The South China Sea dispute shows no signs of abating
In 2024, tensions in the South China Sea have centred on a series of confrontations between the Philippine Coast Guard (PCG) and China Coast Guard (CCG) at atolls both Manila and Beijing claim. China, Taiwan and a handful of South-east Asian countries, including the Philippines, have competing claims in the South China Sea. The US-Philippine Mutual Defense Treaty (MDT) is a restraining factor regarding Chinese assertiveness towards the Philippines.
What next
Subsidiary Impacts
- China’s use of grey-zone tactics is unlikely to bring the MDT into play.
- Occasional flare-ups may occur between China and the other South-east Asian claimants over fishing rights and offshore energy activities.
- The South-east Asian claimants will defend their sovereign rights and avoid negotiating joint development projects with China.
Analysis
China claims some 80% of the South China Sea.
An international tribunal ruled in 2016 that this was incompatible with the UN Convention on the Law of the Sea, but Chinese assertiveness in the exclusive economic zones (EEZs) of rival claimants continues.
This year has seen several tense encounters involving China and the Philippines in the Philippine EEZ.
Tensions with China
Philippine-Chinese tensions will either remain at their current level or increase in 2025.
Since assuming office in 2022, President Ferdinand ‘Bongbong’ Marcos has stiffened Manila’s resolve in the South China Sea. His administration has:
- implemented a policy of ‘assertive transparency’, publicising videos of the CCG’s aggression towards the PCG;
- reinforced the physical infrastructure on Philippine-occupied atolls, most notably at Second Thomas Shoal in the Spratly Islands, where the Philippines deliberately grounded a warship in 1999; and
- strengthened Philippine defence ties with the United States and US allies Japan and Australia, for example through joint naval patrols in Philippine waters (see PHILIPPINES: Manila will bolster defence partnerships – September 10, 2024).
A Chinese blockade of Second Thomas Shoal to prevent regular resupply missions to the atoll led to a series of dangerous encounters this year in which the CCG rammed and used water cannon against PCG vessels, injuring crew members and damaging ships.
In July, the two sides agreed on measures to reduce tensions surrounding these missions.
Nevertheless, China will maintain pressure on the Philippines in 2025. Beijing will want to test the limits of the US-Philippine alliance in the early days of Trump’s second term (see SOUTH-EAST ASIA: Region will watch US election closely – October 8, 2024).
Trump seemingly has a transactional approach to alliances, but his national security team will understand that the Philippines is crucial to Washington’s Asia policy. US access to Philippine bases would be key to any contingency operations in the South China Sea or Taiwan Strait.
The Trump administration will therefore bolster the Washington-Manila alliance and increase the frequency of exercises and naval patrols between the US and Philippine armed forces.
US naval escorts for Philippine resupply ships would anger China
US naval escorts for Philippine resupply ships would represent a significant increase in the US role in the South China Sea and likely inflame US-Chinese tensions.
Other South-east Asian claimants
China will strive to keep avoiding major incidents with the other South-east Asian claimants.
Vietnam
In 2024, Vietnam has continued its extensive land reclamation activities on the atolls it occupies in the Spratlys.
Since 2021, it has reclaimed roughly half the quantity of land China reclaimed between 2013 and 2016 when building seven artificial islands in the same area. Hanoi will use this to build military infrastructure, including airfields enabling it to project air power into the South China Sea.
China avoids protesting Vietnam’s reclamation work for several reasons:
- it does not want to destabilise bilateral relations, which have improved in recent years;
- Hanoi does not have an alliance with Washington, so Beijing is less concerned about Vietnamese activities in the Spratlys; and
- China does not want another crisis in addition to the one with the Philippines.
There are occasional reminders that the competing Chinese and Vietnamese claims in the South China Sea can lead to violence. For example, Hanoi recently protested to Beijing over what it described as “brutal treatment” by Chinese law enforcers towards Vietnamese fishermen near the Paracel Islands.
The respective governments, communist parties and armed forces will maintain dialogue regarding their differences.
Malaysia and Brunei
The Malaysian and Bruneian approaches to the South China Sea dispute will remain markedly different from those of the Philippines and Vietnam.
Both Malaysia and Brunei downplay tensions with China while quietly asserting their territorial claims and legal rights to resources in their EEZs.
Each has indicated a willingness to discuss joint development of energy resources with China. In practice, though, they are reluctant to do so, because they do not want to share lucrative oil and gas revenues with Beijing.
Indonesia
For decades, successive Indonesian governments refused to acknowledge that their country was a party to the South China Sea dispute, despite the overlap between China’s claims and the Indonesian EEZ around the Natuna Islands. They meanwhile rejected China’s claims as having no legal basis.
Under President Prabowo Subianto, who assumed office in October, the country may be ready to describe itself as a claimant.
In a joint statement issued during Prabowo’s state visit to China in November, China and Indonesia said they reached a “common understanding on joint development in areas of overlapping claims”. Indonesia’s foreign ministry said this commitment to cooperation could not be interpreted as acknowledgement of China’s claims and had “no impact on Indonesia’s sovereignty, sovereign rights or jurisdiction in the North Natuna Sea”, but the choice of words remained controversial.
Prabowo’s endorsement of the statement may have been aimed at ingratiating himself with China, in expectation of increased Chinese investment in Indonesia.
Despite the wording, his administration will firmly defend Indonesia’s sovereign rights in its EEZ and will not discuss joint development of resources with China. This may raise tensions with Beijing, but will not impede the development of bilateral economic ties.
The waters around the Natunas contain valuable fishing grounds and natural gas.
CoC outlook
ASEAN Secretary-General Kao Kim Hourn said this year that the CoC would be finalised in 2025, but since the regional group and China will not be able to resolve their disagreements on contentious issues, this is over-optimistic. Negotiations will likely continue into 2026.
The two sides endorsed a third draft of the code this year.
In 2025, further progress will be slowed by disagreement over three contentious issues:
- the code’s geographical scope;
- whether the code should be legally binding or non-binding; and
- what kinds of activities the code should prohibit.
Several ASEAN members are frustrated with the slow pace of negotiations. The Philippines in particular is losing faith in the CoC process.
ASEAN’s relevance to the South China Sea dispute is increasingly in question
