December 2017

SPARK
R
Quarterly
Publication
of the
ADRInstitute
the key link between IDEAS and ACTION

the Philippines’ shifting

strategic environment:
chinese &
american
Approaches to
southeast asia in 2017
adrinstitute.org
 A Turning Point in the
Regional Order?
To many commentators, particularly
in the United States (US), the year
2017 marked a significant turning
point in Asia’s regional order, and
perhaps the global order itself.
Donald Trump’s presidency has
ushered in an “America First”
approach to foreign policy that
implicitly and explicitly calls into
question many of Washington’s
traditional global commitments.
It has also led to a steady
preoccupation with a limited set
of issues like North Korea and an
understaffed and disempowered
foreign policy apparatus. At the
same time, China’s President Xi
Jinping has seized the opportunity
and embraced the global leadership

the Philippines’ shifting

role that he has carefully crafted
over his tenure, promoting free trade

strategic environment:
chinese &
and climate change mitigation as
his counterpart in Washington sheds
commitments. These developments
have given rise to much anxiety

american
within the American foreign policy
community that Trump has ceded
“global leadership” to China.1

Approaches to
southeast asia in 2017

02 SPARK 4TH QUARTER 2017

 The idea of the US eventually being
surpassed by China as a regional economic
or security hegemon is of course nothing
new, but the sudden shift from the more
strategically inclined Obama administration
to Trump’s “transactional” and revisionist
style has concentrated these concerns
and introduced a greater sense of urgency.
Analysts like Michael Swaine2 and Hugh
White3 have long predicted an inevitable
reorganization of the regional order as a
rejuvenating China seeks to acquire greater
ability to control events in its periphery—
more “room” as a Chinese colleague puts
it. But many in the West have ignored
such analyses, in no small part because
they cannot imagine why China, which
has benefitted so much from the current
regional security architecture and US-
supported economic order, would have any
interest in overturning these regimes.

Image credit: nymag.com 2017 has also been transformational for

the Philippines. After a 2016 full of high-
pressure dealings with China over the
international tribunal case in The Hague,
the year has been dominated by issues of
significant internal stability with the capture
of Marawi by Islamic militants in May. The
Malacañang has a new president with new
approaches to both the US and China, and
the looming question of a broader regional
power transition between the two appears
to influence the new administration’s views.

Many analysts envision the Philippines and

other ASEAN states as torn between two
poles of influence—and for the most part
they have lately been seen as “sliding into
China’s orbit.”4 However, even in the face
of a protracted American distraction from
Southeast Asian affairs, this binary image
of international order is both too simplistic
and too limiting to be embraced by the
region’s statesmen. By accepting too much
power-transition fatalism, Asians will miss
Image credit: qz.com
opportunities to leverage an increasingly

4TH QUARTER 2017 SPARK 03

DECEMBER 2017 volume 10 issue 4
on the cover
Cover and content page :
images from business.financialpost.com,
scmp.com, dreams.metroeve.com and
financialexpress.com.
about the author
Alek Chance
is a non-resident Fellow at ADRi and
an international affairs and political risk
consultant. His research focus is on
US-China relations, international order,
and the role of ideas in international
politics. Dr. Chance was formerly
Research Fellow at the Institute for
China-America Studies in Washington
and Resident Fellow at the US Naval
Academy’s Stockdale Center. He
received his PhD in political science
from Boston College and his BA from
St. John’s College, and has taught
international relations and political
theory at Boston College and
Loyola University Maryland.
features
02
10
A TURNING POINT IN THE
REGIONAL ORDER
The year 2017 marked a significant turning point
in Asia’s regional order, and perhaps
the global order itself.
MARITIME AFFAIRS: REGIONAL
AND EXTRA REGIONAL FACTORS
05
Several issues arose in 2017 that indicated that
the South China Sea maritime issues are a
continuing source of controversy and instability.
SHIFTING US PRIORITIES
IN SOUTHEAST ASIA
The relatively undeveloped nature of Donald
Trump’s strategic vision for the region and
his administration’s reluctance to fill key
bureaucratic positions has meant that many
existing approaches to the region
have carried over by default.
09 15
CHINA’S FOREIGN POLICY ESTABLISHING RULES IN A
AND THE PHILIPPINES CHANGING ENVIRONMENT
The US’ sudden shifts regarding trade, climate Even if an inevitable shift in the balance of US
change, and alliances opened a considerable and Chinese regional capabilities demands
window of opportunity for Xi Jinping to promote corresponding shifts in the policies of smaller Asian
China as an alternative leader or reshape states, it is too flattering to China to presume that
patterns of regional affairs. the future holds nothing for them but a stark choice
between accommodation or futile conflict.
CONTENTS
 US priorities in
Southeast Asia
multipolar international order, continuing American interests, and even the complexity of
Chinese ambitions to moderate Chinese power and shape a stable order. A survey
of regional events in 2017, particularly in the maritime domain,
demonstrates that such a project must be actively pursued.

Shifting US Priorities in Southeast Asia

The year 2017 has brought with it remarkable changes in American politics, some of which
have directly impacted its policies in the region. On many fronts, however, the relatively
undeveloped nature of Donald Trump’s strategic vision for the region and his administration’s
reluctance to fill key bureaucratic positions has meant that many existing
approaches to the region have carried over by default.

Defying early predictions that the Washington foreign policy establishment would overcome his
revisionist streak, Donald Trump has continuously challenged the US’ foreign policy status quo.
Almost immediately upon taking office, he carried out his promise of withdrawing the US from the
Trans-Pacific Partnership (TPP). While this move did not directly affect the Philippines, to many, it
indicated a withdrawal of American interest in the region, or at least a decline in its willingness to
supplement its strategic goals with attractive economic incentives for Asian partners. The “America
First” doctrine that gave rise to this protectionist impulse also led the President to repeatedly—
though typically indirectly—question the value of America’s alliances. On early visits to Europe and
Asia, Defense Secretary James Mattis sought to convince North Atlantic Treaty Organization (NATO),
South Korea and Japan of the US’ commitment to its allies. He did this at times,
at apparent cross-purposes with the President, who either contradicted the Secretary’s
messages through extemporaneous comments or altered alliance-related
language in speeches prepared for him by his staff.5

Regarding maritime affairs, the administration made waves in January as Secretary of

State-designate Rex Tillerson used language during his Senate confirmation hearing suggesting
the US would blockade China’s Spratly features. The Trump administration also sent early signals
indicating a stronger line on China regarding Taiwan. However, in each case, US policy largely
reverted to the norm, with Trump reaffirming the “One China” principle, and the US Navy
carrying out only a slightly enhanced freedom of navigation operations (FONOP)
program and increasing ship-days in the South China Sea.

With its “Asia Pivot” or “rebalance” strategy, the Obama administration had at least conceptually
focused its attention on a comprehensive strategy for more deeply integrating the US into East and
Southeast Asian networks of partners. This included a certain amount of attention to increasing
ties with Southeast Asian states and forwarding the TPP. By contrast, the Trump administration’s
attention in Asia has been dominated by North Korea’s nuclear program, and intermittently, the
US’ trade imbalance with China. Both issues had all along been destined to vex any US president,
but Trump has made his own personal contributions to shaping these issues. While his recent

4TH QUARTER 2017 SPARK 05

trip to China painted a picture of smooth
relations between the two powers, the pieces
appear to be in place for the administration
to implement a more restrictive trade
policy towards China that was a feature
of his campaign and is a central focus of
many of his economic advisors.6 Given the
administration’s insistence that Chinese
cooperation is the key to reigning in North
Korea’s nuclear provocations, many analysts
have observed that these two overwhelming
preoccupations in US Asia policy undermine
one another. The US must play hardball
with China on trade while simultaneously
soliciting help on the Korean issue.
06 SPARK 4TH QUARTER 2017
The US’ focus on Northeast Asian issues, its withdrawal from the TPP and
the general sense of a shift away from global commitments have affected
regional perceptions of American resolve or attention span in Southeast Asia.
In line with an overall global decline in confidence in the US,7 Southeast Asian
commentators and academics have taken note of America’s new “transactional”
approach to foreign policy, and the apparent general disinterest in diplomacy
suggested by the weakening of the State Department. This has caused many to
call into question the credibility of the US in the region, sometimes with scathing
language.8 Some analysts have attributed Vietnam’s decision to back down
from China in the Repsol (as will be described below) incident to the sense that
the US is not interested in supporting weaker states in the region. Former US
Ambassador to Vietnam and former Pentagon official David Shear blamed the
current administration’s “inattention” to the region.9 In fairness, however, the
Image credit: time.com
US’ inability to halt Chinese reclamation on disputed features in 2015-2016
illustrates the limits of US influence in such matters even under supposedly more
auspicious circumstances. Many general assessments agree, however, that the
US’ Southeast Asia policy has been low-priority and uncoordinated.10

The Marawi crisis elicited an increase in US security assistance to the

Philippines, with the US providing special operators to advise the Armed Forces
of the Philippines (AFP), a grant of small arms and grenade launchers, drones,
and two Cessna C-208 aircraft outfitted with surveillance and reconnaissance
equipment worth PHP 1.6 billion. While some commentators suggested that this
would turn over a new leaf for Philippines-US security cooperation, President
Duterte downplayed American assistance, even indicating at one point that
its arms transfers were “loans.”11 At the same time, the Philippine President
highlighted Chinese contributions to the recapture of Marawi, announcing that
the gun that had killed the Marawi terrorist Isnilon Hapilon had been one
granted by the Chinese government shortly before this. Other reports
indicated that Hapilon was killed by heavy machine gun fire.

Trump’s November visit to Manila did provide signs of improvement in US-

Philippines relations. While the White House’s copy of the two presidents’ joint
statement gives prominence to their commitment to “mainstreaming” human
rights in “all national programs,” White House spokesperson Sarah Huckabee
Sanders later clarified that human rights came up only “briefly.” Most analyses
point to the US efforts to downplay this issue as contributing to a relative
warming between the two allies. The joint statement released after their meeting
reaffirmed a mutual commitment to the Mutual Defense Treaty and the more
recent Enhanced Defense Cooperation Agreement (EDCA). It also indicated
continuing defense cooperation including disaster response and cybersecurity.
President Duterte had earlier scaled back US-Philippines defense cooperation
by limiting it to disaster relief and other non-combat activities. This wording
may suggest a continuation of the narrower scope of joint activity.

Some exceptions to this overall trend of US inattention or disengagement

can be noted. At the regional level, this includes the continued advancement
of US-Vietnam relations initiated by past administrations.12 One notable
security development during the November summitry surrounding ASEAN
and APEC meetings was a sideline working meeting between members of the
“Quadrilateral” or “Quad,” comprised of the US, Australia, Japan and India. The
grouping met for the first time since 2007 to discuss security cooperation and
interoperability in Asia. US foreign policy during the administrations of former
presidents George W. Bush and Barack Obama had sought to push for an
evolution in Asian security relationships towards a greater involvement of India in
regional affairs and better direct cooperation between American security partners
independent of American facilitation.13 The Trump administration appears finally
to be achieving some strategic focus in the region by continuing such efforts.

4TH QUARTER 2017 SPARK 07

Prior to Trump’s extensive trip to Asia, US National Security Advisor H.R.
McMaster announced that the theme of Trump’s would be a “free and
open Indo-Pacific region.” The term “Indo-Pacific,” long used in American
strategic circles, was repeated by the US President over the course of
the trip. Most significantly, the Asia-Pacific region is a centerpiece of the
White House’s push for a greatly scaled up US military.

08 SPARK 4TH QUARTER 2017

Chinese Foreign Policy and
the Philippines
Conventional wisdom among China
hands suggests that in the year of a
party conference, Chinese leadership
is loath to make bold or pivotal foreign
policy changes. To some degree, 2017
fits this pattern as China prioritized
sweeping maritime tensions under the
rug, touting its Belt and Road Initiative
(BRI) in a grand forum in March, and
presenting to many of its Southeast
Asian neighbors with a charm offensive
of development loans and symbolic
progress towards a Code of Conduct
(COC) on the South China Sea. The
US’ sudden shifts regarding trade,
climate change, and alliances opened
a considerable window of opportunity
for Xi Jinping to promote China as an
alternative leader or reshape patterns
of regional affairs. As evidenced by
his speech at the World Economic
Forum at Davos,14 his speech at the
Danang APEC meeting,15 and at
several other multilateral forums,
Xi has seized this opportunity to
contradistinguish China from the US.
President Duterte’s conciliatory shift
towards China has complemented
Beijing’s shift of focus towards
development and global governance
issues. Beginning in October 2016,
the Philippine President has secured
the equivalent of several billions of
US dollars in loans, by way of official
development assistance (ODA), and
investment pledges from China for
rail, irrigation, Marawi reconstruction
and other infrastructure projects.
Approximately USD 9 billion in loans
and USD 15 billion in investment were
pledged in October 2016, followed
by a further USD 7 billion in loans for
infrastructure projects, in November
following the ASEAN Summit in Manila.
USD 3.2 billion of this is dedicated to
two projects, with the remainder slated
for projects yet to be determined. The
loans will cover 85% of the Kaliwa
Dam-New Centennial Water Source and
the Chico River Pump Irrigation facility.
These commitments supplement USD
9 billion in loans and USD 15 billion in
investment pledges secured from China
by Duterte earlier in the year.
Some of these deals have stirred
controversy in the Philippine press for
involving unproven Filipino entities,
a lack of transparency, and the
involvement of Chinese dredging
company CCCC, which constructed
China’s artificial islands in the South
China Sea.16 Commentary in the
Philippine press has also raised
concerns about debt entrapment and
other issues, looking at the negative
effects of Chinese lending in Africa
or more recently, Sri Lanka. Other
commentaries have pointed out that
on an annualized basis, recent Chinese
pledges would only mean a return to the
norm in the economic relationship.17
Throughout the region and indeed
the world, China worked hard in 2017
to become the face of the future
of globalization. Its “Belt and Road
Forum” held in March sought to win
the commitment of a wide range of
stakeholders for Xi’s signature policy.
The BRI moved forward on a few
important projects in the ASEAN region,
including the Kunming-Vientiane leg of
a proposed Kunming-Singapore railway.
However, the bulk of BRI infrastructure
activity continued to take place
outside the region in places like
Pakistan and Sri Lanka.
Despite its focus on soft power
instruments like infrastructure
development loans and (at least
rhetorical) leadership on free trade
issues, China’s policy in the region
has had a sharp end as well. Even in
the midst of a concerted effort by the
Philippines to reset relations, China
has shown that it is still willing to
employ coercive measures. In May,
President Duterte revealed that he had
mentioned the Philippines’ intention
to drill for oil in the South China Sea,
telling Xi that “what’s ours is ours.”
According to President Duterte, Xi’s
response was that “if you force
the issue, we’ll go to war.”18
A less hypothetical threat was
reportedly made to Hanoi in July.
Chinese officials reportedly threatened
to use military force against
Vietnamese outposts in the Spratly
Islands unless Vietnam ordered the
removal of a drilling platform off the
southern coast of Vietnam.19 Thus,
in addition to revealing the degree to
which China is willing to escalate such
matters, the episode also indicates
that the Hague Permanent Court
of Arbitration (PCA) ruling may
have invalidated the nine-dash-line
in law, but not in fact.
At the highest level, Chinese policy in
2017 appears to be fundamentally
ambivalent, with Xi seeking both to
bolster China’s image as a global
leader, but also to promote a vision of
4TH QUARTER 2017 SPARK 09
Chinese “rejuvenation” in which China’s perceived sovereign rights and interests
will no longer be trifled with. This tension can be seen throughout the rhetoric of
President Xi, including his lengthy speech before the 19th Party Conference in UNCLOS defines “innocent passage” as
October.20 The speech portrays China as defender of the international order, but “continuous and expeditious,22 which
also a model for other states to follow—something Chinese rhetoric previously would exclude the behavior of the vessel as
eschewed. He also touted China’s actions in the South China Sea, describing described by the Philippine government.
“steady progress.” The juxtaposition of the emerging leader and the alternative
model; the proponent of “win-win” solutions that also increasingly associates Some confusion ensued in Manila. Although
military capabilities with its new global status has analysts in the West straining the Department of Defense announced that
to ascertain the degree to which China seeks to alter the regional security it had not received notification, President
architecture and the terms of global governance. Many have read the speech to Duterte announced that he had granted
be indicative of a continuing militarization of the South China Sea. Xi boasted of permission for Chinese research, a claim
“progress,” suggesting not only that the issue was no longer to be downplayed, but also made by China’s MFA.23 During a
also that more is to come in terms of island improvements. Previous descriptions Senate inquiry into the matter last April,
of Chinese activities in the Spratly Islands—that China is simply “catching up” with the Department of Foreign Affairs (DFA)
Vietnam and the Philippines’ militarization of the region—have been abandoned. revealed that that China had been denied
permits for research in 2015 and 2016.24
The episode underscored the continuing
Maritime Affairs: Regional and Extra-Regional Factors sensitivity in Manila to the issue of perceived
Chinese incursions. Although many Filipinos
Several issues arose in 2017 that indicated that the South China Sea maritime were concerned about Chinese resource
issues are a continuing source of controversy and instability. Moreover, Chinese exploration or even land reclamation, the
actions throughout the year to continue military-related construction on research ship’s activities most likely indicate
artificial islands demonstrate that even in the absence of major China’s ambition to expand the area of
international events, the status quo is nonetheless quickly changing. operations for its submarine fleet.25

Benham Rise Controversy Vietnam Hydrocarbon Exploration

In March, several Philippine news outlets reported on the presence of a Chinese
and China
vessel at Benham rise in the Philippine Sea in 2016. Benham Rise is a region Reports emerged in August that Vietnam
off the East coast of Luzon that straddles the Philippines’ exclusive economic had been directly threatened by China in
zone (EEZ). The Philippines successfully submitted a petition to the United July over the activities of a drilling rig owned
Nations Commission on the Limits of the Continental Shelf in 2012 to establish by Spanish oil company Repsol.26 Vietnam
exclusive rights to seabed resources on the continental shelf extending beyond had leased hydrocarbon block 136/3 to
the 200-nautical mile EEZ.21 The Chinese vessel was confirmed by the Philippine Repsol, which commenced drilling in June
National Security Council as a ship capable of biological and hydrographic and reportedly found oil after investing
surveys that loitered in the area from September to November 2016 without somewhere between USD 27-300 million
research permits. Reports indicated that the ship was both within the Philippines’ (reports vary widely). The location of the
EEZ and outside of it, and China’s Ministry of Foreign Affairs (MFA) invoked the block is both within Vietnam’s claimed EEZ
United Nations Convention on the Law of the Sea (UNCLOS) concept of “innocent and within China’s nine-dash-line, though at
passage” to justify its presence, implying that it had been in the Philippines’ EEZ the farthest southern extremity of China’s
or possibly its Territorial Sea (although China’s more expansive view of “innocent claim. An application of the 2016 PCA ruling,
passage” makes it difficult to infer the exact meaning of the MFA’s assertion).

10 SPARK 4TH QUARTER 2017

though not technically precedential in matters relating to Vietnam, effectively Chinese platform HYSY 981 out of Vietnam’s
preempts any legal claim China could assert over these waters claimed EEZ in 2014. In 2014,27 public
based on the nine-dash-line, historic rights, or UNCLOS. outrage in Vietnam over the perceived
Chinese incursion was severe. This
Despite a greater confidence that Beijing’s challenge lacks any legal support, reportedly fed into a decision within
Vietnam’s Political Bureau (Politburo) reportedly decided to acquiesce to Chinese the government of Vietnam to hush
demands after being threatened with an attack on Hanoi’s Spratly outposts. the incident in the local media.
Reportedly, the decision sharply divided the Politburo. Vietnam has a history of
direct confrontation in related matters, notably its ostensible success in driving

4TH QUARTER 2017 SPARK 11

 Virtually, all of Vietnam’s eastern
hydrocarbon blocks straddle the
nine-dash-line, which cuts deep inside
conducting a man-overboard drill, the
Vietnam’s claimed (and presumptive)
destroyer signaled that the US does not
EEZ. China has issued competing
recognize the existence of a territorial
leases to several Chinese oil firms for
sea surrounding Mischief Reef that
overlapping blocks. While the issue was
would oblige it to comply with the rules
somewhat papered over with a set of
of innocent passage. The pattern was
cooperation pledges between China
repeated in August by the USS John
and Vietnam negotiated at the APEC
McCain which reportedly spent up to 90
conference in Danang, the issue arose
minutes within less than 12
again with regard to a similarly situated
nautical miles of the reef.32
oil block over the so-called “Blue
Whale” field. While an official deal
The grounds for this more assertive
with ExxonMobil had been slated to be
activity find support directly from
finalized before the end of this year,28
the 2016 Philippines v China PCA
it appears that Vietnam or ExxonMobil,
ruling, which found Mischief Reef to
or both, have balked, and delayed a
be a low-tide elevation and therefore
final investment decision until 2019.29
incapable of generating a territorial sea.
If this trend continues, it indicates a
This in turn means that it can only be
hardening of the nine-dash-line claim.
considered as a part of the Philippines’
Whereas past iterations of the claim
continental shelf that is not subject
have ranged from intentional ambiguity
to appropriation by another state.33
to “non-exclusive rights” in its recent
Chinese-occupied Subi Reef was also
interactions with Vietnam, China has
found to be a low-tide elevation, but due
effectively treated the claim as an EEZ.
to its proximity to unoccupied high-tide
feature Sandy Cay, questions about its
capacity to generate a territorial sea
More Assertive US FONOPs and the legality of Chinese reclamation
The Pentagon made changes to the activities are more complex.34 This
South China Sea FONOP program to connection between the two features
address concerns that diplomatic may have relevance to the incident
exigencies undermined its legal near Pag-asa Island (Thitu Island)
purpose as an assertion of rights. The that happened in August.
US Department of Defense revealed
that a “schedule” had been set for
an increase in activities,30 although Pag-asa Island (Thitu Island) and
in the end only four FONOPS in the Sandy Cay Incident
Spratly and Paracel Islands have been
In August, Philippine Congressman
conducted during 2017. The most
Gary Alejano called attention to a flotilla
significant shift in the program took
of Chinese fishing boats and naval
place at Mischief Reef in May when the
and coast guard vessels operating
USS Dewey sailed within 12 nautical
within as little as one nautical mile of
miles of the artificial island.31 Whereas
Philippine-occupied Pag-asa Island
all past FONOPs appear to have been
(Thitu Island).35 CSIS’ Asia Maritime
“innocent passage” operations that
Transparency Initiative (AMTI) was able
tacitly affirmed the existence of a
to largely confirm this claim via satellite
territorial sea surrounding the features
imagery.36 While many of the vessels
in question, the Dewey overtly broke the
were actively engaged in fishing, the
rules of innocent passage, exercising
entire operation was likely a concerted
“high seas freedoms” instead. By
tactic in support of China’s claims.
12 SPARK 4TH QUARTER 2017
Some Filipinos worried about a takeover
of Pag-asa Island and others theorized
that the operation was intended to deter
Manila from planned upgrades on the
dilapidated island that is home
to dozens of Filipinos.
Pag-asa’s proximity to Chinese-occupied
Subi Reef suggests another possible
motive, however. Because the 2016
PCA ruling declared Subi Reef to be a
low-tide elevation, China’s occupation
and reclamation activities are effectively
illegal, unless China can lay a claim to
a high-tide elevation within 12 nautical
miles. This option has fortuitously
presented itself to Beijing, since at least
one of the sandbars off of Pag-asa,
Sandy Cay, appears to have become
a high-tide elevation due to sand
and coral deposits resulting from the
dredging activities in support of the
creation of Subi Reef’s artificial island.37
Sandy Cay would seem therefore to
be a natural, high-tide elevation that
is subject to appropriation by a state
other than the Philippines, raising the
possibility of strengthening China’s legal
claim to Subi Reef via effective control
over the sandbar. Chinese activities
might be construed as a demonstration
of administrative control in support of
this legal theory. In November, Manila
announced that Filipino structures
placed on Sandy Cay at an unknown
date would be dismantled after a
protest by China.38 The structures,
which were described as fishing
shelters, technically violated the 2002
Declaration on the Conduct of Parties
in the South China Sea, which prohibits
the occupation of any new features by
any South China Sea claimants. The
episode not only underscores the extent
to which Beijing can demonstrate de
facto control in the South China Sea
without challenge, but also the possibility
of a continued interest in strengthening
its claims through “lawfare” despite its
outright rejection of the PCA ruling.
While reports indicated that several states were willing to
sign on to a stronger statement that mentioned China’s island
building and other activities, President Duterte appeared
to use his prerogative as the Chair to continue
his policy of conciliation with China.
The South China Sea and ASEAN
The Philippines’ hosting of 2017 ASEAN
activities provided additional intrigue to
the perennial question of how ASEAN
would address South China Sea issues.
While reports indicated that several
states were willing to sign on to a
stronger statement that mentioned
China’s island building and other
activities, President Duterte appeared
to use his prerogative as the Chair to
continue his policy of conciliation with
China. The final Chairman’s Statement
did not directly address these issues,
in contrast to past ASEAN statements.39
Reports in Manila circulated that the
Chinese embassy had pushed the
Philippines’ DFA to remove language in
an initial draft that had voiced concern
over militarization and land reclamation
in the disputed Sea.40 Disagreement
among ASEAN leaders regarding this
language change apparently caused the
statement’s release to be delayed a day.
Many of the same tensions arose
again at the August ASEAN ministerial
meeting, though the outcomes were
more mixed. Vietnam reportedly worked
hard for stronger condemnation of
militarization and land reclamation in
the South China Sea and demanded
that any COC be binding. This
apparently prompted Chinese Foreign
Minister Wang Yi to cancel a meeting
with Vietnam Foreign Minister Pham
Binh Minh.41 Nonetheless, this
pressure seemed to yield a more
ambivalent tone in the Minsters’
communique, which notes the lack of
consensus on the maritime issues by
indicating that the positions discussed
pertain only to some ministers.42 The
communique takes “note of the
concerns expressed by some Ministers
on the land reclamations and activities
in the area, which have eroded trust
and confidence, increased tensions
and may undermine peace, security
and stability in the region.”
The communique goes on to emphasize
the “importance of non-militarization
and self-restraint,” but also applies
this consideration to “all other states.”
While this explicitly includes “those
mentioned in the Declaration on the
Conduct of Parties in the South China
Sea (DOC),” i.e. China, some analysts
interpreted this as a nod to China’s
insistence that US Navy activities in the
region are the real source of tension
in the South China Sea disputes. In
fact, Chinese Foreign Minister Wang
Yi suggested that a precondition to
moving forward with a COC for the
South China Sea was a situation which
was “not disrupted by outside parties”
who “stir up trouble.”43 Outside
intervention was nonetheless provided
elsewhere on the sidelines of the
ASEAN ministerial meeting in the form
of Australia, Japan, and the US offering
a joint statement demanding all parties
to respect the 2016 PCA ruling which
invalidated China’s nine-dash-line
claim and rendered some of China’s
activities—including the entire reclamation
project on Mischief Reef—illegal.44
Continued progress in talks between
ASEAN and China were a highlight
of the August ministerial meeting.
While a model for the structure of
the document had already been
announced in May, the August meeting
4TH QUARTER 2017 SPARK 13
 established a further framework for negotiations. Many observers remained skeptical,
however, particularly when the August ministerial meeting concluded without the
resolving the question of whether the COC would be legally binding. Given that the
current governing framework, the 2002 Declaration on the Conduct of Parties already
stands as a non-binding and non-specific commitment to peaceful management of
disputes, the value of a weakened COC to ASEAN members is far from clear. Progress
continued at the November ASEAN summit, where an agreement to begin talks in the
new year was struck, as was a surprise announcement from President Duterte at the
conclusion of the Manila meetings that China had committed to a binding COC.

China’s Continuing Militarization Activities

Chinese rhetoric over the island building program has continuously evolved over the
last few years. Early talking points sought to convince other claimants that China
was merely “catching up” with them. During 2016, as major facilities began to rise
on reclaimed land, there was talk of civilian facilities that would be available for

14 SPARK 4TH QUARTER 2017

other states to use, and that would provide regional public goods. Naturally such
facilities, according to this argument, would require some degree of defense the potential emergence of the “Quad” as
capabilities. By the end of 2017 it has long been clear that the “big three” Spratly a more genuinely multilateral balancer to
features along with others in the Paracel Islands have been developed into centers China,48 the surprising resilience of the
of significant power projection. The AMTI at CSIS has shown that throughout 2017 TPP in the absence of the US, and Japan’s
the foundations for serious military capabilities are being constructed, and the evolution into a “normal” state which
military hardware is gradually filling in or rotating through.45 Radar, missile, and facilitates its security cooperation with
air combat coverage capabilities throughout the South China Sea are extensive or nations like the Philippines. These factors
are projected to be so. This enables significant power projection capabilities and may provide opportunities for smaller states
making possible a future Air Defense Identification Zone. These developments in to continue to pursue hedging strategies.
turn support Chinese de facto control over the sea, which would have significant
implications for the access of other littoral states to fisheries or seabed resources. Another source of leverage for smaller Asian
The immense sums of money and considerable political capital that have been states can be found in the scope of China’s
invested in China’s Spratly features are not likely commensurate with their being ambitions themselves. Xi has made the BRI
simple bargaining chips or placeholders for sovereign claims. a major focus of his tenure, and appears to
be promoting China as the leader of a new
phase of globalization. Xi has also promoted
Establishing Rules in a Changing Environment his “new model” of great power politics
that purportedly transcends realpolitik.
One must be careful not to overstate the degree of transformation underway in Global perceptions of China’s benign and
American foreign policy. Even if major shifts are underway in diplomatic style progressive global leadership appear to be
and trade policy, one can expect broad continuity in the US’ national security important to BRI, making China vulnerable
strategy and the thinking of the military establishment and major congressional to the imposition of audience costs by
figures. When it comes to military capabilities, Donald Trump is as “globalist” as South China Sea claimant states. The MFA’s
any US president, wishing to dramatically increase defense spending and provide agenda of not only pursuing China’s interests
for a 350-ship navy. Presumably these ships wouldn’t all be docked at Norfolk. but hushing complaints regarding the issue
The real challenge presented by “America First” is not a genuine withdrawal into speaks to the salience of reputation in the
isolationism, but that Trump has made it much harder for US diplomats to matter. On the other hand, there is precious
utilize trade policy or an attractive vision of global cooperation in little “win-win” happening in the South China
support of American security commitments and stature. Sea, where China’s actions have persistently
undermined the legitimate and sometimes
Even if an inevitable shift in the balance of US and Chinese regional capabilities significant interests of other claimants. In
demands corresponding shifts in the policies of smaller Asian states, it is too the case of Vietnam and the Philippines,
flattering to China to presume that the future holds nothing for them but a stark fisheries and hydrocarbon resources that
choice between accommodation or futile conflict. If the US’ comprehensive by any reasonable assessment should
predominance in the region fades away, many international relations scholars be indisputably theirs have been placed
don’t see it inevitably being replaced by Chinese predominance, but by power off-limits by Beijing’s policies. For the
configurations yet to be determined.46 These might include a more multipolar Philippines, this presents an energy security
order, a “dual hierarchy”47 where the US maintains its primacy in the security issue, as the Malampaya oil field which
domain despite China’s economic dominance, a “G-zero” in which no state can currently provides 40% of Luzon’s energy
acquire the comprehensive power to attain hegemony, or some as yet unknown is due to run dry within ten years.
order. Signs of a transition to a more complex regional system can be seen in

4TH QUARTER 2017 SPARK 15

 ASEAN’s increasing reluctance to push back against China or impose any reputational
costs seems to have accomplished little, as China appears to have continued along its
established trajectory but with fewer publicized complaints, and fewer challenges to the
Belt and Road narrative of progressive leadership. One result of this has been the perception
in foreign media that the maritime issues have become less important of late. Rather than
prompting its weaker neighbors to stifle complaints, the narrative of the inevitably dominant
China should in fact prompt more pushback against China as the region seeks to establish
stable patterns of interaction for dealing with an increasingly stronger neighbor. The question
of what will moderate Chinese power in the future should begin to be addressed now. This of
course is an exceedingly difficult question, but Beijing’s increasing valuation of its own
global reputation and the importance for a rules-based order to the kind of hyper-globalized
future it envisions both present opportunities. The upcoming COC negotiations should
provide the Philippines and other Southeast Asian states the opportunity to make
progress towards more rule-bound relations with their powerful neighbor, and obtain
binding commitments. Each failure to accomplish this in the short-term only
serves to make the region’s long-term future more precarious.

Image: news4europe.eu

16 SPARK 4TH QUARTER 2017

Image: americanprogress.org

4TH QUARTER 2017 SPARK 17

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South China Sea tensions,” Reuters, August 8, 2017

3RD QUARTER 2017 SPARK 19

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