Code RS 8
Title CONFLICT IN THE SOUTH CHINA SEA
Author
Date

The oil rich and strategically important Spratly Islands archipelago is one of the world's most important flash points. There is a strong risk that the states of South- east Asia could be drawn into a war with China, destabilising the whole region and upsetting economic growth in one of Britain's most important markets. The shipping lanes passing close to the Spratlys carry 25% of the world's oil trade to Japan and America, the South China Sea is one of the most imortant trade routes in the world. Because of the importance of the sea lanes and oil associated with the Spratlys and the fact that Britain is a signatory to a defence pact that includes Malaysia, one of the disputing states, British naval forces could be called in to the South China Sea.

The end of the cold war altered the balance of power in the South China Sea. The United States has withdrawn from Subic Bay in the Philippines and the former Soviet Union has withdrawn from Camranh Bay, Vietnam. China is in the best position to take advantage of the resulting power vacuum. It claims most of the area, and argues that the South China Sea, an area of approximately 800,000 square kilometres, has been encroached upon by other regional powers. The focus of this conflict are the Spratly Islands; claimed by China, Taiwan and, Malaysia, Brunei, Vietnam and the Philippines. The conflict indirectly involves all the states of South-east Asia.

The UK is party to the Five Power Defence Arrangements which also involve Malaysia, Singapore, Australia, and New Zealand. This defence pact is not an alliance, but should hostilities break out in the South China Sea, Britain would be obliged to help Malaysia and has an interest in keeping the sea lanes free for trade. The Spratly Islands dispute has the potential to become a major international conflict.

Background

The Spratly Islands group comprises over 230 islets, reefs and kays, it is located in the southern part of the South China Sea, and covers a vast area of about 250,000 square kilometres. The archipelago is uninhabited and most isles are too small to support human occupation. Until the 1950s, the islands were usually regarded as nothing more than a navigation hazard. In modern times, no state has established uncontested ownership of the islands.

China, Taiwan and Vietnam base their claims upon history. China argues that during the Han dynasty of the 2nd century BC, Chinese navigators discovered the islands and since then they have been used continuously by Chinese fishermen. Taiwan's claim follows the same justification. Vietnam also mentions the use of the isles by fishermen and asserts that it inherited a French claim to ownership of the Spratlys after independence. This claim was reinforced by the French occupation of nine isles during the 1930s.

All the states that base their claims on history claim the whole archipelago. Malaysia, the Philippines and Brunei use the principle of geographical proximity. They claim the isles that lie adjacent to, or on, their continental shelves. In terms of international law, this is a stronger justification for sovereignty. The Philippines claim 60 isles, Malaysia 3 islands and four groups of rocks, and Brunei only claims Louisa Reef that lies adjacent to its coastline.

The most visible manifestation of the dispute has been the occupation of various islands by the disputant states. The first was by the French in the 1930s, they were replaced by the Japanese during the war. Those two powers never returned. In 1946 Kuomintang (Chinese Nationalist) forces occupied the largest island, Itu Aba, and have been there ever since. The Spratlys were ignored by the international community for another 12 years until 1968 when the Philippines occupied three islands. At this point the occupation of the Spratlys began to accelerate.

In 1973 South Vietnam occupied five Spratly Islands, the unified state of Vietnam inherited these islands in 1975. 1978 brought another addition to the Philippine controlled islands. During the 1980s, the race to control more and more islands took off. Malaysia entered the scene in 1983, she garrisoned one island. Two more followed in 1986. 1986 brought another actor to the scene. Beijing sent hydrographic survey ships and naval vessels to the area. A year later, Chinese troops landed on Firey Cross and Cuarteron Reefs. An island hopping race with Vietnam had begun.

In March 1988, Chinese and Vietnamese naval vessels clashed near Chigua Reef. Three Vietnamese naval vessels were sunk and there are reports of up to 80 Vietnamese sailors having lost their lives. By April, Vietnam had garrisoned a further 15 reefs, bringing its total to 21. The Chinese now occupied six isles. At this point the Spratly islands conflict was in the main a symptom of the Cold War rivalry between China and Soviet backed Vietnam.

By the end of 1988 it looked as if a major military clash was brewing. However, the events of 1989 caused a complete change in dynamics of the conflict. In the aftermath of Tianamen Square, the Chinese government tried to avoid any incidents that would inflame international opinion any further. The collapse of Soviet power in Central Europe lead to uncertainty about the future role of the Soviet Union in South-east Asia. During the next years both the USA and the USSR withdrew their forces from the region. This process culminated with the collapse of the USSR its self. For a time it seemed that the dispute was over. 1989 in fact brought a number of informal bilateral agreements involving China, Malaysia, the Philippines and Vietnam not to use military force to pursue the claims.

Between 1989 and 1991 the states slowly consolidated their occupation of the islands, building quays, barracks and landing strips. 1992 brought the Manila declaration. All the claimant states agreed to settle their disputes through dialogue, not to use force to pursue their claims, to jointly exploit the island's resources, and not to appropriate any more islands. However 1992 brought more conflict. Both China and Vietnam signed oil exploration concessions in overlapping areas of sea. China occupied two more islands.

February 1995 brought Philippine protests that China had constructed 'steel supported structures' on Mischief Reef, both sides stationed warships in the area. The reef lies well within the Philippine claim and lies close to the Philippine island of Palawan. There have been a number of bloodless naval confrontations between Philippine and Chinese ships. The Chinese action was in contravention of the Manila declaration.

Legal Issues

The Law of the Sea, particularly the 1982 treaty resulting from the UNCLOS conference, has had a profound effect upon the dispute. This effect can be seen in two areas. The most important is the creation of the Exclusive Economic Zone (EEZ). This is a zone beyond and adjacent to a state's territorial waters that extends for no more than 200 nautical miles from the state's coastline. A state that declares an EEZ has, according to article 56 of the treaty:

(a) sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non- living, of the waters superjacent to the sea-bed and of the sea-bed and its sub soil .... (b) jurisdiction as provided for in the relevant provisions of this Convention with regard to: (i) the establishment and use of artificial islands, installations and structures (ii) marine scientific research (iii) the protection and preservation of the marine environment.1 The EEZ gives a state the exclusive right to manage the economic resources within the EEZ, including fishing and oil extraction. An EEZ can be proclaimed round an island. The control of one small island confers to owner rights to the marine resources of a vast area of ocean. The Spratlys are a vast archipelago. Undisputed control of the islands would involve control over the economic resources of a very large part of the South China Sea.

Fighting For Security

The Spratly Islands dispute has not, within the last seven years, erupted into violence. This makes the conflict less visible. War has the property of defining the parties in dispute and showing exactly how committed they are to their aims. Important events such as seizing islands happen about every two or three years. The dispute has smouldered on since the 1950s with only one violent incident in 1988. However, this state of affairs does not mean that there is no potential for violence in the near future. An international conflict is a symptom of two or more sides perceiving that they have incompatible goals, while this situation exists there is potential for violence.

There are two conflicts in the South China Sea. The first is over the strategic value of the islands, China's ambitions to control the whole of the South China Sea are being opposed by the other states in the dispute. The second conflict is over the vast mineral resources that lie under the Spratlys, and is dealt with below.

The strategic location of the islands is the foundation of the first conflict. According to Ali Alatas, the foreign minister of Indonesia:

the strategic importance of the South China Sea is ... beyond question. As a semi-enclosed sea linking the Pacific and Indian Oceans and located between continental Asia and insular South-east Asia, it encompasses important sea lanes of communication and, indeed, the Straits of Malacca and Singapore at its southern entrance rank among the busiest straits in the world.2 During the second world war the Spratlys were occupied by the Japanese, this presence allowed them to control the South China Sea. The islands offer numerable opportunities to station fast naval vessels, submarines and light aircraft that could patrol the southern part of the South China Sea. Sovereignty over the archipelago would give any state the legal right to interdict sea traffic sailing within their territorial waters. More than 25% of the worlds oil production passes through the Straits of Malacca, en route from the Middle East toward markets in Japan and the USA. The developing areas of ASEAN and the southern coast of China depend upon sea communications to export their products and import raw materials. Possession of the Spratly Islands would give a naval power a position of dominance over the entire region, with the ability to control the economic communications and oil supply of not only the regional states, but also of Japan and the USA.

The current nature of the conflict is a result of the removal of the Superpowers from South-east Asia. The Cold War created stability. We are now in a position of change and the instability that is associated with change. States that were Cold War enemies have become friends. Vietnam, the former revolutionary, has embraced capitalism and plans to join ASEAN. Vietnam, Malaysia and the Philippines have already agreed to jointly exploit oil from the South China Sea. Vietnam, Cambodia and Laos are becoming internationally respectable.

In Northern Europe, the removal of the Cold War caused a vast reduction of military threat and an increase in political and economic links. States like Hungary and Poland have applied to join the EU and NATO. In South- east Asia the end of the Cold War has created new friends, however it has also created new threats. The main threat has come from the Chinese attempt to move her border southward, to include the whole of the South China Sea. China is the key player in the Spratly Islands conflict. The Chinese assertion of her Spratly claim coincided with the waning of the cold war and Superpower influence. The intensity of the conflict stems from the suspicion that the Chinese government's policy is to replace the Superpower dominance of the region with her own.

 

China is the political and military heavyweight. Her military power is greater than all of ASEAN and Vietnam combined.3 As one of the five permanent members of the UN Security Council she can veto any UN operation in the area. If the South China Sea was turned into a 'Chinese lake,' she would exert a considerable degree of control over the whole of South-east Asia.There is a fear in South-east Asian states that China's ambition is to revive its historic foreign policy with its southern neighbours. Imperial China dominated, but did not rule neighbouring states. Nations were divided into barbarians and those who were allowed to send tribute. The barbarian peoples were enemies to be fought. All of South-east Asia paid tribute to imperial China at one time or another. It has been noted that current Chinese foreign policy thinking has been influenced by China's past. Modern Chinese policy makers divide states into those that are friendly and pay tribute, and potential enemies. This pattern can be seen in China's relationship with Vietnam. After the war of 1979, Vietnam was an enemy. China sought to systematically humiliate Vietnam, even after relations between the states had been normalised. According to Gerald Segal, 'The problem is that China defines 'normal' relations with Vietnam as ones where Vietnam is subservient to China. Even the growing cross-border trade relations between Chinese and Vietnamese provinces follow a pattern of Chinese domination.'4 The threat felt by other South- east Asian states involves fear that 'normal' relations with China would be as a political vassal.An obvious solution to the problem of an expansionist China would be for the states of South-east Asia to indulge in traditional balance of power politics. All the weaker states could form an alliance that would have the muscle and will to oppose China. An enlarged ASEAN would provide a focus for an anti-Chinese bloc. However there are a number of reasons why this has not, and probably will not, happen. While the South-east Asian states are disunited the Spratlys are vulnerable to a concerted Chinese push southward. China remains unopposed by a Superpower or the collective will of ASEAN.

The most obvious point is that ASEAN is not, and never has been, a military alliance. Its primary goal was to encourage economic development through increased trade. There are numerous bilateral military treaties, joint exercises and collaborative arms procurement programmes, however they have all been initiated on an ad hoc basis. National independence and sovereignty are the most important criteria to ASEAN states. The Five Power Defence Arrangements only involve Singapore and Malaysia, and in any case are not an alliance. In 1992 the ASEAN foreign ministers confirmed this position when they stated that:

ASEAN is not and should not become a military alliance. Each member-country must always assume primary responsibility for its own defence and security.5 ASEAN has failed to act together when it mattered. The ASEAN response to last years Chinese occupation of claimed by the Philippines was silence. The reasons for this lack of co-ordination lie in the differing perceptions of the ASEAN states. Both Thailand and Singapore have formed close links with China. Lee Kuan Yew, former premier of Singapore, has set himself up as an elder statesman of the Overseas Chinese and therefore of the whole of the Chinese world. Lee has consistently underplayed the threat of Chinese expansion southward and resisted attempts to press China on affairs like human rights and trade. This attitude has aroused the animosity of many regional leaders, Lee Kuan Yew is seen to be strengthening Chinese nationalism and in effect souring relations in South-east Asia, especially among those who worry about China's agenda in the South China Sea. Thailand's military is based on Chinese equipment. The two states formed a close relationship in the 1980s in an attempt to encircle Vietnam, their mutual enemy. Thailand, as a continental state, has much less dependence upon seabourne communications. These two states would be very reluctant to engage in an alliance against China. Also, the Indonesian constitution prevents it from joining a formal alliance.

Those states that do have a direct conflict with China over the Spratlys also have a conflict with each other. All of the South China Sea claims overlap with those of at least one other ASEAN state. Amitav Acharya lists five other territorial disputes between ASEAN states that have the potential to disrupt regional security. These lingering suspicions have interfered with ASEAN's ability to work together.

Disunity among the ASEAN states has contributed to the political instability in the South China Sea. The failure of ASEAN to create a formal alliance has created a strong degree of ambiguity in South-east Asian relationships. It is impossible to be certain what action they might take in the face of Chinese aggression. This ambiguity has sown the seeds of regional instability. Because it is impossible to predict states' reactions, a more aggressive Chinese policy is more likely than if she were faced with inevitable opposition. China may decide to attack, banking on ASEAN disunity preventing any co-ordinated attempt to oppose her. Should ASEAN manage to band together to counter attack, a major regional war would be likely.

Fighting For Oil

The second conflict is over control over resources of oil and natural gas that lie under the sea. All the states in the conflict have developing economies. Access to the oil wealth under the Spratlys is seen as essential for those states' economic security and long term growth. Moreover, oil wealth will be essential if states are to pay for the arms needed to maintain control of the archipelago, Possession of oil wealth is essential to winning the first conflict over the strategic value of the islands.

In 1986 Chinese vessels started to survey the sea bed near the Spratlys. They soon confidently asserted that the Spratlys sat above one of the richest oil reserves in the world. According to Pan Shiying of the Foundation for International and Strategic Studies in Beijing, oil and natural gas reserves in the Spratly region amount to 17.7 billion tons, 'this compares with 13 billion tons for Kuwait and ranks fourth in the whole world. No wonder the region is attractive.'6 In addition to the hydrocarbon resources, the Spratlys lie over large fish stocks and mineral resources, including diamonds and manganese nodules.

Oil represents the major lure for the littoral states. The importance of oil to the Vietnamese economy is shown by the fact that its only field, the Bach Ho, accounted for a third of Vietnam's total export revenues in 1993. The Philippines are in a similar position to Vietnam. The state has the second lowest GDP in ASEAN at $960. It had been 95% dependant upon imported oil, however new discoveries in the South China Sea are set to bring this total down to 85%.7 Malaysia's oil reserves are dwindling while Brunei will need to develop its offshore resources if it is to secure its wealth in the long term. The Chinese government sees the control of the Spratlys as vital for China's economic security. It is this perception that is at the root of China's intransigent and sometimes aggressive stance, which is the most divisive issue of the conflict. The lure of oil has created a confluence of domestic constituencies and government preoccupations that has created China's aggressive Spratly policy.

Jiefangjun bao, an official Chinese newspaper, wrote in 1989 that the Chinese navy must be developed so that the Spratlys' resources could be effectively exploited.8 It continued to say that the answer for starving populations was to exploit the sea, both for food and valuable minerals. In 1985, oil accounted for 27% of Chinese exports. She became a net oil importer in 1994. Like the rest of the developing states in the region, her economic development is thirsty for oil. Many voices in China have advocated an aggressive policy in the South China Sea to ensure self-sufficiency. A pamphlet issued in 1991 stated that:

In terms of resources, the South China Sea holds reserves worth $1 trillion. Once Xinjiang has been developed, this will be the sole area for the replacement of resources, and it is a main fall-back position for Lebensraum for the Chinese people in the coming century. Development southwards is perhaps a strategic orientation that we will have to choose.9 The one major break on what would otherwise be an expansionist policy is that China's remarkable industrial modernisation and development have been based upon an engagement with the outside world. This engagement involves massive amounts of inward investment as well as trade. There have been a number of debates within the Chinese hierarchy as to the proper way to gain economic security, whether to secure the Spratlys' resources by force or maintain friendly relations with trading partners.

The Spratly islands give the Peoples Liberation Army - Navy (PLA-N) an ideal issue with which to fulfil their ambitions of becoming a world class force. They have a two pronged value. First, the revenue gained from exploiting the oil reserves would provide the vast funds needed to develop a carrier fleet. Economic modernisation has provided the funds in the coffers of the PLA-N that has paid for its recent expansion. However, this modernisation has occurred within a strategic environment that has steadily become less threatening. The USA established its rapprochement with China in the early 1970s. By the late 1980s, Gorbachev's new political thinking had introduced a thaw in Sino- Soviet relations. The PLA-N in the 1990s is without a Superpower enemy to justify its ambitions. The answer is to develop the ability to take and hold the Spratly islands. The South China Sea offers both the justification for an aircraft carrier force, and the means to pay for it. Far from seeing the withdrawal of the US and USSR from the region as an opportunity for defence cuts, the PLA-N sees it as an opportunity to expand its influence.

The PLA-N has a number of allies in the Chinese administration. Conservatives and nationalists, unhappy with Chinese pro-Western policies, remain a powerful force. They have stressed the need for China to return to self sufficiency rather than reliance upon the international community for markets and imports of raw materials, particularly oil.

The belief that the Spratlys lie over vast oil reserves has added new dimensions to an already complicated conflict. It has made the islands a doubly valuable prize. The disputant states believe that their economic security is dependant upon obtaining the island's resources. In this situation, oil is perceived as a zero- sum resource. There is a finite quantity, once it has been drilled by one country, it can not be used by another. The oil fields cannot be easily parcelled up, one state's drilling may deplete another state's reserves. This situation occurred when Iraq accused Kuwait of stealing its oil immediately before the Second Gulf War.

Oil, as a motive, explains why China would want to barge into South-east Asia. By asserting her sovereignty over the whole of the South China Sea, and installing military force to back up that claim, she is trying to set herself up as the only state that oil companies can do business with. In this case, political, military and economic security can not be separated. In order to obtain all of the resources, China must play the part of the regional bully. This is what threatens the other regional states.

The Risk Of War And Prospects For Peace.

The late 1980s and early 1990s saw the initiation of a number of proposals for confidence building and regional security organisations. They have been mooted as the best hope of peacefully managing change in the region. A dialogue between the states was intended to lead to a better appreciation of the fears, interests and perceptions of the participating countries. It would enhance mutual trust and understanding, and so prevent misunderstanding and suspicions that can lead to conflict.

The most important attempt to manage the Spratly Islands conflict is the annual Workshops on Managing Potential Conflicts in the South China Sea run under the auspices of the Indonesian government. They involve, including Indonesia, ten states. The inclusion of three states that do not have disputed claims in the South China Sea (Thailand, Singapore and landlocked Laos) represents the recognition that the dispute had implications for regional security and political stability.

The high point of the workshops came in 1992 when China agreed to settle the dispute by using international law and offered to negotiate the sovereignty of the islands. The result of this optimism was the 1992 Manila declaration, in which states agreed not to annex any more islands and refrain from using force. Unfortunately a few months later Chinese marines seized more islands and Beijing issued a Sea Law that claimed the whole of the South China Sea and sanctioned the use of force to defend Chinese possessions.

Since then the workshops have been held annually but have made very little progress. They have discussed various confidence building measures like joint environmental protection regimes but there have been no substantial moves toward conflict resolution since 1992. While China refuses to even discuss the sovereignty of the islands, she claims that they are all part of her inviolable territory, there is little hope of a settlement. China has called for joint exploitation of the oil resources if states will accept Chinese sovereignty. This would solve the conflicts for the oil, but the conflict over the strategic value of the islands prevents any state giving the sovereignty, and therefore military facilities, of all the islands to the Chinese.

The Chinese have refused any formal multilateral negotiations on the South China Sea. The workshops had to remain officially informal meetings of individuals. Formal multilateral negotiations would put China at a disadvantage. Any formal understanding between her and Taiwan would be untenable, given the hostility between the two states. Taiwan would, at best, be a neutral. If the workshops were to become formal conferences, China would be publicly faced with a coalition of at least seven states (ASEAN plus Vietnam) against only herself. China has consistently stressed that the only formal negotiations should be bilateral. This has been interpreted in ASEAN foreign ministries as an attempt at divide and rule.

The recent Chinese offers of negotiating sovereignty and allowing joint exploitation of resources should be taken with a very big pinch of salt. In 1992 she showed herself capable of breaking her own commitments months after they were made. She has constantly refused to sit down at a multi-lateral negotiating table. Moreover the recent conciliatory moves have come at a time when the conflict with Taiwan has reached a very high level of intensity. It is much easier to regard the conciliatory moves as an attempt to stabilise her southern flank while she concentrated upon Taiwan. When the tension with Taiwan dies down China will be able to calmly forget about her assurances.

The main reason why the disputant states will not fight each other is the close economic ties that exist between them and the rest of the world. There are strong trade links between all the states involved in the conflict. A large proportion of investment in China comes from the ASEAN states, especially Singapore. All the states in the region are engaged in a race for economic development. This course of development is reliant upon exports which would be damaged by a regional conflict. The states of ASEAN are playing the game of market expansion rather than territorial acquisition. It is fair to say that ASEAN states are far too busy doing business to go to war with each other.

Vietnam, in its preparations to joining ASEAN, made a number of commitments to joint development of resources and the peaceful settlement of disputes. It would have too much to loose from attacking one of its neighbours possessions in the South China Sea. Vietnam's main regional rival is China, fighting her southern neighbours would be a major distraction to Hanoi. Taiwan is in a somewhat ambiguous position. She supports the Chinese claim to the whole of the South China Sea, because Taiwan is of course a 'Chinese' state. Unfortunately Taiwan is locked in a very bitter conflict with China. Taiwan would be very unlikely to risk a military adventure in the South China Sea. Though she was the first Asian state to occupy one of the Sptatlys, she has remained content to occupy just one island for the last 50 years. Even if she had the military forces, her ambitions do not justify war.

China poses the greatest threat to 'international peace and stability'. China has barged her way into the South China Sea and refused to compromise the issue of sovereignty. As a member of the UN Security Council she should be setting an example of moderation rather than aggression. China has attacked Vietnam, the Soviet Union, India and Taiwan over territorial issues. Of all the conflicting states, she has the most bellicose post- Second World War history.

There are also a number of reasons to doubt whether the international community would be enough to deter China. China does have an expanding market economy, currently 10% of her economy is individually owned. However she is still officially a communist society with a command economy. The capitalist strategy has been pioneered by Deng, however his days are definitely numbered, nobody is sure who will assume power once Deng dies. A more hard- line communist would be much less sensitive to the loss of international trade. While we all think that economic integration is beneficial to China, that view may not be shared by a future leadership in Beijing. China has shown its very capable of wounding its self with disastrous policies like the Great Leap Forward in the late 1950s that resulted in famine or the Cultural Revolution that created chaos throughout the country. A new leader may wish to prove their nationalist credentials by indulging in a 'short victorious war' in the South China Sea.

What is more threatening is the Chinese treatment of their own people. One of the few principles of international politics is that democracies never fight each other (though they have few qualms about fighting other forms of government). Restraint in the use of power in domestic affairs is connected to restraint in international disputes. Countries that are prepared to kill their own dissidents, such as in Tianamen Square or Tibet, will lack the moral abhorrence of violence that prevents a democracy from attacking its neighbours. The use of force has been a hallmark of the Chinese leadership, they will use force in an international dispute if they feel they will get away with it.

The Chinese leadership has refused to change its domestic policies in the face of prolonged Western criticism. It has shown that it is not scared of international condemnation. So far industrialised countries have not taken any meaningful steps to punish China for her human rights abuses. There is a real danger that like Iraq, the Chinese autocrats will see this silence as weakness. China might attack the ASEAN islands if its leaders thought that the response of the rest of the world would be the same inactivity that resulted from Tianamen Square.

Future Chinese aggression is likely to follow a pattern set during the last 8 years. China has embarked upon a series of small scale clashes and harassment with her neighbours, these include the 1988 clash with Vietnam and last year's incident on Mischief reef. China has followed a policy of preventing any rival oil exploration. In June 1994 Chinese ships attempted to blockade a Mobil oil exploration rig operating in a Vietnamese concession. China has attempted to force all oil companies operating in the South China Sea to work with her and so implicitly or explicitly treat China as the sovereign owner of the sea. According to Randall Thompson, the head of Crestone Oil:

I was assured by top Chinese officials that they will protect me with their full naval might. That's what they told me in negotiations - that they will have the full naval fleet out there backing me up, if necessary.10 So far each of the sides have been content to occupy empty islands, this process has come to an end for the simple reason that there are no more free islands to take over. There are hundreds more reefs and rocks, but most of them are under water at high tide and are too small to support a garrison. Last February the Chinese were forced to build a number of 'steel supported structures', or rooms on stilts, over a Philippine claimed reef because there was no dry land to build on. The disputant states have run out of room, they will have to take over each other's islets if they are to expand their presence in the South China Sea.

I do not believe that China has enough military power to take and more importantly hold, the entire South China Sea. A persistent period of creeping encroachment is much more likely. She will continue to illegally harass rival oil exploration ships. A recent paper published in Hong Kong claimed that up to half of piracy in the South China Seas was actually committed by members of the Chinese navy. China will pick the weakest and most isolated rival, such as the Philippines, and expel their forces from one or two islands at a time. The Chinese navy will back up these actions, any state that resisted China would have to fight a full scale war.

ASEAN states, and Vietnam, will be forced to decide whether they will surrender their claims to the Spratlys or stand up and fight. China, as a permanent member of the Security Council, would veto any UN action directed against her. Japan the USA and the UK are possible sources of assistance to the South-east Asians, but their support can not be counted upon.

There are two factors that indicate that the South-east Asian states are making preparations for war. The first is the creation of blocs, the second is the acquisition of arms. In both cases states are increasing their strength relative to their enemies, either by enhancing their military or political muscle.

The disputant states have become polarised. Polarization can be a step toward war because it focuses the attention of both blocs on the issues that divide them, and so the importance of crosscutting issues that may bind them together are reduced. There are now two groups of states, ASEAN, including Vietnam, versus China (Taiwan can be thought of as a neutral). There is an important difference between the creation of a bloc and an alliance. The bloc is a much more ethereal affair, it denotes polarization between the states in the dispute but it lacks the stability and certainty of an alliance. The creation of a bloc shows that states are coming together and ignoring their mutual suspicions because of a strategic imperative. They are anticipating a war and finding friends if not allies.

In an unofficial Chinese navy document entitled Can China's Armed Forces Win the Next War?, the creation of a bloc against China preoccupies the Chinese military authors. Twice it mentioned that the Vietnamese membership of ASEAN threatened China's ability to obtain the islands militarily or diplomatically. The Chinese military, perhaps due to the bloody nose they received from Vietnam in 1979, has much respect for the Vietnamese military. The document calls Vietnam the, 'Unpredictable Ace Hitman..' It foresees that war is inevitable as Vietnam cannot be persuaded to vacate the islands. The document sees the alignment of Vietnam and China's ASEAN opponents as a danger. It calls the group an, 'emerging alliance.'

It would be an exaggeration to say that there is an arms race going on in South-east Asia. Levels of arms expenditure are high, but they have only showed a modest total growth over the last six years. The worrying trend lies in the type, rather than the total quantity, of arms purchased. All the ASEAN states have seen their security priorities shift from counter insurgency to providing the ability to fight a limited naval battle. The Spratly islands dispute, has already been included in the military calculations of the regional actors. It explains, at least in part, the ambitious naval and airforce modernisation programmes undertaken by some ASEAN states.

The regional states have all embarked upon major naval procurement programmes. In 1988 Malaysia signed an MoU with the British Government involving jet fighters and missile armed frigates, the total value was US$1.6 billion. It was Malaysia's largest ever defence contract. December 1994 brought an invitation to tender for a contract to build a further 27 offshore patrol vessels at a total estimated cost of 1.25 - 1.5 billion. The first ship is planned to come into service late in the decade. An unprecedented arms contract between Britain and Brunei worth US $ 400 million, including Hawk fighters and three missile armed corvettes, was completed in 1995. The same year brought a contract between the Philippines and Italy to supply 18 S-211 jets for US $ 73 million. The only focus for this vast expenditure is to reinforce territorial claims in the South China Sea.

Spain is currently building a helicopter carrier for the Thai navy, however as it will be fitted with a ski jump to launch Harrier jump jets, the designation 'aircraft carrier' seems more appropriate. Indonesia's defence budget increased by 18% between 1992 and 1993 to an estimated US$1.95 billion. Much of this increase was spent on buying 39 naval vessels, including 16 corvettes, from the former East German Navy for US$120 million.

Since the early 1980s, four missile armed destroyers have been added to the Chinese navy per year. Last year China bought 4 Kilo class submarines and a number of SU-27 fighters, these purchases were made at the same time that a cut of 500,000 men was made from the Army. Along with the other states in the dispute, China re-equiping her military to fight a naval battle far from her shores.

Conclusions

Attempts to resolve the dispute peacefully have not worked, and there is little prospect of them working in the near future. The only possible way of resolving both disputes would be to declare the Spratlys res nullis, the property of no one. A ban on military installations could be initiated and co-operative exploitation of the oil reserves would ensue. This scenario is impossible for as long as the Chinese do not give away any sovereignty, and as long as South-east Asian states fear the Chinese navy. Until China gives away meaningful concessions the risk of war will remain.

The profound changes brought on the region by the withdrawl of the US and USSR have created a climate of instability. In this climate there is a risk that China may attempt to impose her will on the region by attacking her opponents forces on the Spratlys and non-Chinese merchant vessles on the high seas. It is unlikley that China would attempt to take all the islands in one bite. It would be much easier to get away with a slow period of limited aggression.

Britain, along with Malaysia, Singapore, Australia and New Zealand is a signatory of the Five Power Defence Arrangements (FPDA). This defence pact is not an alliance, however if Malaysian ships or troops were attacked then Britain would be under an obligation to assist. In addition Britain has strong trade links with ASEAN and a profound interest in keeping sea lanes open.

Britain does not have to capability to intervene on her own. However she might send a naval force in collaboration with Australia and the USA. The most likely form of intervaetion would be similar to the Armilla patrol that operated in the Persian Gulf during the Iran-Iraq war. Neutral ships would be protected by warships and the sea lanes kept open without a formal declaration of war against China.

For the first time, Britain, and the US, risk becoming involved in military hostilities with another nuclear power. Despite the very small chance that nuclear weapons would be used such a prospect has frightening prospects for our security in the next century. The international community will have to find a better way of relating to China if we are to avoid a conflict in the near future. One first step might be to stop turning a blind eye to human rights abuses. While this policy would cause a souring of relationships in the short term, China would be given the message that some actions are unacceptable. It could not interpret silence as a weakness and reluctance to become involved in Asian politics that could be exploited. The West should learn the lesson of Iraq, that if reasons of expediency allow the international community to give a free hand to a despotic leadership, those leaders will attack their neighbours because they think they can get away with it.

1 UNCLOS Treaty, Part V, Article 56

2 Managing Potential Conflicts in the South China Sea by Ali Alatas, Indonesian Quarterly vol. 18 no. 2, April 1990, p. 114

3 See The PRC Girds for a Limited, High-Tech War, by Shulong Chu, Orbis, Spring 1994

4 From Deconstructing Foreign Relations by Gerald Segal, China Deconstructs eds. Segal and Goodman, Routledge: London, 1994, p. 333

5 Statement issued by the ASEAN delegations at a preparatory meating to the ASEAN summit, Janurary 1992.

6 The Nansha Islands: A Chinese point of view by Pan Shiying, Window, 3 September 1993, p. 28

7 Far Eastern Economic Review.

8 Jiefangjun bao (Liberation Army Daily), 5 September 1989

9 The realities to be faced in China in the wake of dramatic changes in the USSR and Strategic choices, Zhongguo qingnian bao Beijing: 1991, quoted in Garver op. cit.

10 Quoted in Why the Spratly Islands dispute could trigger war... by Derek Parker, Asian Business Review, 07-01- 1995, pp 85.