Navigating Conflict in the South China Sea. Ted Aljibe/AFP/Getty Images

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1 Navigating Conflict in the South China Sea Ted Aljibe/AFP/Getty Images

2 Navigating Conflict in the South China Sea Why China needs the South China Sea The Philippines Perspective Vietnam s Role Competition Between China and the United States Japan s Part Taiwan s Changing Strategy UNCLOS: Beijing on Trial Fish: A Potential Flashpoint Looking Forward This report cannot be shared or copied without express permission from Stratfor.

3 (STR/AFP/Getty Images) WHY CHINA NEEDS THE SOUTH CHINA SEA Competition in the South China Sea among China, a host of Southeast Asian claimants and the United States might seem like simple nationalist posturing among Pacific powers, but maritime disputes carry a special significance in Asia. Unlike in Europe, water is the organizing element of the continent, which wraps around the East and South China Seas, the Bay of Bengal and Indian Ocean, as well as countless peripheral lagoons and bays. Ownership of a particular island, reef or rock, and the right to name a body of water is more than a question of sentimentality it is the foundation of many national strategies. Securing the right to patrol, build bases and regulate trade through these waterways can mean access to resources critical to sustaining economic growth and political stability. China s transition from an isolated economy to an international powerhouse has moved its focus to the waters of the South China Sea. For a number of reasons, Beijing is no longer comfortable or confident enough STRATFOR 3

4 East Asian Maritime Claims The Pacific Rim has numerous overlapping maritime claims. As China moves to secure access to transit routes, it has pressed its longstanding claim to a nine-dash line encompassing territory claimed by Vietnam, the Philippines, Indonesia, Malaysia and Brunei. N. KOREA S. KOREA Sea of Japan JAPAN East China Sea CHINA TAIWAN Pacific Ocean MYANMAR THAILAND Bay of Bengal VIETNAM South China Sea PHILIPPINES BRUNEI M A L AY S I A 300 mi 600 km I N D O N E S I A Arafura Sea Copyright CopyrightStratfor Stratfor to allow the status quo in the region to remain unchanged. China historically has been a land power, not a maritime power. Although China has been involved in the maritime sphere for centuries and Chinese merchants have been active throughout Southeast Asia, the country s geography, natural resources, population pressures and neighbors have both allowed and encouraged Chinese leaders to focus their attention on the country s vast interior and land borders. At times of relative stability and security in China s history, Beijing could flirt with the idea of state-sponsored maritime exploration, as evidenced by the fleets of Zheng He. But for the most part, China avoided expanding its naval activity because it was neither pressed to physically assert its overseas diplomatic positions, nor did it have the capacity and freedom to look across the sea. The Silk Road provided sufficient access to exotic trade, and security concerns with neighbors kept China focused on the continent. STRATFOR 4

5 Resources Today, there are two primary concerns driving Chinese maritime activity: economic resources and strategic access. Although many of the concerns China is dealing with now are not new, other factors have combined to compel Beijing to become more assertive. The South China Sea has always had an abundance of natural resources. Although much attention is paid to existing and potential crude oil and natural gas reserves, as well as the possibility of subsea mineral extraction, marine protein (fish and seafood) is one of the biggest resource-drivers there is. Asia s enclosed seas provide plentiful and readily available food resources, but fishing is a constant source of regional tension. Even at times of low interregional stress, fishing fleets frequently violate one another s territories, and run-ins with maritime patrols are not infrequent. Crude oil, natural gas and seabed minerals are less sure, and political risk has kept significant progress in exploration to a minimum, except near proven reserves and usually within undisputed territory. However, this is not to say that there is no interest in tapping subsea resources. Rising regional demand to which Beijing is a significant contributor and a rising level of technological proficiency in China and elsewhere is making subsea exploration and exploitation more desirable and achievable. China is entering the realm of deep-sea exploration, something it was not consistently able to engage in before. Still, cost and political risk will continue to affect decisions for exploration, since mere capability doesn t necessarily translate into cost-effectiveness. East Asian Offshore Resources MONGOLIA CHINA South China Sea VIETNAM MALAYSIA INDONESIA East China Sea NORTH KOREA Source: United Nations Food and Agriculture Surface; US EIA Copyright Stratfor SOUTH KOREA JAPAN Oil and gas In addition to resource exploitation, there is another, more strategic, driver for China s maritime ambitions that is quickly becoming more pressing for Beijing. In the past, China was largely capable of meeting its own needs and sustaining its economy domestically, or via land routes. This is no longer the case, and the significant boom in the Chinese economy has raised the increasing vulnerability of China s overseas dependence to a much higher priority for Beijing. The large shift in Chinese consumption has created a heavy dependence on maritime routes, which high levels of Chinese exports only add to. This dependence has shaped the strategic picture in Beijing: As with any country dependent on maritime supply lines, China will seek to secure those routes, STRATFOR 5

6 China s Import Transit Routes and Maritime Chokepoints Chokepoints along the First Island Chain SOUTH KOREA 3% Russia China s crude oil imports by sea CHINA China s natural gas imports by sea VIETNAM South China Sea TAIWAN PHILIPPINES 2% Americas from Pacific Coast Pacific Ocean 82% 30% Strait of Malacca 3% 25% MALAYSIA Asia/ Australia, not via Malacca/ Lombok/ Sunda Straits 1% INDONESIA 300 mi 600 km Lombok/ Sunda Straits Sources: U.S. Department of Defense, RAND Corp. (data from 2013) whether from regional competitors, non-state actors or any major maritime power. The United States is currently the global maritime power, and the only nation that can (and does) operate freely throughout the world s oceans while ensuring the same opportunity for others. But the United States ability to use and act on the seas with near impunity also means that, from China s perspective, Washington has the capability, if not the intent, to use that power to constrain China s growth. China s emergence as an economic power changed the international system, as it became one of three pillars of the global economy. This crucial role shapes not only China s perception of itself and its place in the world order, but also the perceptions others have of China. Beijing s concern is that the United States sees China as its only potential Copyright Stratfor peer, even if only an emerging regional power for now, and thus Chinese leaders fear that Washington will make the decision (if it has not already) to contain any further rise of China. This question of Washington s intent, combined with U.S. maritime power, has put pressure on China to develop the defensive capability to protect its critical maritime supply lines, or leave itself at the mercy of the United States. The shift in Beijing s threat perception coincided with changes in the Chinese military. Under President Jiang Zemin, the Chinese government began to restructure the military and stripped away its business empire, in return offering the People s Liberation Army (PLA) a more modern role and more modern equipment. The modernization of the Chinese military required a new type of soldier who was highly educated and understood STRATFOR 6

7 the technology of modern warfare. It also required a shift in the training, doctrine and overall focus of the Chinese military. The PLA has evolved well beyond its previous, politically constrained form, especially since China s land borders have remained relatively stable, and Beijing has created more civilian forces to deal with internal unrest, freeing the military to focus abroad. The PLA s role is now more than just protecting China s borders, or preventing internal instability; it is preserving China s broader national interests, which include the protection of China s lines of trade. The PLA sees this global role emerging, starting in the South China Sea. New capabilities have allowed China to act with more authority in the South China Sea than in previous decades. Beijing does not see this as aggressive behavior but as defensive action through which it is securing what is necessary to preserve its national interests. Beijing s Southeast Asia Strategy China s aims in the South China Sea are not necessarily separate from its broader goals in Southeast Asia. Beijing sees Southeast Asia as a natural economic and political partner, and an area for trade and investment flowing in both directions that clearly falls within China s sphere of influence. Though not an exact parallel, China sees Southeast Asia in much the same way the United States saw Latin America in the early 19th century. China essentially has an unspoken Monroe Doctrine for its near seas it intends to remove significant foreign interference and influence from the countries around it. This does not mean that China expects regional countries to shun all connections with the United States; rather, China wants to ensure that it has the upper hand in influencing its neighbors decisions to protect its national security interests. In the South China Sea, China s small island strategy is not necessarily one of military expansion. Far different than the island hopping competition between Japan and the United States during World War II, the airstrips and dock facilities on islands and atolls in the South China Sea rarely give China a true military advantage. Modern military technology gives China the range to operate without needing these islets, and possessing the islands does not necessarily give Beijing greater strategic control over their surrounding waters. In some ways, from a purely military perspective, holding the islands farthest from the mainland is more of a risk than a benefit to China. They are small, have few or no local resources (in most cases, not even fresh water), and in times of conflict would prove hard to defend and resupply. Building structures on the islands certainly prevents others from doing the same, and in times of relative peace may make it slightly easier for China to conduct maritime surveillance, but the primary purpose of occupying the islands is not military; it is political. Holding the islands over time, without facing a concrete challenge, strengthens the reality of Chinese ownership. Beijing has assessed that, to its neighbors and their U.S. ally, no single island is worth the military risk of physically countering China, so there is nothing to stop Beijing from slowly absorbing the region. When tension with a particular country rises too high, China can ease off, shift its attention to a different country, or use the perception of heightened tensions to drive a desire for calming the situation. Over time, this strategy slowly shifts the political reality in the region. The lack of real challenge to Chinese actions reasserts, by default, Beijing s claims to and authority over the territory. It also shows that neither the United States nor other extra-regional allies are going to intervene on behalf of the Southeast Asian nations. In the end, China believes this unwillingness for intervention will lead to the realignment of political relations as Southeast Asian nations find that accommodating Beijing is more beneficial than trying to oppose Chinese expansion through alliances with powers outside the region. Implications for ASEAN The changing status quo in Asia is as much a natural consequence of China s economic growth and ex- STRATFOR 7

8 pansion as of the imbalance between China s rapidly changing position in the global system and its relative lag in soft-power expansion. While China s economic rise benefits the Association of Southeast Asian Nations (ASEAN) considerably, there is no guarantee that it does not also undermine the core interests of each individual ASEAN country. The disconnect between China s economic strength on the one hand and the significant security role assumed by others namely the United States on the other, highlights the imbalance of power in the region. In some ways this gap has benefited ASEAN by giving member states the ability to take advantage of the big powers competition for their own benefit. But at other times, they find themselves caught in the ebbs and flows of U.S.-China relations, with little ability to influence the direction of the relationship. China s economic approach has been to create a reality where ASEAN countries rely much more on China than China relies on them. As the security challenges in the South China Sea remain unsolved, deepening economic relations may only heighten ASEAN s suspicion of China s motives. Meanwhile, China s occasional diplomatic and economic mismanagement of its regional relationships may stir political and social resistance in the ASEAN states, adding to the situation s complexity. Despite these short-term conflicts, Beijing still regards its friendly neighbor and peaceful rise policies as the key elements in its relationship with ASEAN. Rather than formally dominate ASEAN states, as colonial powers did in the past, China is hoping to simply draw them in and gain their cooperation a re-creation of the age-old Chinese system of regional political management. n Total Trade With China, 2015 Myanmar** 13.7% Thailand 15.6% Cambodia* 26.4% China Laos 26.7% Vietnam* 19.7% Brunei 4.9% 0-10% 10-15% 15-20% 20% and over Philippines 13.9% Malaysia 15.8% *2014 data **2013 data Source: Trademap Singapore 14% Indonesia 15.2% Copyright Stratfor STRATFOR 8

9 (Dondi Tawatao/Getty Images) THE PHILIPPINES PERSPECTIVE The Philippines forms the eastern edge of the South China Sea, the key route to the Pacific Ocean. China cannot afford to have the Philippines adopt a confrontational stance toward Chinese interests and maritime activity. The Philippines is a U.S. treaty ally, and thus is seen as part of any U.S. containment strategy against China. Beijing feels compelled to break U.S.-Philippines ties, or at the very least create strain in the relationship. The Philippines somewhat ambivalent attitude toward the U.S. military certainly helps China s cause. Furthermore, growing disappointment with the U.S. pivot to Asia, a policy widely misread in the region, has added another dimension to the complexity of the relationship between Manila and Washington. In other words, there is plenty of room to increase cooperation between China and the Philippines especially economically despite any political speed bumps. In 2013, the Philippines received just 1.4 percent of China s total investment in ASEAN, the second-lowest share among the 10 member states. Cross-border trade stood at $15.1 billion that year, ranking China as the Philippines third most significant trading partner (and higher, if trade with Hong Kong is included). But there is much room for more trade between the two, if political distractions can be overcome. The Philippines has been one of the two countries in the South China Sea, along with Vietnam, that has noisily challenged China s expansion. Beijing s actions are the most disadvantageous to Manila and Hanoi, each claim the largest swaths of territory in the South China Sea after China itself and are therefore experiencing the biggest shifts from the status quo as a result of Beijing s expansionism. However, China is confident in dealing with the Philippines because of its disproportionate advantage in their economic relationship and because the U.S.-Philippine security relationship remains strained, givng China far more room to maneuver than Manila. Barring significant U.S. intervention, China will retain this advantage. Ultimately, Beijing is counting on its estimation that the United States won t get tied up in a real confrontation with China over a few unoccupied islands claimed by the Philippines. n STRATFOR 9

10 (HOANG DINH NAM/AFP/GettyImages) VIETNAM S ROLE After the end of France s occupation of North Vietnam in 1945, the border with China early Vietnam s first strategic concern gradually ceased to be a pressing issue. In the modern era, the sea more than the land determined Vietnam s strategy namely maintaining a unified, sovereign nation. Geographically, Vietnam is narrow, with a long coastline dividing distinct population clusters centered on the Red and Mekong rivers at either end. Uniting these clusters under one flag requires securing the middle trunk that connects them Vietnam s geographic weak point. To the west, Laos provides an inland buffer for the trunk, while the coast to the east is largely open, loosely bracketed only by two sets of islands, the Paracels and the Spratlys. Vietnam has had maritime involvement with these islands since at least 1974, when South Vietnamese forces attacked a Chinese fleet in the Paracel Islands. Fearing that Chinese control of the Paracels would both substantiate Beijing s wider territorial claims in the South China Sea and better position the Chinese navy to invade Vietnam at its weak center, South Vietnam made a pre-emptive strike. It lost, and Saigon fell within a year. But its position was soon adopted by North Vietnam, which aggressively captured the majority of the islets in the Spratly chain as a counter to China s success in the Paracels. The importance of the islands in substantiating territorial claims is compounded by the possible presence of underwater energy resources. While far-offshore exploration in the disputed waters has so far been limited by political disputes, most countries in the South STRATFOR 10

11 China Sea region already rely heavily on near-shore oil reserves for revenue, Vietnam included. Currently, crude oil is a crucial export for Vietnam and helps to pay for refined oil imports. Vietnam has long been one of the most vocal opponents of Chinese territorial claims in the South China Sea as well as the most capable and the most willing to risk open confrontation over those claims. History helps explain Vietnam s modern-day boldness. But Hanoi s increasingly visible and multilateral moves also reflect a pressing need to develop new energy sources and to protect its fisheries. The Bach Ho offshore oil and natural gas field in Cuu Long Bay has been Vietnam s primary source of hydrocarbons since its discovery in But the field is now entering terminal decline, and unless Vietnam is able to explore further afield in the South China Sea, it will become a net oil importer in three years. Vietnamese companies are surveying deeper into the sea, but any efforts to comprehensively explore it have been severely curtailed by Chinese naval activity in the region. This is a serious concern for Hanoi. Terminal depletion of oil resources will put significant constraints on the government s ability to maintain high growth rates. And as a non-elected Communist Party, the Vietnamese government like the Chinese has relied in large part on the promise of economic prosperity for its political legitimacy. Therefore, energy resources (and, as Vietnam s refining capacity grows, the prospect of genuine energy independence) are essential for revenue and political stability. Responding to China Vietnam is one the most militarily capable and economically and politically invested opponents of China s growing involvement in the South China Sea. But its ability to actually engage the Chinese in naval combat (especially if protracted) is severely hampered by limited finances and a comparatively smaller and less capable force than China s South Sea Fleet. Though growing fast, the Vietnamese economy is still the size of a small, poor Chinese province. Vietnam s GDP ($193.6 billion in 2015) is low compared with even Chinese municipalities and sustains a much larger population. Given that defining and defending its claims in the maritime sphere will become increasingly important to Vietnam s domestic political and economic imperatives, and also that Vietnam alone is incapable of doing so in the case of a protracted confrontation, Hanoi must work to build external alliances that provide a virtual buffer against the Chinese. While Hanoi views an enhanced U.S. presence in the region as an important check on Chinese aggression in the South China Sea, it will nonetheless work to limit U.S. influence over its own foreign policy by building and maintaining strong defense ties with other countries namely Russia, India and ASEAN member states. Overlapping relationships with larger, more influential powers provide a multilayered buffer against China, allowing Vietnam to play a more active role in shaping the region s political dynamic. Whether or not any of Vietnam s individual partners is actively concerned with containing China does not matter; Hanoi s goal is to be at the center of intersecting global interests in the sea. Doing so allows Vietnam to play a far larger role than if it were to act alone. While Vietnam will benefit from leveraging its military relations with a number of countries in case of conflict with the Chinese military, it remains constrained by its limited economic ability and the hesitation of foreign countries to get too involved in a serious dispute with China. n STRATFOR 11

12 (TED ALJIBE/AFP/Getty Images) COMPETITION BETWEEN CHINA AND THE UNITED STATES The divergent perspectives of Washington and Beijing are rooted in radically different national and regional strategies. On the world stage, China portrays the South China Sea dispute as fundamentally a question of sovereignty. The United States, however, foregrounds concerns about freedom of navigation. Since the end of the Cold War, the United States has been the unquestioned pre-eminent power in the Pacific Rim, assisted by its allies, most notably Japan and South Korea. Simultaneously, however, China has been emerging as a potential regional hegemon, and the South China Sea has become the most visible area of tension. A core but often unstated component of U.S. national strategy is to maintain global superiority at sea. By controlling the seas, the United States is able to guarantee the secure movement of U.S. goods and to deploy military power worldwide. This preserves global economic activity feeding the domestic economy while ensuring that any threat to national security is addressed abroad before it can reach the homeland. This state of affairs is enforced by the powerful U.S. Navy, but it is undergirded by Washington s particular interpretation of international law. In China s near seas, the U.S. global imperative comes into conflict with China s emerging regional needs. STRATFOR 12

13 Since the early 1980s, China has undergone a transition from an insular, self-sufficient state to a major exporter. This has forced Beijing to reassess its maritime risks and vulnerabilities. China is no longer able to protect its national economy without securing the maritime routes it needs to maintain trade and to feed its industrial plant. China s assertion of ownership and control in the South China Sea, coupled with liberal interpretations of its rights within its claimed exclusive economic zone, gives Beijing at least a modicum of greater security. With neighbors unable or unwilling to directly challenge China s concrete actions in the sea, and the United States hesitant to use force to halt Chinese expansion, Beijing is reshaping the status quo unimpeded. Legalizing National Strategy In pursuit of their respective interests, the United States and China have chosen to interpret international maritime law differently. The precise legal nature of various landforms has become key. There are four basic geographic terms at play: island, rock, low-tide elevation and artificial island. Understanding the ambiguity of each of these terms is key to understanding conflict in the South China Sea. According to international law, an island is a naturally formed elevation that is always above the high-tide level and is habitable and/or capable of sustaining economic activity. A rock is also naturally formed and above the surface but not necessarily suitable for habitation or economic exploitation. By contrast, a lowtide elevation can be covered by water at high tide but is exposed at low tide. An artificial island differs from an island in that it is not naturally formed. Disputes are further complicated when considering submerged rocks, seamounts and other subsea landforms. The designation of a landmass determines precisely how the surrounding water can be used and who can use it. An island is granted a 12-nautical-mile territorial sea and a 200-nautical-mile exclusive economic zone, and it can be used to delineate a continental shelf, which has implications for access to subsea resources. A rock is granted a 12-nautical-mile territorial sea but no exclusive economic zone. A low-tide elevation is not granted a territorial sea, but it may be used as a base point in claiming territorial waters if it is within 12 nautical miles of land. An artificial island is granted nothing other than a 500-meter safety zone. Even conduct within another entity s exclusive economic zone is open to interpretation. The United States argues it is within international legal rights to conduct military patrols inside exclusive economic zones; the Chinese counter that this is considered hostile action and is thus forbidden. Beijing and Washington each have their own interpretations. China asserts that its South China Sea holdings are islands and are part of sovereign Chinese territory, giving them the full 12-nautical-mile territorial sea and a 200-mile exclusive economic zone. The United States says that while it has no official stance on maritime disputes, it interprets the holdings as either low-tide elevations or artificial islands. This reading gives U.S. vessels the right to sail within the 12-nautical-mile limit. As with its ASEAN rivals, Beijing also believes it can manage Washington, betting that the United States will work to avoid any real conflict with China in the South China Sea. This has been the case so far, although Washington has challenged Beijing s take on what is and is not allowed in the waters of the South China Sea. And whether China has a legitimate claim to the seas there, it has been careful to avoid any action that could lead to physical confrontation. China is well aware of U.S. reluctance to escalate the conflict and takes advantage to keep expanding its presence. n STRATFOR 13

14 (PETER PARKS/AFP/Getty Images) JAPAN S PART But Beijing does fear one thing in the South China Sea: the involvement of Japan. Tokyo, long a passive power in the Pacific Rim, is now embarking on the long process of reasserting itself. If Japan decides to become more involved in the South China Sea, China s strategy will become significantly more complicated. Japan has its own concerns about South China Sea claims. As an island nation with few natural resources, Japan s economic lifelines can only pass through the seas it has no land options. China s expansion of activity in the waters, following its assertive activities in the East China Sea, have made it clear to Tokyo that there has been a real change in the Asia-Pacific and that Japan needs to secure its interests. While China has suggested it may accept continued U.S. patrols, it has also asserted that it absolutely cannot accept any role for Japan in the South China Sea, arguing that Japan has no legitimate claims or interests in the waters. China s knee-jerk response against Japan is in part conditioned by Tokyo s history of belligerent imperialism. More concretely, however, Beijing recognizes that Japan will have a freer hand in the Pacific than the globally committed United States. The United States is further limited because it, like China, is a nuclear power. Japan is not. This places a stopgap on escalation similar to the constraint on the United States and the Soviet Union during the Cold War. This also explains why Beijing has been so set against potential U.S. deployment of Terminal High Altitude Area Defense anti-ballistic missile systems in South Korea. This system would give U.S. missile defense reach onto the Asian mainland and, over time, potentially weaken the viability of a Chinese nuclear counterstrike capability. China has pledged to not use nuclear weapons against a non-nuclear state. If Beijing intends to uphold that pledge, its ability to threaten Japan is diminished. All of this adds up to a greater threat if Japan and the United States align in the South China Sea. A combined Japanese-U.S. force would be a far different challenge for China than any single force. China is now trying through numerous channels to make clear to the United States that Japan does not have the same constraints and may be willing to gamble with the U.S. security for its own interests. And Japanese aid to the Philippines, by extension, would embolden Manila to potentially trigger a short, sharp clash with China on a disputed islet, armed by Tokyo and able to rely on Washington to step in if things escalate. n STRATFOR 14

15 (SAM YEH/AFP/Getty Images) TAIWAN S CHANGING STRATEGY When China s defeated Nationalists fled to Taiwan in 1949, they brought with them territorial claims to all of China, including a then unimportant group of islands in the South China Sea. Today, Taiwan claims sovereignty over a wide swath of this sea defined by an 11-dash line nearly identical to China s nine-dash line delineating its own claims in the area. Taiwan s military also maintains a presence on Taiping, the largest of the contested Spratly Islands, and on Pratas Island in the northern South China Sea. Ironically, the identical claims put forward by Beijing and Taipei have brought them into a sort of alignment, especially when contrasted with Washington s vision for the region. The United States wants Taiwan to become a responsible stakeholder in the disputed waters by curtailing its claims and coming into accord with U.N. conventions. The United States sees Taiwan, along with nations such as Japan, as allies to counterbalance a China. Altering island claims would have been anathema for a Taiwanese Kuomintang-controlled government that has steadfastly upheld the One China Principle, which maintains that mainland China and Taiwan are part of a single entity with STRATFOR 15

16 The Republic of China s Territorial Claims In 1949, China s defeated Nationalists fled to Taiwan but maintained extensive territorial claims. MONGOLIA RUSSIA Territory claimed by the Republic of China (ROC) Maritime borders claimed by the ROC CHINA CURRENT ROC TERRITORY Matsu Islands, Fujian Province Taiwan Province Kinmen Islands, Fujian Province Taiping Island (largest of the Spratly Islands, and formerly of Guangdong Province) Copyright Stratfor competing governments. But the administration of the ruling Democratic Progressive Party (DPP) may conform with U.S. wishes and, in doing so, alter the South China Sea strategy of both Taipei and Beijing. Cold War Legacies In 1946, China s ruling Nationalist government dispatched warships to claim the islands of the South China Sea as part of Guangdong province. The naval group erected a stele on the tiny island of Itu Aba, which they renamed Taiping after the destroyer that claimed the island. A year later, the government published a map that included an 11-dash line encompassing most of the South China Sea. Today, this map still serves as the basis of the Republic of China s claim. On paper, Taiwan maintains sovereignty over the entire area, although its military has scant capability to control much of the expansive sea. This brings Taipei in direct conflict with the U.N. Convention on the Law of the Sea (UNCLOS), which limits control of waters to 12 nautical miles from a nation s shores plus the 200-nautical-mile exclusive economic zone. The Communist-ruled People s Republic of China inherited the 11-dash line when it formally took power from the Nationalists in 1949 and would go on to use it as the basis for its iconic nine-dash line. For its part, when the Nationalist, or Kuomintang, government retreated to Taiwan, it continued to claim to rule all of China. By 1950s, however, Taipei possessed only the province of Taiwan, a few tiny garrison islands off the coast of China administered as parts of Fujian province and Taiping Island in the South China Sea. The Nationalist claims on territory actually controlled by the Communist government in Beijing were a source of concern for Taiwan s treaty ally, the United States. The Nationalist government refused to accept the idea of two Chinas, instead staking its political survival on the fate of mostly indefensible sea islands it insisted on claiming along the coast and in the STRATFOR 16

17 South China Sea. Washington feared being drawn into conventional or nuclear war over these disputed landmasses. It encouraged, with limited success, Taiwan to abandon its offshore holdings, only achieving the withdrawal of a few garrisons off the coast of Zhejiang province. The Kuomintang government s legitimacy rested on its claim to be the rightful ruler of China because it liberated China from Qing rule and Western imperialism. This in turn meant that China was single and united, not partitioned like the Koreas such was the One China narrative. To maintain this, Taipei needed to maintain its island claims along the Chinese coast, including those inside the 11-dash line. Without these islands, the Republic of China was simply the historical province of Taiwan turned renegade. Ironically, Beijing and Taipei agreed. Although having Taiwan claim sovereignty over the mainland was problematic, it would have been more troublesome had Taiwan formally seceded. The Communist government was content to allow Nationalist garrisons to maintain their positions to avoid completely severing the Republic of China s geographic ties to the mainland. One China or Two? But the once-ironclad One China consensus within Taiwan is in the slow process of unraveling. With the Cold War waning in 1987, Taiwanese President Chiang Ching-kuo declared an end to 38 years of martial law. For the first time, parties besides the ruling Kuomintang became legal. The most important of these was the DPP, which differed from the Kuomintang in that its constituents were primarily Taiwanese who had lived on the island before the arrival of the Nationalist mainland exiles in This population had little sentimental attachment to the mainland or to the idea of greater China. Two-party rule became a reality with the election of President Chen Shui-bian from the Democratic Progressive Party. Chen was native born, not an exile, and widely perceived to be in favor of declaring official independence from China a red line for Beijing. His eight-year presidency strained relations with China. Concerned that the administration would declare independence, China passed an anti-secession law in 2005 and continued to build up its military to outmatch that of Taiwan. Washington was equally concerned by the destabilizing potential of the DPP government, and Taiwan s relationship with the United States suffered. Tensions decreased in 2008 when the establishment Kuomintang returned to power under President Ma Ying-jeou. Ma s presidency was built on stabilizing relations across the Taiwan Strait. Under his rule, Taipei has avoided making political provocations and built economic ties with the mainland. He sold this program as a way to reverse the economic stagnation that began under the previous administration. Unfortunately for the Kuomintang, Ma s program failed to deliver the strong growth he had promised. Worse still, many Taiwanese believed Ma s economic policies were bringing Taiwan too far into China s orbit. This manifested in protests against the Cross Strait Services Trade Agreement, which began in March 2014 and lasted months, culminating in demonstrators occupying Taiwan s legislative building. Afterward, presidential and Kuomintang approval ratings fell to record lows. In May 2016, DPP member Tsai Ing-wen became president of Taiwan. Tsai s victory was due, partially, to the Kuomintang s push for One China, Same Interpretation, a policy that Hung claimed to be about pushing Beijing to recognize the Republic of China government, but was seen by many Taiwanese as evidence that Hung wanted reunification. Sea Change Beijing worries that the new DPP administration will be much less committed to preserving the One China Principle. This is with good reason: DPP policymakers have called for outright abandonment of Taiwan s STRATFOR 17

18 South China Sea claims in the past. While the Taiwan-held islands of Kinmen and Matsu off the coast of China s Fujian province have permanent civilian populations that would protest if the islands legal status was altered, Taiping has no civilian constituency. Furthermore, many Taiwanese perceive Taiping to be of marginal economic value, with its few mineral resources and its distance from Taiwan, which makes it more or less inaccessible to fishermen. A less dramatic option for a prospective DPP government would be to reinterpret or relinquish the 11-dash line instead of abandoning the islands of Taiping and Pratas outright. Even this would cause problems for Beijing. Because the Republic of China originated both Taiwan s claim and that of the mainland, Taiwan reneging would give ammunition to rival claimant countries such as Vietnam and the Philippines. China would also no longer be able to count on implicit backing if Taiwan drops its shared claim. And in the near term, Beijing may face supply problems for its installations in the Spratly Islands, which receive at least part of their water supply from the Taiwanese forces on Taiping. Without a common purpose, Taiwan would have no incentive to continue sending water. Under U.S. President Barack Obama and renewed focus on the Asia-Pacific, U.S. policymakers have been Overlapping Spratly Island Claims SPRATLY ISLANDS COUNTRIES CLAIMING CONTROL Brunei, China, Malaysia, the Philippines, Taiwan, Vietnam THITU ISLAND Philippinecontrolled 0.37 km 2 1,400 m airstrip Upgrade plans include forward deployment of two patrol vessels and two reconnaissance air assets TAIPING ISLAND Taiwan-controlled 0.46 km 2 Largest in Spratly Islands Guarded by 130 coast guard forces Copyright Stratfor ,150 m airstrip Completed 2008 Planned 350 m extension PLANNED WHARF Government will build by 2016 Will accommodate 3,000-ton naval frigates and coast guard vessels STRATFOR 18

19 anxious to push Taiwan to bring its South China Sea claims in line with international law. Washington sees this as a way of transforming Taiwan into a responsible stakeholder, meaning one that upholds U.N. standards instead of a sweeping claim identical to that of Beijing. The U.S. push makes a DPP relinquishment even more likely: Chen s presidency suffered from poor U.S. ties, and this move could be beneficial for Taiwan and the United States alike. Taipei could even barter the resulting goodwill to secure additional U.S. assistance, including political aid to join the second round of the Trans-Pacific Partnership, backing to take more of a role in international organizations or simply more military assistance. n STRATFOR 19

20 (JAY DIRECTO/AFP/Getty Images) UNCLOS: BEIJING ON TRIAL International law has a great deal to say on the issue of maritime territorial disputes and the weaker claimants have taken advantage of this, with U.S. encouragement. In January 2013, Manila initiated legal proceedings against Beijing for violating the UN- CLOS, a 1994 international agreement often called the constitution for the oceans that was intended to provide predictable, mutually agreed-upon definitions and mechanisms to settle maritime conflicts. Since all of the South China Sea s major claimants (with the exception of Taiwan) are parties to the agreement, UNCLOS should, in theory, solve any disputes that take place there. The U.N. Permanent Court of Arbitration agreed in October 2015 to hear the Philippines case, but its decision may have little practical effect on the dispute. Despite being a signatory to UNCLOS, Beijing has refused to accept the court s authority to issue a binding decision on the matter. The United Nations appointed a five-member tribunal to the case anyway, but China has steadfastly defended its right to the more expansive maritime claims laid out by the nine-dash line, which outlines the country s vast territorial claim over much of the South China Sea. (The provisions laid out in UNCLOS would require shrinking those claims, since the exclusive economic zones of other South China STRATFOR 20

21 Sea states jut into the territory bounded by the ninedash line.) Because the U.N. court will probably also reclassify different types of landmasses in a way that will be unfavorable to Beijing, UNCLOS is of dubious value to China. Consequently, Beijing has long fought to arbitrate territorial disputes outside the agreement s binding mechanism, preferring to hold direct talks with other claimants instead. Now, backed into a corner by the Philippines, China must decide whether to renounce UNCLOS entirely or rely on its own interpretation of international law, regardless of whether it flies in the face of the court s ruling. The Philippines vs. China At the center of the court battle between Manila and Beijing are the Scarborough Shoal and the Spratlys, scattered dots of land off the Philippine coast that lie in what Manila calls the West Philippine Sea. According to the Philippines, China illegally occupies seven landmasses in the Spratly chain as well as the Scarborough Shoal itself. Manila s legal strategy is based on negating China s claims in the South China Sea, including that the landmasses in question count as islands. It is not attempting to expand its own territorial claims, and it has conspicuously avoided engaging in new construction or repairs to its own extensive facilities in the sea. Instead, the Philippines asked the United Nations to simply uphold the 200-nautical-mile exclusive economic zone set forth by the terms of UNCLOS, upon which Manila claims China s nine-dash line demarcation impinges. Unsurprisingly, China has refused to play along for a number of logical reasons. For one, China already has a physical presence on many of the landmasses in question. More importantly, though, its clout in the Asia-Pacific region is growing, which gives Beijing the ability to exert pressure on its neighbors without having to use the U.N. framework. China has officially rejected the idea of arbitration several times and has declined to appoint a representative to attend the proceedings. It did, however, issue a position paper in December 2014 detailing its argument as to why the U.N. court has no jurisdiction in the South China Sea and, even if it did, why the specific issues raised by Manila s case lie outside the scope of litigation. From Beijing s perspective, it opted out of binding arbitration in 2006 and thus has the right to choose another method of resolution. (The United Nations denies this argument under Article 288 of UNCLOS, which grants the tribunal the power to decide whether a dispute exists and if its content is relevant.) Beijing, blaming the Philippines for showing bad faith by turning down its offers to negotiate, would rather settle the conflict under China s 2002 pact with ASEAN to formulate a code of conduct in the South China Sea. A Useful Symbol for China s Rivals Other countries that have stakes in the South China Sea have a keen interest in the outcome. Vietnam sent an unpublished statement to the U.N. tribunal endorsing its jurisdiction and urging it to consider Vietnam s rights in the matter as well. Malaysia and Indonesia, both South China Sea claimants, assumed the role of observers alongside Thailand and Japan. And the United States, though it officially remained neutral in the argument, published a report in December 2014 rejecting China s claims in the South China Sea. It followed up on the report in July 2015 with a statement that said China, as a UNCLOS signatory, is obligated to comply with the court s decision. Still, the U.N. court s decision will erode China s legal claims in the South China Sea. But that does not mean the ruling will translate into sweeping regional change. China is a powerful player in the Pacific and, in the end, physically possesses the landforms in its control regardless of what international law dictates. A 2015 U.S. Defense Department report estimated that China has built up over 1,300 hectares (3,200 acres) of land on the seven Spratly landmasses under scrutiny in the STRATFOR 21

22 U.N. case since It has now turned to developing infrastructure. The United Nations, by comparison, has little influence in the Pacific Rim or ability to enforce its writ. This is not to say the Philippines case will have no impact. International law and institutions such as the United Nations are simply more ways for countries to promote their interests by constraining their rivals and helping their allies. The United States and nations that fear China s rise as the premier power in the Asia-Pacific region are no strangers to using these tools for their own ends. In fact, the United States an actor deeply involved in the western Pacific but geographically removed from it wants predictable international mechanisms and principles such as the freedom of navigation to reign supreme there to unify the negotiating power of its numerous partners in the region. But the same international organizations greatly diminish the bargaining power of China, which would rather resolve matters with its smaller competitors through bilateral talks. Beijing s goal is to use its mounting economic and military strength to steadily expand the bounds of its territory, better protecting its access to trade and international markets in the process. China s concrete options for reacting to the U.N. ruling are limited, though. Technically, Beijing could renounce UNCLOS as a whole, but doing so would probably cause more harm than good for China. A UNCLOS exit would not take effect until a year after Beijing s official renunciation, giving other South China Sea claimants considerable time to rush through last-minute cases against China. If Beijing wants to avoid further trials, exiting UNCLOS would not be the way to do it. Moreover, China would still be subject to the court s ruling in the Philippines case, and it would lose the ability to use UNCLOS for its own ends. Beijing has long been interested in mining the region s seabeds, something UNCLOS may assist with, and it is currently pursuing claims against Japan that rest on the convention s limits on the continental shelf in the East China Sea. Instead, China will likely take the path of least resistance to maintain its current stance in the South China Sea, insisting that its interpretation of dispute resolution outside of UNCLOS is the correct one. Furthermore, Beijing will continue to pursue its own interests in the region just as the United States will continue to try to stop it while the weaker South China Sea claimants struggle to keep their maritime boundaries from closing in around them. n STRATFOR 22

23 (TED ALJIBE/AFP/Getty Images) FISH: A POTENTIAL FLASHPOINT With all the posturing and maneuvering among Pacific powers, the main concern is that a small incident will spark a larger clash. In this, very small vessels can become quite important. All of the claimant nations have civilian fishing fleets in the region, plying their trade in the disputed waters. Clashes over fishing grounds are frequent, volatile and mostly out of the control of the various regional governments. Given the size of the seas, maritime patrols are infrequent. The absence of strong regulation or enforcement allows room for gray areas to be exploited and territorial waters to be violated. Poor regulation and enforcement of boundaries make the security situation even more opaque and complex. Fishermen are both exploited by and exploit nationalist government sentiments and willfully push the boundaries of fisheries. As with the agricultural sector, the fishing industry and its countless small-scale producers, can have a disproportionate effect on political decision-making. Feeding Asian Growth In Asia, fish and other marine foodstuffs play a greater role in diets than in the West. Seafood production is an important source of employment and a vital component of national economies. Asian fisheries make up half the global total capture production, and six of the top 10 producers of marine products are in Asia. STRATFOR 23

24 In South Korea and Japan, seafood makes up about 20 percent of the protein supply and contributes more than 15 percent in Cambodia, Indonesia, Malaysia and the Philippines. It makes up more than 10 percent of protein supply in Taiwan, Thailand and Vietnam, and while it was at around 8.5 percent in China, between 2008 and 2011 there was a 13 percent increase in the role of seafood in China s national protein consumption. By comparison, seafood provides a little over 5 percent of protein consumption in the United Kingdom, a little less than 5 percent in the United States and less than 4.5 percent in Germany. In addition to its important role in national diets (and national food security), seafood also plays an important economic role. There are an estimated 1.72 million fishing vessels plying the waters of the South China Sea alone, employing some 5.4 million people. And Asia s fleets are growing faster than those of the rest of the world. Since the late 1980s, the overall size of the world s fishing fleets has stabilized, but the Asian fleet has nearly doubled, comprising around three-quarters of the world s powered fishing vessels. In 2014, Asia contributed a third of global seafood exports, with China alone accounting for 12.5 percent of total global exports, up from just 7 percent in 2007, with the value of China s exports growing nearly 200 percent over the same period. In Indonesia, fisheries contribute more than 3 percent to total national gross domestic product. In other countries, the numbers are harder to Annual Marine Capture Production, Select Asian Nations ( )* In 2013, China produced nearly 60 times as much fish as in Indonesia s annual haul had increased at three times that rate, bringing it up to 16 million tons. Japan reached a plateau after a boom in the 1990s MILLION METRIC TONS Vietnam Philippines Malaysia South Korea Japan 50 Indonesia China * Marine capture production is all volume landed in marine waters. It excludes captive-raised production. Source: UN Food & Agriculture Organization Copyright Stratfor STRATFOR 24

25 come by, as fisheries are often included with agriculture and forestry in statistics. Many countries in Asia have sizable local fishing communities, and as with agricultural concerns, these often have a greater political impact than their economic share might suggest. Fish and other maritime products are particularly important to China. After the 1978 economic opening and reform program, Beijing actively sought to expand its fishing fleet and activities. Since then, China s seafood production has grown at a rate of 7.6 percent per year, making China the largest single producer of seafood in the region and second only to a combined Southeast Asia. The value of the fishing industry in China rose to 1.9 trillion yuan ($289 billion) in 2013, with fish now its top agricultural export. There were nearly 10,000 fish processing companies in China in 2013, employing 400,000 workers, predominantly in Shandong, Liaoning and Fujian. Overall, the fisheries and marine foodstuffs industries in China provide nearly 14.5 million jobs, and China boasted 695,000 fishing vessels in 2013, a sharp rise from the 52,225 in Chinese fishermen earn almost 50 percent more than their farming counterparts, and as of 2010, China was spending $4 billion a year in subsidies to the industry. Annual Marine Capture Production ( )* Since 1950, worldwide marine capture production has increased more than seven-fold. In 1950, Asia accounted for 30 percent of that capture. China accounted for only 4 percent. By 1980, Asia accounted for 43 percent of world production and China 7 percent. As of 2013, Asia accounted for 68 percent and China 32 percent. 140 MILLIONS OF METRIC TONS : million metric tons : 68.1 million metric tons World : 17.7 million metric tons Asia 20 China Marine capture production is all volume landed in marine waters. It excludes captive-raised production. Source: UN Food & Agriculture Organization Copyright Stratfor STRATFOR 25

26 Asian vs. Western Fish Consumption Although they consume less food overall, Asian populations derive a larger share of both calories and protein from maritime sources compared with Western populations. Food consumed: percentage of calories from fish and seafood 0% 1% 2% 3% 4% 5% 6% Cambodia China Indonesia Japan South Korea Malaysia Philippines Taiwan Thailand Vietnam Australia Brazil Germany United Kingdom United States Protein intake: percentage from fish and seafood 0% 5% 10% 15% 20% 25% Cambodia China Indonesia Japan South Korea Malaysia Philippines Taiwan Thailand Vietnam Australia Brazil Germany United Kingdom United States Source: UN Food & Agriculture Organization (2011) Copyright Stratfor

27 Dwindling Resources The marine fishing industry has long been important in Asia, and in the 20th century, it saw several boom and bust cycles with the expansion of mechanized fishing fleets and increased consumption and export patterns. UNCLOS, signed in 1982 and designed to clarify maritime use and international regulations, may have inadvertently spurred both an expansion of regional fishing and increased competition and confrontation in the enclosed waters of Asia. The creation of UNCLOS introduced a use-it-or-lose-it element to exploitation of maritime resources, and Asian coun- The South China Sea s Depleted Fisheries Capture fishing since 1960 has led to a decline in the abundance of several species, especially along the Chinese coast. This has pushed fishing vessels farther out and into disputed waters. Moderately or underfished Fully fished Depleted or overfished CHINA TAIWAN LAOS THAILAND CAMBODIA VIETNAM South China Sea PHILIPPINES MALAYSIA MALAYSIA INDONESIA INDONESIA Source: UN Food and Agriculture Organization Copyright Stratfor STRATFOR 27

28 tries responded with increased fishing activity. Already strained fisheries grew even less productive, triggering a further expansion of fishing outward from the coasts to the formerly common and now contested waters farther out. In 1978, China set the goal of self-sufficiency in fishery products, finally achieving it in But as elsewhere in Asia, this rapid rise in activity saw depletion of stocks along the Chinese coast. In 1985, nearly 90 percent of Chinese fishing was inshore, but by 2002, the last year for reliable statistics, that had fallen to just under 65 percent, and the share of offshore fishing continues to rise. The Chinese government plans to expand fishing, fish processing and exports of fishery products will impact this trend even more. The Chinese fish processing industry is operating at only around 70 percent of capacity, failing to reach the full utilization rates called for in the 12th Five-Year Plan, which ran from China s 2015 agriculture report contains calls for even more overall fish production, with goals of 73 million tons annually by 2020 and 77 million tons by 2024, and a call to increase exports to 5.4 million tons by As much as China s expansion of regulatory and defensive activity in the South China Sea is driven by strategic security and protection of transport routes, it is also driven by the immediate realities of China s maritime products production and consumption. China couches much of its activities in the South China Sea as focusing on the safety of fishing fleets and argues that the waters are Chinese waters traditionally, thus open for Chinese fleets. In the face of criticism from neighbors, China has argued at times that its fleets need to fish, and if they cross into other s waters accidentally, this is not something China can always stop or control. In 2012, the Chinese government assessed its main fishing areas the Bohai Sea, the Yellow Sea, the East China Sea and the South China Sea. The survey recognized the significantly reduced stocks in the Bohai and Yellow seas and called for a reduction in fishing to allow stocks to replenish. But it argued for an increase in fishing in the East and South China seas, and Beijing encouraged fishing through fuel subsidies and surveys of fishing stocks around the disputed Spratly Islands. Confrontations over fishing are one of the most active and visible forms of competition in the South China Sea and the enclosed waters of Asia. The increase in fishing, the decrease in near-shore stocks, government subsidies to spur the maritime industry, and rising consumption of fisheries products at home and abroad are only adding to the frequency of clashes over fishing fleets clashes that have the potential to explode into more active military confrontation. Looking north to the two Koreas, at least two recent maritime incidents between the two countries, ones that led to the sinking of ships and killing of naval personnel, occurred as each country sought to protect its claimed fishing waters in the Yellow Sea. Throughout Asian waters, fishing vessels are engaged in violent confrontations with other nations coast guards, ships crews are arrested and detained, and vessels are confiscated and scuttled. These contribute to national tensions and social distrust among nations. Governments are also exploiting their fishing fleets at times to reinforce nationalist sentiments and territorial claims. It is not unusual to see reports of massive Chinese or Taiwanese fleets setting off adorned with nationalist slogans and asserting rights to fish around contested islets. In 2014, amid a standoff between China and Vietnam over China s moves to build a permanent oil platform near the South China Sea s Paracel Islands, both countries encouraged fishing fleets to enter the area to disrupt their adversaries plans and to complicate matters for the others maritime security forces. But such exploitation has unintended consequences. Fishing fleets often pursue their catch into contested areas, assuming that their governments will provide protection. Governments at times are forced to try to rein in these very fishing fleets that they encourage, or at least turn a blind eye to. And with the massive fleets at sea, each seeking whatever advantage it can garner, even if that means fishing contested waters or violating national maritime territories, the STRATFOR 28

29 chances for unintended confrontations grow. This is a process that may be relatively easy to turn on but hard to turn off. Subsea mineral resources, national sovereignty and critical supply lines are all drivers of regional maritime policy and sources of friction, but fisheries are an active and somewhat uncontrollable force that can serve as the spark of confrontation. Expanding fisheries activities in enclosed waters means greater chances for accidents, illegal activity and confrontation. As the drive for agricultural land drove conflict and expansion on land, the drive for maritime resources, particularly fisheries products, is driving a land grab in Asia s enclosed seas. Maritime security and naval forces are growing in size, assertions of national sovereignty are becoming more concrete, and keeping track of the 1.72 million fishing vessels in the South China Sea alone is not only a daunting task, it is one that can draw neighbors into more active confrontation. Escalating Risk: China Arms its Fishermen Building on its civilian fishing fleet, the Chinese government has made an effort in recent years to train some fishermen and recruit them into formal maritime militias, partly under the military hierarchy. Though these fishermen still complete their normal activities, they do so equipped with light arms, better vessels and monitoring equipment, ready to respond to the needs Three Prominent Chinese Maritime Militias Beijing has numerous maritime militias in its coastal provinces. These three Hainan province militias operate in the South China Sea. Their participation in a number of international incidents provides a case study of militia activity. Prominent militias and incidents Maritime milita base Incident CHINA TAIWAN LAOS Danzhou Maritime Militia Hainan Tanmen Maritime Militia Company Sanya City Maritime Militia THAILAND Paracel Islands Scarborough Shoal CAMBODIA VIETNAM South China Sea PHILIPPINES Spratly Islands Source: U.S. Naval War College, China Maritime Studies Institute (CMSI) Copyright Stratfor STRATFOR 29

30 of China s leaders. Their movements ebb and flow with those of the fisheries, but they spend more time at sea and in more obscure locations than the comparatively conspicuous coast guard or naval vessels, giving Beijing a more granular picture of (and some measure of ambient control over) its sprawling maritime domain. As China continues to expand its reach in the contested waters of the Asia-Pacific, the importance of its maritime militia in defending those claims will only grow. Militias are not a unique instrument in the history of warfare. Many nations worldwide and throughout time have mobilized their populations for defense purposes without removing them from the workforce, for good reason. In times of war, these irregular soldiers serve as force multipliers, enhancing the effectiveness of professional troops by providing logistical support or harassing the enemy. In times of peace, they can relay vital intelligence to the military and support leaders strategic goals. China maintained militias since before the Communist Party rose to power in Modern Chinese militias, however, are largely a holdover from Mao Zedong s people s war strategy, which called for arming citizens so they could bleed an invader dry. The ranks of these militias are drawn from all levels of society and are formed at the local level, set up by government institutions and employees of state-owned, private and even foreign-owned enterprises. About 2 to 3 percent of the country s defense budget is allocated toward training and equipping them, supplemented by additional funding from local governments. Of China s many militias, the maritime militia plays an especially active role. Though there are no reliable estimates of its numbers, units exist in all of China s coastal provinces, scattered among cities, villages and islands. Like their land-based counterparts, they have been around for some time but their role has grown alongside China s maritime ambitions. The original purpose of the militias, which were established in the 1950s, was to augment the Communist government s meager naval defenses by patrolling the coastline to prevent Kuomintang incursions from Taiwan. When China began its initial effort to solidify its South China Sea claims in the early 1970s, maritime militias participated, helping the military to seize the western Paracel Islands from South Vietnam in Since 2009, the militias have resumed their place on the front lines of numerous clashes around the Paracels and Scarborough Shoal, rebuffing Vietnamese, Philippine and U.S. advances. A Flexible Policy Tool There are several ways maritime militia units can carry out the government s policies. Officially, the maritime militia has three goals: to encourage fishermen to exploit all of China s claimed waters, to further the national will to establish maritime control, and to protect fellow fishermen in those pursuits. Maritime militiamen are China s first line of defense in disputed waters, followed by maritime law enforcement and the Chinese navy. Exactly how the militia executes its goals varies by region. Maritime units in Fujian, Zhejiang, Jiangsu and Shandong provinces are oriented toward building up China s offensive capabilities against Taiwan. In addition to conducting surveillance, maritime militias in these areas are expected to act as an auxiliary force that assists in operations against Taiwan, including landings. Maritime militias in Guangdong, Guangxi and Hainan, by comparison, operate in the South China Sea. Their activities also depend on China s current threat level. In peacetime, maritime militias serve as the military s eyes and ears, transmitting intelligence on conditions in far-flung waters to the mainland via radio and satellite communications. The information is also used by maritime law-enforcement agencies to better regulate fishing. At the same time, militia vessels participate in reef- and island-building near disputed islands where the Chinese military is present. This tac- STRATFOR 30

31 tic is part of Beijing s cabbage strategy of enlisting all of China s military, law enforcement and civilian ships to envelop the islands in overlapping layers of vessels and surveillance. When tensions with China s neighbors run high, maritime militias may escalate their operations and even clash with other nations ships. They did just that in 2011, when they harassed PetroVietnam vessels near the Vietnamese coast; in 2012, when they became embroiled in a standoff with the Philippines over Scarborough Shoal; and in 2014, when they protected China s Haiyang Shiyou 981 oil rig from Vietnamese reprisals. Chinese militias also impeded U.S. vessels that were conducting freedom of navigation patrols in waters claimed by China in If open war were to break out, these activities would intensify, distracting enemy ships while fishing boats ferry supplies to other Chinese forces. Intelligence, surveillance and reconnaissance as well as laying mines, providing transport, spying and harassing enemies are critical wartime functions of the maritime militia. A Risky Strategy Not all Chinese fishermen belong to the maritime militia, but that does not mean they are not useful to Beijing. The Chinese government can still prod them to support its goals through regulations, specialized subsidies and incentives. By definition, though, these civilian vessels are almost entirely out of the government s control. The maritime militia, by comparison, is integrated into military and civilian command structures and receives political education, training and weaponry from the government. At the national level, the People s Liberation Army General Staff Department sets the regulations for all militias. Locally, though, Party committees and military units share leadership of the maritime militia, handling its day-to-day activities. So although there is a chain of command directly linking the maritime militia to the highest Communist Party bodies, many of its orders are filtered through local leaders lenses. Once at sea, China s armed fishermen may even act on their own interpretations of Beijing s interests. After all, they are fishermen first and foremost, not rigidly disciplined regular forces. From Beijing s perspective this presents a risk, since militia members may make rash decisions or act imprudently. In an attempt to assert some degree of control over these units, the Chinese government has mandated they receive annual training that emphasizes Party ideology and national policy. But enforcing this requirement is another matter. Because maritime militias primary role still lies in the fishing industry, there is no guarantee that all members will be able to attend trainings. Instead, Beijing must rely on boat captains and information officers to collect and relay information to and from government officials. China s increasing reliance on its maritime militias has also carried an unintended consequence: Its neighbors have begun to build them, too. Vietnam, for example, established its own maritime militia in 2009 hoping to replicate Beijing s success. Now it and other South China Sea states are leaning more heavily on unconventional forces to assert their claims. Though China s maritime militia is undoubtedly the most official, organized and well-funded in the region, the proliferation of vessels whether civilian, paramilitary or military does not bode well for Beijing or its rivals. And as the contested sea becomes more crowded with actors that are loosely controlled at best, the chances of unexpected conflict will rise. n STRATFOR 31

32 (SAM YEH/AFP/Getty Images) LOOKING FORWARD China s naval development, its advancements in anti-ship missiles and its assertive reclamation of islands and reefs in what it considers its territory in the South China Sea are perceived by the United States as aggressive behavior from a rising nation. China s maritime expansion to the Indian Ocean and the Gulf of Aden its string of pearls port development and its military reform and modernization further heighten these concerns. Meanwhile, China sees these measures as defensive behavior against a dominant United States. Both are right; both are wrong. But each government is primarily beholden to its own national interests, not to the feelings or concerns of the other. Those concerns may help guide diplomatic efforts or shape policy details, but the underlying realities drive the imperatives and impel action. Geopolitics does not dictate the response, but it does frame the options and, more directly, the costs of action and inaction. But U.S.-Chinese competition is not limited merely to naval developments in the South China Sea or questions of missile defense in Asia. China s international economic networks and dependencies have made it harder for Beijing to retain older policies of noninterference. The larger and more active China becomes economically, the fewer countries around the world will consider Chinese actions innocuous. China faces political and security challenges to its investments and economic interests in Africa, Latin America, South Asia, Central Asia and elsewhere. As China seeks advanced technologies to remain on par with other global economic powers, it is stymied by political opposition, national security concerns and fears of competition. n STRATFOR 32

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