In the former approach, China showed willingness to negotiate and explore joint development options. At the ASEAN Regional Forum in Bali, China agreed to guidelines proposed by ASEAN to better implement the 2002 Declaration on the Conduct of Parties in the South China Sea. China and ASEAN also pledged to carry out cooperative projects, including joint developments of oil and gas. But the reality is that, without technological expertise, China cannot bring much to the negotiating table. The negotiating dynamics also enable smaller states to band together and involve outside powers, something China wishes to avoid.
Shortly after the negotiations, the Philippines and Vietnam offered exploration contracts to energy companies in the disputed areas. In early August, Jose Layug, Filipino energy undersecretary, confirmed that 15 areas for exploration covering over 100,000 km square, all within the Philippines’ exclusive economic zone (EEZ), are up for bids. This is despite China’s People’s Daily having claimed that a few areas fall within Chinese territory, while others are in overlapping territories. Meanwhile, Vietnamese state-owned PetroVietnam is offering nine offshore oil blocks in its 2011 licensing rounds, with many apparently falling within China’s territorial claims in the South China Sea.
To overcome technological obstacles, Southeast Asian countries are capitalising on the technologies of foreign companies through the petroleum-sharing contract model. Vietnam, one of the most aggressive claimants, is speeding ahead. Between 1998 and 2005, Vietnam signed more than 50 petroleum contracts with international oil companies. While most contracts cover shallow-water blocks, future developments to increase production will push operations to deeper, and contested, waters.
According to a July investigative report by Beijing’s Caixin Magazine, oil production in the South China Sea reaches 1.37 million barrels per day, with China accounting for only one-fifth. Another Chinese report by the Guangzhou-based Southern Weekend, citing sources from China’s state-owned oil company CNOOC, describes China as ‘operating in the dark’ due to a lack of scientific expertise and first-hand data. As a result, Chinese operations mostly concentrate on the Gulf of Tonkin and the coast of Guangdong province, despite CNOOC having been granted the license to explore the southern part of the South China Sea as early as 2004. China does not even know whether some of Vietnam’s oil discoveries lie within its nine-dashed line claim.
For Beijing, the tough approach is not viable, as the Chinese navy still lacks projection power. The US Navy remains unmatched, and Washington is showing the political will to act as the mediator. Geography further inhibits China’s options. The disputed Spratlys and Paracel islands lie within or close to the EEZs of Vietnam and the Philippines, much further away from China. While clashes occasionally occur between China and the two countries, there is no evidence of systematic attempts to project Chinese power.
In light of this, the Philippines and Vietnam do not shy away from responding to Chinese actions. Following Chinese harassment of Vietnamese oil exploration vessels in May this year, Vietnam promptly retaliated with live-fire naval exercises. This was followed by an unprecedented series of anti-China rallies in Hanoi between early June and late August. The Philippines also protested from February to May this year, with allegations of the Chinese navy opening fire on Filipino fishermen, intimidating a Filipino oil exploration ship and putting markers in Philippine-claimed areas. In an act of defiance, the Philippines renamed the South China Sea the ‘West Philippines Sea’ and removed some of the Chinese markers.
The Philippines and Vietnam are also upgrading their navies. In August 2011, the Philippines took delivery of a decommissioned US Coast Guard cutter. In the same month, Vietnam received a second Russian Gepard class guided missile frigate, the most modern ship in the Vietnamese navy. It also ordered six Russian diesel-electric submarines for a total of $2 billion.
Such actions are indicative of Vietnam and the Philippines capitalising on the relative weakness of China, particularly with the protection offered by America. While buying time at the negotiating table, they are extracting concrete benefits from the South China Sea. Thus the connection between diplomacy and practice is somewhat disconnected. China’s alternatives are currently limited, but this status quo will not continue. As its military and technological prowess grows, China will not be content with the creeping assertiveness of its smaller neighbours. In the meantime, it is in the interest of all parties to exercise stronger political will, understanding and transparency at the negotiating table.
Andy Yee is a writer and translator based in Hong Kong. He has worked at the Political Section of the EU Delegation to China in Beijing and blogs at Global Voices Online and China Geeks.
This article deceives readers to what really took place in the South China Sea during recent months. China is portrayed as victims and Vietnam, the Philippines as aggressors ( nicely worded as being “assertive”. Nothing could be further from the real fact:
1. “China does not know whether some of Vietnam’s oil discoveries lies within its nine dashed line claim”. First,this statement implies acceptance of the 9 dashed point claim from the countries sharing this sea. The fact is Brunei, Malaysia, Indonesia, the Philippines and Vietnam all contest this illogical Chinese claim and in fact, China has recently cut cables of Vietnamese survey ships twice and chased away Filipino ship once. It also sent its largest patrol ship to check on every oil installation in the area.
2. “There is no systematic attempts to project Chinese power”. You mentioned Vietnamese live-fired naval exercise ( 40 miles from the coast of Vietnam ) but conveniently forgot to mention 2 Chinese naval exercises outside Vietnam and 800 miles from the coast of China.
Unlike China, the Philippines and Vietnam are engaging international oil companies to explore resources within their EEZ’s and and modestly upgrade their navies in defensive gestures. Even after the upgrades, their navies are extremely outmatched by the current Chinese navy. So far, America has not offered ” protection ” as you stated and realistically the US is having too many problems to confront China in SCS.
Your article is a clear attempt to set up public opinions for further Chinese aggressiveness against its neighbors and place blame on the Philippines and Vietnam for inviting the US into the conflict which is the official Chinese Communist party line.
Andy, are you really from Hongkong? Last time I checked Hongkong used to be the most democratic part of China , it’s citizens are freedom-loving people who can think for themselves and not believe Communist propaganda. If you read the major newspapers of the world that are available in Hongkong you’ll see a fully different view than the one you portray. Vietnam and the Philippines are tiny countries compared to China. Outmatched and outclassed in both economic and military power. China has the second highest GDP per capita spending on it’s military which is being led by it’s navy. China is the one not adhering to international norms and laws…much less the UNCLOS. It’s claim which is historically based is the weakest of all and won’t hold water in the International arena. That is why when the Philippines asked it to go for arbitration on the International Court of Justice it vehemently refused! Why? because it knows it will lose. China’s greed for oil makes it blind to international laws and customs. China claims the South China Sea as its own. Even though it is furthest from the Spratly’s it claims the entirety of it and bullies its neighbors economically and militarilly. The ancestors of the nations of south-east asia- the austronesians, the malays have sailed and fished these waters since time immemorial , long before tha Hans of the yellow river descended the southern coasts of Guangdong province. so please a little transparency. We respect China, for it’s history , it’s power, the prosperity it will bring to Asia. But make no mistake, if you threaten or bully any of your neighbors…as is happening now, a united alliance will form with Japan, the US and South Korea as well as India and Australia to stem the tide of greed.