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Troubled Waters: Demystifying the South China Sea ruling

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Brookings India hosted a public discussion on “Troubled Waters: Demystifying the South China Sea Ruling” on July 14. The discussion featured Abhijit Singh from the Observer Research Foundation and Darshana Baruah from Carnegie India, and was moderated by Dhruva Jaishankar, Fellow for foreign policy at Brookings India. The discussion focused on the outcome of the South China Sea ruling released by the Permanent Court of Arbitration on July 12, the response by China and other actors in the dispute, as well as possible implications for India.

The maritime features in the South China Sea have been under contention since 1945. In January 2013, a year after China started provocative manoeuvres around the Scarborough shoal (claimed by the Philippine government as an integral part of its territory), the Philippines referred the matter to the Permanent Court of Arbitration (PCA) in The Hague, invoking Annex VII of the UNCLOS, which allows parties to submit a dispute for arbitration. Since territorial disputes (such as those in the South China Sea) cannot be addressed by the PCA under UNCLOS, the Philippines did not present its case as a territorial dispute. Instead, the Philippines’ concerns related to: the legality of China’s nine-dash line, on whose basis China claims the maritime features in the South China Sea; the nature of the maritime features, i.e. whether they qualify as islands (in which case they would generate an Exclusive Economic Zone (EEZ) and an entitlement to a continental shelf) or as shoals (in which case they generate no more than 12 nautical miles of territorial sea, hence undermining China’s claims); and whether China’s land reclamation activities affected the nature of these maritime features.

The PCA ruled that the nine-dashed line is an invalid basis for China to make historic claims over the South China Sea. It also ruled that no maritime feature in the South China Sea is an island and therefore does not generate an EEZ. According to the ruling, China’s land reclamation does not alter the status of the maritime features and also violates international law, regardless of whether it is for civilian or military purposes. Predictably, China did not take part in the proceedings, claiming that the PCA has no jurisdiction over the interpretation of the UNCLOS, and has refused to accept its verdict. The challenge is that there is no mechanism to ensure the implementation of the Court’s ruling without the consent of the disputing parties. This is likely to generate a lot of uncertainty over the next steps in the dispute.

There are differing opinions on how the disputing parties should respond to the Court’s ruling. Some claim that China could undertake military action in the South China Sea which will further escalate tensions between China and other actors in the region. Others advocate a limited response by China so as to not affect its soft power (which has already been undermined by its economic slowdown) and to not compromise on the possibility of gaining market economy status. The Philippines’ reaction to the ruling has been remarkably quiet, indicating that the country is trying to strike a delicate balance between flaunting the validation of its position on one hand and taunting China on the other. Bilateral economic relations are a key factor in the Philippines’ reaction to the ruling.

There are several reasons for India to be concerned about the PCA ruling. About 40 to 50 percent of Indian trade passes through the Malacca Straits and South China Sea. Therefore, it is in Indian interests to ensure peace and stability in the South China Sea. Since India aspires to become a global power and join the global high table, it has a responsibility to take a stand on issues of global importance and speak out against attempts to curtail freedom of navigation. Moreover, China’s presence in the South China Sea increases its power projection in the India Ocean region, which India considers as a threat to its own influence in the region. Predictably, India acknowledged the Court’s ruling but is not expected to take any unilateral actions to address the South China Sea dispute or uphold the PCA’s ruling. Concrete steps might be taken by India only through a multilateral framework.

The ruling is likely to inflame tensions between China and several other regional states including the Philippines, Vietnam, and the United States. Rifts will increase if the United States takes concrete actions in support of Philippines, as other allies will be expected to follow suit and make their positions clear. However, it is unlikely that the tensions in the South China Sea will spiral into a full-blown international conflict, which is in no country’s interest given the large volumes of trade traversing through the South China Sea. Nevertheless, China will lobby hard to take the South China Sea ruling off the agenda of international organizations such as ASEAN. An important effect of this ruling has been a clear dent in the narrative of China’s peaceful rise in the global order. Chinese response to this ruling will be observed closely by all countries involved, and will be indicative of future Chinese attitudes towards the liberal international order.

Sara Perlangeli, a Research Intern at Brooking India, contributed to this report. Like other products of the Brookings Institution India Center, this report is intended to contribute to discussion and stimulate debate on important issues. The views are of the discussant(s), contributor(s) or author(s). Brookings India does not have any institutional views.

Event Announcement

On July 12, the Permanent Court of Arbitration in The Hague issued its final award in an arbitration case initiated by the Philippines against China over the South China Sea dispute. This dispute sits at the heart of differences between countries seeking to uphold freedom of navigation in these waters and China’s growing maritime ambitions. China has refused to participate in the proceedings, saying that the dispute should be settled bilaterally by the parties directly concerned. The ruling therefore risks inflaming tensions between China and several other regional states including the Philippines, Vietnam, and the United States. The ruling also has implications for India, given the importance of freedom of navigation for the Indian economy; according to Defence Minister Manohar Parrikar, more than half of India’s trade passes through the waters of the South China Sea.

Brookings India held a public discussion on July 14 that aimed to discuss the outcome of the South China Sea ruling, the response of China and other actors, and the possible implications for India.

Speakers

Abhijit Singh
Senior Fellow, Maritime Security Initiative
Observer Research Foundation

Darshana Baruah
Research Analyst
Carnegie India

Jayadeva Ranade
President
Centre for China Analysis & Strategy

Moderator
Dhruva Jaishankar
Fellow, Foreign Policy
Brookings India

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