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The South China Sea Dispute: Evaluating the Drivers of Chinese

Policy in the Dispute Matthew Popkin

Thesis Advisors: Markus Jachtenfuchs and Thanh-Dam Truong

Hertie School of Governance and the Maxwell School Atlantis Programme

Master’s of Public Policy and International Relations

Popkin

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Table of Contents

Table of Contents ..................................................................................................................... 2

Acknowledgements ................................................................................................................. 3

Executive Summary ................................................................................................................ 4

Acronyms ................................................................................................................................... 5

I. Defining the Boundaries of Research ............................................................................ 6 Research questions and methodology: ...................................................................................... 9 The Research Question: ................................................................................................................................ 9 Research Methodology and Structure .................................................................................................... 9

II. The Rise of China and the Quest for a new approach in the South China Sea: Insights from Existing Literature. ................................................................................... 12

III. Energy Security and the South China Sea: Internal Doubt and External Debate. ..................................................................................................................................... 18 China’s Energy Dilemma: Why is China stirring the pot in the South China Sea? ..... 18 Going Global: Evolution of China’s International Energy Policy .................................... 21 The South China Sea in China’s Energy Policy: An Analysis ............................................. 25

IV. Understanding China’s Maritime Assertiveness in the South China Sea: The Century of Humiliation and the Reclaiming of China’s Civilizational Standing. .................................................................................................................................................... 30 The Century of Humiliation, Chinese Culture and the Civilizational-‐State. ................ 31 Insecurity and Strategy in the South China Sea: Exploring the Relationship between history, culture and behavior. .................................................................................................... 37

V. Conclusion: Understanding the Primary Drivers of China’s Maritime Claims in the South China Sea. ........................................................................................................ 45

References .............................................................................................................................. 50

Map of the South China Sea Dispute ............................................................................... 57

Energy and Trade Routes in the South China Sea ...................................................... 58

Popkin

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Acknowledgements

I would like to express my gratitude to my two supervisors Dr. Markus

Jachtenfuchs and Dr. Thanh-Dam Truong, whose expertise, understanding, patience and

support has proven invaluable in writing this. I would like to especially recognize Dr.

Truong for her diligent review, regional expertise and contribution(s) of time, effort and

patience as I have worked to complete this thesis. Without her care and support, I would

have been lost in this endeavor. I would like to thank my Professors at the Maxwell

School and Hertie School of Governance for helping me shape my research, academic

focus and assistance they have provided me over my course of time at both institutions.

A very special thanks goes out to my family, whose support during my life has

enabled me to be here. I thank my family with providing me with the inspiration to

pursue my dream and providing me with impetus to work on a challenging subject and to

thrive to learn. I also thank my friends and colleagues whose support and care have

aided me in my studies.

In conclusion, I would like to recognize the dedicated body of scholars whose

research, publication(s) and dedication in the field of China Studies made my research

possible. Furthermore, I thank Syracuse University, the Hertie School of Governance

and the International Institute of Social Studies for supporting my research and providing

a home for me these past few years.

Popkin

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Executive Summary The primary purpose of this study is to explore the causal determinants of China’s recent behavior in the South China Sea. The South China Sea is subject to a long-standing series of sovereignty and territorial disputes between Southeast Asian nations. Furthermore, the discovery of hydrocarbon resources is inciting a regional competition for control over exploration and development of these resources. As China’s claim(s) are the largest and most diverse, determining the rationale for their assertive behavior could provide an insight into attaining a peaceful resolution to the disputes. The discussion within is centered on the intersection of culture and history to ascertain causal linkages between their material needs and ideological insecurities. This study presents the boundaries of existing research, the rationale underpinning its orientation and an approach that deals with the mutual interplay between objective and subjective domains. Building upon existing approaches to maritime disputes in the South China Sea, this paper will explore China’s energy situation and its role in determining Chinese behavior. In addition it aims to provide an understanding of China’s maritime assertiveness vis-à-vis the cultural, historical and ideological realms. The emphasis is to understand specific areas of contention where China is pursuing unilateral action in asserting their claims. Beyond summarizing key findings, the conclusion will also offer some ideas on the prospects for regional cooperation, conflict resolution and the leadership role China envisions for itself in the South China Sea. China’s economic transformation of the past several decades has affected their perception of territory and in turn is shaping their behavior in the South China Sea. A growing gap between their domestic production of oil and imports coupled with rising instability in international energy markets is driving Beijing to seek increase its exploration and production of oil and natural gas in contested waters of the South China Sea. Efforts at coming to a diplomatic resolution to the dispute are further harmed by China’s adamant refusal to pursue multilateral negotiations with smaller rival nations. Furthermore, China’s historical insecurities are shaping its emerging regional position and as such are leading it seek regional hegemony with Chinese characteristics.

Popkin

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Acronyms

ASEAN Association of Southeast Asian Nations

ADIZ Air Defense Identification Zone

BBL Billion Barrel. Measure for Oil

CCP Chinese Communist Party

CNOOC China National Offshore Oil Corporation

CNPC China National Petroleum Corporation

CoC Code of Conduct

EEZ Exclusive Economic Zone

EIA Energy Information Administration (US)

GDP Gross Domestic Product

IEA International Energy Agency

IOC International Oil Company

ITLS International Tribunal for the Law of the Sea

LOS Law of the Sea

MBD Million Barrels/Day

NOC National Oil Company

PLAN People’s Liberation Army Navy

SCS South China Sea

SOE State Owned Enterprises

TCF Trillion Cubic Feet. Measure for Natural Gas

UNCLOS United Nations Convention on the Law of the Sea

USGS United States Geological Survey

Chapter 1 Introduction Popkin

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I. Defining the Boundaries of Research

The South China Sea is a semi-enclosed and ecologically diverse body of water

that has provided sustenance and avenues of trade for its neighbors. With the rise of

globalization in the 20th century, its role in global commerce has magnified exponentially

as it is a geopolitically critical body of water to both the regional and global economy. Its

position nested between small and large Asian economies that have experienced in the

past several decades’ immense economic growth continues to underscore the importance

of maintaining freedom of navigation and minimizing the potential for regional

instability. Due to its history and strategic location, the South China Sea is also subject to

a long-standing series of sovereignty and territorial disputes that have challenged the

regional order. Complicating the nature of the existing disputes has been the discovery of

hydrocarbon resources in the form of oil and natural gas. Competition for control over

these resources has driven regional claimants to take measures to control development of

potentially new “indigenous”1 hydrocarbon resources that can help sustain and expand

their economic development. While energy remains an important factor to Asian

economies that are primarily dependent on the sea as a corridor for trade in energy and

resources, other tertiary factors have given way to increased competition for control over

these disputed waters and there potential resources.

As competition in the South China Sea escalates, it has led scholars to focus on

the causes underlining the escalation of the disputes. In part, escalation has been fueled

by the discovery of hydrocarbon resources, the rise of nationalism and behavioral

uncertainty on behalf of regional claimants. The primary claimant, China, holds a U-

shaped line cover nearly the entirety of the South China Sea. The line is made up a

number of dashes that shifts in time from eleven in 1947, to nine in 1953 and now ten,

reflecting legal ambiguity in regard of the sources of the claim2. Competing claimant

nations that include Vietnam, the Philippines, Brunei, Malaysia adhere to international

1 Utilization of the term “indigenous” in this study refers directly to China’s perceived desire to consider any material resource, especially hydrocarbon, as part of their domestic oil and gas supply. 2 (Malik, Historical Fiction: China's South China Sea Claims, 2013)


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norms, especially the Law of the Sea Convention (LOS)3. The facilitation of lasting and

long-term measures towards dispute resolution remains elusive, and encounters between

primary claimants4 have recently become increasingly terse. This in part is due to a

common perception that Chinese behavior in the SCS is becoming increasingly assertive,

and whose umbrella claim to the SCS has managed to incite furor among rival claimants.

This perception of assertiveness has not been mitigated in part due to long standing

regional rivalries, but also due to uncertainty about China’s intentions in the region. At

this juncture, the focus of this paper is not to provide an in-depth study of the nature of

the dispute itself, but on assessing the behavior of the primary claimant. In light of

indiscernible Chinese behavior, the aim is to assess several primary determinants of

Chinese behavior; the intent being to unveil the ethos behind China’s claims and the

evolving nature of Chinese assertiveness in the South China Sea.

At one level, China's assertiveness is inseparable from the transformation of East

Asia that is experiencing tremendous economic growth. Asia’s economic growth

measured by GDP will rise by 6.2% in 2014 and is predicted to rise by 6.4% in 2015.5

China has experienced a slight decline in its economic growth throughout this period,

transitioning from growth of 7.7% in 2013 to an expected growth of 7.4% in 2015.6

Despite this decline, China’s impressive economic growth averaging 10% since 1978 has

increased its importance and role in the region. To a certain extent, Asia’s economy is

highly interdependent and it is important to consider China’s role in driving the global

and regional economy. At the same time, scholars and policymakers question China’s

behavior in the region, which at times is consistent with its stated policies, but is

increasingly, diverging from its past policies of peaceful engagement and economic

cooperation towards more assertive and less consistent policies of engagement. A

3Taiwan holds a similar claim to China, based on the line drawn up under the Chiang-Kai-shek government in 1947; but because it is formally a Province of the PRC it is not considered as an independent claimant. Indonesia has declared itself not a claimant under the PRC’s U-Shape line since the line does not include Indonesia’s Natuna Islands. However since early 2014 the country is facing the reality of China’s incremental claims of the water surrounding these islands as its own territorial waters. 4 China, Vietnam and the Philippines 5 (Asian Development Bank, 2014) 6 ibid.


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puzzling question is what role does China envisage for itself in regional politics in the

coming century and how does this manifest itself in the maritime realm.

In line with the above concern, this paper explores key dynamics that are affecting

China’s behavior in the South China Sea. While considering the implications of China’s

regional ambition through the lens of hegemonic power, the paper will not directly assess

China’s regional aims vis-à-vis discourses on great power behavior, be it hegemonic or

post-imperialist. Rather, it follows Ikenberry and Kupchan's idea of the leadership role as

a position in which a state uses diplomacy, cultural learning7and a shared vision.8

Whether China’s stated goal to promote development and peace in cooperation with its

neighbors9 will be realized to this effect remain to be seen given the recent challenges

disputes on maritime boundaries in the South China Sea, about which General Fang

Fenghui10 stated

“I want to underscore, finally, that for the territory, which has passed down by our

ancestors into the hands of our generation, we cannot afford to lose an inch”. Though

recent Chinese behavior in the South China Sea would position China as a “coercive

hegemon” who is willing to use all means of power or influence, short of military

intervention, to achieve it’s stated or unstated objectives11, this paper aims to reveal the

underlying factors driving said behavior, and to a limited extent assess if this behavior is

one of asserting regional hegemony through leadership or coercion.

7 The establishment of Confucian Institutes worldwide, in affiliation with the Chinese Ministry of Education, whose mission statement is “Learning Chinese, Experiencing Culture”, aims to expand towards a “harmonious world.” http://www.chinesecio.com/index.php 8 (Destradi, 2010) 9 (Qingguo, 2006), statement by Jiang Zemin expressed at the 16th national representative congress of the CCP. 10 (Johnson, 2014) 11 (Destradi, 2010)


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Research questions and methodology:

The Research Question:

1. What are the key determinants behind China’s envisaged leadership position in

the South China Sea?

2. What role does China’s perception in the area of its historical “legacy” and the

“century of humiliation” plays in its behavior in this area and the likely

consequences for its aspiration for a leadership role?

Research Methodology and Structure

This paper will draw primarily from secondary literature using a chronological,

cross-disciplinary approach that will look at prevailing articles in international relations,

history and cultural studies to attempt to delineate and provide substantive analysis of the

material and ideological factors. There are several areas in the main body where primary

sources will be utilized. In assessing China’s energy situation, information12 will be

drawn from multinational energy companies including Chinese National Oil companies,

energy information agencies (EIA, IEA), as well as government documents written in

both English and Chinese. The use of figures and maps depicting the claims in the South

China Sea will be drawn, when applicable, from internationally recognized sources,

except by necessity.13 The selection of sources of research for this paper are intended to

draw from multiple disciplines, but focus primarily on China, its situation as it pertains to

the discourses under discussion and in reference to normative international law as it

pertains to maritime law in the fields of sovereignty and territorial boundaries.

In the field of China studies, it is difficult to provide an entirely objective

perspective, and there are multiple instances where I may be unable to draw upon

12 Data, Figures, Maps, Charts, Projections. 13 For example, if the motive is to demonstrate China’s regional claim, Chinese sources are a typically better resource for presenting the Chinese position on the South China Sea.


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information that is entirely accurate.14 Potential bias that are to be expected can come

from academic journals, think tanks and media sources that contain objective statements

in favor of their respective nation, and I intend to assess the outlined question utilizing a

minimalist approach and will address potential disparities as the paper progresses. As

mentioned in the introduction, China’s stated policies do not always correlate with their

recorded behaviors. Whether in ascertaining particular foreign policy, energy policies or

the behavior of the CCP, recognition of the changing nature of China’s regional and

international behavior must be considered, and as such, any potential conclusions that are

made within this thesis are the opinion of this author, and due to the evolving nature of

Chinese policy, subject to change.

The primary discourse will be formulated under the assumption that China is

undergoing a transitional change in its regional relations caused by perceived insecurities

in two distinct areas. The first and primary area surrounds an assessment of China’s

material interests that will assess their energy situation and the evolution of their energy

policy in the South China Sea. While China holds significant interests in expanding

access to maritime resources, especially the continued development of Chinese fisheries

in the SCS, these resources play a considerably smaller role in determining existing

policy. The second area surrounds an assessment of China’s ideological drivers and will

include an assessment of historical implications of the “century of humiliation” and how

it plays a role in their perception of territory. In addition, the discussion will be centered

on the intersection of culture and history to ascertain causal linkages between the material

and ideological domains. One of the critical functions of this paper is to address the role

culture plays in determining Chinese behavior; by drawing from China’s notions on its

own “imperial legacy” and “middle kingdom” status the paper shows how ideas about the

material, ideological and cultural domains interact and contribute to the shaping of

Chinese policy in the SCS. This could provide a more adaptive understanding of the key

differences between its perceived and actual behavior.

14 Data, especially in the field of energy studies, is rarely conclusive, and the South China Sea remains a vastly underexplored region due to the nature and history of the territorial disputes.


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Chapter 1 presents the boundaries of this research and the rationale underpinning

its orientation and how an approach with deals with the mutual interplay between the

objective and subjective domain, i.e. China’s energy demands and the construction of its

identity as the re-emergence of an ancient civilization may provide a better understanding

of China’s regional assertion and the implications for interpreting SCS disputes. Based on

a review of selected existing literature on the South China Sea and the rise of China the

second chapter will provide a concise assessment of existing approaches used to analyze

and interpret the related maritime disputes concerning especially energy and SLOCs. The

third chapter provides a snapshot of China’s energy situation and the debate on its role in

the South China Sea dispute. The fourth chapter aims to provide an understanding of

China’s maritime assertiveness vis-à-vis in the realm of history, culture and ideology.

This chapter will emphasize areas of contention where China has pursued unilateral

action in asserting their claim and the relationship to the research focus of this study. The

concluding chapter presents the findings of the two predominant discourses, behavioral

and energy that this author has identified as key determinants of Chinese behavior.

Beyond summarizing key findings, it will also offer some ideas on the prospects for

regional cooperation, conflict resolution and the leadership role China envisions for itself

in the South China Sea.

Chapter 2 Literature Review Popkin

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II. The Rise of China and the Quest for a new approach in the South China Sea:

Insights from Existing Literature.

Renewed tensions in the South China Sea have ignited the interest of scholars and

policymakers alike in the past several years. In turn this has led to the formation of a

series of discourses and proposed solutions, which integrate cross-disciplinary insights

surrounding the role of energy, sovereignty, regional security mechanisms and the role of

individual claimants. This review of prevailing discourses on the SCS will first focus on

the dispute in international law and maritime disputes taking into consideration the claims

of China, Vietnam and the Philippines15. The focus will then address current approaches

towards conflict resolution in the region. Within this area, emphasis will be placed on

factors that are believed to be inciting a rise in regional tensions, and address pertinent

gaps in understanding the motives of the largest claimant, China. Furthermore, existing

discourses on the SCS dispute have increasingly turned to a policy centric perspective

that provides a cursory glimpse at a larger problem, omitting critical understanding of

history, domestic politics, economics and cultural factors that may be driving the rise of

tensions in the SCS.

The primary debate under contention is the interpretation and application of the

rules of international law as it applies to maritime jurisdiction. To this extent, the United

Nations has held since its inception several conferences that led to the formation of the

United Nations Convention on the Law of the Sea (UNCLOS).16 UNCLOS addressed

existing gaps in international law, providing clarification over what a coastal nation could

claim, extending the EEZ17 to 12nm in addition to allowing states “sovereign” rights of

exploration and exploitation of maritime and sea-bed resources to up to 200 nm.

(Townsend-Gault, 1998) There is dearth of literature that discusses in particular the

nature of UNCLOS, and its applicability to existing disputes in the SCS, but herein the

discussion is not aimed at addressing the specific nature of claims in the SCS. It is

15 Noted Earlier, the “Primary” claimants to the South China Sea. These three parties have the most pronounced claims and have engaged in skirmishes and/or minor conflicts pertaining to their relative claim(s). 16 (Guoxing, 1998)(Hong, 2013)(Townsend-Gault, 1998)(Dean, 1960) 17 Also considered almost exclusive maritime jurisdiction.


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necessary to discuss the history of the SCS dispute. While UNCLOS codified the notion

of a 12 nm EEZ, of the claimant nations, China, through its “Declaration on China’s

territorial sea” in 1958 claimed a 12nm EEZ; this declaration was separate from the 1958

Geneva Convention on LOS.18 China extended this declaration to cover the “islands of

the South China Sea” as part of its initial “nine-dash” claim first established by the

Nationalist Chinese government in 1947 and subsequently supported by the PRC in

1949.19 Concurrent claims were made by both Vietnam and the Philippines at different

times over control of geographic features.20 The Philippines, first claimed in 1951,

following the renunciation by Japan of its sovereignty in the SCS under the San Francisco

Treaty, but its first “official government claim” was made in 1971 and covered an

extensive, and overlapping portion of the Spratly Island, in direct contention with China’s

nine-dash claim.21 Following the San Francisco treaty, South Vietnam (Republic of

Vietnam) declared sovereignty over the Paracel and Spratley islands in 1956.22 North

Vietnam (Democratic Republic of Vietnam) initially accepted China’s claim in 195823,

but after 1975, when Vietnam was unified under the name “the Socialist Republic of

Vietnam, the government asserted its own claim that extended its sovereignty and

territorial claims to both the Paracel and Spratly Islands, in contention with both China

and the Philippines.24

The nature of the disputes under international law have been contentious and there

is a wide debate over the applicability of UNCLOS to the SCS dispute, as both China and

Vietnam, also utilize historical claim(s) to the region.25 According to Ji Guoxing, China

has maintained “administrative control” over the island chains and can meet the

18 (Cheng, 1969) 19 (Hong, 2013) 20 Spratly, Paracel Island Chains are cited by most scholars and claimants. 21 (Nguyen, 2006) 22 The San Francisco Treaty signaled the official end of World War 2. In addition it was intended on establishing the notion of institutional norms, a regional security infrastructure and reconcile international law as it applied to territory. The “San Francisco System,” is still criticized for its inability to reconcile historical animosities that resulted from Japanese “imperialism” prior to the treaty. 23 South Vietnamese Premier Pham Van Dong. (Hong, 2013) 24 (Hong, 2013)(Nguyen, 2006) 25 (Cheng, 1969)


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definition of “acquisition by discovery” under international law, though the author fails to

specify which international law.26 According to Nguyen, the codification of the LOS is

particularly challenging due to the overlapping nature of the claims and how UNCLOS

codifies the notion of both continental shelf and EEZ’s of claimant nations. At the same

time UNCLOS is impotent due to its political nature, and cannot “itself” be applied to

solve existing territorial disputes, due to what Scott specifies as “lack of binding

enforcement features”.27 At the same time, the International Tribunal on the Law of the

Seas (ITLS) has seen attempts at bringing a conclusion to the disputes through mediation,

with the Philippines seen trying to utilize the LOS vis-à-vis its overlapping claim with

China. The Chinese position, made clear in an August 2006 statutory declaration to the

UN Secretariat that “it would not accept any international court or arbitration in disputes

over sea delimitation, territorial disputes and military activities in the SCS.”28 Despite

the unwillingness of claimants to directly address and provide a resolution to these

disputes, there has been a lot of efforts made to establish means of conflict resolution and

establishing a binding code of conduct for behavior of claimants in the SCS. The

motivation behind the disputes and reaction also calls into question the behavior of the

region’s largest nation, and claimant, China, whose economic and military growth

parallels their growing position in international and regional politics. At the time, the

emphasis by scholars is on the importance of UNCLOS and international law to the

dispute, and how “China” must be willing to work within its contexts to resolve the long-

standing disputes. This belies that China is the only party to the dispute, and that the

action(s) of others, be them claimants or nations with a pronounced interest in

maintaining either international law, or freedom of navigation, but for the purposes of

this paper, the majority of literature that discusses the South China Sea dispute as it

pertains to United States policy or its objectives in the Asia-Pacific, are omitted.

Existing discourses on conflict resolution, cooperation and regionalism in the SCS

are focused in several areas. The regionalism discourse has primarily focused on the role

26 (Guoxing, 1998) 27 (Scott, 2012) 28 ibid.


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of ASEAN29, and its perception as a valid regional mechanism that could potentially be

used to reduce or solve existing tensions in the SCS30. To this extent, there are two

primary debates within the regionalism discourse. The first debate centers on

establishing an actual “binding” code of conduct that would build upon the 2002 ASEAN

Code of Conduct of Parties in the South China Sea31 that would mitigate potential

conflicts in the SCS. This can also be perceived as a normative view, in that economic

integration and willing cooperation through engagement is critical in dealing with China

and obtaining a lasting solution to the SCS dispute. The other debate should be viewed

as transitioning ASEAN into a security community along the lines of NATO, in which

collective defense and cooperation along those lines could subsequently strengthen ties

between China and its rival claimants. A problem with both approaches is that while

ASEAN nations and China are cognizant of the importance of economic cooperation,

there is a long history of animosity, mistrust and a growing level of nationalism amongst

claimant nations. Furthermore, reference to the 2002 Code of Conduct, often fails to

recognize that it has yet to be implemented32, and that while there is a renewed effort to

implement a “revised COC”, it does not resolve the dispute. At the same time, a security

community requires trust and commonality in governance, for which Asian nations share

little similarity between each other.

In a similar discourse on regionalism and the potential for cooperation in the SCS, there

exist several tracks that distinguish between the economic and political parallels in the

regional power relationship. Expounding on the potential for regional security-political

forums, such as the ASEAN regional forum (ARF) or its annual defense ministerial

meeting (ADMM), debate has focused on the cultural and ideological norms necessary to

incite cooperation.33 In this context, China and non-claimant34 ASEAN nations have at

29 Association of South East Asian Nations. Formed in 1967, Expanded in the 1990’s to include a Plus Three Grouping that included China, Japan and South Korea. 30 (Chakraborti, 2012) 31 See http://www.asean.org/asean/external-relations/china/item/declaration-on-the-conduct-of-parties-in-the-south-china-sea 32 see http://news.usni.org/2012/07/18/code-conduct-south-china-sea-undermined-asean-disarray 33 (Acharya, 2007)(Mansfield & Solingen, 2010)


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times viewed the SCS as being a disruptive issue, and secondary to issues of economic

importance. Acharya goes as far as stating that he does believe that culture can be

viewed as an explanation or cause for the broad failure to establish a security community

in Asia.35 In this area, Acharya posits that the informal nature of interpersonal

relationships are “unstructured, with no clear format for decision-making or

implementation” that are pre-requisites for a collective security community.36

One of the critical functions of this paper is to address the role culture plays in

determining Chinese behavior; by drawing from China’s notions on its own “imperial

legacy” and “middle kingdom” status could provide a more adaptive understanding of the

key differences between its perceived and actual behavior. The emphasis in the policy

debate surrounding the SCS and its role in the regional and global economy is placed on

the on behavioral, policy and economic drivers of claimant nations. This debate is

inclusive of the discovery and role of hydrocarbon resources, maritime fisheries, freedom

of navigation and the risk of conflict over ensuring access to these rights. In the field of

energy security and related discourses on hydrocarbon exploration/exploitation, the

emphasis has recently focused primarily in three areas. The first is China’s domestic

energy issue, which is its fast-growing demand for oil and natural gas. The second is the

role the SCS plays in the transport of energy, not just to China, but also to Asia, which is

heavily reliant on imported energy supplies for its economic growth and success. The

third and less prevalent discourse is on existing and potential supplies of oil and natural

gas in contested, and uncontested areas of the SCS. Within the first discourse, scholars37

have found sufficient common ground in their approach that centers around questions on

China’s potential behavioral changes due to its perception of what is “energy security”, in

addition to China’s fear on depending on other nations for its supply needs. This

discourse covers a broad expanse that demonstrates a reticence within the “Chinese

Energy Community” that can be realized through either China’s military expansion, or its

34 Cambodia is a notable example. See http://www.cambodiadaily.com/archives/south-china-sea-dispute-off-asean-summit-agenda-609/ 35 (Acharya, 1999) 36 (Acharya, 1999) p. 58 (Zhang, 2009)37 (Downs, 2004)(Buszynski, 2012)(Buszynski & Sazlan, 2007) (Kennedy, 2010) (Hong, 2013)


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wave of “oil diplomacy” that has witnessed the rising size and strength of China’s

NOC’s, and how they adapt and shift their policies to adapt to functioning within the

international energy market. There has been limited debate on the role of NOC’s in

China, and potential correlation(s) between their internationalization and policy

convergence with international oil companies, and their continuing dependency role

within China. There is significant disagreement in this area, with many believing that the

internationalization of China’s NOC’s has led to a higher degree of independence from

the CCP and governmental control, yet at the same time, they are viewed suspiciously

because they are still state-owned enterprises. There is relatively sparse follow up

research into the extent of their relationship vis-à-vis China’s energy security policies,

and this in a nexus pertinent within the SCS, where I intend to look. This author holds

that there is a stronger than believed correlation between China’s “oil diplomacy”,

NOC’s and the role the CCP plays in determining their external behavior. Along these

same lines, policymakers have relied excessively on the reports of the EIA, IEA and

USGS surveys in determining potential hydrocarbon deposits in contested areas of the

SCS, for which estimates made by Chinese scholars and agencies are often significantly

higher than those of international energy agencies. The perceived failure to consider that

Chinese estimates could be the sole estimates trusted by China’s NOC’s or its recent

exploration/exploitation efforts in the SCS are a cause for concern.

The post-world war II period has given way to a shifting understanding of where a

nation can exercise its sovereignty. Furthermore, the “traditional” definition of a states’

boundary under the “Westphalian” system has become amorphous and encourages

nations to extend their boundaries into the maritime domain. The locus of the SCS

dispute is driven by questions of how and where a nation, in this case China, can

“legally” extend their claim in its near seas. There is no conclusive “node” or theory

behind Chinas’ behavior, and this paper clearly aims to discern potential “nodes” that are

potential driving forces in the South China Sea dispute. In the proceeding sections, the

paper will look at three areas under consideration; the areas of concentration being

energy, culture and history.

Chapter 3 Energy Security Popkin

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III. Energy Security and the South China Sea: Internal Doubt and External Debate.

On May 2nd, 2014, CNOOC deployed the Haiyang Shiyou oil drilling and

exploration rig to a contested area of water within Vietnam’s coastal zone. This

development incited a maelstrom of condemnation, from both Vietnam and the

International community. That this action started a wave of speculation over China’s

energy policy in the SCS is not surprising, but it reveals several of the primary challenges

facing China in addressing its energy needs vis-à-vis its SCS policies.

This chapter provides an assessment of China’s energy dilemma and how it

affects their policy in the South China Sea, focusing on three areas affecting Chinese

energy policy. A snapshot of China’s energy production-consumption situation is

presented showing and how potential hydrocarbon resources in the SCS may be

influencing a shift of China’s behavior and the responses of claimant states. This is

followed by an assessment of China’s international energy policy and how growing

demand for energy is driving the behavior of key actors in the energy sector, i.e. China’s

NOCs, and how this can become counterproductive, i.e. enhancing the suspicion of

neighbors and creating the justification for the formation of a regional security alliance

which in turn can enhance China’s insecurity in the region. Finally, this section will

provide an analysis of the South China’s Seas role in China’s energy policy and discern

their intentions for energy exploration and development in contested areas of the SCS.

China’s Energy Dilemma: Why is China stirring the pot in the South China Sea? Before 1994, China was primarily an exporter of oil due in part to China’s

historical dependence on coal and the small role of oil in its domestic economy. Fast-

forward to today and China is the world’s second largest consumer of oil, and the largest

consumer of energy.38 As of 2011, oil and natural gas made up approximately 18% and

4% of China’s total energy consumption. Despite the recent global recession that

reduced consumption of non-renewable energy in Europe and the United States, China

saw a relative burgeoning in its consumer demand. Continued economic growth will

38 Energy Information Administration, China, Report, pp. 1

Figure 1 Consumption-Production Gap


19

continue to fuel a significant increase in Chinese demand for oil and natural gas for the

foreseeable future. The challenge exerting itself on China is how to meet the growing

demand for oil.

As shown in Figure 1, China’s domestic oil production has been unable to keep

up with China’s growing demand for energy. In 2010, China domestically produced

approximately 4.1 mbd of oil, yet it imported over 5 mbd, which accounts for over half of

their total demand for oil.39 Complicating this is the declining production of on-shore oil

production40 in China’s primary oilfields41. Offshore exploration and production of oil is

seen as one of the few areas that are seeing a rise in production.42 While the bulk of this

growth is northeast China, several recent discoveries have been made of “small-medium”

39 (IEA, 2012) 40 The introduction of enhanced oil recovery (EOR) mechanisms has helped sustain but not boost existing field production. 41 (Hook, Xu, Xiongqi, & Aleklett, 2010) 42 (EIA, 2014)


20

sized fields in the SCS. Relatively new technological breakthroughs in oil and gas

exploration could sustain or increase domestic on-shore production of oil in China, yet

the SCS and offshore oil/gas development provides a lucrative and relatively untapped

frontier for increasing domestic production.

In the SCS, estimates of potential hydrocarbon resources are diverse. The EIA

estimates that the SCS holds 11 BBL of oil, the USGS estimates up to 5 BBL of oil,

whereas CNOOC estimates up to 125 BBL of oil. In the area of natural gas, the EIA

estimates up to 190 TCF, whereas CNOOC estimates the SCS possesses up to 500 TCF.43

There is little rationale for the diversity in estimated hydrocarbon resources, but the

nature of the maritime disputes in the SCS have so far prevented significant exploration

or development efforts, and until the events of May 2nd, there has been no significant

effort made directly by CNOOC to potentially explore or develop additional contested

oil/gas fields.44 At the same time, it is apparent that China is taking a more proactive role

in determining the potential for energy in the SCS and the Chinese government has

repeatedly stated that the placement of the rig is routine, legitimate and exploration

efforts along these lines have been ongoing for a while.45

As China’s domestic supply constraints dwindle, dependence on imported oil46 is

increasing and is projected to grow substantially over the coming years. This in turn has

given rise to concerns in Beijing over perceived vulnerability to supply disruptions, price

fluctuations and a lasting concern that a country such as the United States or even India

could block or disrupt the delivery of oil, potentially crippling China’s economy.47 In

this area concern is centered on the role of the SCS and the Straits of Malacca to China’s

energy security as these areas represent an area of insecurity for Beijing.

43 (EIA, 2013)(Global Security, 1998)(EMECS, 2001) 44 (Manicom, 2014) 45http://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/t1155154.shtml 46 China is currently able to supply approximately 90% of NG demand from domestic fields. 47 (Kennedy, 2010)


21

Going Global: Evolution of China’s International Energy Policy China’s shift to becoming a major importer of energy has had a tremendous effect

on international energy markets. It has also had a significant impact on how China’s

growing demand for oil has forced China and its NOCs to pursue a more proactive

“going abroad” policy in order to diversify and address Beijing’s longstanding concerns

of assuring energy access that is critical in sustaining China’s economic growth. In

reality, there are three primary areas under review. The first is centered on the role

China’s NOCs play in the international energy market, and provide a synopsis of how

these actions signify the importance of energy to China. This will focus on the oil sectors

investments in oil production and exploration efforts abroad. The second is to assess how

China’s perceived energy supply insecurities are driving it to pursue broad diversification

of how it receives its oil. This is a critical area as approximately 77% of China’s oil is

imported via the Straits of Malacca and the SCS.48 The third area intends to focus on the

role NOC’s have played in shifting China’s understanding of energy security and the

relationship between the two.

China’s big three oil companies (CNPC, Sinopec, CNOOC) began in the early

1990’s, a period of time when Chinese energy policy was focused on internal self-

sufficiency, to invest in international oil production. In part this was due to the declining

production of “indigenous” oil fields, but growing domestic demand for oil also played a

role.49 In turn, Chinese leadership advocated for a new “going abroad” policy50 that

pushed China’s NOCs’ into investing in oil exploration and production abroad.51 In turn,

these companies have gone on a veritable buying spree. Between 2002-2010, China’s

NOC’s have spent approximately $65 billion (USD) acquiring oil and gas shares and

approximately $77 billion (USD) on longer term supply contracts.52 These contract(s) are

viewed as longer-term “loans” in exchange for oil/gas, but also represent a fundamental

shift in energy policy for China. This shift, witnessed in the immediate aftermath of the

48 (Sinton & Jiang, 2011) 49 (Xu, 2007) 50 ibid. 51 Equity Oil: the purchase of a share or interest in a developed or developing oil field. 52 (Sinton & Jiang, 2011)


22

2008 global financial crisis gave way to what Zhang53 coins a “Go Abroad and Buy”

policy. It led to the formation in 2010 of a National Energy Commission54 that positions

energy security as a principle national security interest, witnessed by its leadership by

then Premier Wen Jiabao. It is no surprise that energy security is important to China, but

the global community is concerned over the willingness of China to sign massive oil and

gas contracts, and the ramifications that may have for their own energy security.55

China’s NOCs’ are some of the largest oil companies in the world, with CNPC the fourth

largest energy company56, and their participation in global energy markets has yielded

significant results. China is continuing to expand both investment in and procurement of

oil and gas supplies as witnessed by the recent 30-year, $400 billion (USD) deal signed

with Russia.57 In addition, NOC’s have continued to invest significantly in future

projects, providing funding and technology that will enable them to attain access to

additional sources of oil. Today, China’s NOC’s are operating in 3158 countries with

their production of equity oil accounting for 2.0 mbd in 2012 and this is expected to grow

in the coming years.59 It would be a stretch to say that overseas production of equity oil

translates into increased “energy security” for China and Beijing continues to emphasize

the need for increased domestic production of oil and gas, whether through the adoption

of more advanced extraction and production technology or by the development of

realized offshore production.

The evolving geopolitical landscape in light of unrest in Africa and the Middle

East, particularly in Libya, Iraq and Sudan, are of concern. This is due to China’s heavy

reliance on these regions for oil imports, of which China receives approximately 46% of

its oil from the Middle East, and up to 40% from Africa and Latin America.60 The 2011

unrest in Libya, and the current unrest in Iraq and Syria have incited a measured level of

53 (Jian, 2011) p.6 54 (Yuan Cai, 2010) 55 (Jian, 2011) 56 EIA, IEA. 57 (Wan & Hauslohner, 2014) 58 (Lee, 2012) 59 (IEA, 2012) 60 (EIA, 2014)


23

apprehension over the potential for a broader conflict in the Middle East that could

threaten their access to Middle Eastern oil. Despite this, China has continued to develop

new exploration and production sources in both nations, and China’s NOCs’ were among

the first companies to sign production agreements with the new Iraqi government in 2008

and have made significant investments in oil production in Libya, Syria and Sudan over

the past two decades.61 Chinese energy policy is increasingly unconcerned about the

potential ramifications of its engagement with “rogue states”, but this strategy, while

bolstering China’s “access” to additional oil supplies, also poses a political risk.

Continued investment in these states bolsters the irresponsible stakeholder discourse that

is affecting China’s perception, while also having the potential to backfire. Chinese

investments in Iraq, Syria and Iran have been substantial, and recent unrest and potential

formation of a “caliphate” coupled with the potential formation of a sectarian conflict, are

increasing Beijing’s uncertainty about disruptions to their ability to access to Middle

Eastern oil. Furthermore, while conflicts in the regions have had a trivial affect on global

oil production so far, potential disruptions are more likely to affect Beijing than the

United States, due to their heavy investments in oil-related development in these

countries.62

Continued investment in equity oil and pursuit of addition supplies has provided a

modicum of relief for Beijing, yet Beijing still suffers from what Christina Lin coins a

distinct “Malacca Dilemma”, in that the majority of China’s energy (~80%) is transited

via the Malacca strait.63 The Straits of Malacca provide a linkage between the Indian

Ocean and the South China Seas that at its narrowest point is less than 3 km wide and is

critical to China and Asia’s energy security, in addition to being an important transport

corridor for global trade. This poses a “dilemma” for China in that potential blockages

would have a significant impact on China’s economy and energy supply., Beijing

maintains a trepidation-insecurity complex as it believes that dependence on the Malacca

strait makes it tacitly susceptible to containment by rival powers64,65 Beijing’s stance on

61 (Kan & Yan, 2012) 62 (Al Jazeera, 2014) 63 (Lin, 2011) p. 4 64 United States, India, Japan.


24

its sovereignty over the South China Sea and supporting an activist energy-supply

diversification strategy is in part due to this concern.

The development of transnational pipelines from Russia, Central and Southeast

Asia aim to diversify how China receives its energy supplies. Of note is the

establishment of pipelines from Central Asia that have highlighted China’s rapidly

increased investment and participation in oil exploration, production and delivery in

Kazakhstan, Turkmenistan and Russia. In developing pipelines and production capacity

in these regions, China is able to “assert” control over production and delivery of oil and

gas that provides a modicum of stability for its central planners. Development of a

Myanmar pipeline to bypass the Malacca Strait, in addition to other pipeline development

is expected to alleviate but not erase China’s dependence on the strait for the majority of

their imports.66 In this area, these pipelines, if they even reach their promised capacity,

would be able to transit under 30% of China’s oil imports.67 Pursuing such development

has required a balance of negotiation between official diplomacy vis-à-vis the Ministry of

Foreign Affairs, and high-level talks between leaders in addition to the direct

participation of the NOCs. This level of collusion or “oil” diplomacy in this author’s

opinion shows the strength of the ties between the CCP and NOCs, and while NOCs

demonstrate a certain level of independence in International energy markets, they are still

SOEs. As such, China’s NOCs demonstrate a certain level of mercantilist attitude both in

the SCS and in how they use multiple levels of negotiation to meet their production goals.

Prior to the global financial crisis, China’s NOCs were able to set production goals based

on their own internal growth strategies, but recently their production goals are lining up

directly with Beijing’s stated objectives of increasingly production in the South China

Sea. This also suggests that the recent reshuffling of their role in China’s energy security

policy is increasing and is representative of China’s growing emphasis on self-assurance,

65 (Kennedy, 2010) 66 (Sinton & Jiang, 2011) 67 (Shaofeng, 2011)


25

unilateralism and the rise of national interests in Chinese policy, especially in the field of

energy.68

The South China Sea in China’s Energy Policy: An Analysis

In recently years, the geostrategic importance of the SCS to China mentioned

earlier has become more acute, given that China’s domestic onshore production of oil has

been in a state of decline. Thus offshore oil and gas production is one of the few, and

potentially the largest areas where China can mitigate its high-level of dependence on

foreign oil. One of the key actors in this area of focus is CNOOC. Though the third

largest of China’s NOCs’, it is the most aggressive69 and most directly involved70 in

offshore oil and gas development and production. There is some merit to the hypothesis

that CNOOC in particular, in addition to other NOCs’, maintains a significant level of

influence in the CCP and on China’s foreign policy.71 CNOOC, in particular, has

invested heavily in international collaborative projects that have enabled it to expand its

technological capabilities specifically in the area of offshore exploration and

production.72 Whereas China used to rely almost exclusively on the deep-water expertise

of IOC’s in oil exploration and production efforts in China’s near waters; the introduction

of an oil rig in contested waters of the SCS merely portends the extent to which CNOOC

has focused on deep-water exploration and production capabilities.73 Their efforts have

ranged from developing more advanced seismic exploration technology to advanced

offshore exploration for oil and gas. These capabilities are enabling them to push further

into contested and uncontested waters in the SCS.

There are several reasons that should concern China's neighbors regarding

CNOOC. First, CNOOC's primarily tasked with offshore oil and gas technology and 68 (Downs & Meidan, Business and Politics in China: The Oil Executive Reshuffle of 2011, 2012) 69 (Sinton & Jiang, 2011) 70 CNPC subsidiary PetroChina holds interests in the very southern areas of the SCS. (Downs, Business and Politics in the South China Sea: Explaining HYSY 981's Foray into Disputed Water, 2014) 71 (Downs & Meidan, Business and Politics in China: The Oil Executive Reshuffle of 2011, 2012) 72 (Du, 2014) 73 (Hall, 2014)


26

development. Second, one needs only to look at the history behind the oil platform

currently in place in contested waters of the SCS. This platform is the direct result of

China 863 program that was launched in 1986; according to Erica Downs, CNOOC

chairman Wang Yilin characterized it as a “mobile national territory” and a “strategic

weapon.”74 The statement alludes to the notion that all operations in the SCS are

predominately policy/dispute driven; in addition CNOOC has a strong economic

incentive to maximize its economic profits as well. The development of deep-water

drilling technology would enable it to bolster its own production as well. Furthermore,

Beijing has direct control over NOCs operations in contested waters75, and as Downs

speculates, provided the “blessing” enabling the placement and operation of the rig in the

disputed waters.76 Third, CNOOC is continuing to invest heavily in the production and

deployment of additional oil platforms in the SCS.77 CNOOC has gone so far as to target

daily production of offshore oil/gas at 120 million tons by the end of 2020, this roughly

translates into ~2 mbd of oil-equivalent offshore production.78 This a rather ambitious

goal considering that the majority of their existing production is in non-contested waters

and would inherently require production in contested waters in the SCS. China vis-à-vis

CNOOC and its NOCs’ is continuing development of additional deep-water offshore

platforms, and when taking into consideration the fact that they have substantial existing

production in non-contested areas in their near seas79, one would assume that they are

destined for “new” projects in undeveloped areas. In this context, there is sparse

evidence to indicate that CNOOC or other NOCs have production intentions in disputed

areas of the East China Sea, where there is believed to be substantial oil and natural gas

74 (Downs, Business and Politics in the South China Sea: Explaining HYSY 981's Foray into Disputed Water, 2014) 75 In the 1990’s and early 2000’s, Beijing actively prohibited NOCs from operating in contested waters. 76 ibid. 77 (Manicom, 2014) (Rajagopalan & Zhu, 2014) 78 (Testing CNOOC's Deepwater Credentials, 2012)(Manicom, 2014) 79 Bohai Bay/Shengli Field, Pearl River Basin. (EIA, 2014)


27

deposits, however there is clear evidence80 that CNOOC/NOCs want to operate and

increase production in the SCS.81

Ascertaining why energy development in the South China Sea may be more likely

than in the East China Sea is a challenging proposition. Returning to the discourse on

how one should view their behavior vis-à-vis the notion of regional hegemony and threat

perception, China’s apprehension-trepidation syndrome is more applicable in areas where

China recognizes the danger of potential engagements with more capable states.82 In the

context of the broader dispute over control of resources in the SCS, China is facing a

hesitant ASEAN and nations with limited national defense capabilities. Furthermore,

China has shown that it is willing to engage ASEAN and at times has been able to disrupt

any potential coalition against its claims in the SCS.83 The evolution of China’s energy

policy from one of peaceful engagement, learning and participation within the

international energy market has increasingly moved towards becoming one of “creeping”

assertiveness. Whether this is demonstrated by CNOOC’s exploratory contracts awarded

to foreign IOCs or involvement by China in preventing similar contracts or exploratory

activities by Vietnam or the Philippines in contested waters, is a relatively mute point.84 It

can be said that energy is certainly not the sole rationale for Chinese interests in the SCS.

As will be discussed in the proceeding chapter, rising nationalism in China and China’s

desire for economic and territorial security play a factor as well.

The South China Sea holds far greater importance to China when considering that

it is responsible for channeling the majority of China’s energy imports through SLOCs.

This factor may outweigh even the potential for energy within contested waters. As

mentioned earlier, China attempts to circumvent the Straits of Malacca is one part of their

attempts to move from reliance on the sea for the transport of oil. The SCS also plays a

pivotal role in China’s recent efforts pushing the establishment of a new “maritime silk

80 (Hall, 2014) (Downs, Business and Politics in the South China Sea: Explaining HYSY 981's Foray into Disputed Water, 2014) 81 (IEA, 2012) 82 (Ramirez, 2014) 83 (Symonds, 2012) 84 (Buszynski, The South China Sea: Oil, Maritime Claims and U.S.-China Strategic Rivalry, 2012)


28

road” and revival of the historical Silk Road. Evocative of its historical significance,

China envisions this new road through a variety of lens. Within this chapter, emphasis

will reflect its role on China’s broader energy strategy in Central Asia, the Middle East.

Along the same line, the new “maritime” Silk Road is envisaged as a series of

partnerships built upon the Shanghai Cooperation Organization85, a quasi security-

economic intergovernmental organization.86 The context behind China’s supply-side

diversification87 strategy is part of a broader hedge against instability in the Middle East

and China’s own perceived insecurity regarding the Straits of Malacca. This perception

has been exacerbated by China’s perception of its own encirclement by the United States

vis-à-vis its own “pivot” to Asia and its involvement in the Middle East. As analyst

Christina Lin puts it, China strategy resembles a “string of pearls.”88 From providing

China’s military with port access in strategic locations in the Indian Ocean to the

development of new facilities89 across primary SLOCS that connect Africa and the

Middle East to China, the strategy aims to bolster their security and provide assurances

against the risk of maritime embargoes or realized encirclement. In this area, the revival

of the Silk Road carries both contemporary and historical contexts. The proceeding

chapter will touch on how this strategy dually reflects China’s self-perception and the

role history and culture play in it.

This chapter provided a snapshot of the broader energy narrative and its role in

determining Chinese policy. Having established that China does indeed have an energy

dilemma, it can be argued that their behavior in the South China Sea is derived in part by

a pressing need for oil and natural gas. The evolution of China’s international energy

policy has yielded significant results for China, from obtaining additional routes for the

transportation of energy to acquiring new supplies. It has also raised doubts, both

85 (Sznajder, 2006) 86 It consists of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. Observer nations are Afghanistan, India, Iran, Mongolia and Pakistan. 87 Pipeline and Overland Transit of Oil/Energy/Trade. 88 (Lin, 2011) 89 Additional Oil Platforms, landing strip in the Woody Islands and upgraded military facilities in Hainan. With the exception of Hainan, these new “facilities” fall within contested areas of the SCS.


29

internally and externally. The international community at times has been very

apprehensive over NOCs “buying sprees” and the risk they may pose to their own energy

interests, but in this area, there is noticeable separation of NOCs internationalization from

that of the CCP objectives; in this area they have functioned in alignment with the

international energy market. China’s “internal insecurities” have also resulted in

international apprehension as to their derived behavior, however in this area there is

distinguishable collusion between the objectives of the CCP and their NOCs. In

considering China’s “Malacca dilemma” or their planned development of offshore

hydrocarbon resources in the South China there is evidence of China’s strategic goals

aligning with those of CNOOC or other NOCs and evidence that the development or

placement of oil platforms in contested waters can only be done at the behest of Beijing.

In the words of Christina Lin, Beijing’s deeper involvement in “energy security” is “too

important to be left to market forces alone”.90 This belief adequately describes the

importance of energy security to Beijing and this chapter positioned the role of energy

security in the context of the South China Sea.

90 (Lin, 2011) pp. xv

Chapter 4 History and Culture Popkin

30

IV. Understanding China’s Maritime Assertiveness in the South China Sea: The

Century of Humiliation and the Reclaiming of China’s Civilizational Standing.

This chapter provides a perspective on the relationship between the subjective and

objective realms that may help explain China's behavior in the SCS beyond the demand

for energy. China’s fear of being encircled by Western powers, the US, Great Britain,

France as well as Russia, though subjective, has a clear role in promoting national unity

and determination to no longer allow its territory and cultural standing to be subject to

insult and humiliation at the hands of western imperialism and aggression. Mao Zedong

coined this as the “Century of Humiliation” upon the founding of the Chinese Communist

Party in 1949, in the immediate aftermath of a wave of Japanese aggression. By assessing

the significance of the “century of humiliation” and how it resonates within Chinese

leadership and culture of governance, the chapter makes a connection between China's

maritime claims and rising nationalist sentiment that may be affecting Chinese policy and

perceptions in the South China Sea. Section 1 highlights key aspects of China’s

perception of its own history and the notion of the Chinese “Civilizational-State” within

the context of the “century of humiliation.” This also focuses on the notion of “culture”

in the creation of a national identity, or what it means to be “Chinese” in the broader

narrative of “civilization” and “humiliation”, highlighting the key subjective factors that

have driven policy formation, perception(s) on national identity, hegemony and

sovereignty in the South China Sea. Section 2 explores the intersection of history, culture

and insecurity as it pertains to the South China Sea, and discusses China’s demonstrated

behavior in the maritime domain in this part of the world and how its national

“insecurities” have and continue to pose a major challenge to its neighbors. In this

context, Chinese behavior should be viewed as both reactive and proactive in asserting a

uniquely conceived view on hegemony, in which Chinese “assertiveness” is distinctly

different from western “imperialism” despite the apparent similarities.


31

The Century of Humiliation, Chinese Culture and the Civilizational-State. In order to understand the effect of the “century of humiliation” discourse within

the Chinese psyche, we must first look at the historical and contemporary understanding

of the Chinese “civilization-state”. This discourse accounts for the long history of

Chinese civilization in the context of perceived cultural and material superiority

throughout the world that dates back to Imperial China. Chinese thought has long

centered on the “middle kingdom” as a notion that depicts Chinese “exceptionalism”.91

The notion of Tianxia or “all under heaven” was emboldened by Imperial China’s tribute

and periphery “system” in which China92 is positioned as the lone kingdom tasked with

protecting its culture and friendly relations with neighboring nations considered to be

inferior in civilizational terms but pacifiable through benevolent rule.93 The notion of a

nation-state versus civilization in this context measures the durability and difference that

characterizes Chinese self-perception of their lasting legacy as a civilization and not a

“country or nation”, be it their sense of exceptionalism or centralism.94 From the

perspective of the CCP this notion of civilization when intertwined with the national

consciousness produces a notable differentiation of what it means to be Chinese and

presents a different school of thought from the Westphalian system of a nation-state.

Accordingly this psyche builds upon the historical sense that Ancient China was

organized around a system that predated Westphalia and had its own institutional norms

that were able to define territorial boundaries and had an established system of law.95 As

Zhang explains, Pax Sinica has come to define the identity of the “Chinese” civilization

as possessing “hegemonic beliefs in the moral purpose of the word,”96 that is embodied in

a Confucian sense of hierarchical order that positioned China as the center of a

civilization, and not just an empire/nation-state. Rather than “cutthroat competition,

91 (Zhang F. , 2013) 92 China, as a title, is a modern-day construct, whereas during its long history, what is now China witnessed multiple “dynastic” periods of control. 93 (Rozman, 2012) 94 (Wei-Ming, 1991) 95 Some Chinese scholars have contended that the norms of Li or rituals, in Ancient China, are an equal measure to present-day international law. (Zhang Y. , 2001) 96 ibid. pp. 56


32

military strength and expansionism” that characterized the western system97, Pax Sinica

was an institutionalized tribute system in which peripheral, inferior cultures paid tribute

to China in return for protection, by and through such practices further expanded the

historical belief in Chinese superiority.98 Yet, from the vantage point of ancient China

being the sole civilization in the world, Pax Sinica embodied the inseparability of both

notions: innate superiority and invulnerability. This also set the conceptualized mythos

of what Chinese civilization was, and henceforth the period of history of defeat by

Western powers came to be referred to by the CCP as the “century of humiliation.”

Accordingly, the humiliation discourse is multi-faceted; there is the historical

underpinning that resonates in China’s national psyche and on the other hand there is the

strategic-political that has been used by the CCP in its official narrative. In a sense, the

First Opium War (1839-1842) represents its’ beginning, and it came to a conclusion with

the proclamation of the People’s Republic of China in 1949. During this period,

“western” nations99 through the use of force and coercive negotiation100 forced China into

ceding large swaths of “peripheral territory101” including Hong Kong and Taiwan to the

“imperial aggressors.” Subsequently, this period was also rife with internal collapse

dominated by a series of rebellions and uprisings in protest against the foreign

presence.102 Further reductions in Chinese territory occurred due to independence

movements in Tibet, Mongolia and Xinjiang during the early 20th century.103 This period

that gave rise to the fall of Imperial China, and the end of Sino-Centrism left China104

with a growing sense of vulnerability and weakness. Consequently, China also lost to

Japan in the first Sino-Japan war in 1895, what was believed to be a “shameful” and

97 (Wang, 2012) 98 (Zhang Y. , 2001) 99 Britain, France, United States, Russia and Germany. 100 Aptly coined “gunboat diplomacy”; this terminology is attributed in part to actions by the British in the 1st Opium War, in Canton, what is now modern day Guangzhou. 101 Coastal Port Cities such as Qingdao, Canton, etc. were also ceded to foreign control. 102 (Kaufman, 2010) 103 (Kaufman, Testimony before the US-China Economic and Security Review Commission on China's Narratives Regarding National Security Policy, 2011) 104 (Zhang F. , 2013)


33

“humiliating” defeat at the hands of a perceived “inferior” nation.105 There should be no

denial that the historical events that predated the formation of the People’s Republic of

China occurred, but as will subsequently discussed, is the central role that these events

play in understanding the broader “century of humiliation” narrative. This narrative may

be fundamental in explaining and understanding the role nationalism and insecurity plays

in present-day Chinese behavior.

Contemporary understanding of Chinese culture paints a complimentary picture

on China’s perception and creation of self. As mentioned before, the notion of Sino-

Centrism or Pax Sinica is also built upon the achievements Chinese “civilization” has

contributed to the world and stretches to include “majestic” achievements in the fields of

science, technology, economic, military and culture.106 At the height of “Imperial

China”, the notion of benevolent pacifism107 is continually attributed to the Confucian

value system. This system, as argued by Chinese scholars, places emphasis on the idea

that Confucianism “suppresses the assertion of individualism and promotes the

harmonious coexistence of differences and is thus tolerant of other cultures.”108 Yet,

being “Chinese” was a unique construct of self-identity and semi-hypocritical. It was

hypocritical in the sense that Chinese viewed themselves as cultured and civilized,

surrounded by uncivilized barbarians that “needed” Chinese benevolence to survive, and

thrive.109 The most radical manifestation of Chinese culture could be viewed as their

perception of territory, and the broader narrative that accompanies it. The

“decentralizing” humiliation by the west “took” from China, not just Hong Kong, and

Taiwan, but also Burma, Vietnam, Thailand. In essence, it affected China’s periphery to

105 Side note: The Treaty of Shimonoseki is considered to be a pivotal historical underpinning of the East China Sea dispute between China and Japan over the Senkaku/Diaoyu Island Chains. 106 (Yahuda, China's Foreign Relations: The Long March, Future Uncertain, 2009) 107 (Zhang F. , 2013) 108 ibid. pp. 313 109 (Wei-Ming, 1991)


34

an extent that vis-à-vis the “century of humiliation” and contemporary Chinese foreign

policy discourses, is manifesting itself in Chinese behavior in the SCS.110

The “century of humiliation” discourse in the context of the present-day CCP

should be viewed as underlying driver behind party ideology, nationalism and identity.111

In the ideological sense, Mao sought to revolutionize, reform and change the mentality of

China and sought a “return” to great power status. The CCP in this sense instilled into

the system of historical, cultural and “patriotic” education that China was entitled to great

power status solely on the basis of its civilizational history and that the west “must”

recognize and recompense for the humiliation it imposed on China through the years

preceding the rise of a “triumphalist” China.112 Nationalism and humiliation in this

context have been “constructed” socially and ideologically, via “patriotic education that

builds upon the past.”113 The most interesting aspect(s) of CCP ideology in this area is

the differing periods and different focuses on the past. As a reader, you might expect

notions of being a “victim” of the west to be a construct of the Mao years114, when Mao,

according to Zheng, emphasized a “victor” narrative, but China as the victim is a post-

cold war construct.115 In fact, under Mao’s leadership the focus of the broader discourse

was on how the CCP defeated “western” imperialism and Mao’s belief that China was at

the center116 of anti-western, anti-imperialistic “revolution.117” Mao strongly believed

that as part of its anti-imperialist stance, that the need to cleanse China of its humiliating

past was the CCPs’ “raison d'etre” and it became apparent in how China interacted with

110 (Callahan, National Insecurities: Humiliation, Salvation and Chinese Nationalism, 2004) 111 (Callahan, 2004) 112 (Callahan, Nationalism, Civilization and Transnational Relations: The Discourse of Greater China, 2005) 113 (Wang, National Humiliation, History Education and the Politics of Historical Memory: Patriotic Education Campaign in China, 2008) 114 1949-1972. 115 (Wang, National Humiliation, History Education and the Politics of Historical Memory: Patriotic Education Campaign in China, 2008) 116 A return to being the “center” of the world. 117 (Callahan, National Insecurities: Humiliation, Salvation and Chinese Nationalism, 2004)


35

the international system before it “opened” up under Deng Xiaoping.118 In this area,

policy formulation during the Mao years was centered on China’s perception of

sovereignty and national security.119

As Chung puts it, the “pursuit of autonomy” was dictated by the need to oppose

both the USSR and the United States.120 Along the same line, Chinese foreign policy of

the time emphasized that China would “never act as a hegemon”121 and that the cultural

notions of peaceful pacifism and benevolence was to determine Chinese behavior. It

became a prevalent narrative in Chinese foreign policy both during and proceeding Mao’s

tenure. Beijing’s constant emphasis on its goal of “peaceful development” or “peaceful

coexistence” for all was to become the official party line throughout leadership changes.

Despite its constant emphasis on peaceful coexistence and the habitual utilization of this

discourse in its foreign policy, China has been unable to reconcile its statements into

action due to one particular policy area. This is the notion of China’s desire to reclaim

not only lost prestige, but also to restore China to its former civilization-state. In almost

every area of external debate, foreign interaction and neighborly relations, China also

reiterates the importance of sovereignty and territorial control. As mentioned earlier, in

the viewpoint of the CCP, China’s loss of its “peripheral territory122” was due to western

imperialism, corrupt leadership and that in order to be “whole again” and to reverse

national shame, it is necessary to reclaim what is believed to have been once part of

“China.”

The desire for territorial reclamation has become a symbol of rising nationalism

and ideological change in China that occurred during the regime of Deng Xiaoping and

subsequent Chinese leadership. This ideological change, conducted post-cold war, has

moved from revolutionary to national-interest driven.123 Factors supporting the notion of

a unique Chinese identity and nationalism often move hand-in-hand. In 1991, China

118 (Callahan, National Insecurities: Humiliation, Salvation and Chinese Nationalism, 2004) 119 (Zhang Y. , 2001) 120 (Chung, 2011) 121 (Yahuda, China's Foreign Relations: The Long March, Future Uncertain, 2009) 122 Extending beyond just Taiwan and Hong Kong. 123 (Chung, 2011)


36

instituted124 a new “Patriotic Education Campaign” that sought to rejuvenate the century

of humiliation discourse, while also imparting a sense of loyalty to party, state and

selective history.125 This selective history was inclusive of the need for territorial

reclamation, of the broader struggle for dignity and also imprinted upon students what

exactly constituted China’s territory. In this area, students were taught that the

southernmost border of China was not continental, but maritime, ending at James Shoal,

which is the southernmost part of the SCS and coincidentally at the far end of China’s

claim to the SCS.126 It also enhanced the perception amongst Chinese that prior conflicts

with Vietnam in the 1970’s was an expression of Soviet and Vietnamese hegemony, and

that in order for China to be successful, reversing the century of humiliation was on-

going and essential for every “Chinese” to take part in ensuring the realization of this

mission. In this context, to be Chinese, extended beyond being a citizen of the PRC,

aiming to also appeal to the Chinese diaspora living abroad. It was aimed at restoring the

notion of China being a sum of a greater entity, that being the “descendants” and

inheritors of a great civilization.127 This “re-education” campaign is ongoing and

scholars have witnessed a rise of Chinese tourism not only to areas of focus, but also to

contested territory in both the East and South China Seas. As Kim puts it, China was

successful in “institutionalizing” patriotism in order to achieve a political goal.128

In this context it is important to understand the potential role nationalism (i.e.

patriotism) has on Chinese behavior and strategic thought. While the CCP is an elite-run

political entity at this point, it is cognizant of the action(s) or desires of its citizens. Their

construction of historical events has led their citizens to strongly believe in the discourse

of lost territory, humiliation and the role of “imperialism” in Chinese history. This

should be of concern to policymakers, scholars and claimants to the SCS dispute. As

mentioned earlier, Chinese foreign policy has seen the reiteration of “peaceful

development” and “harmonious coexistence” discourses in a popular context, not only in

124 Emphasized and focused upon are also apt characterizations. 125 (Wang, National Humiliation, History Education and the Politics of Historical Memory: Patriotic Education Campaign in China, 2008) 126 (Kim, 1998) 127 (Wei-Ming, 1991) 128 (Kim, 1998)


37

public statements, but also in how Beijing has utilized history to defend its action(s) and

to oppose “revisionist” history in neighboring countries. For example, China continually

chides Vietnam and the Philippines historical claims in the SCS as being irredentist and

false, while continually reinforcing their perspective through popular action.129 Historical

memory in this context is invoked in larger international crisis such as the relatively

minor 2001 US Spy Plane incident130 where China was the “victim” and again suffered at

the hands of the “aggressor”. Therefore it should not be a surprise that China is

increasingly reactive to actions that it perceives as humiliating. If China is willing to

frame a minor incident as a “devastating loss of face” it could be theorized that China

would be willing to go a lot further to protect its own territory.

Insecurity and Strategy in the South China Sea: Exploring the Relationship

between history, culture and behavior. Today, China is a nation that is experiencing economic, social and geo-political

change. In the context of the South China Sea, confluences of factors are at play in

determining the rationale for its behavior and strategic thought. The 1st Opium War and

the subsequent “century of humiliation” has shifted China’s strategic perception and

created a crisis that has added an element of insecurity that is shaping how China

formulates policy in the South China Sea. This section will focus on exploring the role

history and ideology play in China’s behavior in the SCS. The first area under

consideration is the broader geographical importance of the near seas to China. The

second area will explore how Chinese insecurity and threat perception is shaping their

long-term strategy in the region. The third area will explore how China is potentially

seeking to expand it territorial boundaries and its engagement with regional organizations

and claimants to the South China Sea dispute. Strategically, China has been increasingly

129 Inciting nationalist/patriotic fervor to mobilize popular support of the official position. 130 (Eckholm, 2001)


38

adept at utilizing history to bolster its claims, while also bolstering its strategic and

operational behavior in defense of its claims in the sea.131

Prior to the 1st Opium War, China132 had spent a disproportionate amount of effort

in securing its territorial frontier from potential invaders. Evolving Chinese dynasties

constructed the Great Wall with deterrence and protection in mind. With the exception of

the early Ming period, under which the Ming emperor Zhu Di (Yong Le) provided

material support for the voyages of Zheng He, China did not pay significant attention to

naval development. Subsequently, China maintained an inward approach to deal with

threats from its continental neighbors and to maintain its territorial integrity. Since the

inception of the CCP, Chinese leadership has cited maritime/coastal vulnerability as a

primary focus for their defensive and strategic efforts.133 As such, China’s leadership

began to shift its focus towards their maritime geography to serve as a strategic and

defensive barrier. As China perceives the Straits of Malacca and strategic chokepoints134

in the South China Sea as potential limiter(s) for trade and the transit of energy, it can

also utilize the same geographical limitations as a strategic benefit. It was in the early

1990’s that the concept of using the island and geographical features of the SCS as a

mechanism for coastal defense arose. Scholars, analysts and the CCP began to use the

term 1st island chain to create a conceptualized line that extends from the southernmost

tip of Japan and extends to the southernmost area of the SCS, as claimed by China.135

The notion of the 1st island chain as a defensive perimeter provides a better idea of the

impetus for Chinese assertiveness in the SCS for three primary reasons. The first reason

reinforces the notion that China feels that it must protect and assure its access to energy

and trade via the Strait of Malacca. In this area, by claiming or bolstering military,

131 In this area analysts have focused predominately on structural and military policy, whereas this study omits this analysis in favor of exploring the perceived role of the South China Sea to China. 132 Imperial. 133 (Cole, 2014) 134 Maritime Geographical feature that limits access to an area, in the case of the South China Sea, there are only several access points to the area, increasing the importance of the Straits of Malacca and other entry/exit points in the sea. (Dutton, 2014) 135 (Yoshihara, China's Vision of its Seascape: The First Island Chain and Chinese Seapower, 2012)


39

political or legal claims to the seas provides a perception of securing China’s southern

maritime boundary. The second reason is that China has increasingly felt that the recent

US rebalance to the Pacific enhances the threat of containment, while control of the area

would allow China to construct structural defense mechanisms while also serving to

bolster their legal claims to contested islands/areas in the SCS. The third reason is that

by bolstering its territory to include the entirety of the SCS it is also able to enhance

popular support and further institutionalize its control over maritime resources136. As

Jiang Zemin put it, China sought to create a “maritime great wall” with the intention of

assuring that China, would never again, be invaded by sea.137

China’s strategic “gamble” in the South China Sea also represents a return to the

notion of centrality. Chinese perception of self has increased due in no small part to the

immense economic growth China has experienced in the past thirty years; this growth is

leading China to restore its belief in the notion of its own centrality. The 1st and 2nd

island chain conceptualized defense is one part that positions China geographically as the

central part of a broader economic and diplomatic strategy. Additionally, the notion of a

rejuvenated “maritime silk road” as mentioned earlier, seeks to rejuvenate historical and

modern trade relationships and routes with the Middle East. Coinciding with increased

diplomatic relationships with maritime nations between China and the Middle East is the

development of additional facilities138 both within the SCS and alongside the SLOCs

transiting via the Malacca Strait.139 This strategy has a two-fold benefit. On one hand it

would bolster China’s ability to ensure access to energy and trade routes in a contest area.

On the other hand it also bolsters the notion that China has an interest in restoring its

historical influence, specifically in energy rich regions such as the Middle East. The

problem with the “string of pearls” strategy is that it calls for further development in the

South China Sea on contested islands and stands to further inflame existing disputes and

136 Including potential energy deposits. (Yoshihara, China's Vision of its Seascape: The First Island Chain and Chinese Seapower, 2012) 137 (Cole, 2014) 138 Deep-Water Ports, Airstrips in the South China Sea and bolstered defense facilities in Hainan. 139 (Lin, 2011)


40

could lead to conflict escalation with Vietnam, the Philippines and potentially the United

States.

China’s umbrella claim and desire to control access in the SCS goes beyond a

desire to control resources. China, as part of the broader “silk road” strategy seeks to

control access to the maritime domains. This extends to a desire to establish credible

control over SLOCs and the ability of other claimant nations to access disputed resources.

Beyond territorial/sovereignty claims, Chinese leaders retain a distinct insecurity

complex due in part to the geostrategic importance of the SCS for both economic and

energy needs, but primarily due to historical memory that is enhancing their perception

that the SCS poses a distinct security dilemma.140 In this area, China has been acting

unilaterally to enforce its claims. First, over the past several years, China has been

increasing its detainment of Vietnamese and Filipino fishing vessels in contested waters.

Second, China has worked to impede the energy development efforts being conducted by

Vietnam, including the severing of a Vietnamese seismic survey vessel in 2010.141 Third,

China has deployed nautical beacons, island facilities and deployed civilian fishing fleets

within contested areas of the SCS.142 The buildup of facilities across the Spratly and

Paracel islands are viewed by the CCP as means of establishing permanent control.143

China’s unilateral action(s) serve as a medium between China’s stated control and their

utilization/perception of international law in furthering their case in the SCS.

In the area of international law, understanding China’s position and goals

becomes more complex. While China signed and ratified UNCLOS in 1982, they did so

with reservations. Their reservations are perplexing and should be of significant concern,

both to regional claimants and the international community. First, as mentioned earlier,

China utilizes history and legacy of control in the South China Sea to bolster its claims.144

140 (Blazevic, 2012) 141 With Regards to the Philippines, China has resorted to official statements condoning similar acts by the Philippines, in part, due to their existing treaty with the United States. 142 (Chakraborti, 2012)(Blazevic, 2012) 143 (Blazevic, 2012) (Buszynski, The South China Sea: Oil, Maritime Claims and U.S.-China Strategic Rivalry, 2012) 144 Vietnam and China utilize similar historical claims to both the Spratly and Paracel islands.


41

Second, as Blazevic observes, China utilizes the term EEZ not as an exclusive economic

zone but an “economic exclusion zone”145 that has no international legal basis. Third,

China has made two material declarations, in 1958 and 1992, on the law of their

territorial seas.146 These declarations emphasize that the SCS is China’s sovereign

territory and that all vessels and aircraft must obtain express permission to utilize existing

SLOCs or to conduct any military or civil activities. Subsequent declarations with the

later 1996 Geneva Conference on the Law of Seas147 (GCLOS) have held similar

declarations that further expand China’s base claims to territorial and sovereignty control

in the SCS.148 China has yet to make a move to implement a similar enforcement

mechanism as they did in 2013 with the ADIZ149 and there is not enough evidence that

point to a similar intention in the SCS.

In the context of the South China Sea, Nguyen argues that control over the Spratly

island group, in particular is tantamount, as it would provide the controlling nation the

ability to exercise jurisdictional control over SLOCs and resource access.150 Within the

Spratly Islands themselves, multiple claimants have maintained occupation over different

formations over time in the hopes that it would bolster their sovereignty claims in the

region. International law following the inception of UNCLOS provides no support for

occupation or coercive subjugation for attaining sovereign control over geographical

features. Despite this, China’s declarations on its territorial seas and consolidation of civil

and military regulatory agencies in Hainan province have sought to bolster Chinese

control and circumvent international law. China has emphasized the importance of

demonstrating extended control and administration of both the Spratly and Paracel

islands in hopes of supporting their broader sovereignty claim in the SCS.151 China’s

selective implementation and interpretation of international law has confounded fellow

claimants and is contributing to the potential for conflict in the South China Sea.

145 (Blazevic, 2012) pp.89 146 (Jie, 1994)(PRC, 1992)(Blazevic, 2012) 148 (Blazevic, 2012) p.90 149 East China Sea. Air Defense Identification Zone 150 (Nguyen, 2006) 151 (Poling, 2014)


42

The multiplicity of methods that China is utilizing to enhance, enforce and sustain

control over the SCS suggests that China may seek to further strengthen and enforce their

territorial declarations, despite running contrary to international law. This entails broader

maritime strategies that enforce stricter interpretation of Chinese strategic territorial

requirements that coupled with PLAN and Civil developments would support a

conclusion that China has a long-term strategy in the SCS that aims to address their

trepidation and concern of encirclement and maritime vulnerability. In addition, China is

seeking to control access to maritime resources within the SCS, while ensuring that rival

claimants are unable to counter-balance China and attain access to what China considers

their own indigenous resources.152 Evolving Chinese foreign policy vis-à-vis rival

claimants remains ambiguous and contentious. In this area there is significant concern

that diplomatic efforts to address potential conflict, resource management and dispute

resolution have failed due to Chinese interference in regional and international

organizations.

There is broad separation between regional economic and political diplomacy. In

the SCS, ASEAN remains the largest regional multilateral quasi economic-political

organization under which China actively participates that involves primary claimants to

the dispute. The 2002 ASEAN-China CoC for parties in the South China Sea remains at

an impasse and is largely considered to be an ineffective document. There have been

recent diplomatic efforts amongst ASEAN-China to resurrect a CoC, but multiple factors

have halted significant progression towards its implementation. The primary factor is

China’s active efforts to shelve or sideline discussion of the dispute at annual ASEAN

meetings, while concurrently utilizing official development aid and non-concessional

loans to non-claimant ASEAN nations.153 In the same line, the CCP official line is that it

values its “close relationship” with ASEAN and that it is always willing to discuss a CoC,

yet it also utilizes public diplomacy to criticize and blame its failed implementation on

rival claimants. In particular, China has been very vocal that Vietnamese hydrocarbon

exploration and fishing vessels are operating “illegally” in Chinese waters, despite a lack

152 (Cole, 2014) 153 (Sutter & Huang, 2013)


43

of tangential evidence.154 The same applies to the Philippines efforts within their own

territorial waters155, while China, at the same time, actively works to isolate the

Philippines and Vietnam within ASEAN.156

China is adamant that the South China Sea dispute is solely an affair between

claimants, and attempts to internationalize the issue have been met with stern opposition

from Beijing. Of the primary claimants, the Philippines, have filed for international

arbitration vis-à-vis ITLS on their claims in the SCS.157 Along the same lines, both

Vietnam and the Philippines have also sought closer ties with the United States to bolster

their position. China’s has been adamant that the SCS is a regional issue and despite

ratifying UNCLOS, has so far refused to participate in dispute arbitration. This is widely

believed to be the result of fear by China that arbitration or mediation by an international

body would rule against them.

Whereas China was once seen as being willing to participate in multilateral

negotiations on the SCS dispute, its policy changed with the global financial crisis toward

one favoring bilateral negotiation. As a result, diplomacy is increasingly viewed as being

an ineffective means towards resolving the disputes. This is due to increasing hesitancy

of ASEAN nations, highly dependent on China for their own economic growth, to pursue

resolution of the disputes at ASEAN ministerial level meetings, and also within their own

bilateral relations with China.158 It remains to be seen what affect the recent resurgence

of Chinese activity in disputed waters will have on ASEAN nations willingness to

counter China’s ambition(s) in the SCS, but needless to say ASEAN nations remain

concerned about growing Chinese assertiveness in the region.159 China continues to

promote its expanding presence in the SCS and underlying behavior as being beneficial

to the region. Furthermore, China views the reluctance of ASEAN, rival claimants and

154 (Jie, 1994) 155 3nm EEZ 156 Utilization of ODA and non-concessionary loans are also used to bolster support for China’s claims and mitigate cohesion amidst ASEAN nations. 157 (Hong, 2013) 158 ibid. 159 ibid. (Sutter & Huang, 2013)


44

the international community to counter its presence as tacit approval for its ambitious

claims in the South China Sea.

Chapter 5 Conclusion Popkin

45

V. Conclusion: Understanding the Primary Drivers of China’s Maritime Claims in

the South China Sea.

Understanding the primary drivers of China’s maritime claims in the South China

Sea seems crucial in attempting to evaluate its behavior, which continues to be a

challenge for analysts concerned with its rise and implications for the conduct of China’s

International Relations. It appears that China’s economic transformation of the past

several decades – seen through the country’s growing influence in International Affairs

and an equitable shift in how they formulate policy – is affecting their perception of

territory and how they seek to strengthen their sovereignty in the South China Sea. By

exploring the causal factors behind China’s resurgent policy in defense of its claims in

the South China Sea this paper hopes to provide a contextual understanding of China’s

perception of itself taking more seriously into account its notion of a civilization-state

and its role in shaping the dynamics of its regional interaction. In part, China’s rising

demand for material resources and assertiveness in pursuing them may influence its

potential leadership role in the region and further promulgate the perception of China as

an irresponsible stakeholder in the international system. Due China’s shifting worldview

and how its foreign policy has had to adjust to understand and cope with changing global

conditions in areas of its’ national self-interest, the concluding remarks presented here are

to be taken as tentative.

In the field of energy and diplomacy China’s assertiveness in, and incremental

control over, the South China Sea may be understood as an attempt to bolster its energy

security situation. Its’ heavy dependence on non-renewable resources is in turn leading it

to take measures to increase domestic production of hydrocarbon resources and mitigate

potential supply-side disruptions. The approach that is taking in the South China Sea has

the potential to further destabilize its perception of security. By seeking to bolster

domestic production in contested waters while also bolstering its civilian-military

presence in the region, it is in turn serving to shape regional reaction(s) to its increased

presence. Furthermore, Beijing’s recalcitrant attitude in its diplomacy vis-à-vis ASEAN,

where its selective application of international law especially its refusal to accept any


46

form of legal settlement under UNCLOS/ITLS is bolstering regional concerns that China

is “stacking the table160” to benefit its own national self-interests.

China’s comparative geopolitical advantages to smaller regional claimants are

leaving these nations with relatively few options to address their fears. The most

prescient option would be to counter-balance China’s influence and military capabilities

in the region. Region nations have sought to accomplish this by bolstering their ties with

the United States and Japan, both of which are perceived by China as their “natural”

rivals both in Asia and abroad. The second and potentially more dangerous option is to

seek development of military capabilities in the areas of A2/AD161, a strategy that China

is also utilizing to “counter” the US presence in the region. The potential for a regional

arms race is in danger of becoming a reality and could lead to conflict escalation rather

than resolution in the South China Sea. In addition, the potential for ASEAN nations to

pursue the formation of a collective defense mechanism would also position them to

challenge the increased Chinese presence in the region. Chinese behavior is becoming a

self-fulfilling prophecy of a dangerous sort. It reinvigorates China existing fears of

containment, energy disruption vis-à-vis their “Malacca dilemma” and could incite

nationalist sentiment within China that is aimed against the CCP.

China’s discourse on the Civilization-State, used to project its cultural values and

ideology, especially in the South China Sea may become a bottleneck for finding a

peaceful resolution through international law because this would mean having to abandon

the notion of civilization-state (Pax Sinica) in which the concept of suzerainty was

embedded. China’s self-conceived perception of its historical legacy lends credence to

regional perceptions that it is seeking a return to centrality in Asia. In contemporary

terms, Chinese belief in their own exceptionalism is in part affecting their diplomatic

engagement with their neighbors. While Beijing continues to emphasize that it will never

seek hegemony in the imperialist sense; rather it wants to engage with regional nations to

increase regional economic and political cooperation, it actions are much less convincing.

160 Figurative. Refers to the perception that China is selectively interpreting international law, refusing to implement a CoC and is utilizing disruptive behavior until conditions are right for a favorable resolution to the existing disputes. 161 Anti-Access, Area Denial.


47

By continuing to develop a renewed presence on contested islands in the SCS, Beijing is

demonstrating that it is willing to utilize its geopolitical advantages to exert control over

less capable and smaller neighboring nations.

In Ikenberry and Kupchan’s perspective, diplomacy, cultural learning and shared

vision is by definition the anti-thesis of hegemony. This is in stark contrast to a state that

exercises dominance to ensure stability, authority and sovereignty. The main issue for

littoral states in the South China Sea here seems to be the issue of “shared vision” and the

tension between UNCLOS and China’s attempts to assert its “historic rights” supported

by the claim of being a civilization-state with a “historic” sphere of influence. This poses

a major dilemma for South East Asian Countries. This dilemma surrounds an existent

fear that China, in part is seeking a form of regional hegemony that could lead it to

extend its maritime and continental claims in order to assure its own economic and

political stability.

China’s open participation in regional organizations such as ASEAN could

suggest that China values economic and political cooperation on regional issues. As

such, this would support the notion of sharing a regional vision on achieving tangible

economic and political objectives, with equitable coexistence as being China’s

penultimate goal in Southeast Asia. However, China’s behavior in the South China Sea,

where it seeks to assure its own sovereignty through the use of coercive diplomacy,

military force and its use of comparative geopolitical advantages, both economic and

political supports the notion that China is in reality seeking regional hegemony. In short,

Beijing is pursuing hegemony with Chinese characteristics. I posit that China is seeking

a balance between peaceful coexistence and coercive leadership in the South China Sea,

where it functions as an economic driver and benefactor for neighboring countries. Their

selective benevolence162 has it drawbacks, as it requires primary claimants and nations to

accept China’s claims in the South China Sea, but also their position as the “central

nation” in the region.

162 In this narrative, “benevolence” refers to China’s utilization of development aid, non-concessional loans and cooperation on economic development.


48

Prospects for a lasting resolution to the South China Sea disputes depends entirely

on the ability of regional nations and the international community to work towards

enhancing dialogue and building trust vis-à-vis future confidence-building measures.

The rationale is that immediate resolution of existing disputes over sovereignty and

territory in the South China Sea innately requires a level of trust between stakeholders

that simply does not exist at this time. Attaining necessary levels of trust and cooperation

will continue to pose a challenge if there is no growth in regional cooperation and

diplomacy in non-economic areas under contention. Considering that China holds the

largest sole claim in the South China Sea, it would be circumspect to say that their

behavior moving forward provides a benchmark for attaining any long-term resolution or

code of conduct in the SCS.

Building upon policy suggestions in earlier research on the South China Sea

dispute, I would posit that efforts at confidence-building measures and dispute

negotiations focus in three primary areas. The first would be aimed at building dispute

resolution framework that alleviates concerns over freedom of navigation and guaranteed

access to maritime commons. This could be built upon existing suggestions for maritime

cooperation in the fields of search and rescue, anti-piracy163 and seismic (knee

hydrocarbon) exploration. The second measure is aimed at the international community

and the United Nations, who should work to clarify and strengthen existing UNCLOS

framework, while also further delineating between maritime and territorial sovereignty.

This is a relatively challenging but necessary proposition, as it would help clarify the

“boundaries” of the dispute, and may be perceived as unacceptable by China. The third

suggestion is to speed up the development of an ASEAN economic community164 and to

integrate geopolitical cooperation as part of its framework. Furthermore, this suggestion

calls for the direct integration of China, Japan and Korea into ASEAN versus their

current nesting in ASEAN+3 grouping. This could potentially strengthen economic and

political ties between China and rival claimants, thus allowing them to build over time a

level of trust and confidence necessary to come to a resolution to the existing disputes.

163 Focusing around the Straits of Malacca and other geographical chokepoints. 164 Tentatively ASEAN seeks such a community by 2015. See http://www.asean.org/communities/asean-economic-community


49

At this time, it would be difficult to say that China’s policy towards the South China Sea

dispute remains irresolute. China is undergoing an intense period of economic growth

and has to overcome both internal obstacles such as rising nationalist sentiment and

concerns over political stability that is in some ways shifting their behavior over time.

Along the same lines, China’s integration into the international community remains

incomplete and until the time comes where China is able to either grasp the broader

“western” concept of a responsible stakeholder or to clarify its intentions regarding the

international system, it is hard to make a concrete estimate as to their long-term strategy

both in the South China Sea and in their International Relations.

References Popkin

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Appendix Popkin

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Map of the South China Sea Dispute

Appendix Popkin

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Energy and Trade Routes in the South China Sea