Throughout 2010 and into 2011, disputes in the South China Sea were at the forefront of regional tensions involving China, the United States, and neighboring countries. The focal point of such tensions was the 2010 Association of Southeast Asian Nations (ASEAN) Regional Forum where the United States along with ASEAN countries confronted China over its “assertive” behavior in the South China Sea. This episode demonstrated clearly the troubled situation in the South China Sea and the potential for conflict in East Asia. Robert D. Kaplan, writing on how the issue will be a major challenge for the future, states that “Just as German soil constituted the military front line of the Cold War, the waters of the South China Sea may constitute the military front line of the coming decades.” (Kaplan 2011)

Tensions though soon eased toward the end of 2010 and the mood at the 2011 ASEAN Regional Forum meeting was markedly different. It was more conciliatory as an agreement was struck between China and ASEAN countries to resolve their disputes. Even with tensions mounting again between China and Vietnam over the South China Sea during May and June of 2011, the two sides eventually came to an agreement to resolve differences.

What can be understood from these two divergent approaches by Beijing to the South China Sea issue? It is expected that from 2012, China will approach the South China Sea issue through a mixture of assertive and conciliatory approaches. With the emergence of a new leadership in the Communist Party, new policies will be framed and developed. In recognizing the limits of assertive policies, while also not wishing to ease too much on their territorial claims, the new leadership will pursue a policy that fuses the divergent approaches of 2010 and 2011. Crucial to interpreting the new policy for the future, this U.S.-China Relations Series Brief attempts to understand why China’s position shifted over the South China Sea issue. That is why Beijing went from an “assertive” stance to a more restrained or “constructive” one, seeking dialogue rather than further tensions. Power-transition theory can help to understand the direction in which China is going in terms of the limits rising powers face. This Brief shows that because of the way Beijing characterizes the dispute and its naval strategy, a more ambiguous approach can be expected when compared to other areas of dispute, such as Taiwan or even the Diaoyu/Senkaku Islands.

Conflicting Interests in the South China Sea

China shares its land border with 14 countries yet has relatively few ongoing territorial disputes with them. By contrast, China has multiple maritime disputes with its neighbors in the region, particularly in the South China Sea. The Spratly Islands are at the heart of this dispute. While China claims all the islands, it is disputed by Malaysia, Philippines, and Vietnam. Furthermore, to the north of the Spratlys are the Paracel Islands that China seized from Vietnam in 1974 and are hotly contested. Along with the island disputes, Beijing claims much of the South China Sea as its Economic Exclusive Zone (EEZ). Based on historical and cultural arguments, China believes its claims to the South China Sea are solid. Although this dispute involves multiple countries, Beijing has refused to deal with the matter multilaterally. Rather the Chinese government prefers to resolve the dispute bilaterally and without the involvement of outside parties.

The United States has a number of concerns about the South China Sea dispute, not just for peace and stability in the region, but for the freedom of navigation in one of the world’s busiest and strategically-important waterways. It would seem that from 2010 the United States increased pressure on China over the South China Sea issue when it appeared to U.S. officials that Beijing was taking on a more assertive approach. (Pomfert 2010) In the past, China and the United States have had a number of conflicts over the South China Sea issue which has mainly related to the definition of the EEZ. For example, Washington challenges Beijing’s view that military vessels passing through its EEZ must give notice and that surveillance activities are illegal. (Swaine and Fravel 2011, p11) This has led to some notable clashes over the years, such as the EP-3 spy plane incident in 2001 and USNS Impeccable incident in 2009 where Chinese fishing trawlers harassed a navy surveillance ship. The Impeccable incident shows how China has been using coercive diplomacy in this regard to get its message across. That message was for the United States to halt its surveillance activities in waters around China that were viewed as highly provocative. (Mastro 2011)

The more active policies by the United States toward the South China Sea issue can also be understood as part of its “return” to Asia approach under the Obama administration. As wars in Iraq and Afghanistan wind down, Washington is now shifting its focus back to East Asia, the region that it has identified as the most important for the twenty-first century. Some countries in the region have welcomed this reengagement, in particular Vietnam which has tried to internationalize the South China Sea dispute much to China’s opposition. The culmination of this was the ASEAN Regional Forum in July 2010. At that meeting Secretary of State Clinton took the lead in pressuring China over its assertive policy toward the South China Sea. (Landler 2010) At the meeting, Clinton stated that “the United States, like every nation, has a national interest in freedom of navigation, open access to Asia’s maritime commons, and respect for international law in the South China Sea.” Beijing interpreted this as U.S. intervention and characterized it as an “attack” on China. One year later, at the following ASEAN Regional Forum the mood was friendlier. China and ASEAN countries agreed on guidelines to implement the Declaration of Conduct, an agreement originally reached in 2002 that outlined measures to resolve the South China Sea dispute. Although a non-binding agreement, the move signaled a less “assertive” approach by China.

In some respects the issue of the South China Sea addresses the nature of China’s rise and power-transition theory in this regard provides us with an analytical framework. Power-transition theory tells us that a rising power will seek to challenge the established power as it become dissatisfied with the international system that it sees as favoring the hegemon. As a rising power in this regard, China would be expected to forcefully assert its claims in the South China Sea issue and seek to challenge the United States. However, its actions have been more restrained as it has sought dialogue and accommodation.

Is the South China Sea a “core interest”?

In order to understand China’s position, a close analysis is required of how the Chinese leadership characterizes the issue from the perspective of a “core interest.” Much has already been said about the importance of “core interests” in U.S.-China relations. Among the major issues in the bilateral relationship, Tibet, Taiwan, and human rights can be considered to be main areas of potential conflict. This is due to the way in which China has officially defined them as “core issues.” Vice-Minister of Foreign Affairs Dai Bingguo at the 2009 U.S.-China Strategic and Economic Dialogue stated three areas which constitute China’s core interests; its “basic system” and national security, sovereignty and territorial integrity, and economic and social sustained development. These points were further clarified in a recent white paper on China’s peaceful development. “Core interests” were defined as including “state sovereignty, national security, territorial integrity, and national unification, China’s political system established by the Constitution and overall social stability, and the basic safeguards for ensuring sustainable economic and social development.” This broadly covers the basic elements of China’s economic development and rise as well as the country’s own unity. Currently, only Taiwan, Tibet, Xinjiang, and human rights have been officially stated as a “core interest.” Beijing’s general approach to these issues has been a nonnegotiable stance, to the extent that it would even be willing to consider the use of force if seriously challenged. (Swaine 2011a) The question is then whether the South China Sea dispute is also regarded by Beijing as a “core interest.” So far, Beijing has not publically declared the South China Sea as a “core interest.” However, it was reported in early 2010 that China had indeed labeled it as a “core interest.” Secretary of State Clinton herself confirmed this in an interview when she recalled her meeting with Dai Bingguo, “when China first told us at a meeting of the Strategic and Economic Dialogue that they viewed the South China Sea as a core interest, I immediately responded and said we don’t agree with that.” From this statement we can see that the 2nd Strategic and Economic Dialogue was the moment in 2010 where both sides tough stance clashed over the issue. Clinton’s comments would seem clear that China regards this dispute as a “core interest.” However, China expert Michael Swaine persuasively argues that the South China Sea dispute is not a “core interest” and believes Beijing is in fact being intentionally ambiguous on defining the issue as a “core interest.” (Swaine and Fravel 2011, p10) The Dean of Peking University’s School of International Studies Wang Jisi, writing in Foreign Affairs, also believes that “apart from the issue of Taiwan…the Chinese government has never officially identified any single foreign policy issue as one of the country’s core interests.” (Wang 2011, p71) This can be supported when assessing Dai Bingguo’s remarks during the previously mentioned 2010 Strategic and Economic Dialogue where he referred specifically to Taiwan and Tibet as “core interests.” Certainly if a “core interest” is an issue that China is not willing to negotiate over then its behavior with regard to the South China Sea dispute is certainly not in line with its approach to other issues such as Taiwan or Tibet. In its statements, Beijing has consistently offered to negotiate, albeit bilaterally, with countries that it has a dispute with. And as mentioned before, China reached an agreement on facilitating guidelines to implement the Declaration on Conduct. While not legally-binding agreement, this demonstrates that China has been willing to reach some arrangement with its neighbors...(Continued)