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Background Briefing: South China Sea: Chinas Floating Factory Makes a Debut Carlyle A. Thayer July 4, 2012

[client name deleted] 1) China launched the "floating factory" to SCS in May this year. Said to be able to process up to 2,100 tons of seafood a day, how could this ship change the fishing patterns in the SCS? Will it accelerate the depletion of living marine resources in several waters of SCS? ANSWER: The Hainan Baosha 001 is Chinas largest sea processing ship and only one of four such mega-processing ships in the world. Fishing stocks have been depleted in Chinese waters so the Hainan Baoshi 001 and its escorts have been deployed to deeper waters in the East Sea. The ship will support over 300 Chinese boats that will fish in the area surrounding the mother ship. Since Chinas annual fishing ban covers the sea north of twelve degrees north latitude, this means that the Hainan Baosha 001 will operate in waters surrounding the Spratly Islands. Vietnamese and Filipino fishermen cannot hope to compete because the Hainan Baosha 001 can stay on station for nine months and support up to 500 Chinese fishing vessels. The methods used by China could result in the extinction of certain fish stock and permanent alteration of the marine environment. 2) With such a huge capacity, the ship and its escorting fleet may violate UNCLOS provisions that require the coastal states to restrain from over-exploiting marine resources? That may also deprive other claimants' right to joint-exploitation in overlapping waters? ANSWER: Yes, there is great concern that the Hainan Baosha 001 will deplete the fish stock on which Vietnam and the Philippines are dependent. This is in violation of UNCLOS. Under Articles 61 and 62, China has an obligation not to overexploit living sea resources but to conserve them. Under Article 123, China has a further obligation as a state bordering on the South China Sea to cooperate with Vietnam and the Philippines in the management, conservation, exploration and exploitation of living resources in the East Sea. In maritime areas where claims overlap all parties have an obligation to show mutual restraint and cooperate. Further, under the provisions of UNCLOS Articles 74.3 and 83.3, China, Vietnam and the Philippines are obligated to negotiate in good faith provisional arrangements of a practical nature and refrain from unilateral actions that could result in permanent

2 damage to the marine environment. By acting unilaterally China is shirking this responsibility. 3) Apart from its superior capacity and equipment for fishing and seafood processing, here and there I also heard that the Hainan Baosha 001 is, like other "marine surveillance" ships of China, in fact a semi-military disguise. In a sunny day, it is a merely a seafood factory; but in a "stormy" day, it may turn out to be a paramilitary vessel and its fishermen and workers be soldiers. What do you think about this "allegation"? ANSWER: The Hainan Baosha 001 is definitely not a military vessel. It is a 32,000 ton mega-seafood processing ship. Its crew are trained for their task. The ship is equipped with modern communications equipment and can readily report information of interest to Chinese enforcement authorities. Its radar can detect and distinguish foreign fishing boats in the area, for example.

Suggested citation: Carlyle A. Thayer, South China Sea: Chinas Floating Factory Makes a Debut, Thayer Consultancy Background Brief, July 4, 2012.