Nationalism Looms Over South China Sea Disputes

Even if America, China and Southeast Asian countries want to mend disputes, there are major political obstacles.

The annual ministerial meeting of the ASEAN Regional Forum in Phnom Penh, Cambodia this week hosts a myriad economic and trade discussions but the real focus is on the growing security concerns in the South China Sea amid the backdrop of an increasingly testy relationship between China and the United States.

Officials in the region must figure out how to put the nationalist genie back in the bottle regarding the South China Sea disputes because it is preventing cooler heads from prevailing in resolving it.

A binding agreement governing conduct in the sea would be considered a very positive development but that will likely prove too difficult to achieve given the current climate and the emotions surrounding the issue.

Indeed, on the eve of the meetings, officials from the Association of Southeast Asian Nations convened and were said to be close to reaching an agreement with China on a “code of conduct” aimed at preventing disputes from escalating into conflict.

While the Chinese Foreign Ministry said that it was ready to discuss a code of conduct, it stressed that it views such an agreement not aimed at resolving the disputes but as a means to building “mutual trust and cooperation.” As such, any hopes for an agreement resolving the disputes or ratcheting down tensions should be tempered.

China is commonly blamed for fueling anger with its heavy handed approach to the issue but many regional governments are fanning the flames of nationalism.

In Hanoi, there were unprecedented anti-China demonstrations last Sunday over the Spratly and Paracel Islands, which is very rare in Vietnam. In Beijing, in a seemingly regular occurrence, angry crowds assemble outside foreign embassies whenever disputes flare up over the South China Sea. While in May, protests in the Philippines related to the Scarborough Shoal row were widespread.

China has fed into regional fears and provided nationalists in other countries plenty to fret about though. Last month, its Defense Ministry announced that it would be deploying combat ready patrols in the waters around the disputed islands in the waters and then appointed a known hawkish commander to lead the fleet. 

On the same day that Vietnam’s National Assembly reaffirmed its claim to the Spratly and Paracel Islands, China upgraded the status of Sansha to a prefecture level city, something vehemently opposed to by Vietnam and the Philippines. A Chinese official explained that the move will help China strengthen its claims over the entire sea.

The competing claims are made even more complicated because there are believed to be vast oil deposits in the area. The United States Energy Information Agency estimates the reserves to worth up to 213 billion barrels. If true, that would be more oil than everywhere except in Saudi Arabia and Venezuela.

China’s next generation of leadership, taking office between this year and next, will have difficulty settling the disputes. They need to avoid appearing weak and relinquishing sovereignty in the sea after the government previously claimed the entire sea as its domain. It would also be risky for the incoming leaders, during a year of transition, to even negotiate such a hot button issue.

Finally, it would be constitute a change in Chinese policy to endorse a multilateral framework for resolving the competing claims in the sea since it has historically preferred a bilateral setting for negotiations due in part from the leverage it has over smaller neighbors.

In light of the announced Asian “pivot” in 2011 by the Obama Administration, Sino-American relations have also come under pressure, causing allied Asian nations to be increasingly concerned that the rebalancing policy has been too focused on the military while ignoring economic issues. As such, the United States have begun to talk up and focus on political and economic reforms in the region.

Secretary of State Hilary Clinton, in Mongolia earlier this week at an international forum on democracy, while not mentioning China specifically, made a point of emphasizing the importance of political reforms in order for economic growth to be sustainable over the long term.

American support of the Trans Pacific Partnership, which seeks to address issues like intellectual property rights, the role of state-owned enterprises and environmental concerns, has for the most part not been at the forefront of trade agreements involving China however.

China, as the region’s major economy and biggest trade partner to most Southeast Asian nations, looms over these regional meetings both as the driver of economic growth and a source of worry for the coming years.

Southeast Asian nations do not want to be put into a position of having to choose between China and the United States and therefore are in a delicate balancing act. They see relations with both powers as vital for their continued economic growth and for peace in East Asia.

Importantly, the two great powers also see cordial relations as in their interests. The problem is that events involving nationalism have a tendency to ratchet out of control no matter how much the political leaders would like to see it differently.