The South China Sea Conflict after the Arbitration of July 12, 2016

Analyses and Perspectives

by Jörg Thomas Engelbert (Volume editor)
©2018 Edited Collection 284 Pages


This is a collection of contributions written on the occasion of the third anniversary of the South China Sea Arbitration Award (Case: Philippines versus People’s Republic of China) of the Permanent Court of Arbitration in The Hague. The contributions deal with legal, political and economic causes and consequences of this regional conflict. The authors establish connections to China’s One World, One Road projects and to the different conditions of interior and exterior politics in several individual countries.

Table Of Contents

  • Cover
  • Title Page
  • Copyright Page
  • About the author
  • About the book
  • Citability of the eBook
  • Contents
  • Editor’s Preface
  • The South China Sea Conflict: Analyses and Perspectives
  • Despite and Beyond Parties’ Non-Compliance: Legal Implications of the Arbitral Award of 16 July 2016 on the Establishment of the Outer Limits of the Continental Shelf
  • China’s Reaction to the PCA Award
  • From Hostile Goliath to Partner in Development: Philippine Perceptions and Strategies for Dealing with China
  • History as Problem, History as Solution: A Means to Resolve the South China Sea Disputes
  • ASEAN Security Multilateralism and the South China Sea
  • Territorial Claims, Security Threats and Empty Nets: The Fishermen Dilemma in the South China Sea
  • Russia and the South-China Sea Conflict
  • Can China and Vietnam Use International Law to Resolve their Maritime Disputes?
  • The South China Sea and the Media from a European Perspective
  • Order-Building in Southeast Asia on China’s Terms?
  • The South China Sea Three Years after the Permanent Court of Arbitration Ruling: Preliminary Conclusions and Outlook
  • Summaries
  • The Authors

Editor’s Preface

Two years have passed quickly… In November 2017, political scientists, law experts and historians from Germany, Britain, Russia and Norway met in Hamburg to discuss the situation in the South China Sea one year after the 12 July 2016 award of the Permanent Court of Arbitration (PCA) in the The Hague, which ruled in the case 2013–19 Philippines versus The People’s Republic of China (PRC) in the matter of the South China Sea arbitration.

The main question was to what extent the PCA ruling and its non-implementation has been or has not been a mile-stone in the development of this more than forty-years-old conflict. Break-through or dead end – that was one of the heatedly debated questions.

The answers given in the contributions to this volume are careful, measured and guarded, partly contradictory, depending on the subject and the researcher’s area of expertise. Several contributors discussed the subject as to whether an extension of the PRC’s One-Belt-One-Road or Belt and Road Initiative (OBOR or BRI)1 was a face-saving answer to a legal defeat, as China could use this program to buy ASEAN’s silence regarding the PCA ruling.

In his introduction, Thomas Engelbert has presented the reactions of China and several ASEAN countries to the PCA award. Interior and exterior politics are inseparably intertwined in all states concerned. There are different views with regard to the ongoing discussion about China’s policies in the South China Sea and beyond.

Suzette V. Suarez is of the opinion that the Arbitral Award, though final and binding according to the UN Convention on the Law of the Sea (UNCLOS), will neither be complied with nor enforced any time soon, because both sides, the PRC and the Philippines have decided to ignore it. Notwithstanding this, the ruling will have far-reaching effects on other ←7 | 8→law-of-the-sea issues. In this legal aspect, it could be regarded as a mile-stone in the history of the conflict.

Gerhard Will has analysed China’s reaction to the PCA award. The PRC has employed a tough language, but has used a multi-faceted strategy, especially manifesteted in its economic and diplomatic initiatives. This author has shown the inherent limits of China’s “grand strategy”.

Peter Kreuzer has developed a different view. He thinks that not only the assertive acts of China in the South China Sea should be mentioned. Arbitration has led to a dead end. Conflict resolution is currently not on the agenda, but bilateral and multilateral approaches might offer a way out of the stalemate.

Bill Hayton has reminded us of the emotional power of history. His contribution shows how problematic it is to present “historical claims” in the South China Sea. He is of the opinion that more could be done to reveal the shakiness of these claims to the aroused publics in the region.

Howard Loewen has pointed to the unsatisfactory balance of ASEAN security multilateralism. Especially the security management in the South China Sea is a vivid illustration of these general shortcomings, which are characteristic of this regional organization.

Felix Heiduk has shown us the importance of fishery in the South China Sea. While the territorial conflicts remain unresolved, a new approach to the management of the resources is badly needed.

Vladimir N. Kolotov’s contribution is on Russia’s role in the South China Sea conflict. According to his understanding, the US is a source of instability, Russia is a security exporter and Vietnam should be friendlier towards China. He thinks that Russia’s weapons are making Vietnam stronger in its deliberations with its mighty northern neighbour.

Stein Tønnesson has proposed ways out of the current deadlock. Especially Beijing and Hanoi could make more courageous moves to find a solution to their conflict in the South China Sea. Beijing’s text-book claims are an impediment to a rational solution.

Rodion Ebbighausen has shown how difficult it is to report on the South China Sea conflict. So far, the interest of the European public in this conflict has been very limited.

Jörn Dosch and Shengmin Cui have presented outlines of China’s One Belt, One Road Initiative. They show, how this initiative can be regarded ←8 | 9→as a water-shed in the Chinese discourse about the role of the PRC in international relations, especially in the region of Southeast Asia.

In his conclusions and outlook, Thomas Engelbert has tried to sum up the main tendencies of the academic discussion. He has compared them with the most recent developments in the region, especially with regard to the ASEAN claimant states.

The editor would like to express his deep gratitude to the authors and to the technical staff, especially Cao Quang Nghiệp, who made this publication possible. A special thanks goes to Catherine Framm for her careful proofreading and to the Hamburger Gesellschaft für Vietnamistik e.V. for the sponsoring of this book.

The Editor

←9 |
 10→←10 | 11→

1 Jörn Dosch/Shengmin Cui used yet another acronym: 21MSR. The official Chinese designation is ‘One Belt, One Road’ (一带一路). It would be best rendered with the English acronym OBOR. See also Jörn Dosch/Shengmin Cui’s contribution to this volume.

Thomas Engelbert

The South China Sea Conflict: Analyses and Perspectives.

An Introduction to the Topic

On 12 July 2016, the Permanent Court of Arbitration (PCA) in The Hague ruled on the case Philippines versus China concerning the South China Sea. The PCA ruling invalidated Beijing’s claim to virtually the entire South China Sea, where altogether six countries (PRC, Taiwan, Vietnam, the Philippines, Indonesia and Brunei) claim territories. The court ruled in favour of seven of the Philippine submissions, especially the invalidity of the so-called nine-dash line of China’s maritime borders and the historic rights on which this line is based. The PCA did not rule on any question regarding either the sovereignty of land territories within the South China Sea or maritime borders.1 China had refused to participate in the arbitration and declared the result “null and void”. The PRC would continue its military program in the South China Sea, where the “blustering US” was only “a paper tiger”.2

Even with this outright rejection of the verdict by one of the conflicting parties, the rule can be considered as a juridical milestone in the history of the South China Sea conflict as China’s claims have been proven inconsistent with international law. This alone, however, does not yet lead to a conflict settlement.

←11 | 12→

The international community was following this event and its possible consequences with attention, anxiety and expectations. What would be the reaction of the PRC and the US? Even more important was the question: is ASEAN solidarity going to pass the test to find a common position?

The reactions to the verdict were expected, unexpected and partially astonishing. China’s outright rejection came as a surprise to no one. But Beijing shrewdly played on several tables. This time, the PRC used its economic power.

Whereas the legal counsel of the Philippines, Paul Reichler, declared the rule an “outright victory” for his client, the new Philippine president, Rodrigo Duterte (in office since 30 June 2016) astonished the world with his public praise of China and his “trashing” of Philippine-US relations. His statements and the withdrawal of the Philippine naval forces from joint US-Philippine patrols in the South China Sea were regarded as undermining the fragile security architecture of the region and ASEAN unity – all to China’s benefit.3 In the wind shadow of Rodrigo Duterte’s backing down in public, Vietnam also seemed to have taken notice of, but has not officially recognized, China’s stance on the PCA case.4

←12 | 13→

Sticks and Carrots

The month of September, 2016, brought a flurry of diplomatic activities. At the ASEAN-China Summit in Vientiane (Laos) in early September 2016, the ASEAN leaders and the Chinese premier agreed to continue their two-track diplomacy on the basis of the Declaration of Conduct of the Parties in the South China Sea (DOC). The joint statement stressed the respect for the freedom of navigation within and the right to over-fly the sea. Both sides expressed their willingness to resolve their territorial and jurisdictional disputes by peaceful means in accordance with the universally recognised principles of international law, including UNCLOS (1982). They promised to exercise self-restraint in the conduct of activities that could complicate and escalate disputes or affect peace and stability.5 It is interesting to note that China had rejected the PCA award which was based on UNCLOS, but officially adhered to the principles of this UN declaration.

Later in September 2016, the new Vietnamese prime minister, Nguyễn Xuân Phúc, headed a 132-member delegation on an official visit to Beijing where he was solemnly greeted with 19 cannon shots on Tiananmen Square almost like a head of state (who usually gets 21). Nine agreements about science and technology, education, trade, infrastructure and environment were concluded during this visit. Both sides emphasised again the necessity to solve the differences in the South China Sea peacefully. Only Premier Nguyễn Xuân Phúc, not his Chinese counterpart Li Keqiang, mentioned in their statements the importance of international law, especially the UN Declaration on the Law of the Sea (UNCLOS, 1982) and “respect for legal and diplomatic procedures”.6 Obviously, Vietnam has ←13 | 14→decided not to let the conflict dominate the overall close and successful cooperation with the PRC. ASEAN solidarity is a key factor indeed, but difficult to achieve. Bilateral relations between China and most individual Southeast Asian countries are imbalanced in trade and investments. Other countries were even more exhilarated to get the carrots in the aftermath of the PCA ruling.

In this regard, Southeast Asia has quite a few interesting case studies to offer. It shows how much the conflicts in the South China Sea and China’s One-Belt-One-Road-Initiative (OBOR) are connected with each other. Insubordination is punished with the withholding of assistance (Benigno Aquino II), good conduct rewarded with massive subsidies (Razak, Hun Sen or Duterte). Quite often this “aid” is a poisoned chalice for the receiver, as short-term interests of the donor are ruthlessly enforced.

OBOR is perhaps not a coherent program with a strategic long-term vision, but rather a sum of individual projects wrapped together as one large-scale program. Without any doubt, the very nature of this generous Chinese “present to the world” is the utilization of industrial over-capacities in China, especially in the steel and construction industries, dominated by large, centrally-controlled state conglomerates with access to loans from state banks. In recent years, they have been used to drive the staggering economic growth, but have at the same time squeezed the Chinese market. Smaller players have been forced out.7

Of all the contractors participating in Chinese-funded projects in Asia, 89 percent are Chinese, and only 7.6 percent are local companies. China uses several tools, like state-owned companies as contractors, credits with commercial terms, and infrastructure and trade agreements to boost its export industries especially in steel and construction-related goods. The key Chinese players act as a united front and use flexible payment terms, such as compensation in natural resources or equities. This “flexibility” creates short-term incentives and masks long-term risks.8

←14 | 15→

Corruption is a burning issue both in China and in most Southeast Asian countries. Authoritarian regimes are usually characterized by patron-client ties and centralised power structures. National interests are perceived as party, clan or family interests. In several countries, however, a growing middle-class is raising its voice, demanding reformasi, transparency, accountability, the rule of law and “good governance” from the rulers.

Malaysia is an interesting case study. Prime Minister Najib Abdul Razak visited the PRC in late October and early November 2016, and concluded trade and investment agreements worth 32 billion USD, the largest of any such deals ever reached at a Malaysian PM’s visit abroad. After his return to Kuala Lumpur, the domestically beleaguered PM9 had to dissipate fears of his own UMNO party leadership that he had sold out Malaysian national interests to China. In an open-ed article for the China Daily, Razak lashed out against “former colonial powers” that had no right to teach Malaysia a lesson. Global institutions did not reflect the historical peculiarities of the non-Western countries. The coming century belonged to the Asians10, he stated, but not to him anymore, it seems.

On 9 May 2018, his alliance Barisan Nasional lost the elections to a loose coalition of three main parties (Pakatan Rakyat) which were united to fight Razak’s corruption. On 22 May 2018, the former PM was taken into custody. His long-term predecessor (1981–2003) and successor (since May 10, 2018) Mohamad Mahathir had strongly condemned China’s infrastructure investments during the election campaign, claiming that Razak had sold out the country for bribes, and expressed his firm will to renegotiate the treaties. Mahathir went as far as using terms like “unequal ←15 | 16→treaties” and “new colonialism” during the campaign, and stopped two large projects11 after he had taken office. The old new PM seems to have understood, that there were many white (or “red”) elephants along the proposed new maritime and land silk roads, constructed by Chinese state companies with loans coming from Chinese state banks, to be paid back by Southeast Asian tax payers. The larger the project, the bigger the profits from payola under the table, realised by Chinese construction and engineering companies, national and international banks or investment funds as well as Southeast Asian politicians.12 The 1Malaysia Development Berhad (1MDB) scandal has thrown a light on the darker side of this assistance. It has also pointed to the methods of local authoritarian regimes, which keep themselves in power by a mixture of nationalistic populism (e.g. election promises and anti-Western rhetoric), looting of state funds, graft, money-laundering and criminal breach of trust.13

Notwithstanding this scandal, PM Mahathir was received in Beijing with full honours. He has turned down his anti-China rhetoric considerably since. Notwithstanding his milder tone, even during his visit he dared to confirm his position that China had to respect the freedom of movement of all vessels, even foreign warships, through the South China Sea. Anything else, he stated, would lead to trouble.14

←16 | 17→

Last but not least, the Kingdom of Cambodia should not be forgotten. Here, the relations between the South China Sea conflict and “generous” Chinese rewards are even more visible. The Philippines of President Rodrigo Duterte and Cambodia, led by the long-time PM Hun Sen, were instrumental in watering down the language in several ASEAN declarations and joint communiqués in 2016 and 2017, which criticised Chinese actions, like land reclamation and militarization, in the South China Sea. Any mention of the PCA ruling were to be dropped.15


ISBN (Hardcover)
Publication date
2020 (February)
Berlin, Bern, Bruxelles, New York, Oxford, Warszawa, Wien, 2020. 284 pp., 10 fig. col., 4 fig. b/w, 5 tables.

Biographical notes

Jörg Thomas Engelbert (Volume editor)

Thomas Engelbert is Professor for Vietnamese Language and Culture at the University of Hamburg. His research focus is on the South, especially on majority-minority relations.


Title: The South China Sea Conflict after the Arbitration of July 12, 2016
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286 pages