Row Over Spratly Islands – OpEd

There has been another standoff between Philippines and Chinese naval vessels over disputed territorial waters. In January this year, ships from each navy squared up over the Spratly Islands and this week the confrontation has been over the Scarborough Shoal.

It may be called “the South China Sea” but according to international law, by no means all of these waters belong to China, as Beijing insists. Indeed six nations claim various parts of the South China Sea, the others being Vietnam, Malaysia, Brunei and Taiwan.

Under the agreement that underpins the international law on coastal waters, every country with a coastline is entitled to claim a 200-mile economic zone from which other nations are excluded. The UN Convention on the Law of the Sea, which China has both signed and ratified, would appear to put China in the wrong. However, Beijing’s argument is that historically the disputed islands and rocks, some of them little more than reefs, have always been Chinese and therefore form the boundary from which the 200 territorial waters should be measured.

The reason this matters so much to all the countries involved is that there is strong evidence that beneath 3,500,000 sq. kilometers of the South China Sea there are substantial reservoirs of oil and gas. With a average sea depth of 1,400 meters, the exploitation of these hydrocarbon resources would be easy for an international offshore industry well used to working in far greater depths.

China’s voracious demand for energy would be ideally served by such a bountiful supply of oil and gas right on its doorstep. However, by choosing the path of confrontation with the Philippines and the four other countries that have an arguable case to own parts of the South China Sea, Beijing is choosing the wrong path.

Indeed it is inviting the very thing to which it most objects, which is outside intervention of a threatening nature. Washington is of course arguing that the joint exercises planned with the Philippines navy starting April 16 are ”routine” and the fact that they happen to be near the disputed Scarborough Shoal, is pure coincidence. No one is likely to be fooled, least of all the Chinese.

However, unless they are prepared to try and face down US warships with their own, the parade of Filipino and American naval vessels around these disputed waters is likely to involve China in a loss of face. How much better if Beijing had chosen the route of international arbitration, perhaps inviting the UN to call a conference of all six countries to hammer out and finally agree on who owns what? Whatever issues could not be resolved at this gathering would be adjudicated upon by independent assessors.

China would surely gain far more from this approach than its risky strong-arms tactics. And besides, what is really more important to the Chinese — the ownership of the oil and gas or being able to buy and transport it easily to its own refineries and power stations ?

China is committed to eradicating subsidies on nonrenewable energy. When its consumers start paying market prices for this energy then, with the exception of taxation returns, it will not matter who owns the oil and gas used to generate that power.

Unfortunately this is not the only new oil frontier where angry disputes are brewing. Russia and other states around the Arctic Circle are scrambling to claim their part of another anticipated oil and gas bonanza. The Russians have even sailed two miniature submarines to the sea floor of the North Pole and planted a Russian flag. They hope by so doing to lay claim to a 1,200 mile range of underwater mountains.

Putin’s Kremlin would seem to have little to gain by compromising on what could be a significant extension of its current massive hydrocarbon riches. China’s position is very different. While it can project its economic power militarily, the greater benefit will accrue from commercial dominance, as the business history of the united States has demonstrated over the last century. Like Washington, Beijing should practice talking softly while carrying a big stick. However, as the Americans have learned repeatedly, to their cost, the stick by itself does not work.