A Military Game of Chicken in the South China Sea?

Despite China’s protestations against discussing the issue, the South China Sea was front and center at this month’s meetings between the Association of Southeast Asian Nations (ASEAN) and other regional players in Kuala Lumpur. Amid criticisms of China’s island-reclamation activities, the U.S. and China continued to trade accusations that the other is militarizing the South China Sea. Meanwhile, China maintained its objection, to no avail, to internationalizing the South China Sea issue through the involvement of non-ASEAN members.

The ship has sailed on both fronts. Now, more than ever, the South China Sea has become both a military and international issue. Given how all parties appear to have dug deeper into their positions, the situation looks unlikely to change anytime soon.

While Chinese foreign minister Wang Yi told his ASEAN counterparts that China has halted its reclamation of artificial islands on atolls and reefs in disputed parts of the Spratly Islands, it is proceeding with the construction of military installations on some of those islands.

Alarmed by the unprecedented scale on which China has conducted its reclamation activities (and is seeking to project force from these reclaimed features), the U.S., the Philippines, Vietnam, Indonesia and others have engaged in a flurry of maritime patrols and joint exercises. The Chinese navy itself recently conducted large-scale air and sea drills, although it states that those were routine drills planned far in advance and not aimed at any third parties.

Southeast Asian countries are also building up their maritime military capabilities as part of a broader trend of increased defense spending in the region. According to the Stockholm International Peace Research Institute, defense expenditures in Southeast Asia rose by 44 percent, in real terms, between 2005 and 2014, reaching $35.9 billion in 2014. Vietnam, whose territorial claims overlap the most with China among all Southeast Asian claimants, increased its defense spending by 128 percent during this period and by 9.6 percent in 2014 alone.

Efforts to manage and contain tensions in the South China Sea are also now involving players beyond the territorial claimants—China, Taiwan, Vietnam, the Philippines, Malaysia and Brunei—and, for that matter, ASEAN, which is still negotiating a code of conduct with China.

The U.S. involved itself several years ago, when then Secretary of State Hillary Clinton said at an ASEAN Regional Forum meeting in Hanoi in July 2010 that the United States has a “national interest” in freedom of navigation and would be willing to facilitate multilateral talks on the South China Sea issue.

Japan, which is involved in a territorial dispute with China in the East China Sea, has lent its political support to Vietnam and the Philippines, has proposed to participate in surveillance patrols in the area, has provided a patrol vessel to Vietnam and may do likewise to the Philippines—actions that could threaten Japan’s tenuous rapprochement with China. Australia, India and most recently, Britain, have also voiced concerns about the situation in the South China Sea.

Given the $5 trillion in global trade that passes through the South China Sea, the international attention is unsurprising, especially if the ability to navigate vital shipping routes could be compromised. However, the varying definitions of “freedom of navigation,” particularly as it relates to permitted (especially military) activities in exclusive economic zones (EEZs), have been an ongoing source of contention, prompting China to articulate its position on the limits to freedom of navigation following the ASEAN meetings.

Between the U.S. and China, such differences have already given rise to several dangerous incidents at sea and in the air over the years. These include the deadly collision between a U.S. navy EP-3 surveillance plane and a Chinese J-8 fighter jet in 2001, the 2009 harassment of the USNS Impeccable by Chinese vessels, and more recently, the buzzing of a U.S. navy P-8 plane by a Chinese J-11 fighter jet in 2014. (All these episodes occurred off the coast of Hainan.)

Even as external parties have become more vocal about their concerns, they have made it a point to distinguish between taking an interest in managing the situation and choosing sides on the territorial claims themselves. U.S. Assistant Secretary of State Daniel Russel drew that distinction when he remarked that the U.S. remains neutral about the merits of the sovereignty claims but is “not neutral” when it comes to the resolution of disputes in accordance with international law. Yet he has also shown how delicate that balance is, having previously publicly questioned the legal validity of the nine-dashed line, which forms the basis of China’s territorial claims.

A greater source of potential conflict is what now appears to be an increasing propensity of all parties to turn to military deterrence to defend their interests in the South China Sea. This trend will be difficult to reverse as long as each side perceives others to be raising the stakes—which makes the implementation of maritime confidence-building measures (CBMs) all the more important at this juncture.

The most significant CBM would be a binding code of conduct between ASEAN and China, negotiations on which are proceeding slowly. On the more immediate front, China and ASEAN are reportedly in discussions to establish a hotline to deal with emergencies in the South China Sea. The United States and China are making good on their November 2014 agreements on two sets of military confidence-building measures, regarding the notification of major military activities and rules of behavior for air and maritime encounters. As part of this process, both governments are aiming to agree on an annex on air-to-air encounters by September 2015, to complement the rules on at-sea encounters that have already been agreed upon.

More broadly in the region, the U.S., Chinese and other navies have begun practicing the Code for Unplanned Encounters at Sea during joint exercises or routine maritime operations.

But CBMs alone are not sufficient if the default position is still to undertake risky behavior. Such risky behavior could be in the form of reckless or aggressive actions by vessel crew that lead to inadvertent conflict. Tensions could also escalate when parties act on threat assessments based on suspicion or a lack of clarity regarding the other’s strategic intentions.

In short, CBMs that seek to avoid or mitigate the risk of maritime clashes need to be accompanied by efforts to facilitate an environment that constrains the tendency for conflict. Such efforts could include: toning down inflammatory rhetoric and breaking the vicious cycle of alternately ratcheting such rhetoric up and down; encouraging constructive behavior, or at least discouraging (or refraining from) provocative behavior (the latter is formalized in the ASEAN-China Declaration on the Conduct of Parties in the South China Sea); and maintaining open channels of communication through which all sides are willing to explain their respective positions on the issues and talk to, not past, one another.

As the meetings in Malaysia showed, those are tougher to materialize: Harsh rhetoric abounded, and the countries could not agree on the halting of provocative actions. Yet, an alternative would be a much more dangerous scenario that would allow such differences to play out in a game of military “chicken” in and above increasingly crowded waters.