China’s neighbors should beware of Beijing’s trap

A global energy shock triggered by turmoil in the Middle East has confronted coastal countries in Southeast Asia with an escalating security crisis. To weather this storm, states such as the Philippines are planning to accelerate domestic oil and gas exploitation. 

But countries must be careful not to sacrifice their long-term strategic interests when pursuing joint development initiatives with China.

The energy shock has handed Beijing a strategic opportunity to revive its long-standing proposal of “setting aside disputes and pursuing joint development” in the South China Sea. In April, Manila suggested that it may resume joint oil exploration with China.

It came amid growing security concerns in the South China Sea. While some Philippine senators back the move, critics like retired Supreme Court associate justice Antonio Carpio warn that joint oil cooperation could be a “trap” for Manila.

Beijing’s “joint development” approach was first proposed by former Chinese leader Deng Xiaoping in the late 1970s and it has adhered to this strategy for over 40 years. It is built upon the premise that “the sovereignty of the territories concerned belongs to China.” 

International law

During negotiations for a Code of Conduct in the South China Sea, Beijing even sought to insert a provision requiring that coastal states stop cooperating with third-country energy companies in “disputed” waters.

Chinese sources frequently highlight the Reed and Vanguard Banks as potential areas for “joint development.” They lie entirely within the exclusive economic zones, or EEZs, and continental shelves of the Philippines and Vietnam respectively.  

This reflects a tendency for Beijing to favor joint development in areas where it lacks valid legal claims under international law yet describes “overlapping,” or “disputed,” rights with South China Sea coastal states.

“Joint development” typically occurs in “disputed waters,” where overlapping claims meet the requirements of the 1982 UN Convention on the Law of the Sea.

Beijing’s expansive moves rest on its vague “nine-dash line” and maritime assertions arising from the crucial sea lane. But the 2016 South China Sea Arbitration Award clearly affirmed that the claim of “historic rights” within the “nine-dash line” has no legal basis. 

This undermines Beijing’s legal standing to turn the waters under the sovereignty of coastal states into “disputed areas,” such as the Spratly Islands. 

Yet on the ground, China has consistently interfered with oil and gas exploration by Malaysia, Indonesia, Vietnam and the Philippines, all within their own EEZs. 

Strategic concessions

Beijing uses coercive measures to make independent exploration so costly and dangerous that coastal states are left with no choice but to partner with Beijing on “joint development” on its terms. This represents a sophisticated effort to realize China’s illegal claims in the region. 

Manila must recognize that Beijing’s calls for Philippine “sincerity” as a political prerequisite for joint development often serve as a facade for strategic concessions. These include reducing its maritime activities within its own EEZ. 

Accepting joint development on Beijing’s terms would implicitly validate the existence of a dispute where the law says there is none. Even if an agreement is reached, limited trust and power asymmetry may undermine its durability. 

Indeed, immediately following initial talks in Quanzhou in March, China responded not with cooperation, but by ramping up patrols around Scarborough Shoal just a day later.

For the Philippines, the primary hurdle to oil and gas exploration is its constitution, as experts debate whether a joint development with Beijing violates the nation’s sovereign mandates. The ideal scenario would be a 60-40 profit-sharing model in favor of Manila. 

If Beijing refuses, the Philippines may have to work with other partners. But these would require strong strategic resolve to withstand geopolitical pressure and keep risk-averse private energy firms from retreating when sovereign risks escalate.

Contested areas

If Southeast Asia coastal states prioritize energy autonomy within their EEZs, China will likely tighten the screw to force them to accept joint development arrangements. Vietnam and the Philippines must remain vigilant and cautious when considering China’s offers. 

Given that Beijing still firmly rejects the 2016 South China Sea Arbitration Award and the 10th anniversary is approaching, accepting China’s offers could become a “strategic trap.” It would turn undisputed EEZs into “contested areas” by default.

Nguyen Thanh Long holds a Master of Arts in International Relations from Ho Chi Minh City University of Social Sciences and Humanities. 

This edited article is republished from East Asia Forum under a Creative Commons license. Read the original article here.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy of China Factor.