The Paradox at the Heart of the South China Sea Ruling

On July 12, an arbitration tribunal at The Hague delivered what is widely regarded as a landmark ruling on the maritime territorial dispute between the Philippines and China. Among many breathtaking findings, the tribunal declared China’s so-called “nine-dash line” invalid. It also concluded that none of the Spratly Islands — not even Itu Aba (Taiping Island), the largest naturally formed feature — are capable of generating an Exclusive Economic Zone (EEZ) and continental shelf of their own.

On their face, these decisions, which rejected every argument that China made, drastically reduce China’s maritime rights in the Spratly chain of the South China Sea; international observers have almost unanimously described the ruling as an overwhelming victory for Manila, a heavy defeat for Beijing, and a game changer for Asian maritime disputes. But so far, the award hasn’t changed the underlying dynamics of regional politics in the South China Sea, and ASEAN, a powerful southeast Asian body, refrained from commenting on the award following a meeting, a move widely seen as the result of arm-twisting from Beijing. In fact, it is becoming clear that the tribunal’s finding was so sweeping that it is paradoxically less likely to have any real-world impact.

Perhaps the biggest paradox of the ruling is that many policy elites inside China now privately see it as a big gift to their government. That, at least, was the immediate post-ruling reaction from several leading scholars at prestigious think tanks in Beijing, who wished not to be named. For those who have questioned Beijing’s refusal to take part in the arbitration and who would have liked to see meaningful engagement instead, the outcome came as a personal disappointment and a blow to their cause. But for those who have opposed the arbitration process, there is more than a sigh of relief at the fact that the nature of the award makes it far easier for Beijing to delegitimize it, at least at home.

Three camps — realists, hardliners, and moderates — are currently vying for influence over South China Sea policy within China’s policy-making apparatus. The award is likely to make the hardliners a winner in these internal debates. They have long maintained that the arbitration case is but an American conspiracy against China; now the outcome serves as vindication of those suspicions. Beijing will now have no qualms about upgrading administrative and physical control to further strengthen its positions in the South China Sea — in recent days, China’s military has already swiftly moved to begin regular patrol of the South China Sea, in addition to conducting a new round of military exercises. China’s top naval commander has affirmed Beijing’s determination to complete island construction, likely including military installations.

The sweeping nature of the award has invited Chinese analysts and officials to try to tear it apart. Immediately after the ruling, one vice foreign minister criticized the fact that the judges were paid by the Philippines for their work. He said that the tribunal does not understand Asian culture or the South China Sea dispute, given that four of the judges come from Europe, and one from Ghana. More recently, a team of scholars from the Chinese Communist Party’s Central Party School concluded the tribunal had misunderstood China’s claims to the “nine-dash line.”

On the diplomatic front, the tribunal decision presents more of an obstacle than an opportunity for Manila and Beijing to reach a compromise, at least in the short run. After the award, Chinese diplomats insisted it cannot be used as the basis for negotiation under any circumstances, deadlocking negotiation while China continues to build up its physical presence in the South China Sea. Yet in the months leading up to the award, Chinese diplomats heard calls from many countries for China to comply with the outcome of the arbitration. The pressure was mounting. The more limited the outcome, the easier other countries would have found it to call for Chinese compliance, and the more combative Chinese resistance would have appeared. That pressure has now abated; one senior Chinese diplomat privately described the award as “stupid.” Although China expected the ruling to favor the Philippines, this diplomat said, the findings still came as a surprise.

Chinese officials hope that the broad nature of the award helps to convince other countries that the tribunal is biased. They will no doubt find solace in the fact that thus far, only the Philippines, the United States, Australia, New Zealand, Canada, Japan, and Vietnam have openly called for Chinese compliance. This list surprises no one, since the Philippines initiated the arbitration, the United States is presumed to have instigated it, Australia, New Zealand, Canada, and Japan are key U.S. allies, and the final country, Vietnam, is itself involved in territorial disputes with China while also emerging as a security partner for the United States. ASEAN’s joint communiqué, issued almost two weeks after the ruling, mentions neither China nor the arbitration, although it expresses serious concerns over recent developments including land reclamations. The European Union, along with many other countries, have used mild language merely to acknowledge the ruling, without calling for compliance.

Another paradoxical effect of the award is its potential to effect Chinese attitudes toward international law. Beijing’s refusal to take part in the arbitration process has always confused Chinese scholars, particularly legal experts. (An article by an overseas Chinese scholar criticizing Beijing’s refusal to participate as damaging to China’s national interests aroused huge controversy at home.) The award, however, undermines advocates of a more proactive approach to international law by appearing to demonstrate the political nature of the arbitration process. The “anti-participation” camp is now arguing more forcefully that advocates of participation are naïve and utopian in placing hope in international law.

Had the award been more attentive to Chinese interests, a future, more enlightened leadership in Beijing might have gradually and quietly complied with some of the rulings (whatever its public statements to the contrary), thus bringing China’s claims broadly in line with the United Nations Convention on the Law of the Sea. But this award doesn’t appear to give Chinese leaders such face-saving opportunities.

One can argue that, over the long run, the award brings benefits to China. For example, the United States and Japan currently claim some of their features in the Pacific Ocean as “islands” entitled to EEZs. But under the award’s narrow definition of “islands,” the status of these features would be reduced from “island” to “rock,” and thus no longer entitled to exclusive economic rights.

Unfortunately, to think in more creative and forward-looking terms will require a radical change of mindset among the Chinese leadership that is all but inconceivable for the foreseeable future. For a long time to come, China will be instead preoccupied with preventing and reversing losses to its interests in the South China Sea that it believes have accumulated over the past several decades as a result of Southeast Asian claimant states’ actions, rather than with making new economic or strategic gains in the high seas.

Of course, the tribunal likely based its judgments on legal grounds, not prudential considerations about the award’s possible geopolitical implications. But from Beijing’s perspective, what at first glance looks like a home run for the Philippines actually represents the best outcome from a bad case. In this sense, the Philippines has won too much.

The many paradoxes the award presents are not all bad for regional politics. Beijing has moved proactively to prevent large-scale demonstrations against the ruling, inviting some confidence in its basic policy rationality. The ruling also makes it less likely for Southeast Asian countries to initiate new arbitrations, since the award’s reasoning also applies to and favours their EEZ claims. In addition, the United States will have less incentive to conduct its Freedom of Navigation operations in such a public manner, since the ruling makes much of the South China Sea international waters as far as American naval vessels are concerned. Moving forward, American restraint will reduce the likelihood of maritime incidents with China and create conditions for more effective diplomacy. It will be needed, given the uncharted territory awaiting Asia’s troubled maritime order in a post-arbitration world.

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