Assessing the Risks of Conflict in the South China Sea

In exploring hidden risks to the international system, this issue has covered a variety of functional, regional, and theoretical topics; however, with U.S. foreign policy focus shifting to Asia, it is not surprising that many authors draw their attention to the South China Sea. Marvin Ott’s “Southeast Asia’s Strategic Landscape,” Charles Doran’s “Power Cycle Theory and the Ascendance of China,” Chris Ford’s “Soft on Soft Power,” and Ian Bremmer’s interview all touch in some way on potential conflict in the South (and East) China Seas. As Sino-Taiwanese relations warm following the January 2012 re-election of Taiwanese President Ma Ying-jeou, who has made strengthening ties with the mainland a priority of his administration, the South China Sea will become the preeminent focus of U.S.-China watchers who study potential military clashes between the two countries.

Given the shifting attention to the issue, the risk of conflict in the South China Sea is not particularly “hidden.” Indeed, over the last two years, the United States has paid increasing attention to the region, most evident by Secretary of State Hillary Clinton’s reassertion of U.S. interests there at the ASEAN ministerial meetings in Hanoi in July 2010¹ and President Obama’s emphasis of the same concerns at the November 2011 East Asia Summit.² The essential dynamics are well-covered by popular media and clearly understood from traditional theories of international relations: a rising power, China, competes with a status quo hegemon, the United States, for influence in a complicated multipolar regional context across a variety of military, diplomatic, and economic fronts. The South China Sea is particularly well-suited for such competition as, beyond its large economic and strategic importance as a global crossroads, it is a source of vast, untapped natural resources.

Though the overarching risk of tension in the South China Sea is not hidden, policymakers in Washington should be clear on the actual dangers posed by conflict as they begin to consider future U.S. competition with China in the region. By realistically assessing the situation and understanding the likely scope of the risk, the United States can better formulate its strategic response, which need not increase the risk of conflict—whether between China and the United States or other countries in the region—but instead can reduce it. As discussed in Ott’s piece, Secretary Clinton defined two U.S. requirements in her Hanoi remarks:

1. 1. Free and open access to sea lanes passing through the South China Sea; and

2. 2. Multilateral resolution of competing territorial claims according to the UN Convention on the Laws of the Sea.

From these requirements, we can infer the main risks identified by U.S. policymakers and, from there, determine a proportionate strategic response. While a full assessment of strategic options is beyond the scope of this note, the basic risks, simply stated, are a helpful starting point.³

Regarding Secretary Clinton’s first requirement, the risk of actual closure of the South China Sea remains remote, as instability in the region would affect the entire global economy, raising the price of various goods and commodities. According to some estimates, for example, as much as 50 percent of global oil tanker shipments pass through the South China Sea—that represents more than three times the tanker traffic through the Suez Canal and over five times the tanker traffic through the Panama Canal.⁴ It is in no country’s interest to see instability there, least of all China’s, given the central economic importance of Chinese exports originating from the country’s major southern ports and energy imports coming through the South China Sea (annual U.S. trade passing through the Sea amounts to $1.2 trillion).⁵ Invoking the language of nuclear deterrence theory, disruption in these sea lanes implies mutually assured economic destruction, and that possibility should moderate the behavior of all participants. Furthermore, with the United States continuing to operate from a position of naval strength (or at least managing a broader alliance that collectively balances China’s naval presence in...