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Thayer Consultancy Background Briefing:

ABN # 65 648 097 123


South China Sea in 2019 –
Diplomatic, Military and
Commercial Developments
Carlyle A. Thayer
December 29, 2018
Van Khoa, Thanh Nien:
Q1.How do you predict the situation in South China Sea in 2019?
ANSWER: In 2019, the situation in the South China Sea will be affected by two
contending trends. The first trend will witness diplomatic progress on – but not
completion of – a final Code of Conduct in the South China Sea. China will use its
negotiations with ASEAN members to promote joint development in the South China
Sea with Vietnam and Malaysia after concluding deals with Brunei and the
Philippines.
The second trend will see an increase in naval presence and freedom of navigation
operational patrols in the South China Sea by outside powers such as Australia,
Canada, France and the United Kingdom in addition to the United States. The U.S.
will also increase patrols through the Taiwan Strait. Taken together these naval
patrols will provoke a Chinese military response and the possibility of confrontations
at sea particularly in the Taiwan St.
Q2. What will President Donald Trump do to challenge China in South China Sea in
2019? Will the Trump Administration become more assertive if a Chinese warship
approaches a U.S .navy ship in disputed waters?
ANSWER: In May 2017, President Donald Trump approved an annual program of
Freedom of Navigation Operation Patrols (FONOP) drawn up by the Pentagon. These
FONOPs will continue. Recently, Randy Schriver, the Assistant Secretary of Defense
for Asian and Pacific Affairs, noted that the United States has stepped up its naval
patrols in the South China Sea to challenge China’s claims to disputed islands. He
called on Australia and other U.S. allies to exert pressure on China by stepping up
their military presence in the South China Sea to signal that China’s behaviour is
unacceptable.1
At the same time, the United States will conduct continuous bomber presence
patrols by B-52 and B-1B Lancer strategic bombers flying from Guam, Diego Garcia
(Indian Ocean) and North Dakota (United States mainland) over the South China Sea.

1
Cameron Stewart, “Pentagon urges China Sea patrols,” The Australian, December 28, 2018, pp. 1-2.
Schriver gave an exclusive interview to Stewart, The Australian’s Washington Correspondent.
2

Chinese sources report that during the encounter on September 30 between a


People’s Liberation Army Navy warship and the USS Decatur, the U.S. warship used
electronic warfare emissions to warn the Chinese ship. It is likely this tactic will be
repeated. The onus will be on China to decide whether to escalate or not.
Q3. Will China deploy more weapons to man-made islands in South China Sea in
2019? If so, what kind of weapons will China deploy?
ANSWER: China already has sufficiently militarized its artificial islands in the South
China Sea to exert influence on regional states and to pose a threat to the United
States military in a time of crisis. Unless the security situation in the South China Sea
deteriorates markedly China is unlikely to deploy new major weapon systems such as
missiles. Rather, China will continue to improve its C4ISR capabilities
(Command, Control, Communications, Computers, Intelligence, Surveillance and
Reconnaissance) this could include underwater drones, underwater sound
surveillance systems, and other infrastructure.
Q4. The Philippines and China signed a framework agreement on joint oil and gas
exploration in the South China Sea. What will the two countries do next in 2019?
How will their cooperation impact on the other involved parties?
ANSWER: China and the Philippines signed a Memorandum of Understanding (MOU)
on Cooperation on Oil and Gas Development on November 20, 2018. The MOU did
not specify the exact location where cooperation would take place in the “West
Philippine Sea” but Recto (Reed) Bank has been mentioned in media reports.
The two parties will now set up an Inter-Government Joint Steering Committee co-
chaired by their respective ministers of foreign affairs and energy ministers. The
Joint Steering Committee (JSC) has the responsibility to negotiate and reach
agreement on specific cooperation activities and the maritime areas to which the
agreements apply. The JSC will also set up one or more Inter-Entrepreneurial
Working Groups to discuss technical and commercial arrangements.
The MOU states that the two parties “will endeavour to agree” on cooperation
agreements within twelve months.
China has already nominated the China National Offshore Oil Corporation (CNOOC)
for each Working Group. The Philippines will nominate enterprises that have entered
into service contracts with the Philippines to appropriate Working Groups or
nominate the Philippine National Oil Company – Exploration Corporation (PNOC-EC)
as its representative.
Q5. China said it hopes its talks with Southeast Asian nations on a code of conduct in
the South China Sea will bear fruit in three years. Do you think China will push talks
on the code of conduct in 2019?
ANSWER: It has been the common position between China and the ten members of
ASEAN that the timetable for reaching agreement on a Code of Conduct (COC) in the
South China Sea would be “mutually agreed.” However, after China and the ASEAN
states agreed to the Single Draft South China Sea Code of Conduct Negotiating Text
on August 3, 2018, China unilaterally declared that it would take at least three years
to complete. In other words, China is in not hurry to complete COC negotiations
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because it suits China to prolong negotiations and play on differences within ASEAN.
Regional diplomats report that China has put the pace and scope of COC
negotiations into ASEAN’s court.
Q6. Thailand will hold the chairmanship of ASEAN in 2019. How will this impact on
the situation as well as talks related to South China Sea?
ANSWER: Thailand’s deputy minister for foreign affairs recently noted that his
country has spent two and a half years preparing for its role as ASEAN Chair. In the
past, Thailand used its role as ASEAN country co-ordinator for China to step up pace
and scope of working level discussions on the South China Sea. Thailand, as ASEAN
Chair, can be expected to play a key role in consensus making within ASEAN on
negotiations with China on a COC. Thailand’s deputy minister for foreign affairs has
expressed his hope to complete the first of three readings of the Single Draft South
China Sea Code of Conduct Negotiating Text by May 2019.

Suggested citation: Carlyle A. Thayer, “South China Sea in 2019 – Diplomatic, Military
and Commercial Developments,” Thayer Consultancy Background Brief, December
29, 2018. All background briefs are posted on Scribd.com (search for Thayer). To
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.