The South China Sea disputes involve both island and maritime claims among several sovereign states within the region, namely Brunei, the People’s Republic of China, the Republic of China, Malaysia, the Philippines, and Vietnam. Non-claimants want the South China Sea to remain as international waters, with the United States conducting “freedom of navigation” operations. There are disputes concerning both the Spratly and the Paracel islands, as well as maritime, areas near to sea, boundaries in the Gulf of Tonkin and elsewhere. There is a further dispute in the waters near the Indonesian Natuna Islands. The interests of different nations include acquiring fishing areas around the two archipelagos; the potential exploitation of crude oil and natural gas under the waters of various parts of the South China Sea, and the strategic control of important shipping lanes.
The Shangri-La Dialogue serves as the “Track One” exchange forum on security issues surrounding the Asia-Pacific region, including territorial disputes in the South China Sea. The Council for Security Cooperation in the Asia Pacific is the “Track Two” forum for dialogue on security issues. In February 2016, President Obama initiated the U.S.-ASEAN Summit at Sunnylands for closer engagement with the Association of Southeast Asian Nations. Territorial disputes in the South China Sea were a major topic, but its joint statement, the “Sunnylands Declaration”, did not name the South China Sea, instead calling for “respect of each nation’s sovereignty and for international law”. Analysts believe it indicates divisions within the group on how to respond to China’s maritime strategy. In July 2016, the Permanent Court of Arbitration ruled against China’s territorial claims in Philippines v. China. China does not acknowledge the Court nor abide by its ruling.
The area may be rich in oil and natural gas deposits; however, the estimates are highly varied. The Ministry of Geological Resources and Mining of the People’s Republic of China estimate that the South China Sea may contain 17.7 billion tons of crude oil (compared to Kuwait with 13 billion tons). In the years following the announcement by the ministry, the claims regarding the South China Sea islands intensified. However, other sources claim that the proven reserve of oil in the South China Sea may only be 7.5 billion barrels, or about 1.1 billion tons. According to the US Energy Information Administration (EIA)’s profile of the South China Sea region, a US Geological Survey estimate puts the region’s discovered and undiscovered oil reserves at 11 billion barrels, as opposed to a Chinese figure of 125 billion barrels. The same EIA report also points to the wide variety of natural gas resource estimations, ranging from 190 trillion cubic feet to 500 trillion cubic feet, likely located in the contested Reed Bank”. The South China Sea is dubbed by China as the “second Persian Sea.” The state-owned China Offshore Exploration Corp. planned to spend 200 billion RMB (US$30 billion) in the next 20 years to exploit oil in the region, with the estimated production of 25 million metric tons of crude oil and natural gas per annum, at a depth of 2000 meters within the next five years.
The Philippines began exploring the areas west of Palawan for oil in 1970. Exploration in the area began in Reed Bank/Tablemount. in 1976, gas was discovered following the drilling of a well. However, China’s complaints halted the exploration. On 27 March 1984, the first Philippine oil company discovered an oil field off Palawan, which is an island province bordering the South China Sea and the Sulu Sea. These oil fields supply 15% of annual oil consumption in the Philippines. The nine-dotted line was originally an “eleven-dotted-line,” first indicated by the then Kuomintang government of the Republic of China in 1947, for its claims to the South China Sea. After, the Communist Party of China took over mainland China and formed the People’s Republic of China in 1949. The line was adopted and revised to nine as endorsed by Zhou Enlai. The legacy of the nine-dotted line is viewed by some Chinese government officials, and by the Chinese military, as providing historical support for their claims to the South China Sea. In the 1970s, however, the Philippines, Malaysia and other countries began referring to the Spratly Islands as included in their own territory. On 11 June 1978, President Ferdinand Marcos of the Philippines issued Presidential decree No. 1596, declaring the Spratly Islands (referred to therein as the Kalayaan Island Group) as Philippine territory.
The abundant fishing opportunities within the region are another motivation for the claim. In 1988, the South China Sea is believed to have accounted for 8% of world fishing catches, a figure that has grown since then. There have been many clashes in the Philippines with foreign fishing vessels (including China) in disputed areas. China believes that the value in fishing and oil from the sea has risen to a trillion dollars. The area is also one of the busiest shipping routes in the world. In the 1980s, at least 270 merchant ships used the route each day. Currently more than half the tonnage of oil transported by sea passes through it, a figure rising steadily with the growth of Chinese consumption of oil. This traffic is three times greater than that passing through the Suez Canal and five times more than the Panama Canal. As of 1996, Vietnam, the Philippines, Brunei, Malaysia and other countries asserted claims within the Chinese nine-dotted line The United Nations Convention on the Law of the Sea, which came into effect on 16 November 1994, resulted in more intense territorial disputes between the parties. As of 2012, all of the Paracel Islands are under Chinese control.
The position of China on its maritime claims based on UNCLOS and history has been ambiguous, particularly with the nine dash line map. For example, in its notes verbales in 2011, the first phrase stated that China has undisputed sovereignty over the islands and the adjacent waters, suggesting China is claiming sovereignty over its territorial waters, a position consistent with UNCLOS. However, the second phrase in its notes verbales stated that China enjoys sovereign rights and jurisdiction over the relevant waters along with the seabed and subsoil contained in this region, suggesting that China is claiming sovereignty over all of the maritime space (includes all the geographic features and the waters within the nine dash line). The third phrase indicates support for basing their claims on historical basis as well. Recently in its notes verbales in 2011, China has explicitly stated that it claims the territorial waters and all of the islands in which each island has its own exclusive economic zone and continental shelf. A major problem with this claim is that it fails to distinguish between geographic features considered as “islands” or “rocks” under UNCLOS. The vast majority of international legal experts have concluded that China’s claims based on historical claims is invalid. Many ambiguities arise from the notion of historical claims as a basis for claiming sovereignty and is inherently ambiguous.
Japanese scholar Taoka Shunji criticized Japanese Prime Minister Shinzo Abe for trying to falsely portray China as a threat to Japan and that it was invading its neighbors like the Philippines. He pointed out that the Spratly islands were not part of the Philippines when the US acquired the Philippines from Spain in the Treaty of Paris in 1898, and the Japanese-ruled Taiwan itself had annexed the Spratly islands in 1938, a move that was never challenged by the US-ruled Philippines, which never asserted that it was their territory. He also pointed out that other countries did not need to do full land reclamation since they already controlled islands and that the reason China engaged in extensive land reclamation is because they needed it to build airfields since China only has control over reefs.