Feng Zhang. Australian Journal of International Affairs. Volume 71, Issue 4. August 2017.
Introduction
On 22 January 2013, the government of the Philippines under Benigno Aquino III initiated compulsory arbitration proceedings under Article 287 and Annex VII of the United Nations Convention on the Law of the Sea (UNCLOS) over maritime disputes between the Philippines and China in the Spratly Islands of the South China Sea. On 19 February 2013, China declared that it would neither accept nor participate in arbitration. On 29 October 2015, the five-person arbitral tribunal registered with the Permanent Court of Arbitration at The Hague issued its award on jurisdiction. On 12 July 2016, the tribunal rendered its final award on the merits of the Philippines’ submissions in a case known as the Philippines v. China (Mensah et al).
International observers have almost unanimously described the final ruling as an overwhelming victory for the Philippines and a heavy defeat for China (Bergin; Erickson et al). Among many breathtaking findings, the tribunal ruled that to the extent that China claimed historic rights to resources in the waters inside its so-called ‘nine-dash line’, such rights were extinguished when it ratified UNCLOS in 1996 if those waters were now within the exclusive economic zone (EEZ) of other coastal states.
In a bold and surprising decision, the tribunal ruled that none of the disputed islands—not even Itu Aba (Taiping Island) occupied by Taiwan, the largest naturally formed feature—are islands entitled to an EEZ and continental shelf of their own. In other words, the tribunal decided that all of the islands in the Spratlys, as well as the Scarborough Shoal (Huangyan Dao), are, at most, rocks that are entitled to no more than a 12-nautical-mile territorial sea. The impact of this decision is that there are no areas of overlapping EEZ claims between China and the South-East Asian claimant states of the Philippines, Vietnam, Malaysia and Brunei.
The tribunal also ruled that several of the reefs occupied by China are low-tide elevations rather than islands, and are thus neither subject to a sovereignty claim unless they are within 12 nautical miles of an island nor entitled to any maritime zones of their own. In particular, the tribunal ruled that Mischief Reef (Meiji Jiao) and the Second Thomas Shoal (Ren’ai Jiao) are both low-tide elevations within the EEZ of the Philippines, and are thus subject to Manila’s jurisdiction and control. Since 2014, however, with industrial-scale land reclamation and construction work, China has made Mischief Reef into the largest island of the South China Sea with no less than 5.6 square kilometres.
On the face of it, these decisions, which support 14 out of a total of 15 of the Philippines’ claims, drastically reduce China’s maritime rights in the Spratlys and the Scarborough Shoal. They have led many observers to conclude that the award—final and binding under UNCLOS provisions—is a game changer for Asian maritime disputes. Robert Beckman, a world authority on UNCLOS, argues that the award has not only clarified in several ways how UNCLOS applies to the complex disputes in the South China Sea, but has also brought home to all concerned the importance of UNCLOS in establishing a rules-based global maritime order. In particular, the award ensures that the waters in the South China Sea outside the 12-nautical-mile territorial sea from the islands will be open to all states to exercise freedom of the high seas, including overflight, navigation and military activities—an outcome particularly welcomed by the USA and its allies in the region (Beckman).
But what kind of game changer is the award? Is it going to facilitate a rules-based maritime order in the South China Sea under its legal findings? This article explores these questions by examining China’s response to the arbitration ruling. China’s response is crucial since the initial impetus for the Philippines’ arbitration attempt was to clarify the respective rights of the two countries in the South China Sea under UNCLOS, and to compel China to accept international arbitration and its outcomes. Beijing, however, has repeatedly insisted on the position of ‘four nos’: no participation, no acceptance, no recognition and no enforcement (Wangyi News). If China openly defies the arbitration ruling, does this mean that the South China Sea is entering a new period of tension and chaos in its wake?
This article argues that the sweeping nature of the arbitration award has created some very paradoxical effects on Chinese policy and Asian maritime politics. The arbitration ruling has led to a hardening of China’s South China Sea claims, but it has also raised a new readiness among Chinese policymakers to renew negotiations. The nature of the award makes it difficult for the new Philippines government under Rodrigo Duterte to reach a negotiated compromise with China on the basis of the award, but it also presents a surprising opportunity in regional politics for all the major actors involved to lower tensions and recalibrate their policies. It is hard to conclude in a categorical manner whether the arbitration ruling has been beneficial or harmful for South China Sea dispute settlements, but it certainly presents one of the most interesting cases about the role of international law in world politics.
This article proceeds in five sections. The first outlines the historical evolution of China’s claims to the South China Sea in order to assess the changes in its claims following arbitration. The second explains the paradox that Chinese policy elites actually saw the arbitration ruling as a gift to their government. The third examines the hardening of China’s South China Sea claims as a result of the arbitration ruling. The fourth argues that the ruling had another paradoxical effect of strengthening the hardliners’ position in China’s internal debates about the South China Sea. The fifth and final section explains China’s new readiness to negotiate as embodied by its post-arbitration diplomacy.
Evolution of China’s Claims to the South China Sea
Since its founding in 1949, the People’s Republic of China (PRC) has issued ten key statements of claims to the South China Sea, in which eight key dimensions can be discerned (see Table 1). These dimensions encompass almost all of the categories of sovereignty and maritime rights that China may claim in the South China Sea under the current international legal framework. A distinction is made between ‘sovereignty’ and ‘indisputable sovereignty’ because China’s claim has, in fact, evolved from initially claiming sovereignty over the various land features in the South China Sea (islands, reefs, shoals, atolls, and so on) to claiming indisputable sovereignty over them, to again claiming sovereignty in the latest iteration.
Table 1. Historical evolution of China’s claims to the South China Sea.
|
Statements |
Key dimensions | |||||||
| Sovereignty | Indisputable sovereignty | Internal water | Territorial sea | Contiguous zone | EEZ | Continental shelf | Historic rights | |
| I 1958 territorial sea declaration (PRC Government 1958) | * | * | * | |||||
| II 1992 law on territorial sea and contiguous zone (PRC Government 1992) | * | * | * | |||||
| III 1996 statement on ratifying UNCLOS (PRC Government 1996) | * | * | * | |||||
| IV 1998 law on the EEZ and continental shelf (PRC Government 1998) | * | * | * | |||||
| V 2009 notes verbales to the United Nations Secretary General containing identical claims (PRC Permanent Mission to the UN 2009a, 2009b) | * | |||||||
| VI 2011 note verbale to the United Nations Secretary General (PRC Permanent Mission to the UN 2011) | * | * | * | * | ||||
| VII 2014 position paper on the Philippines v. China arbitration (PRC Government 2014) | * | * | * | * | ||||
| VIII 2015 statement on arbitration (PRC MFA 2015) | * | |||||||
| IX 2016 comprehensive statement on China’s claims in the South China Sea (PRC Government 2016) | * | * | * | * | * | * | * | |
| X 2016 White Paper on settling disputes with the Philippines through negotiation (PRC State Council 2016) | * | * | * | * | * | * | * |
A number of points can be made here. Statements I to III gradually claimed sovereignty, internal water, territorial sea, a contiguous zone, an EEZ and a continental shelf. Statement IV further codified these rights into domestic law. In addition, this law noted that its stipulations do not affect China’s historic rights in the South China Sea. This was the first time that Beijing had officially referenced the issue of historic rights, even though it was intended as a ‘saving clause’ and not in itself a claim to a specific set of historic rights (US Department of State).
Statement V consisted of two notes verbales, which were responses to the submissions by Vietnam and Malaysia (jointly) and Vietnam (individually) to the Commission on the Limits of the Continental Shelf, and contained the identical claim that: ‘China has indisputable sovereignty over the islands in the South China Sea and the adjacent waters, and enjoys sovereignty rights and jurisdictions over the relevant waters as well as the seabed and subsoil thereof (see attached map)’ (PRC Permanent Mission to the UN).
Triggering major international controversy and confusion about China’s South China Sea claims, this statement lies at the heart of the latest round of South China Sea disputes since 2009. It is notable for a number of reasons. First, although China’s foreign ministry had referred to ‘indisputable sovereignty’ before, it is the first document among the 10 documents analysed here in which Beijing has formally declared its indisputable sovereignty in the South China Sea. Second, it uses ambiguous terms such as ‘adjacent waters’, ‘relevant waters’ and ‘seabed and subsoil thereof’ to describe China’s South China Sea rights. These might be interpreted as references to territorial sea, an EEZ, historic-rights waters and continental-shelf resources, but China has offered no clarification as to their precise meaning. Third, perhaps most confusingly and also somewhat ominously, both notes verbales contained the so-called ‘nine-dash line’ map. The dotted line encircles about 80 percent of the South China Sea, yet Beijing has never clarified its legal status and meaning.
Statement VI’s note verbale was a response to a note verbale of the Philippines stating Manila’s claim to the South China Sea. In addition to reproducing the claim of the 2009 notes verbales (but without the ‘nine-dash line’ map), it also stated that: ‘China’s sovereignty and related rights and jurisdiction in the South China Sea are supported by abundant historic and legal evidence’ (PRC Permanent Mission to the UN). It further claimed territorial sea, an EEZ and a continental shelf for the Nansha (Spratly) Islands. Statement VII was a carefully written justification for China’s refusal to participate in arbitration. It claimed China’s indisputable sovereignty as well as territorial sea, an EEZ and a continental shelf in the South China Sea. Statement VIII reiterated China’s indisputable sovereignty. Statement IX, released immediately after the tribunal delivered its final award in the Philippines v. China arbitration on 12 July 2016, comprehensively outlined China’s claims to the South China Sea. Beijing then issued Statement X, its first South China Sea White Paper, which focused on dispute settlements between China and the Philippines. Containing identical claims, Statements IX and X represent Beijing’s clearest and most comprehensive positions thus far.
Of special importance is Statement IX, a concise document outlining the history of China’s rights in the South China Sea, the main components of its current claims, and a new willingness to make practical arrangements to maintain regional stability. It divides China’s claims into four areas: sovereignty over all South China Sea islands; internal waters, territorial sea and a contiguous zone based on these islands; an EEZ and continental shelf based on these islands; and historic rights in the South China Sea.
A number of important conclusions emerge from this review of the historical evolution of China’s South China Sea claims. First, although Beijing consistently claims sovereignty over South China Sea islands, the strength of this claim has varied across different periods. China’s position was the hardest between 2009 and 2015, when it claimed indisputable sovereignty. At the conclusion of the Philippines v. China arbitration in July 2016, it reverted to its earlier position of claiming sovereignty only. While the difference in terminology might appear trivial, it may, in fact, suggest China’s new flexibility about sovereignty negotiations. As one official from China’s Ministry of Foreign Affairs questioned: ‘How can China negotiate with other states if its sovereignty is indisputable?’ (Interview with MFA Official).
Second, although Beijing had made various kinds of claims to the South China Sea since its 1958 territorial sea declaration, it had not claimed all the seven areas (excluding indisputable sovereignty) identified in Table 1 in one comprehensive statement until Statements IX and X. It is apparent that Beijing consolidated and updated its past claims, which were previously scattered in different places, into one single document.
Third, in addition to being comprehensive, Statement IX has also taken an important—albeit still very much incomplete—step towards clarifying China’s South China Sea claims. This is especially true with respect to historic rights. As noted earlier, among the 10 statements analysed here, official reference to historic rights only appeared once, as a ‘saving clause’ in Statement IV. Now, Beijing has clarified in a prominent manner that it, indeed, claims historic rights in the South China Sea, without specifying the precise nature and scope of such rights. But it does not appear to base historical rights on the ‘nine-dash line’ map. This is important evidence that China wants to reduce the significance of the map in its claims.
Another example of enhanced clarity is the use of easily recognisable concepts under the UNCLOS framework such as an EEZ and a continental shelf, rather than the ambiguous terms such as ‘adjacent waters’ and ‘relevant waters’ that appeared in Statements V and VI. The preference for such ambiguous terms has led to the accusation that Beijing has employed a tactic of ‘deliberate ambiguity’ to advance its interests. Statement IX by no means eliminates all ambiguities in China’s claims. But in employing common legal concepts, it creates an adequate basis for diplomatic dialogue and negotiation, and is thus an advance on the confusing claims contained in Statements V and VI.
Fourth, and mentioned only in passing as a historical footnote to China’s South China Sea claims, the ‘nine-dash line’ does not figure prominently in Statement IX. At most, it serves as historical background to current claims. The document gives the impression that, with the exception of the claim to historic rights, China is making claims on the basis of its land features in the South China Sea, in accordance with both domestic and international law, including UNCLOS. In fact, this seems to have always been China’s position since the promulgation of its 1992 law on territorial sea and a contiguous zone (Statement II). Statement VII cites very favourably the international legal doctrine that ‘maritime rights derive from the coastal state’s sovereignty over the land, a principle which can be summarised as “the land dominates the sea”‘ (PRC Government, para. 11). However, the clarity of this position has been compromised by the attachment of the ‘nine-dash line’ map in Statement V. Beijing has not used the map in further official communications and, as mentioned earlier, has tried to play down its significance. This suggests that it may have recognised that inclusion of the map was a mistake or at least an unnecessary complication of its policy.
Statement IX best reflects China’s latest and most authoritative position for its next South China Sea policy phase. Given that it was issued on the same day as the release of the arbitration award, to what degree can the new position be seen as a response to the arbitration ruling? More generally, what is the impact of the arbitration ruling on China’s South China Sea policy? The remainder of this article argues that the award has created some very paradoxical effects on Chinese policy. Whilst the award was widely seen as a big defeat for Beijing, Chinese elites expected it to ease international pressure on Chinese compliance with the ruling. The arbitration process virtually determined that the only possible response from China was a hardening of its claims, and the award had the additional consequence of strengthening the hand of the hardliners in internal debates inside China. Yet, Chinese policymakers also displayed a new readiness to renew negotiations with the Philippines and other South-East Asian claimant states, and to restart an institutional approach to disputes. But in the short term at least, the nature of the ruling is only likely to create a deadlock in negotiations.
The ‘Best’ Outcome from a ‘Bad’ Case
In terms of international law, the arbitration award was a humiliating defeat for Beijing. Yet, as mentioned earlier, many Chinese policy elites and leading scholars at some of Beijing’s prestigious think tanks privately saw it as a big gift to their government, at least where China’s immediate political response to the ruling was concerned (personal email communication, July 13, 2016). For those who had questioned Beijing’s refusal to take part in arbitration and who would have liked to see meaningful engagement instead, the outcome came as a personal disappointment and a blow to their cause. But for those who had opposed the arbitration process, there was relief that the nature of the ruling made it easier for Beijing to delegitimise it, at least at home.
The Ministry of Foreign Affairs, which had opposed arbitration, belongs to the latter group. According to a senior diplomat, the award was ‘stupid’. Although China expected the ruling to favour the Philippines, the findings still came as a surprise (Interview with MFA Official). In the months leading up to the ruling, pressure was mounting, with Chinese diplomats hearing calls from many countries for China to comply with the outcome of arbitration. The more limited the outcome, the easier other countries would have found it to call for Chinese compliance, and the more combative Chinese resistance would have appeared.
That pressure abated after the ruling. Chinese officials hoped that the broad nature of the ruling would convince other countries that the tribunal was biased against China. Judging from international responses to the ruling, their hope was not entirely unfounded. Although the generally lukewarm international support for the ruling stemmed in large part from a very activist Chinese diplomacy warning other countries against open support, the sweepingness of the ruling may have also played a part.
According to the Asia Maritime Transparency Initiative, only Australia, Canada, Japan, New Zealand, the Philippines, the USA and Vietnam have publicly called for the ruling to be respected. Thirty-three countries have issued generally positive statements noting the verdict, but have stopped short of calling for the parties to abide by it. Nine countries have made overly vague or neutral statements about the South China Sea without addressing the ruling, and five have publicly rejected it. The identity of those countries that have supported the binding nature of the ruling does not surprise China: the Philippines initiated arbitration; the USA is presumed by many inside China to have instigated it; Australia, Canada, Japan and New Zealand are key US allies; and Vietnam is itself involved in territorial disputes with China, while also emerging as a security partner of the USA. Notably, the Association of Southeast Asian Nations’ (ASEAN’s) joint communiqué, issued almost two weeks after the ruling, mentioned neither China nor the arbitration ruling, although it expressed serious concerns over recent developments, including land reclamation (ASEAN).
This outcome could not but convince Chinese officials that they had scored a tough diplomatic victory in suppressing the significance of the arbitration ruling in regional politics surrounding the South China Sea. Thus, what appeared to be a ‘home run’ for the Philippines actually represented the ‘best’ outcome from a ‘bad’ case for China—a truly paradoxical outcome of the arbitration ruling.
Moreover, the sweeping nature of the ruling has invited Chinese analysts and officials to try to tear it apart. Before the ruling, Chinese officials could only base their attacks on procedural grounds, such as the charge that the arbitral tribunal lacked jurisdiction (see Statement VII, in particular), but such criticisms did not appear entirely convincing to an international audience. After the ruling, although Ministry of Foreign Affairs officials have continued to make procedural criticisms (PRC MFA), Chinese scholars are ready to discover ample grounds for a new round of substantive and deeper criticisms. Thus, one day after the ruling, a leading expert in international maritime law identified seven areas where the ruling was said to lack legitimacy, including a denial of China’s historic rights and a distortion of the historical record of China’s fishing activities (Qu). One week after the ruling, a team of scholars from the Chinese Communist Party’s Central Party School concluded that the tribunal had misunderstood China’s claims to the ‘nine-dash line’ (J. Wang). One can only expect that as Chinese scholars continue to study the arbitration award, they will produce sophisticated criticisms of the award to justify Beijing’s rejection of it. Beijing may also organise a coordinated international effort to delegitimise the award on legal grounds. Eventually overturning the award may be China’s ultimate objective in this legal battle over the South China Sea, but how to achieve this in a fundamental way appears far less clear.
A Hardening of China’s Claims
Statement IX not only reasserts China’s sovereignty over all of the ‘islands’ in the South China Sea, but also claims for these ‘islands’ all of the potential sovereignty and maritime rights, including internal water, territorial sea, a contiguous zone, an EEZ and a continental shelf, in addition to the new claim of historic rights. If, in the past, China had fallen short in producing an official notification of the full range of its claims to the world, this statement now fills that gap. In Statement IX, ‘islands’ (nanhai zhudao) is an all-encompassing term for all the various kinds of land features in the South China Sea. No distinction is made between ‘islands’, ‘rocks’ and ‘low-tide elevations’, which carry distinct legal meanings under UNCLOS, with correspondingly distinct maritime rights (UN). The broad nature of these claims is unprecedented not just in the PRC era, but also throughout twentieth-century Chinese history. This suggests a considerable hardening of China’s claims to the South China Sea. To what extent can this hardening be seen as a result of the arbitration ruling?
Given the swiftness with which Beijing released Statement IX following the arbitration award, it is clear that the document had been prepared beforehand. Given also that contingency planning is a normal part of China’s foreign policy decision-making process involving events as important as the award, Beijing was likely to have prepared several different policy statements for different outcomes (Interview with MFA Official). A reliable source also revealed that China had obtained access to the content of the award one week before its formal release (personal email communication, July 13, 2016). Thus, Beijing effectively had a one-week window in which to deliberate over a final response to the award. Its choice of Statement IX and the hardened positions contained therein can be interpreted as, at least in part, a response to the award’s overwhelming support for the Philippines. Strikingly, the sweepingness of the award was matched by the sweepingness of Statement IX’s claims. It is hard to believe that this was a mere coincidence.
At the same time, however, one should not attribute too much of a causal role to the final award itself. Even if the award were somewhat balanced in its judgments about the merits of the Philippines’ claims, it would still be highly unlikely for China to soften its claims, as such softening may give the impression that China was yielding to the arbitration ruling’s pressure. Beijing would try by all means to avoid such an impression because it would seriously damage the government’s resolve to protect China’s interests in the South China Sea in the eyes of domestic nationalists. Moreover, a softening of its position would also run counter to its fierce criticisms of the legitimacy and legality of the arbitration process (Interview with MFA Official). Thus, some hardening of its position would seem to be China’s only possible response, and it was virtually determined by the arbitration process itself. The sweeping nature of the final ruling likely increased the sweepingness of China’s new claims as a targeted response, but only as a contributing factor. A less wide-ranging ruling might have led to a less wide-ranging Chinese response, but that less wide-ranging response would still represent a hardened position compared to the past.
China’s security policy immediately before and after the release of the award supports the argument that the hardening of its claims was a premeditated response to the award. During 5-11 July, China’s navy conducted a major exercise near the Paracel Islands of the South China Sea involving all of its three fleets—the South Sea Fleet, the East Sea Fleet and the North See Fleet (Sina News). Although the government claimed that it was a routine annual exercise, the timing—one week before the release of the arbitration ruling—suggests that it was at least in part targeted at the release of the ruling. If Beijing were counting on a more or less balanced ruling as a face-saving opportunity to de-escalate regional tension, the timing of the exercise would appear truly baffling. Such an exercise, carried out just before the announcement of the most anticipated decision of any international court or tribunal in UNCLOS history (Beckman), would only be used internationally against China as evidence of its assertiveness. But if Beijing had known about the ruling one week in advance or had already made the decision to harden its positions regardless of the ruling, it would appear logical for the leadership to organise a military exercise to defy the arbitration ruling and demonstrate its sovereignty claims.
Following the arbitration ruling, Beijing apparently had no qualms about upgrading administrative and physical control to further strengthen its position in the South China Sea. Indeed, some Chinese analysts argued that the ruling was a good thing for China because it would help raise awareness among the Chinese public about the South China Sea, stimulate China to speed up island construction, and encourage government authorities to streamline South China Sea policy decision-making (W. Wang).
In any case, the government acted quickly. One day after the tribunal’s release of its ruling, Beijing sent two civilian planes to Mischief Reef and Subi Reef (Zhubi Jiao) to demonstrate control (Perlez). The military swiftly moved to begin regular combat air patrols over the South China Sea, in addition to conducting new military exercises (Forsythe). Admiral Wu Shengli, China’s top naval commander, affirmed Beijing’s determination to complete island construction (Xinhua News Agency). Since the land reclamation was completed, the current phase of construction includes the installation of facilities on the islands, including military hardware. Satellite images taken in late July 2016 show that China has been building aircraft hangars at Fiery Cross Reef (Yongshu Jiao), Subi Reef and Mischief Reef that can handle all types of fighter-jets (Asia Maritime Transparency Initiative). More generally, in the area of military strategy, on 19 July, Fan Changlong, Deputy Chairman of the Central Military Commission, called on the People’s Liberation Army to continuously intensify preparations for military struggle on the maritime front (Xinhua News Agency).
While China is trying to strengthen strategic control over its positions in the South China Sea, it is also apparent that it does not wish to escalate regional tensions. As discussed later, Beijing wants to decentre the South China Sea in its regional policy. Since the beginning of 2016, the USA and many regional states have begun to worry that China may start reclamation and construction work on the Scarborough Shoal (Huangyan Dao), and establish an air defence identification zone in the South China Sea (Vuving). There was no evidence that China was planning either of these moves following the arbitration award. That Beijing has protested the award with a modest show of strength suggests that it still values the centrality of a diplomatic approach to managing South China Sea disputes. Moreover, this measured assertiveness seems as much intended to demonstrate to the Chinese public the government’s resolve to protect China’s interests in the South China Sea as to signal a warning to the USA and regional countries, especially since the USA did not scale up its regional military deployments or operations immediately after the ruling.
A Gift for the Hardliners
In addition to the hardening of China’s claims, the sweepingness of the arbitration award may also have unfortunate consequences for China’s still evolving internal debates about the South China Sea. Some scholars argue that three camps—pragmatists, hardliners and moderates—are currently vying for influence over South China Sea policy within China’s policymaking apparatus. The pragmatists value China’s physical presence and material capability in the South China Sea more highly than its international image or reputation. They thus celebrate Beijing’s construction since 2014 of seven new islands out of existing features in the Spratly archipelago of the South China Sea, including, most importantly, Fiery Cross Reef, Subi Reef and Mischief Reef. The hardliners go considerably further than the pragmatists in thinking that not only should China present these islands as a fait accompli to the outside world, but it should further expand its territorial and military reach in the South China Sea. The moderates, on the other hand, believe that if China does not adjust its policy to clarify current ambiguities about its territorial claims and strategic design, it will eventually face the ominous danger of strategic overstretch (Zhang). If this analysis is correct, the nature of the arbitration award is likely to make the hardliners the winners in these internal debates. The hardliners have long maintained that arbitration is but a US conspiracy against China; now the outcome serves as a vindication of those suspicions.
In this respect, it is also important to note another paradox that the ruling presents: its potential to affect Chinese attitudes towards international law. Beijing’s initial refusal to take part in the arbitration process has confused many Chinese scholars, particularly legal experts. An overseas Chinese scholar’s criticism that Beijing’s refusal to participate was damaging to China’s national interests aroused huge controversy and debate in China (Ling). These debates may be instrumental in shaping Chinese attitudes towards international law, and such attitudes are becoming increasingly important, as questions are now being raised about China’s challenge to a rules-based international order.
The sweeping ruling, however, undermines advocates of a more proactive approach to international law by appearing to demonstrate the political nature of the arbitration process. The ‘anti-participation’ camp is now arguing more forcefully that advocates of participation are naïve and utopian in placing their hopes in international law. International politics, they assert, is determined by power politics, not by international law. They are able to claim that the nature of international politics has not fundamentally changed since 1919, when China’s legitimate sovereignty rights were snubbed by the great powers of the day at the Versailles negotiations held at the conclusion of World War I. Although China was an Allied power during the war, German concessions in China were to be given to the Japanese rather than returned to China (personal email communication, July 13, 2016). This kind of argument, when fanned by grass-roots populism, has the danger of turning the arbitration award into a new ignominious chapter in China’s so-called ‘century of humiliation’, dating from the mid nineteenth century, which can justify any response, including military force. In this sense, the award presents an unexpected obstacle to China’s troubled engagement with international law.
A New Readiness to Negotiate
While China has hardened its claims to the South China Sea, it does not want to get bogged down in regional tensions to the detriment of its overall foreign policy interests. In Statement IX, it extended a new olive branch to the Philippines and other South-East Asian claimant states for diplomatic negotiations. The statement tries to send such a signal with a new feature—what may be described as ‘enhanced clarity amid general ambiguity’—in its claims.
As noted earlier, China is now using internationally accepted legal concepts to describe its claims. But it still fails to specify how it might apply these concepts to the complicated realities of the South China Sea. For example, in the claim to sovereignty over all South China Sea ‘islands’, do these ‘islands’ meet the definition of an island outlined in Article 121 of UNCLOS? Or is the term so loosely used that it also includes ‘low-tide elevations’, which cannot claim territorial sovereignty under UNCLOS unless they are within 12 nautical miles of an island? In claiming internal water, territorial sea, a contiguous zone, an EEZ and a continental shelf for these ‘islands’, Beijing leaves the geographical scope of these rights entirely undefined. And on historical rights, there is only one bland assertion that ‘China has historic rights in the South China Sea’, without delimiting the geographical boundary of such rights or specifying their contents. The ambiguity embodied by the unwillingness (or inability) to specify the legal nature and geographical scope of these new claims has contributed to their seeming sweepingness.
On the other hand, however, such ambiguity is also intended to leave room for diplomatic flexibility in future negotiations (Interview with MFA Official). Indeed, preserving such flexibility has always been a central purpose behind Beijing’s ‘deliberate ambiguity’ in its claims. The new ‘enhanced clarity amid general ambiguity’ thus serves as an invitation to restart diplomatic negotiations. Beijing may hope that enhanced clarity can create a new basis for communication and dialogue, while general ambiguity can preserve enough room for flexible bargaining. Indeed, Statement IX declares that:
China is ready to make every effort with the states directly concerned to enter into provisional arrangements of a practical nature, including joint development in relevant maritime areas, in order to achieve win–win results and jointly maintain peace and stability in the South China Sea (PRC Government).
But would not hardened claims present new obstacles to negotiation? Apparently, Beijing was not too concerned with such a contradiction. Herein lies another intriguing paradox of China’s South China Sea policy following arbitration. Beijing had hardened its claims, but also wanted to put negotiation back into the centre of regional politics surrounding the South China Sea. One possible explanation is that although China’s South China Sea claims had been hardened as a result of arbitration, as argued earlier, they had not been so hardened as to make negotiation impossible. The new feature of ‘enhanced clarity amid general ambiguity’ was designed as new grounds for negotiation and thus represented an attempt to delegitimise and decentre arbitration in future South China Sea dispute settlements. Beijing apparently believed that its diplomatic leverage would be effective enough to suppress the significance of the arbitration ruling and restore negotiation as the dominant approach to South China Sea dispute management.
Thus, when the Chinese delegation arrived in Vientiane in late July 2016 to attend a series of ASEAN-centred foreign ministers’ meetings, there was only one overriding objective against which the success or failure of China’s South China Sea policy would be measured: reducing the significance of the arbitration ruling and restoring the centrality of negotiation to South China Sea dispute settlements. When meeting his counterpart from Brunei, considered a ‘friendly’ claimant state by China, Foreign Minister Wang Yi emphasised the importance of the so-called ‘dual-track thinking’ initially proposed by Brunei and keenly promoted by China—namely, specific disputes need to be resolved by the relevant parties through peaceful consultation, while the stability of the South China Sea needs to be maintained by both China and ASEAN.
Meanwhile, in other meetings, Wang characterised the arbitration ruling as ‘a wrong prescription to South China Sea disputes settlement’ and emphasised the need to ‘reduce the fever and lower the temperature’ of South China Sea tensions. According to Wang, arbitration had changed the effective means of resolving disputes through diplomatic dialogue and consultation by the relevant parties in the past, and had thus increased regional tensions. Not only had arbitration failed to achieve the objective of reducing disputes, but it had damaged regional stability; disrupted the process of implementing the 2002 Declaration on the Conduct of Parties in the South China Sea, signed by China and ASEAN countries, and negotiating a new code of conduct; and reduced the China-Philippines relationship to a historical low. Therefore, Wang declared, it was now time to ‘rectify chaos and restore appropriateness’ (boluan fanzheng) by returning to the correct track of implementing the 2002 Declaration. From his perspective, arbitration was a needless, provocative, distracting and disruptive interregnum in a normal process of settling, through negotiation, the relevant disputes between China and the Philippines.
Wang had good reason to believe that he had largely achieved the twin objectives of reducing the significance of the arbitration ruling and restoring the centrality of negotiation. As mentioned earlier, ASEAN failed to reference either China or the arbitration ruling in its joint communiqué of 24 July, even though the communiqué continues to call for peaceful resolution of disputes in accordance with international law, including UNCLOS. Furthermore, China succeeded in getting ASEAN to issue a new joint statement on the full and effective implementation of the 2002 Declaration (Foreign Ministers of ASEAN Member States and the People’s Republic of China). In his meeting with US Secretary of State John Kerry, Wang also elicited from Kerry a pledge that the USA would not take sides in the arbitration outcome, and that the USA supported restoration of bilateral dialogue between China and the Philippines in order to move beyond the arbitration ruling and reduce regional tension (PRC MFA). Given US diplomatic and military challenges to China’s South China Sea policy over the past several years (Cronin), including Freedom of Navigation Operations near Chinese-held islets in the Spratly and Paracel Islands (Kuok), Kerry’s pledge signalled a more conciliatory approach and appeared highly encouraging to the Chinese side.
Nevertheless, China’s diplomatic victory was less than complete. First, Paragraph 174 of ASEAN’s joint communiqué stated that:
We remain seriously concerned over recent and ongoing developments and took note of the concerns expressed by some Ministers on the land reclamations and escalation of activities in the area, which have eroded trust and confidence, increased tensions and may undermine peace, security and stability in the region (ASEAN).
This was a criticism of China in all but name.
Second, the new ASEAN-China joint statement was a reiteration of the central themes of the 2002 Declaration, as Clauses 2, 3 and 6 of the statement correspond exactly to Clauses 4, 5 and 10 of the Declaration. It was far from a diplomatic breakthrough. Given the inability of the Declaration to prevent tensions from rising since 2009, it is not clear that the new joint statement will be able to do so in the future.
Third, although Kerry seemed highly accommodating in his post-ruling diplomacy towards China, he nevertheless agreed to a trilateral statement with Japan and Australia expressing serious concerns over South China Sea disputes. Unambiguously criticising China and calling for its compliance with the arbitration ruling, the statement declared that:
The ministers expressed their strong support for the rule of law and called on China and the Philippines to abide by the Arbitral Tribunal’s award of July 12 in the Philippines–China arbitration, which is final and legally binding on both parties (US Department of State).
According to a Chinese diplomat, during a meeting with Wang on 26 July, Kerry regretted the hastiness with which he had approved the statement the night before, and agreed with Wang on the need to de-escalate regional tensions (Interview with MFA Official). Nevertheless, the Japan-USA-Australia trilateral statement stood out as an obstacle to the full restoration of negotiations in South China Sea dispute settlements.
It is clear from the Chinese diplomacy in Vientiane that Beijing had recognised the cost of its recent South China Sea policy and wanted to lower regional tensions. It proposed to reinvigorate the implementation of the 2002 Declaration and expedite the negotiation of a code of conduct. In trying to restore the centrality of the Declaration and the code of conduct in a future negotiation process, it wanted to banish arbitration from regional discussions. An ideal post-arbitration world for China would be one where the arbitration ruling is entirely forgotten, as if it had never happened.
But can China really banish the arbitration ruling from regional memory? Can it really reduce the significance of the arbitration ruling so that it will have no effect on the future negotiating positions of South-East Asian claimant states? Chinese officials insist that the award cannot be used as a basis for negotiation under any circumstances (Wangyi News). But it would be hard for the Duterte administration in the Philippines to treat an overwhelming legal victory as a de facto political defeat in future dealings with China, however different its China policy might be from that of the preceding Aquino administration. The Duterte administration’s initial response was to reject China’s offer of negotiation outside of the award framework (Straits Times). As relations with China warmed up following his successful state visit to China in October 2016, Duterte has decided to set aside the arbitration ruling for the moment and refrain from actions that might heighten tensions with China, particularly in the Scarborough Shoal (Mogato). But this restraint is likely to be a temporary expediency, not a long-term commitment, and will in any case depend heavily on the political relationship between Manila and Beijing. In the long run, the award will make it difficult for the Philippines to make meaningful concessions to China, since it is so heavily in Manila’s favour. If Duterte agrees to share the resources within the EEZ of the Philippines with China under the premise of ‘shelving disputes and seeking joint development’—a long-standing Chinese position—he will face enormous domestic pressure, possibly including a challenge from the Supreme Court. In this sense, the Philippines has won too much. But, paradoxically, in winning too much, it has, in fact, won little in the real world of diplomacy if the award presents more of an obstacle than an opportunity for it to reach a decisive diplomatic compromise with China.
Had the award been more attentive to Chinese interests, a future, more enlightened leadership in Beijing might have gradually and quietly complied with some of the rulings (whatever its public statements to the contrary), thus bringing China’s claims broadly in line with UNCLOS. But this award does not appear to give Chinese leaders the kind of face-saving opportunities they would prefer. Although it does not rule that the ‘nine-dash line’ per se is illegal or invalid, its decision that Mischief Reef and the Second Thomas Shoal are low-tide elevations within the EEZ of the Philippines, and thus subject to its jurisdiction and control, is very hard for China to swallow, especially considering China’s massive building activities over Mischief Reef. China’s hardened claims and lack of obvious compromise options from the award mean that a deadlock over South China Sea negotiations is the most likely outcome in the near future. Thus, contrary to China’s wish to create a post-arbitration world where the arbitration ruling would play no role in South China Sea dispute settlements, the arbitration and final ruling have presented new and significant difficulties for negotiation. After all, arbitration has occurred, and China cannot simply pretend otherwise.
One may argue that arbitration would have contributed greatly to South China Sea dispute settlements had China accommodated it and accepted its verdict. Even the sweeping award opens new diplomatic avenues and may bring benefits to China in the long run. For example, although the ruling that none of the Spratly features or the Scarborough Shoal generate an EEZ is seen as devastating to Chinese claims, it also creates a large area of high seas in the middle of the South China Sea beyond national jurisdiction by any of the clamant states. This new area will now be amenable to a joint regional claim involving China and other claimant states to its resources as a regional common heritage, thus avoiding competing individual claims and creating an innovative pathway to cooperation (Valencia). The ruling might also serve China’s global interests. The USA, France and Japan currently claim some of their features in the Pacific Ocean as ‘islands’ entitled to EEZs. But under the award’s narrow interpretation of ‘island’ as defined by UNCLOS, the status of these features would be reduced from ‘island’ to ‘rock’, and thus would no longer be entitled to exclusive economic rights (Rosen).
Unfortunately, to think in such creative and forward-looking terms would require a radical change of mindset among the Chinese leadership that is all but inconceivable for the foreseeable future. Moreover, to follow these suggestions would mean the de facto acceptance of the ruling, which is anathema to Beijing. For a long time to come, China will instead be preoccupied with preventing and reversing losses to its interests in the South China Sea that it believes have accumulated over the past several decades as a result of South-East Asian claimant states’ actions, rather than with making new economic or strategic gains in the high seas.
However, one should not lose sight of the fact that the many paradoxes that the arbitration ruling presents are not all bad for regional politics. Perhaps the biggest—and also most paradoxical—benefit of the ruling is that all the major actors involved—China, the Philippines, ASEAN and the USA—viewed it as presenting an opportunity for de-escalating regional tensions rather than as a flashpoint precipitating a new crisis. This was the fundamental reason why tension in the South China Sea quietened down in the second half of 2016. China’s relationships with three South-East Asian claimant states—the Philippines, Malaysia and Vietnam—all improved during this period. In this sense, the ruling represented a turning point in regional politics over the past three years, even though it has made negotiation of the disputes harder than it was before January 2013 when the Philippines initiated the arbitration process.
Moving forward, the South China Sea in the wake of the arbitration ruling still faces significant uncertainties. The first uncertainty is the strength of China’s commitment to the institutional approach represented by the implementation of the Declaration on the Conduct of Parties in the South China Sea and the negotiation of the code of conduct. China’s new readiness to negotiate is welcome, especially compared with the highly destabilising alternative of letting a military solution dominate its South China Sea policy. The Ministry of Foreign Affairs genuinely wants to sustain the momentum of the de-escalation of regional tensions and the rise of a cooperative spirit among the major countries generated in late 2016. But the hard-power dimension of China’s policy, promoted by the military and law-enforcement establishments, is likely to continue as well, as Beijing has started to install both civilian and military facilities on the seven islands constructed in the Spratlys. If China perceives a major provocation from regional states or the USA in the future, the institutional approach may again be compromised by the assertion of hard power.
The second major uncertainty is US policy from a new Republican administration under the unpredictable command of Donald Trump after January 2017. The Obama administration, despite repeated urging from the Pacific Command, was reluctant to forcefully challenge China at sea. A new Trump administration, under the banner of ‘America First’ and guided by the traditional Republican belief in US supremacy, is likely not only to continue the Obama administration’s Freedom of Navigation Operations, but possibly also to make them more robust and provocative, in addition to further strengthening US military presence in the region. The South China Sea has already become a geopolitical battleground for US–China strategic competition. Periodic tensions in the region are going to become a defining feature of Asia-Pacific politics in the years to come.
Conclusion
Many international legal experts believe that the Philippines v. China arbitration award represents a game changer for South China Sea dispute settlements because the award has brought a breathtaking and much-needed legal clarity to the complex disputes. If China could accept the verdict, the South China Sea would be well on its way to a rules-based maritime order. This argument makes eminent sense from a purely legal point of view. But at the level of political reality, it is wishful thinking to expect China to accommodate and accept the arbitration ruling anytime soon—if ever. Yet China’s defiance of the arbitration ruling does not necessarily mean more tensions and disputes in the region. Beijing has not pushed back against the ruling by reclaiming the Scarborough Shoal or declaring an air defence identification zone over the South China Sea.
Paradoxically, China—and the Philippines, ASEAN and the USA—decided to turn the ruling into an opportunity to lower tensions and restart negotiations. Although China has continued to strengthen its strategic control over positions in the South China Sea by beginning regular air patrols and building further military facilities over the new islands, it has not let a military approach dominate its policy. Diplomacy still takes centre stage. And the immediate responses from the Philippines, ASEAN and the USA have been more or less measured and moderate. This is, then, the biggest immediate benefit that the arbitration ruling has brought to regional politics—an opportunity for recalibrating policies that might lead to a turning point in South China Sea disputes for good.
But one cannot be too sanguine. Although the ruling presents an important political opportunity for policy rethinking for the actors involved, it has also contributed to a hardening of China’s claims. The sweeping nature of the ruling also makes it hard for the Philippines government to make meaningful concessions to China, thus presenting new difficulties for negotiation. Although China’s new readiness to negotiate, including its pledge to reinvigorate the implementation of the 2002 Declaration and to expedite the negotiation of the code of conduct, is welcome, the overall impact of the three-and-a-half-year-long arbitration is likely to create a deadlock in negotiations in the near future. Paradoxically, this may raise the importance of political and power-centred approaches to regional dispute settlements, as the legal approach embodied by arbitration continues to meet Chinese defiance.