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John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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China's Benign Foreign Policy Image at Odds with South China Sea Stance

China's Benign Foreign Policy Image at Odds with South China Sea Stance

Beijing for years has relentlessly projected a benign image in its foreign policy, but as its maritime neighbors are discovering, China’s pacifist representations do not extend to energy issues, most notably in the disputed South China Sea.

Now, Chinese “imperial” overreach may bring U.S. naval forces once again into the western Pacific, as Beijing’s southeast Asian neighbors feel increasingly threatened by China’s overarching territorial claims in the South China Sea.

China currently contends sovereignty of the Spratly islands’ 750 islands, islets, atolls, cays and outcroppings with the Philippines, Taiwan, Vietnam, Malaysia and Brunei, bolstering its claims with ancient Chinese maps, despite the 2002 "Declaration on the Conduct of Parties in the South China Sea," designed to ease tensions over the archipelago.

At stake?

Resource-rich waters surrounding the islands, teeming with fish and possibly massive hydrocarbon reserves. As regards the latter, the U.S. Geological Survey calculates that the South China Sea may contain roughly 28 billion barrels of oil, while the Chinese government calculates that the South China Sea region contains nearly 200 billion barrels of oil but no one knows for sure, especially as the Chinese Navy harasses and chases off foreign survey vessels.

Citing historical precedence, China is not above even using data from its “renegade” Taiwan province to assert its claims. A 16 February article in Hong Kong’s Ta Kung Pao the PRC-owned daily newspaper commented, “Soon after World War II, China's central government, the Kuomintang (KMT), dispatched a small fleet, composed of the warships presented to them due to America and Japan being at war, to the South China Sea. As a result, there were surveys taken of the surrounding islands, along with establishing emblems of China's sovereignty, as well as the defining of national boundaries in accordance with the field surveys done.”

Despite Taiwan’s and the KMT’s ongoing “renegade” status the article continues, “ In 1947, in support of China's advocacy, the Department of Territorial Administration of the Ministry of Internal Affairs of the KMT government published an atlas of the South China Sea. Since these South East Asian countries were still ‘western colonies,’ their governments raised no objection to China's territorial claims… Since establishment of the People's Republic of China, the new central government inherited the territorial assertions of its predecessor…”.

So, the Chinese Communist Party is not above citing the government that it overthrew in 1949 to further China’s territorial claims.

Other maritime disputes?

Besides the Spratlys, China occupies some of the south China Sea’s Paracel Islands, which it seized in 1974 but are still claimed by Vietnam and Taiwan, while, finding further common cause with its “renegade” province, both China and Taiwan continue to reject Japan's claims to the uninhabited islands of Senkaku-shoto (Diaoyu Tai) and Japan's unilaterally declared equidistance line in the East China Sea. Adding fuel to the fire, China is also embroiled in a territorial dispute with Indonesia over the South China Sea’s 272-island Natuna archipelago, 150 miles northwest of Borneo. In 1993 China presented the Indonesian government with a map of its "historic claims" on the Spratlys, which included not only nearly the entire South China Sea but a portion of Indonesia's Exclusive Economic Zone (EEZ) off the Natuna islands as well. The Natuna islands are hardly worthless, as its offshiore natural gas reserves are among the largest in the world, estimated at 210 trillion cubic feet.

Even more striking, China even has disagreements with North Korea over several islands in the Yalu and Tumen rivers, and it was only last year that China and the Russian Federation finally demarcated the once disputed islands in the Amur and Ussuri rivers, over which they fought a brief but vicious border war in 1969.

But in the end, the Spratlys may not prove to be a great a bargain as Beijing apparently thinks. Quite aside from questions about the actual amounts of hydrocarbon reserves, a second factor is the potential cost for developing them. Given the relatively high “lifting” costs involved, some analysts project that the price of a barrel of oil from South China Sea deepwater wells could be as much as four times that of a barrel produced from conventional reserves like those in the Middle East.

But the end result of China’s ‘big stock” policy may be to reinforce a recently announced policy of the Obama administration to shift its focus to Asia, as both the Philippines and Vietnam are inveigling the United States to intervene in their disputes with China. Both have attractive military assets to offer Washington – the Philippines, Clark airfield and Subic Bay, which the U.S. military used until 1992, while Vietnam has Cam Ranh Bay, the finest deepwater port in Southeast Asia, a prime staging post for the U.S. Navy until 1975.

So, potential “bottom line” for undisputed Chinese sovereignty over the South China Sea?

Economically, an expensive development program that may produce far less than the Chinese government hopes.


But the possible diplomatic fallout is worse - bad relations with fellow Association of Southeast Asian Nations (ASEAN) countries.

And last but not least, aggrieved Southeast Asian nations are as a result of Chinese pressure avidly welcoming the return of U.S. military forces.

All considered, not much of a bargain. For a nation lauded for its economic acumen, at present China is curiously tone-deaf to the concerns of its South China Seas neighbors. If the politicians in Beijing can overcome their nationalist xenophobia and negotiate creatively with their ASEAN partners for joint sovereignty and production-sharing agreements, then they might yet forestall one of their unsettling visions – a return of the Stars and Stripes to the waters of the southwestern Pacific, this time by request.

By. John C.K. Daly of Oilprice.com

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Leave a comment
  • illiam wiles on February 22 2012 said:
    Good article John. As you know the Chinese have launched their first, of many, air craft carriers and will be asserting her power over People's domain. I think it is quite clear and obvious that China has an interest in her, longstanding, South China Sea possessions and will be asserting those claims as she builds her sea power. I think it best that the USA, and her Allies in the region quit making trouble and selling weapon systems to renegade Chinese Provinces. Allen Dulles is dead and his paranoia which he asserted on our country, for so many years, should now be swept away and the Americans should let China take care of her Sovereign interest and just, simply, withdraw. We should quit Japan and South Korea and pull back to the Phillipines

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