Maritime Energy Resources in Asia: Energy and Geopolitics

Asia’s Changing Balance of Military Power: Implications for the South China Sea Dispute

149 the national bureau of asian research nbr special report #35 | december 2011 IAN STOREY is a Fellow at the Institute of Southeast Asian Studies (ISEAS), Singapore. He specializes in Asian security issues with a focus on Southeast Asia. His research interests include Southeast Asia’s relations with China and the United States, maritime security, and China’s foreign and defense policies. He can be reached at . Asia’s Changing Balance of Military Power: Implications for the South China Sea Dispute Ian Storey EXECUTIVE SUMMARY This essay examines the impact of Asia’s shifting balance of military power on the South China Sea dispute and how the implementation of confidence-building measures (CBM) could reduce the risk of miscalculation and conflict. MAIN ARGUMENT Tensions over contested territorial and maritime boundary claims in the South China Sea have been rising since 2007 due to a combination of factors, including regional military modernization programs. In particular, the rapid expansion of the Chinese navy has strengthened Beijing’s hand in the dispute, put Southeast Asian claimants at a disadvantage, and called into question the sustainability of the status quo. Existing dispute management mechanisms—specifically the 2002 ASEAN-China Declaration on the Conduct of Parties in the South China Sea (DoC)—have been ineffective in mitigating rising tensions. If further instability is to be avoided, ASEAN and China must pursue the concrete implementation of CBMs, including those identified in the DoC. POLICY IMPLICATIONS The DoC provides a convenient framework to operationalize cooperative CBMs in the South China Sea, including: • increased dialogue between Southeast Asian countries and China at their annual defense and security discussions • advanced notification of military exercises and naval patrols in the South China Sea • establishment of telephone hotlines for use in crisis situations • negotiation of incidents-at-sea agreements to avoid naval skirmishes Building trust and confidence among the claimants will also require greater transparency regarding regional states’ military modernization programs. 151 ASIA’S CHANGING BALANCE OF MILITARY POWER u STOREY T he South China Sea is among the world’s most important ocean spaces. Vital arteries of global trade flow through the 1.2 million square mile body of water and link the vast expanses of the Pacific and Indian oceans and hence the continents of Asia, North America, and Europe. These sea lines of communication (SLOC) help bind the economies of the member-states of the Association of Southeast Asian Nations (ASEAN) and serve as key energy supply conduits for the economic powerhouses of Northeast Asia. The South China Sea is also rich in fisheries and provides an important source of protein for millions of people, while the seabed is reputed to hold valuable reserves of energy deposits. At the strategic level, regional and international navies regard the sea as a critical theater of operations. The South China Sea connects the countries of Asia—and Asia with the rest of the world—and is an indispensable enabler of global economic growth. However, contested sovereignty and maritime boundary claims among China, Taiwan, Vietnam, the Philippines, Malaysia, and Brunei over a host of small islands and reefs and their adjacent waters, have been, and continue to be, a source of interstate tensions. Conflicting claims over ownership of the islands, especially the Paracel and Spratly Islands, have existed since the end of World War II but only rose to prominence in the post–Cold War era as the superpower presence receded and the littoral states moved to protect their maritime interests by strengthening their jurisdictional claims and augmenting air and naval power. Since the 1990s, tensions in the South China Sea have been cyclical; since 2007 tensions have been on the upswing. Several reasons explain this trend: continued demand for energy resources, rising nationalism, disputes over fishing grounds, advances in military capabilities, and attempts by the various claimants to bolster their sovereignty claims through domestic legislation, the establishment of administrative bodies, and submissions to international legal regimes. Rising tensions in the South China Sea have underscored the limited effectiveness of existing dispute management mechanisms, specifically the 2002 ASEAN-China Declaration on the Conduct of Parties in the South China Sea (DoC).1 The DoC is essentially an attempt at preventive diplomacy and was conceived to freeze the status quo in terms of prohibiting the “habitation” of unoccupied features, as well as to promote confidence-building measures (CBM) among the claimants (except Taiwan, which was not invited to sign). The DoC...