Subi Reef, Spratly Islands in the South China Sea | Photo: United States Navy via Wikimedia Commons | Public Domain Mark 1.0

One year after the Permanent Court of Arbitration’s decision on the South China Sea

On July 12, 2016 the Permanent Court of Arbitration (PCA) in The Hague handed down its verdict on the case against China brought to the Court by the Philippines in 2013. The award nullified most of the Chinese claims in the South China Sea. Following China’s rejection of both the Court’s jurisdiction and its adverse decision, confrontation seemed looming. Yet, a year later the storm clouds have dispersed. The rather surprising absence of any crisis in the region rests on two coinciding factors: the legal standards for “islands” developed in the verdict and the change in government in the Philippines.

Up to 2013, the various claimants to sovereignty over islands and sovereign rights over vast tracts of the South China Sea had largely fought each other in a bilateral, tit-for-tat fashion, with the smaller powers at times welcoming the helping hand of the global hegemon, the United States. In 2013 the Philippines no longer stuck to the unwritten rules of the game and brought their case to the PCA, against the express will of China. Whereas the Philippines claimed to bring to fruition the chances of arbitration by a neutral international institution, the Chines side saw the case as a form of asymmetric “lawfare” – the “use of legalized international institutions to achieve strategic ends”.

Conflict escalation during the PCA-proceedings

During the following years media pundits and political scientists attuned the public to a period of uncertainty and enhanced threat as China would certainly lose its case. Chinese behavior seemed to confirm the appraisals. The most outstanding signal of Chinese assertiveness was the built-up of several artificial and heavily militarized islands that help establish Chinese maritime control and project naval power over the South China Sea.

The Philippines did not budge, but strengthened its security alliance with the United States and internationalized the conflict by not only reaping Japanese support, but also by successfully depicting China as a bully who tries to coerce its weaker neighbors into submission. To itself the Philippines attributed the role of the small but brave David who stands up for the general validity of international law. The United States also zeroed in on the Chinese claims. It strengthened its bilateral security partnership with the Philippines, upgraded bilateral exercises, enhanced relations with Vietnam and publicly reported on Freedom of Navigation Operations that challenge Chinese claims which (from the US-perspective) exceed the limits of international law.

The award: putting a legal end to excessive Chinese claims

Then came the PCA-award. The nine-dash-line advanced by China as signaling the almost comprehensive claims was declared invalid. Likewise, the historic rights claimed by China were declared “extinguished to the extent they were incompatible with the exclusive economic zones” (EEZ). Most importantly, the PCA declared that all the islands in the South China Sea are no islands in the legal sense, but rocks. Therefore none of them can be utilized as a territorial basis for advancing EEZ-claims. Even though formally the PCA stuck to its mandate not to rule on sovereignty, the award discarded almost all Chinese claims that do not emanate from the Chinese mainland coast or Hainan Island. So it is no wonder that observers held their breath. However, one year after the PCA verdict, the South China Sea seems to be “back to normal”: The commotion is long over, Sino-Philippine relations even entered a “golden period of fast development” and the United States largely continued its longstanding position of conducting Freedom of Navigation Operations against what they perceived excessive Chinese claims and hardly ever referred to the verdict. The brewing crisis did not erupt – largely for two reasons.

Inconvenient side effects of the award dampen external powers’ options

The minor reason for the United States and Japan to largely duck the PVA-award is buried in the depth of the award’s discussion of the features that constitute an island. This had been largely left undefined by the Law of the Sea (Art. 121). The PCA now established extraordinarily high standards for “islands” in the legal sense. Thereby the PCA brought the United States and Japan as well as a number of other former colonial powers into an awkward position. Pushing China to accept and abide by the ruling with respect to the legal definition of “islands” could backfire, as these countries also claim vast tracts of the world’s oceans on account of their sovereignty over miniscule territories that would not qualify as islands as defined by the PCA. In such a situation a low key approach is clearly the first choice for any state that wants to avoid public attention on its own extensive claims.

The role of the new Philippine President Rodrigo Duterte

The major reason for the post-award non-crisis is the change in government in the Philippines from Benigno Aquino to Rodrigo Duterte shortly before the PCA award.

Even before his inauguration, President-elect Duterte had made clear that he would mend fences with China. In his view, confrontation had not succeeded in furthering Philippine interests. Instead it had resulted in severe damage to Philippine interests. For the Duterte administration the Chinese decision to build artificial islands complete with dual-use harbors and airports as well as high-powered defense was a reaction to the Philippine decision to bring their case to the PCA. Further, while the PCA-award vindicated the Philippine legal position and claims, this confirmation was useless, as long as it could not be enforced. In this respect, the build-up of islands had severely weakened the Philippine position on the ground. Finally, the confrontation threatened Philippine bilateral economic cooperation with China as well as its participation in the Chinese One-Belt-One-Road (OBOR) plans. If China was to lend a helping hand to Philippines’ development as the Duterte administration hoped for, it could no longer be described as an international bully and a threat to peace in Southeast Asia. Instead, to tap Chinese money, China had to be reframed as a friendly power and the conflict downplayed.

To China, the willingness of the Philippine President to downplay the award in exchange for tangible benefits came as a singular option to turn around the destructive dynamics of the past few years. While China had established its military might more securely in the South China Sea it had to pay dearly for it with a loss in soft-power and trust not only in the Philippines, but in most states of Southeast Asia and the wider region as well. Many Southeast Asian states wanted to participate in the gigantic Maritime Silk Road project. Yet, mistrust was ever present with respect to Chinese motives. Further, the United States and Japan were gaining ground for Vietnam and others as viable partners for balancing the rising China. Other external parties – India, Australia and even France – were willing to jump on the bandwagon of external interference in the region under the guise of protecting freedom of navigation.

No wonder then that China grabbed the chance provided by the new Philippine President, who was invited to Beijing and granted meetings with both the Chinese President and Prime Minister on short notice. In turn, Duterte has been careful to establish a cognitive framework for the bilateral relations that pays tribute to Chinese needs for respect and status, sticks to the rules of the game as preferred by China and explicitly calls for Chinese financial “largesse” in exchange as proof of mutual recognition of an asymmetric but reciprocal relationship.

In the meantime and after a flurry of bilateral meetings on various levels, the two countries have signed 22 cooperative agreements. China has been willing to foot much of the bill for the development projects of the Duterte administration. The latter in turn promised not to mention the PCA-award for the moment. Instead Duterte and the other members of his administration constantly voice their gratitude to the “Chinese people for loving us,” as well as for Xi Jinping’s OBOR idea, which is “a big idea in a world that is searching and wanting for big ideas.”

Does the seeming Philippine submission to China entail any costs? Certainly not for the moment if the current situation is compared to the realistically available alternatives. Big powers do neither submit their cases to international judiciary nor do they accept the rulings when their core interests are at stake. So, even when the small Philippines and the other claimants challenge Chinese core interests, past patterns have shown that China reacts less assertively and is more willing to search for procedural compromises with opponents that broadly respect the overall Chinese frame of reference for the bilateral relations and the regional order. To the Philippines and the other regional claimants the question is whether they prefer a bird in the hand to two in the bush or otherwise.

Peter Kreuzer
Peter Kreuzer is a Senior Researcher at PRIF. He focuses on political violence in the Philippines and maritime conflicts in the South China Sea.

Peter Kreuzer

Peter Kreuzer is a Senior Researcher at PRIF. He focuses on political violence in the Philippines and maritime conflicts in the South China Sea.

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