arbitral tribunal decisions. As seen in the China-Taiwan section of this issue of Comparative Connections, the government issued strongly worded criticism of the ruling and dispatched a warship to Taiwan-held Taiping Island in the Spratly Islands.

Media reports and private consultations in Taiwan in July showed that Taiwan officials had been working closely with US counterparts in preparing their reaction to the July 12 decision. On the one hand, Taiwan sought to stay on good terms with Washington, which sought to calm tensions once the decision was announced. On the other hand, Taiwan sought to avoid major retreat from its traditional expansive claims to the South China Sea which mirror Beijing’s. To do the latter was seen likely to cause problems by signaling that Taiwan was moving away from its support of territorial claims associated with one China. Unfortunately, key aspects of the ruling involving the name used to refer to the Taiwan government and the unexpected ruling that Taiping Island did not qualify as an island under UNCLOS came as negative surprises, prompting the harsh and assertive Taiwan government responses.

Indonesia-China frictions

In the wake of repeated challenges by Chinese fishermen and Coast Guard ships to Indonesian control of resources in its EEZ along the northern border of the country and the South China Sea, Indonesian President Joko Widodo adopted the strongest public posture any Indonesia president has taken against China in over a decade. Intrusions into the Indonesian EEZ by Chinese have met with firm responses by the Indonesian Navy, now being given more responsibility for the protection of the country’s maritime resources. The latest episode came on June 17 when Indonesian Navy ships fired warning shots at Chinese fishing boats said to be in Indonesia’s waters. One boat was damaged and one person on board was injured and another fishing boat with seven crewmen was detained. The Chinese sent Coast Guard ships to help the injured and protect Chinese fishermen. The Chinese Foreign Ministry spokesperson said as he has in the recent past that Chinese fishermen are rightfully fishing in their “traditional fishing grounds” and that China and Indonesia have overlapping claims for maritime rights and interests. That President Widodo wanted to show his firmness against such Chinese intrusion showed when he traveled to the area and held a Cabinet meeting on border security on the Indonesian Navy ship involved in the episode. His lieutenants told the media the president wanted to send a clear message of his government’s serious intent to protect its sovereignty.

China-Myanmar relations

In August 2016, Myanmar leader Aung San Suu Kyi visited Beijing, her first overseas diplomatic trip apart from ASEAN since the National League for Democracy was elected into government earlier this year in March. She met senior Chinese officials, including President Xi Jinping and Premier Li Keqiang. At the top of her agenda was to secure China’s cooperation and assistance in ending more than seven decades of civil war in Myanmar. A joint statement was issued with China pledging to play a constructive role and promised a seat at the political dialogue as a mediator. It did persuade three ethnic rebel groups with close ties to Beijing – the Kokang, Arakan Army, and the Ta’ang National Liberation Army – to take part in the Panglong Conference that Aung San Suu Kyi convened at the end of August. The United Wa State Army, Myanmar’s largest ethnic army, has also indicated that it will attend the peace talks.

Aung San Suu Kyi also met with Jin Liqun, president of the Asian Infrastructure Investment Bank, and is seeking to attract more infrastructure investment and development in Myanmar. At the same time, her government was noncommittal about such controversial projects as the Chinese-backed Myitsone dam, indicating that it would be reviewed by a committee for an “appropriate resolution” in November.

Uncertain outlook

A review of past practice of the government of Xi Jinping suggests that it may ease its expansive activities in neighboring waters in coming months ito calm tensions prior to important international meetings where China plays a leading role. The Xi government has done so in efforts to create good atmosphere during annual fall East Asian leadership and APEC meetings during the Xi presidency. This year, Xi also is hosting the G20 Summit in September, an event said by Chinese foreign policy officials to be Beijing’s most important conclave in 2016. However, none of the respites from South China Sea expansionism have lasted long. Though some authoritative specialists in China privately tell US counterparts that the current thaw is different and China has truly “turned a page” away from expansionism, grave doubts persist in the United States and among many of China’s neighbors.