Beyond Imposing Costs: Recalibrating U.S. Strategy in the South China Sea

Executive summary

This essay assesses how U.S. strategy in the South China Sea can be optimized to retain military superiority while addressing the risk of instability resulting from a clash with China.

Main argument

U.S. policy in the South China Sea has failed to fully address two problems: China's continuing buildup of military and paramilitary power in the region, and the risk of an incident at sea escalating into major conflict. The main alternative to current policy focuses on imposing political, economic, and military costs on China to deter further militarization of the region. However, this approach risks spoiling cooperation on risk-reduction measures while pushing Beijing toward even greater regional militarization. Instead of a fundamental revision, U.S. strategy should be recalibrated through sustained cooperation at a practical level, more finely tuned deterrence measures, and clearer and more consistent messaging. Nevertheless, U.S. options will continue to be constrained by the need for broader stability in Sino-U.S. relations as well as by China's inherent resolve. It will be up to the Trump administration to exert the political will necessary to refine U.S. strategy.

Policy implications

• • U.S. policymakers will have to balance the competing demands of improving communication during a crisis with Beijing and strengthening deterrence. The latter goal needs to be focused squarely on preventing Chinese military domination within the South China Sea and should consist of unilateral military enhancements, stronger partnerships with Japan and others, and progressively clear commitments to the Philippines.

• • A linchpin of effective strategy is delivering a consistent and clear message to Chinese interlocutors about U.S. intentions. Care should be taken to direct this message to the appropriate audience and avoid unnecessarily incendiary rhetoric.

The security situation in the South China Sea has been in flux since the July 2016 ruling of the Permanent Court of Arbitration that challenged China's extensive maritime claims. On the one hand, tensions between China and the Philippines have calmed due to President Rodrigo Duterte's diplomatic overtures to Beijing. On the other hand, China has continued to pursue aggressive military deployments and maneuvers in the region. This was reflected in revelations of Chinese military hardware being placed on reclaimed features in the Spratly Islands, as well as a Chinese naval ship's illegal seizure of an unmanned underwater vehicle belonging to the U.S. Navy. Those incidents underscored the failure of current U.S. policy to arrest two main problems: China's continuing buildup of military and paramilitary power, and the risk of a dangerous incident involving U.S. and Chinese forces escalating into a major conflict.

The Trump administration will have to consider how U.S. policy needs to be updated to address these problems. The dominant view proposed by U.S. foreign policy experts over the past few years has favored a more muscular, "cost-imposing" approach to China.¹ Analysts have identified a range of economic, diplomatic, and military tools that could be used to influence China's decision-making calculus, such as more frequent U.S. Navy freedom of navigation operations, greater publicity for assertive actions by Chinese ships, and sanctions on Chinese dredging companies.² One scholar even proposes abandoning traditional U.S. neutrality in South China Sea territorial disputes should Chinese military expansion in the region continue.³ Trump's pre-inaugural statements blasting China's land-reclamation activities and theft of the U.S. unmanned underwater vehicle suggest that he could accept many of these proposals.

The cost-imposing paradigm can be useful in thinking through the tools available to U.S. policymakers to shape China's choices. Yet overemphasizing costs, or implementing them haphazardly, could not only undermine existing mechanisms for managing crises but also give Chinese hardliners a useful rationale for supporting even greater militarization of the region. How, then, can U.S. strategy be optimized to reduce the risks of escalation while also countering China's military buildup? This essay argues for a recalibration of U...