REPORT: The South China Sea Is A Mess And The US Needs To Get In The Game

South China Sea oil rig China

Photo: AP

Economies with over 3 billion people ship goods to the U.S. via the South China Sea.

India, China, and chunks of Southeast Asia all push ships through the sea, which acts as kind of a funnel for cargo destined to the West Coast of the United States.

See what’s happening in the South China Sea >

These crowded trade routes sit atop supposedly massive oil and natural gas deposits, with more than half-a-dozen countries holding legitimate claims to overlapping sites.

This potential mess is what prompted Mitt Romney’s team to pen the new report “Co-operation from Strength: The United States, China and the South China Sea,” a report calling for a bigger U.S. Navy and an increased American presence throughout the area.

The report suggest the following five steps: 

  • The U.S. needs a stronger naval presence in South China Sea — raising to its fleet to 346 ships, rather than the 313 currently expected under the Navy’s 30-year plan. During the Reagan era, there were almost 600 warships in the Navy as opposed to the current 284.
  • The U.S. should develop stronger partners in the Southeast Asia.Countries like Vietnam, which is concerned about being controlled by China; Indonesia, which is interested in protecting its sprawling offshore energy reserves and fish stocks; and India, Japan and South Korea, all looking to keep China’s military might in checkwhich seek to balance out power against China.
  • US should maintain peace and security in South China Sea, focusing on freedom of navigation. 
  • US should promote economic integration with focus on trade.
  • US should pursue a realistic relationship with China through active diplomatic and economic engagement supported by growing economy and strong military.

$1.2 trillion in US trade is transported through the South China sea each year

Almost half of all commercial goods in terms of tonnage and one third in terms of monetary value travel through the South China Sea.

Last year, China's trade with Association of Southeast Asian Nations (ASEAN) countries topped out at $400 billion. That amount is only expected to grow.

China has over 60 submarines and is expected to have 75 in the next few year

Vietnam is getting submarines of its own

defence spending in Vietnam increased from 1.9% of its GDP in 2005 to 2.5% in 2009.

When Vietnam purchased six Russian, Kilo class submarines, a spokesman for the military implied they were purchased to keep China from meddling.

China is ready to defend its claims in the South China Sea with its South Sea Fleet

Chinese analysts claim claims about 90 per cent of the South China Sea for Beijing

China's claims nearly all of the South China Sea, roughly coinciding with the dashed line.

This causes friction with Vietnam and the Philippines.

Spratly Islands are a point of discontent between China and Philippines

Even though China doubled its foreign investment in the Philippines and increased trade by 35%, the Philippines continues to ally with the U.S. due to competing claims to the Spratly Islands.

China is bullying its neighbours

Or so Vietnam, Malaysia, Singapore, Brunei and the Philippines fear.

The report insinuates that Finlandization (influence of one powerful country on the policies of smaller neighbouring countries) is part of China's indirect approach to nudge the U.S. out of the South China Sea.

By reducing its neighbours' desire or ability to work with America as a counterweight to Chinese power, China could exercise regional power even as it forces an isolated Taiwan into closer reunion.

The South China Sea is considered to be a second Persion Gulf and may yield billions of barrels of oil

China estimates the potential yield of South China Sea's oil fields to range from a very optimistic 100 billion to 200 billion barrels of oil with about 10.5 to 21.3 billion barrels being recoverable.

U.S. estimates cite a more realistic 15.6 billion barrels, with about 1.6 billion barrels being recoverable.

China National Offshore Oil Corporation has invested $20 billion to explore in the area and India's state-owned Oil and Natural Gas Company Videsh is partnering with Vietnam to explore for oil and natural gas in disputed waters that Vietnam claims as its own.

China is vulnerable to energy disruptions in the South China Sea

80 per cent of China's energy resources pass through the Malacca, Singapore, Lombok, Makkassar and Sunda Straits.

The ability to secure these sea lines from possible disruption is vital to China.

For example, 60,000 vessels transit the Strait of Malacca each year, including tankers holding more than 13 billion barrels of petroleum, or more than 40% of globally produced oil.

Billions of dollars in fishing revenue increases pressure in the region

In order to prevent overfishing, China does not allow harvesting in the northern part of the South China Sea from May to August and has detained Vietnamese fishermen suspected of violating the ban.

According to the Vietnam Ministry of Natural Resources and Environment, China detained several Vietnamese fishermen and their vessel in 2009 and required a $31,500 fine to be paid for their complete release.

Additionaly, a Vietnamese newspaper reported that between 2005 and October 2010, China detained 63 fishing boats with 725 men.

China is building its naval might and slowly taking control of the area

The South Sea Region Fisheries Administration Bureau is the agency tasked with escorting Chinese fishing boats in disputed waters and China Marine Surveillance (CMS) services enforce China's jurisdictional claims in the South China Sea

Last year, two CMS vessels harassed Philippine-chartered Veritas Voyager and forced it to withdraw.

This was followed by more vessels cutting cables towing seismic survey equipment behind the PetroVietnam vessel Binh Minh 02 and yet another vessel severing the cables of Vietnamese-chartered survey ship, the Viking 2.

There has been very little progress in the past 10-years

China will refuse to adhere to any code if it is not a party to the talks

Additionally, China is opposed to United States faccilitating any talks on implementing the 2002 DoC, as Secretary of State Hillary Clinton previously suggested.

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