The long road towards peace and cooperation in the South China Sea (SCS) started back in the late 1980s. This was after several decades of disputes and confrontation that began soon after the end of World War II when countries around the SCS first started making claims to sovereignty over features within the sea. In the late 1980s and before the conclusion of the Cambodian war through the 1991 Paris Peace Agreement, I recognized that prospects for peace and cooperation may finally have come to Southeast Asia, although there was still potential for worrying developments and conflicts in the SCS.

The countries around the SCS have a long history of confrontation and very little experience of cooperation. Armed clashes between China and Vietnam have occurred primarily in 1974 with the latest in 1988. Multiple territorial claims to islands existed, as well as claims to national maritime zones of jurisdiction, particularly in and around the Spratly Islands group. The island disputes were bilateral, trilateral or even, in some instances, multilateral. The rapid economic development of the countries around the SCS, particularly China, led to a scramble for the natural resources of the SCS, both living and non-living.

Strategic issues were also at stake. The strategic significance of the SCS to non-littoral countries could not be ignored. The sea-lines of communications through the area are significant both for the region and for world trade and the global economy. Consideration needed also to be given to increasing problems of pollution and the safety of navigation as well as to the protection of the marine environment and fragile marine ecosystems.

Then there were the political factors that inhibited the process of cooperation. The SCS is surrounded by countries that are vastly different from one another, in land size, population, per capita income, employment in fisheries, fish catch and consumption of fish per capita. Political systems also markedly varied from the communist/socialist countries of the northern littoral, namely China and Vietnam, to the non-communist southern and eastern insular countries (Malaysia, Singapore, Indonesia, the Philippines, and Brunei Darussalam). There was also the complicating factor of Taiwan/Chinese Taipei as a claimant. An important geographical fact is that the insular countries control maritime approaches to and from the coasts of the mainland SCS countries.

The South China Sea and its Three Problematiques

Among the reasons why a resolution of the territorial and maritime resource disputes in the South China Sea seems to be nowhere in sight are that there is not one, but many disputes in question; not two but many actors involved; and not one particular issue but several strategic interests at stake. The South China Sea disputes can be described as the confluence of three problematiques.

Primarily, the disputes are a contest for sovereignty and control over specific areas of land and water, as well as over economic resources (fisheries, oil and gas), involving two or more of altogether six claimant parties (Brunei, China, Malaysia, the Philippines, Taiwan, and Vietnam). Successful claimants hope to enjoy benefits arising from sovereignty and sovereign rights, as recognized under international law, but such rights and benefits may only be fully enjoyed if uncontested. For this to happen, the different sets of countries whose claims overlap must negotiate boundary limits to reduce/remove the overlaps, or, failing to do so, they should agree to resource-use arrangements and other rules governing activities in disputed areas, that may be pursued even in the absence of a definitive determination of sovereignty or boundaries.

Mistrust of neighbours has clearly been an obstacle to an early resolution of the disputes, attributable to power asymmetry or to historical enmities. However, in some cases strong domestic opposition to any compromise, the absence of a clear-cut national policy, and inadequate capacity to move forward with the technical and legal aspects of the claims have also prevented sustained efforts at dispute management.

Secondly, the disputes are a microcosm of the dilemma in security relations between China on the one hand and the Association of Southeast Asian Nations (ASEAN) on the other hand (four of the claimant-states being members of ASEAN, and Taiwan not having the juridical personality to participate in state-level interactions on this issue). The weaker states (ASEAN) realize they must band together to strengthen their influence over the stronger power (China), but fear that this will lead to a perception of ganging up against China and thus elicit greater hostility than may already exist.

Malaysia's maritime boundaries border those of six other countries, namely, Brunei, Indonesia, the Philippines, Singapore, Thailand, and Vietnam. Because of the number of littoral countries around the South China Sea, these boundaries are more apparent there compared to the rest of Malaysia's maritime space. Malaysia's maritime territory in the South China Sea is basically divided into two parts, separated in-between by Indonesia's Exclusive Economic Zone. Of Malaysia's two areas of the South China Sea, one borders the East Coast of Peninsular Malaysia and the other borders the Malaysian states of Sabah and Sarawak (collectively referred to as East Malaysia) on the island of Borneo. It is the East Malaysian part of the South China Sea that is the most contentious area, particularly given the various overlapping claims over the Spratly Islands.

Malaysia's maritime territory in the South China Sea encompasses twelve features, be they islands, rocks, reefs, shoals and atolls in the Spratly Islands. Malaysia maintains a physical presence on five of the features. These are Pulau Layang-Layang (Swallow Reef), Terumbu Mantanani (Mariveles Reef), Terumbu Ubi (Ardasier Reef), Terumbu Siput (Erica Reef), and Terumbu Peninjau (Investigator Reef). Two other features, though lying within Malaysia's claims, are occupied by the Philippines and Vietnam, with the Philippines occupying Terumbu Laksamana (Commodore Reef) and the Vietnamese occupying Pulau Amboyna Kecil (Amboyna Cay). Malaysian special forces actually landed on Pulau Amboyna in 1978 and placed markers, but the Vietnamese who subsequently occupied the feature destroyed them. Malaysia then began a series of gradual claims of several positions in the area beginning in May 1983 when special forces personnel occupied Pulau Layang-Layang (Swallow Reef). The full details of the developments of these military outposts will be discussed later in the chapter.

The current official position of the Malaysian government towards its claims can be seen in the replies of the Malaysian government to Senator Tunku Abdul Aziz on issues regarding the Spratly Islands and the South China Sea. The two transcripts below dated 6 May 2010 and 28 July 2010 were originally provided in Bahasa Malaysia by the Senator's office to the media and obtained by the author. I have translated the transcript and edited out the routine salutation and greetings in the response to the Senator's question.

The Association of Southeast Asian Nations (ASEAN) and the ASEANfounded and ASEAN-centred, 27-member ASEAN Regional Forum (ARF) are often derided (or worse) for being unable to “do something” about flashpoints for conflict in their respective areas of coverage — Southeast Asia in the case of ASEAN and the larger Asia-Pacific in the case of the ARF — although what precisely they should do is never clear. One of the leading and most prominent of these flashpoints is the South China Sea — the conflicting multiple claims to the land features and waters of that sea (contrary to the government-declared Chinese view, no such claim is “indisputable”).

Yet, there is very little likelihood that the sovereignty or other jurisdictional issues can be definitively resolved anytime soon, or ever. This is because each of the claimants considers and projects its position as its national strategic interest — one of its “core interests”, if you will. Criticism of ASEAN or of the ARF for their inability to remove the South China Sea flashpoint by resolving the sovereignty and jurisdictional disputes flies in the face of this reality.

The Chinese government — in Beijing or in Taipei — fears that losing control of the South China Sea would render China vulnerable to other powers’ attempts to encircle it, “contain” its rise, and prevent it from taking (or re-taking) its rightful place in the world. China has an understandable aversion to foreign military vessels lurking close to its shores. The Chinese are probably concerned about an attack — from the sea or from the air — or even an invasion, from the surface of, under or above the South China Sea to their southeast. For their part, the authorities on Taiwan cannot be seen as taking a “softer” position on territorial questions than their counterparts on the Chinese mainland. The South China Sea is also a lucrative source of fish for Taiwanese fishing fleets as well as for other fishing vessels ranging over that vast and open sea.

Vietnam would find itself almost completely surrounded by China, which occupied it for a thousand years and bloodied its nose in 1988, if it were to lose its foothold in the South China Sea. Having been invaded from across the South China Sea during the Pacific War, the Philippines considers it in its security interest to push its western frontier as far out as possible.

The South China Sea is usually considered as having vital strategic and economic interest. It is a nexus of maritime routes, connecting the Indian and Pacific Oceans. It possesses a diverse marine environment with rich resources of fisheries and ideal conditions for marine research activities. In addition, the continental shelf in the South China Sea is believed to contain great oil and gas reserves. This gives rise to the existence of one of the most complicated and long-lasting sovereignty and maritime disputes. However, with its specific geographical characteristic of a semienclosed sea,2 any exploration, exploitation, and management activities in the South China Sea must be conducted in a cooperative manner. In this regard, Article 123 of the United Nations Convention on the Law of the Sea (UNCLOS) is worthy of being quoted as a framework for cooperation of states bordering enclosed or semi-enclosed seas:

Such a framework must also be taken into account in settling the disputes in the South China Sea.

Sovereignty Disputes

The sovereignty disputes in the South China Sea mainly relate to some mid-ocean islands. The Paracels are disputed between Vietnam and China (including Taiwan). The Spratlys are disputed (as a whole or partly) between Vietnam, China (including Taiwan), Malaysia, Brunei, and the Philippines. The Scarborough Shoal is disputed between China (including Taiwan) and the Philippines.

The South China Sea (SCS) represents a historical success of conflict prevention and peace building. It has been, and is, the locus of a number of territorial conflicts between China and the members of the Association of Southeast Asian Nations (ASEAN), and a region where regular military clashes have occurred. In Sino-ASEAN relations, the SCS is the most likely flashpoint to escalate into war, or generally undermine otherwise positive developments. To cite, Rodolfo C. Severino, former ASEAN Secretary- General, “[i]f not for the South China Sea, China-ASEAN relations would be hassle free”. It is not without reason that the characterization of the Spratlys as “Asia's next flash point” became a standard reference phrase during the 1990s. However, these predictions seem to have been premature, and have so far not materialized. Indeed, although the underlying incompatibilities have not been resolved, not only have the tensions not escalated into a serious military conflict, but such an event has in fact been mitigated, and as this chapter will argue, a more stable peace has developed.

Scholars of neorealism — the dominant research paradigm for analyses of the East Asian security setting — have painted a gloomy picture of the prospects for the South China Sea and the East Asian region in the post–Cold War era, with perpetual conflicts dominating the predictions. Virtually all analysts of U.S. policy have also made similar assessments. However, these predictions seem to have been premature, and have thus far not materialized. Not only is this the case in the South China Sea, but also in the broader East Asian region where instead of perpetual conflict the post–Cold War era has been characterized by integration and a focus on multilateralism and multilateral cooperation. Though less prone to predict conflict, other mainstream international relations theories fail to account fully for the level of peaceful developments. Liberal institutionalism tends to either give the various institutional arrangements in East Asia more prominence than they deserve, or dismiss them simply because they are so different from the Western ones. Constructivism, on the other hand, tends to give more credit to Asian identity building than it deserves.

This chapter will provide an empirical study of the SCS dispute since the end of the Cold War. More specifically, the study focuses on China's role on behalf of peaceful developments in the SCS and in the overarching Sino-ASEAN relations.

The South China Sea is clearly of concern to many countries and parties apart from China and the Southeast Asian states that have rival claims there. In terms of larger questions of peace, regional stability and global commerce, those with deep and legitimate interests heavily outnumber claimants. Indeed, it can be safely asserted that the entire international community — multinational corporations, private traders and energy companies, as well as governments of all political persuasions — has a huge stake in the maintenance of the South China Sea as a peaceful and open waterway.

The multiple sea-lines of communications traversing the South China Sea, which carry significant amounts of international maritime trade, are of crucial importance to the countries within the broader region and beyond. Economic powerhouses China, Japan, South Korea and Taiwan all depend on uninterrupted energy supplies, largely in the form of oil, natural gas and coal from the Middle East, Australia and Africa, much of which flows through the South China Sea.

This chapter examines American interests in the South China Sea. Although other non-claimant countries could be expected to offer comments, engage in diplomacy and make representations in the event of looming instability in the South China Sea, only the United States possesses the power to intervene decisively. Other parties might not agree with specific American actions in the event of intervention, but the United States broadly would represent their desire for an outcome that preserves peace and permits freedom of navigation and overflight in the South China Sea.

Summary

The United States has maintained a consistent policy on the South China Sea, even as the attention it gives the area has been, at best, intermittent. America is not only a non-claimant and does not back anyone else's claims in the South China Sea, but it adopts no position whatsoever on the legal merits of the six sets of overlapping and competing sovereignty claims. As the world's pre-eminent power, the United States is overwhelmingly concerned with freedom of navigation, ensuring no disruption to the flow of maritime trade that is vital to its own prosperity and that of its friends and allies in Northeast and Southeast Asia. At the strategic level, the U.S. Navy depends on unimpeded passage through South China Sea transit corridors to deploy vessels rapidly between the Western Pacific and Indian oceans, greatly facilitating America's global military posture.

On 31 December 2015, the Association of Southeast Asian Nations (ASEAN) will celebrate the establishment of the ASEAN Community (AC), designed to be a “dynamic, cohesive, resilient and integrated” institutional expression of “soft regionalism”. It is “soft” in the sense that the members did not give up any of their independent sovereign rights through multilateral cooperation. There is no central authority with plenipotentiary powers. There are no mechanisms through which members can be held accountable for violation of norms or rules. Over the years the regionalist vision, inaugurated in 1967 by the original core of five members — Indonesia, Malaysia, the Philippines, Singapore, and Thailand — has become even “softer” with the inclusion of the CLMV states — Cambodia, Laos, Myanmar, and Vietnam. The AC project comes onto the scene as ASEAN is characterized by intramural political divergence and diminishing international political relevance. The fact that ASEAN has survived its discords and travails over half a century to reach the point of an AC is in no small measure due to the commitment of Indonesia.

The vision of an ASEAN Community was given policy content at the 2003 9th ASEAN Summit chaired by Indonesia. Its “Declaration of ASEAN (Bali) Concord II” set forth the objective of the creation of an ASEAN Community by the year 2020. The AC rests on three “entwined and mutually supportive” pillars: the ASEAN Economic Community (AEC); the ASEAN Security Community, renamed the ASEAN Political and Security Community (APSC); and the ASEAN Socio-Cultural Community (ASCC). At the 2007 12th ASEAN Summit in Cebu, the Philippines, the timetable was accelerated, setting 2015 as a new date for completion. A reading of the summit's “Cebu Declaration on the Acceleration of an ASEAN Community by 2015” confirms that the shortening of the calendar had more to do with the dynamics of change in the international environment than progress in community building. Historically, ASEAN has always seemed to be one or more steps behind the regional events affecting it.

As an international actor, the ASEAN Community will be little different than the historical ASEAN. The modus operandi is unchanged. The economic, political, and social integration inherent in the AC's stated goals faces the insurmountable obstacle of the ASEAN principles of sovereignty, non-interference in domestic affairs, and a consensus decision-making mode in which the weakest or the most reluctant member holds a trump card.

Indonesia's newly recognized status as a democracy has qualitatively changed its international relationships. It can now claim a seat at the table with the liberal democracies of the world while posing as a role model for the less-than-democracies of its cohort in ASEAN and elsewhere in the developing world. The democracy that is being consolidated in Indonesia is a real democracy, not just electoral machinery rolled out at stipulated occasions to give an aura of legitimacy to essentially undemocratic governments. Indonesia is now one of 90 polities, out of 195, in the world that is ranked as “free” in Freedom House's annual classifications, and the only one in ASEAN. The criteria by which it is judged “free” include open political competition, respect for civil liberties, a significant independent civic life and an independent media. Acknowledging that the working of Indonesia's democracy has well-publicized problems of religious tensions, ethnic strife, and corruption — as do other democracies — the consensus is that, with halts and starts, the domestic political processes begun in 1999, by President Yudhoyono's second term, have resulted in a relatively stable democracy in which democratic values conform to the normative basis of the state: the Pancasila and the stipulations of the Indonesian constitution.

Accepting that Indonesia is a democracy and that Indonesia proudly flourishes its democratic credentials to the world, the question here is how the democratization of Indonesia has affected Indonesian foreign policy in terms of both its domestic base and its international interests and objectives. There is no question that Indonesia assiduously projects its democratic image to enhance its standing globally. Democracy has been part of Indonesia's new status in global multilateralism and its bilateral standing with liberal democratic communities. It is a consciously adopted foreign policy strategy which depends on the domestic political order. Foreign Minister Marty, in his first major address on taking office in 2009, praised his predecessor, Hassan Wirajuda, for the “democratization” of Indonesian foreign policy”.

The basic conception of how Indonesian foreign policy should be formulated and carried out was laid out more than six decades ago by Vice-President and Prime Minister Mohammad Hatta in a government statement to Indonesia's provisional parliament. The speech was titled Mendayung diantara Dua Karang — “rowing between two reefs”. It is rightly considered the foundation of Indonesian foreign policy. The two reefs at that time were the Cold War reefs of the Soviet Union and the United States of America. The domestic context for the speech was the rivalry for power between the communist left and the democratic socialists.

Hatta's prescription for navigating the reefs was a foreign policy that was bebas dan aktif (independent and active). Every Indonesian government from Sukarno to Yudhoyono has claimed bebas dan aktif as the foundation of its foreign policy. Bebas dan aktif is not a policy or strategy. It is a quality of policy in the way it is formulated and carried out: with national interests being defined independently (bebas), then pragmatically promoting those interests (aktif). This is not ideology; it is realism, particularly if we pay attention to Hatta's insistence that interests had to be pragmatic and pursued in accordance with the realities Indonesia faced in the external environment.

For contemporary Indonesia we could restate Hatta's title as Mendayung diantara Banyak Karang — rowing between many reefs. On an updated political navigation chart the great-power reefs of China and the United States are prominent, but there are hazards unseen by the founders of Indonesia's republic such as nationalism and globalism; environmentalism and development; religion and terrorism, to mention a few. There are also a host of what former foreign minister Hassan called “intermestic” issues where there is a confluence of non-traditional issues at the international–domestic policy interface including human rights and national integrity. Even in ASEAN there are reefs: the differing political, strategic, and economic orientations of the continental and maritime members or the tiered economic division between the more economically developed members and the CLMV states.

A quarter of a century ago, Donald Emmerson, one of America's most astute observers of Indonesian affairs, wrote an article for Foreign Affairs titled “Invisible Indonesia” (Emmerson 1987). The premise of the article was that the significance of a country and the attention it receives are separate matters. In an almost prescient way, he asserted that Indonesia's visibility would increase in the years ahead. His dependent variable at the time of writing was stated, “What will make Indonesia better known is its success or failure in selecting someone to replace General Suharto.” Now, well into the post-Suharto era, we can still endorse his conclusion that “in a zigzag trajectory of its own, invisible Indonesia will make its presence known”. The erstwhile “invisible Indonesia” has become a very visible Indonesia in both its regional and global international settings.

The zigzags along the trajectory that brought Indonesia its new visibility were sharp and, for policy, daunting. Not the least was overcoming the obstacles left in the political and economic wreckage of the collapsed Suharto regime: political instability, the lingering impacts of the Asian economic meltdown, ethnic and religious violence, and, of course, the separatist war in Aceh. Through the first half-decade after Suharto's fall, many Indonesia watchers were concerned that the country showed all of the earmarks of a failing state (Weatherbee 2002). Far from failing, President Susilo Bambang Yudhoyono leads a nation that is globally recognized as a political and economic success story. Indonesia has emerged in the past decade as a signally important middle-power player on the international stage whose friendship and cooperation are sought by the world's greater powers. A myriad of books, book chapters, and articles have documented Indonesia's rise to new prominence in world affairs.

Although Suharto's Indonesia may have been globally “invisible”, during the second half of his regime Indonesia had experienced a “rise”. By the early 1990s it was the dominant regional power in ASEAN, an important player in East Asia and the Pacific, and through the Non-Aligned Movement (NAM) a leader in the developing world. In its international role and status, the country was defined as a “pivotal state” (Bresnan 1999). The features of a pivotal state include physical size, large population, important geographical location, and, most importantly, capacity to affect regional and international stability.