Thayer Consultancy

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Background Brief: South China Sea: Passport Map and Cable Cutting Carlyle A. Thayer December 6, 2012

[client name deleted] We are now concerned about two issues as follows:   Inclusion of the 9 dash lines in Chinese e-passport claiming territory in South China Sea Chinese fishing boats cutting seismic exploration cable of Vietnamese survey ship for the second time.

We request your assessment of the following: Q1. Do you think that China ’s expedient of printing “nine dash line” map in its new passports will help Beijing be more recognized by international community on its South China Sea territorial claims? ANSWER: China’s use of its new passports to promote its claims to the entire South China Sea appears to have back fired. India has responded by stamping its own map including the disputed land boundary in the new Chinese passports. Vietnam is issuing entry visas on a separate paper for holders of the new passports. The Philippines has protested and the United States has voiced its concern. Passports are used to establish the citizenship of individuals and permit them to travel. China has attempted to use its new passports to demonstrate its “indisputable sovereignty.” This has been challenged by the states concerned. This nullifies any advantage China might have hoped to gain. Under international law maps are merely pieces of information. China’s new passport does not change the current status quo. Q2. What responses from international community do you think that can help prevent China from pursuing its nine dash line claim in South China Sea ? ANSWER: The international community must maintain unrelenting pressure on China to clarify exactly what it is claiming with the nine-dash line map. Further, the international community must also keep up diplomatic pressure on China to adhere to international law and to refrain from force or the threat of force. These pressures might have the effect of influencing the debate currently underway in China about how best to advance its territorial claims in the South China Sea.

2 The international community must also take it lead from Vietnam and the Philippines. Both countries need to develop an effective Coast Guard to exert sovereignty. And both states must keep up surveillance over their maritime waters. If the Philippines and Vietnam respond to Chinese assertiveness in a firm and legal manner, they will secure the support of the international community. Q3. What do you comment on the fact that two Chinese boats cut the seismic exploration cable of Binh Minh 2, Vietnamese survey ship dated November 30? According to you, is it made by accident or intentionally as a new wave of assertiveness of China? ANSWER: Vietnamese authorities have issued conflicting accounts. The Chief Executive Officer of the Vietnam Oil and Gas Group has stated that the cable cutting incident was an accident. The Ministry of Foreign Affairs has stated the cable cutting incident was deliberate. The Vietnamese government has taken the proper course by issuing a written diplomatic protest to Chinese officials. It is up to China to investigate and take appropriate action. Unfortunately China is unlikely to admit its fishing boats were at fault. China will argue the Binh Minh 2 was engaged in “illegal activities” in Chinese waters. At the moment, given the information available to me, I believe that the cable cutting incident was caused by the captains of the fishing boats involved and not part of a new policy of increased assertiveness. It is clear that the central government in China has had difficulty controlling local actors. It is also clear, however, that the central government by its inaction is condoning such displays of Chinese jurisdiction. Time will tell. It is clear that China is being very assertive in its dealings with the Philippines. It told Secretary of Foreign Affairs del Rosario that it would continue to occupy Scarborough Shoal by deploying civilian patrol boats in the area. China’s deputy foreign minister also told del Rosario that the Philippines should not internationalise their dispute. Madame Fu Ying specifically told del Rosario that the Philippines should not raise this issue with third parties including allies, take the issue to the United Nations or hold high-profile public press conferences.

Suggested citation: Carlyle A. Thayer, “South China Sea: Passport Map and Cable Cutting,” Thayer Consultancy Background Brief, December 6, 2012.

Thayer Consultancy
ABN # 65 648 097 123

Background Brief:
South China Sea: China Issues New Passport, New Regulations and Cuts More Cables

Carlyle A. Thayer December 6, 2012
[client name deleted] Could you provide an assessment of the following issues: Are recent acts of Chinese assertiveness a “message” from China’s new leadership to Vietnam? 1. Upcoming Chinese Party Chief Xi Jinping flew from Beijing to Nanning to meet Prime Minister NguyenTan Dung just before the sixth plenum of the Vietnam Communist Party’s Central Committee., where you correctly predicted that Dung would survive despite of a lot of rumours that he would be ousted. Was this a sign of Chinese support for Dung? 2. The issuance of new Chinese passports that have the U-shapef line map printed inside. On November 23, China published a map of the so-called “Sansha” city that included the two archipelagoes, exclusive economic zone and continental shelf of Vietnam. 3.Hainan province adopted the revised border security regulations for its coastal regions, covering Hoang Sa (Paracel) and Truong Sa (Spratly) archipelagoes over which Vietnam claims sovereignty. 4. The cable -cutting with Binh Minh Two (it coincides with the name of Vietnam’s Foreign Minister [Pham Binh Minh], who is reportedly not liked by China). Do you think points 1-4 is a strong message to Vietnam, as well as some other ASEAN claimants, after China's success in buying off Cambodia and the stronger return by the US to South East Asia? ANSWER: It is my view that local authorities in Hainan and fishing boats in the mouth of the waters forming the Gulf of Tonkin are largely acting on their own. Their actions are condoned but not necessarily approved in advance. The Chinese central government has had difficulty exerting control over what they call “the eleven dragons” or competing bureaucracies. Trying to establish control is difficult when there is rising nationalism bordering on jingoism (extreme nationalism). The passport was undoubtedly approved some time ago [around May]. The CEO of the Vietnam Oil and Gas Group has stated that the cable cutting was an accident while the Ministry of Foreign Affairs says it was deliberate.

2 I am not yet ready to argue that the three incidents – passports, Hainan regulations and cable cutting – are part of a new concerted policy by Chinese central authorities. We will have to see how the regulations are enforced. And we will have to see how China responds to Vietnam’s diplomatic protest over the cable cutting incident. I doubt China will admit it was a mistake, China is more likely to charge the Binh Minh 2 with operating in “Chinese waters.” However, China is playing hardball with the Philippines. Its Foreign Secretary Albert del Rosario has said China told him it will permanently occupy Scarborough Shoal by maintaining China Marine Surveillance ships there. It has also told the Philippines not to internationalize their dispute. Specifically, the Philippines was told not to discuss territorial disputes with third parties (especially allies), not to raise the matter at the United Nations, and not to conduct high-profile media interviews. The action by the Hainan province authorities are legal under international law if applied to China’s territorial sea (12 nautical miles from baselines marking the coast). But they could be subject to international arbitration if they took place in disputed waters (See Sam Bateman’s RSIS Commentary No. 220, December 5, 2012). The attached New York Times article quotes Wu Shicun as stating the new regulations are aimed mainly at illegal Vietnamese fishing boats.

Suggested citation: Carlyle A. Thayer, “South China Sea: China Issues New Passport, New Regulations and Cuts More Cables,” Thayer Consultancy Background Brief, December 6, 2012.

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: South China Sea: Chinese Actions, Vietnamese Reactions Carlyle A. Thayer December 10, 2012

[client name deleted] Q1. How do you assess this move from the Vietnamese authorities? Vietnam has broken up two small anti-China rallies in Saigon and Hanoi today, in the latest protests against Beijing as tensions flare over the South China Sea. Can we say that in this case, the government “permitted” very, very small rallies, to send a signal to China, but did not want them to stay in length? ANSWER: The Vietnamese security authorities have two reasons to break up antiChina demonstrations. First, in June 2011 Vietnam and China reached agreement "to steer public opinion," in other words to control public demonstrations that harmed bilateral relations. Second, s a one-party state security authorities seek to be in control and not appear reactive. The demonstrators were permitted to make their point briefly because there is considerable support for the their patriotic sentiments. But the demonstrations were quickly broked to fulfill the spirit of the promise to China. As public security authorities were quoted as saying, the protest complicated Vietnam's foreign policy. Q2. In a more general view, how do you explain the actual growing assertiveness of China against Vietnam? ANSWER: China is now demonstrating that it will brook no dissent from small Southeast Asian states over sovereignty disputes in the South China Sea. China has created disunity in ASEAN through its stalking horse, Cambodia. China has demonstrated especial sensitivity over what it considers the internationalization of the South China Sea dispute. Senior Chinese diplomats have told the Philippines they will continue to occupy Scarborough Shoal with civilian paramilitary vessels. In effect, China has annexed Filipino territory. China has told the Philippines that internationalization includes: raising South China Sea issues with parties not directly involved such as the U.S., taking the South China Sea disputed to the United Nations, and holding public press conferences. Much of China's recent behaviour - the new passports with maps of the South China Sea, new regulations issued by Hainan provincial authorities, and the cable cutting incident - may be seen as a continuing reaction to Vietnam's passage of its Law of the Sea.

2 Q3. Is there something to do with the new leader Xi Jinping? ANSWER: Chinese actions are the result of the central government's inability to reign in competing bureaucratic groups at provincial and local level. this has created an atmosphere of impunity by local and provincial official who feel they can do almost anything to advance Chinese claims to sovereignty. Xi Jinping was a member of the Politburo Standing Committee for the past five years. He currently head the small leading group in charge of South China Sea affairs. He is informed of what is going on but I do not think he personally approved each of these incidents. Xi has many pressing domestic issues to address and any flare up in the South China Sea may force him to support long entrenched positions. Local authorities appear to be the "tail wagging the dog."

Suggested citation: Carlyle A. Thayer, “South China Sea: Chinese Actions, Vietnamese Reactions,” Thayer Consultancy Background Brief, December 10, 2012.

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: South China Sea: Chinese Provocations on Two Fronts Carlyle A. Thayer December 12, 2012

[client name deleted Could you provide your assessment of the following questions? Q1. China's latest moves in the South China Sea have alarm bells ringing across the region. How is this going to impact relations between China and ASEAN nations? What recourse does Southeast Asia have without escalating the situation further? ANSWER: Even before the latest incidents in the South China Sea, China signaled that discussions with ASEAN members states on a Code of Conduct (COC) would be protracted. ASEAN officials speak of a possible agreement in 2015 when the ASEAN Community is expected to come into being officially. The Philippines has taken the lead in defying China. A government spokesman recently endorsed a change in Japan's constitution to allow Japan to re-militarize. China actions in issuing new passport claiming the South China Sea, Hainan province's new regulations permitting the boarding of vessels operating illegally in its territorial sea, and the cable cutting incident instigated by Chinese trawlers have enflamed sentiment in the Philippines and Vietnam. The problem for ASEAN is that it needs consensus on a policy towards China. Indonesia is playing a major behind the scenes role. However, ASEAN members must keep a low profile in order to mollify China and draw it into discussions. The recent incidents and the reactions by the Philippines undermine this effort to cool things down. In sum, the new Chinese leadership will respond to what they perceive as a provocation by entrenching current policies. The new Chinese leadership has other priorities and needs a calm atmosphere to re-evaluate South China Sea policy and return to formal discussions with ASEAN members. Q2. China's maritime might is showing no signs of easing. How is this going to play out in terms of its relations with neighbours, including Japan? ANSWER: It is important to note that the Chinese navy and other military forces have not been directly involved in recent incidents including the Senkaku islands dispute. The top foreign policy priority for the new Chinese leadership will be focused on relations with Japan. Who wins the impending elections in Japan will be important in determining whether there will be more confrontation or a lowering of tensions. All the signs are that tensions will continue. China Marine Surveillance and other

2 paramilitary patrol boats will remain on station around the Senkakus and conduct forays into Japan's territorial waters. This is a high risk strategy that could lead to a clash with the Japanese Coast Guard. Chinese preoccupation with Japan and Senkakus issues may lead to a respite in the South China Sea as Beijing generally avoids instigating too many confrontations at the same tie. Q 3. The islands in South and East China Sea have been around for centuries. Why suddenly, have they become flashpoints? ANSWER: The South China Sea has witnessed recurrent cycles of tensions since 1974 when China seized the Crescent group in the Paracels, 1988 when China fought with the Vietnamese navy off South Johnson Reef and 1995 when China occupied Mischief Reef. The recent tensions are part of a cycle that began in 2007-08 when China responded to the issuance of oil exploration licenses by the Philippines and Vietnam. A key turning point was May 2009 when China tabled officially for the first time its infamous nine-dash line u-shaped map claiming over eighty percent of the South China Sea. This was a period when China chased a foreign exploration vessels from Reed Bank in Philippines' waters and cut the cables of two exploration ships operating in Vietnam's Exclusive Economic Zone. More recently, China has reacted to the confrontation between Philippines' ships and Chinese fisherman at Scarborough Shoal and Vietnam's passage of it Law on the Sea. China has adopted a so-called policy of "reactive assertiveness". In other words, China responds to challenges to its sovereign jurisdiction by assertive actions. China has been most assertive at Scarborough Shoal because the Philippines sent a military ship to the scene. This was a formed US Coast Guard cutter commissioned into the Philippines Navy. China has now virtually annexed Scarborough Shoal through the continued deployment of China Marine Surveillance vessels and fishing boats. China has also roped of the entrance to the shoal. Q 4. The importance of history cannot be underscored enough, with China, Japan, Vietnam, all staking a historical claim to the various isles. Since each country has its own interpretation of history, how can the differences be reconciled going forward? ANSWER: There are two sets of issues here. The first is over sovereignty - who owns the land features and has sovereign rights over the maritime zones around these features. The sovereignty issue can only be solved by the states directly concerned, either through negotiations or international arbitration. Given the forces of domestic nationalism in all claimant states, and the "winner take all" nature of international arbitration, the questions of sovereignty is unlikely to be solved. The second issue is how should states behave toward each other within the context of competing sovereignty claims. ASEAN is trying to get China to commit to a Code of Conduct to prevent force, intimidation and coercion from being used. ASEAN also wants to get China to commit to observing international law, including the UN Convention on Law of the Sea. In other words, ASEAN would like to see China base it claims in the South China Sea from the land. China bases its claims on "historic rights". Under international law a state may only claim sovereign jurisdiction from its coast line, and islands and rock. A state can claim a 200 nautical mile Exclusive Economic Zone from its coast and from an island. It can only claim a 12 nautical mile territorial sea from rocks. Much of what China claims is not based on the legal

3 principle that "the land dominates the sea". China also claims sovereignty over islands and rocks that are currently occupied by the Philippines, Vietnam and Malaysia. If China and ASEAN nations could agree to shelve their sovereignty claims, bring their claims into accord with international law, they could then engage is joint cooperative efforts to manage the fish stock (which is dwindling due to pollution and overfishing) and develop hydrocarbon (oil and gas) resources. In 2008 China and Japan reached agreement on resource exploitation around the Senkaku islands but it was never implemented. One problem with the South China Sea is that no one knows for certain the extent of oil and gas reserves. They have not been properly surveyed. China provides estimates seven times larger than oil industry and the United States. This heightens Chinese motivations to control these resources. Industry analysts argue the South China Sea represent "peak oil" or limited reserves that would be quickly exhausted given rising energy demands throughout the region. In other words, regarding the South China Sea, resource nationalism as trumped international law and common sense. Q5. A follow up question would be: With its latest moves, is China violating the UN Law of the Sea? ANSWER: The short answer is no, China is not violating the UNCLOS if it enforces its new regulations in its territorial sea, that is waters within 12 nautical miles of its baselines. China has clarified that its new regulations will only be applied to such cases. The difficulty comes in disputed waters where to or more nations contest sovereignty. At the least China's actions upset the status quo; international law counsels restraint. At worst, China's actions could be resisted by the Philippines or Vietnam by appropriate force to defend their sovereignty. Q6. And in regards to the East China Sea, there is a general paranoia among the Chinese and Koreans about Japan's wartime atrocities and Chinese officials have gone as far as to link the isles dispute to Japan's imperial past. Is there any merit behind this thinking? ANSWER: Of course China and Japan do not agree on past history. Japan claims that it occupied the Senkaku islands as a result of a Cabinet claiming the rocks were terra nulis (unoccupied). Japan claims they were annexed following the first Sino-Japanese War under the Treaty of Shimonoseki which came after the Cabinet decision. China has only advanced its claims to the Senkakus only since the 1970s when it was reported that oil deposits could be found in nearby waters. Japans's war time atrocities date to the Second World War and are invoked emotively. They are not relevant to Japan's earlier acquisition Of course both China and Japan would accuse me of grossly simplifying a very complex history.

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Suggested citation: Carlyle A. Thayer, “South China Sea: Chinese Provocations on Two Fronts,” Thayer Consultancy Background Brief, December 12, 2012.

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: South China Sea: Three Drivers of Chinese Assertiveness Carlyle A. Thayer December 12, 2012

[client name deleted] On the South China Sea, where do you think China is coming from? ANSWER: Three factors are driving Chinese policy towards the South China Sea: resource nationalism, jingoism and military transformation. China views the South China Sea and its oil and gas as well as marine resources as its own. Actions by the Philippines and Vietnam to develop hydrocarbons as seen as plundering Chinese resources. At the official level China seeks to assert sovereign jurisdiction over the land features and waters within the nine dash line map. Domestic nationalism has shifted to a virulent stage or jingoism. This has been recently featured in domestic reaction to Japan over the Senkaku islands dispute. But it has also been observed in the postings by Chinese netizens calling on leaders to teach Vietnam and the Philippines a lesson for their impudence. No Chinese leader can ignore this powerful domestic force. Finally, China's military transformation as led certain quarters in the PLA and party-state bureaucracy to argue that China should use its military muscle to enforce sovereignty claims. China's leaders will not go down this path. But they can do little to alter the "culture of impunity" by local authorities and various civilian bureaucratic interest groups who from time to time undertake unilateral action against the Philippines and Vietnam. The recent cable cutting incident involving Vietnam Binh Minh 2 survey ship was most likely the result of the actions by captains of fishing trawlers rather than direction from Beijing. Two observations may be drawn about China's action. First, the central government has its work cut out if it wishes to restore central control over civilian agencies, provincial government, and local fishermen and fashion a coherent strategy. Up to now the tail is wagging the dog. Second, China's new leaders will be focused on domestic issues and relations with Japan. They may attempt to cool the South China Sea tensions but they will respond decisively to any sign of a challenge to Chinese jurisdiction. One Chinese scholar at the Asan Institute China forum 2012 used the expression "massive retaliation."

Suggested citation: Carlyle A. Thayer, “South China Sea: Three Drivers of Chinese Assertiveness,” Thayer Consultancy Background Brief, December 12, 2012.

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