In March 2010, Chinese diplomats told senior Obama administration officials that China (People’s Republic of China: PRC) would not tolerate any interference in the South China Sea, now part of China’s “core interest” of sovereignty. The People’s Liberation Army (PLA) navy and the Chinese maritime security agencies have begun to deploy their battleships and patrol boats in the South China Sea. Tensions between China and its Southeast Asian neighbors are on the rise. The United States, Japan, and Australia also show concern for the security of Sea Lines of Communication (SLOC) in the South China Sea. It is also said that the PLA navy has a plan to develop aircraft carriers. This paper analyzes these maritime challenges and explores implications for the security cooperation between China and its neighboring countries including Japan and the United States.
Background of the South China Sea Conflict
There are four Island groups, namely, the Pratas Islands, the Paracel Islands, the Macclesfield Bank, and the Spratly Islands in the South China Sea (See Fig-1). The Pratas Islands were occupied by Taiwan (Republic of China: ROC) in 1946, the Paracel Islands were occupied by China after the naval clash between the PLA navy and Republic of Vietnam (RVN) navy in 1974. The reefs of Macclesfield Bank are all sunken reefs with the exception of two rocks of the Scarborough Shoal being occupied by the Philippine Armed Forces.
The focal point is the territorial disputes over the Spratly Islands. According to Chinese sources, the sea area of the Spratly Islands is around 800,000 square kilometers, or 38% of the total sea area of the South China Sea; the area includes 230 islands, reefs, and cays. All the islands, reefs, and cays are claimed by China, Taiwan, and Vietnam, and some part of the islands and reefs are claimed by the Philippines, Malaysia, and Brunei. The four claimants, namely Brunei, Malaysia, the Philippines, and Vietnam are members of Association of Southeast Asian Nations (ASEAN).
The sea area of the Spratly Islands is believed to be rich in oil and fishery resources, and this is the main reason that all claimants assert their sovereign right to the Spratly islands. But no oil detection has yet been successful, and the Japanese specialists are rather pessimistic about the oil & gas production in the sea area surrounding the Spratly Islands. It is true that some oil fields and natural gas deposits were found in the South China Sea, but they are located mainly in the sedimentary basins of the coastal areas of Vietnam, Sabah and Sarawak of East Malaysia, and the Natuna Islands of Indonesia. No resources were found in the sea area surrounding the Spratly Islands, which are located in the central deep sea area of the South China Sea.
Regarding the fishery resources in the South China Sea including the sea area surrounding the Spratly Islands, recent statistics showed about 11.5 million tons total catch in 2001 (China: 3.4 million tons, Indonesia: 2.9 million tons, Thailand: 1.9 million tons, Vietnam: 1.5 million tons, the Philippines: 0.9 million tons, Malaysia: 0.7 million tons). The statistics show that China’s catch in 1989 was 5 million tons. If so, the fishery production capability of the South China Sea is failing.
In regard to the actual occupation of the Spratly Islands (i.e. troops stationed there), Taiwan did so in 1947, the Philippines in 1956, the Vietnamese (RVN) in 1974, and China in 1988. The Chinese government asserted its sovereignty over the whole Spratly Islands group in August 1951, though the PLA navy was the latest comer among the claimants to the Spratly Islands. PLA navy Jiangdong class destroyers (displacement 2000 tons) attacked Vietnamese troopships in the sea area surrounding Johnson Reef of the Spratly Islands in March 1988, sinking two Vietnamese ships and wrecking one.
The PLA navy built a territorial marker at the Gaven Reef in July 1992, and the ASEAN foreign ministers showed their concern without naming China in the Declaration on the South China Sea. The PLA navy built some military posts for stationing troops on the Mischief Reef, which was also claimed by Vietnam and the Philippines, in February 1995, and they expanded them in October 1998. The ASEAN foreign ministers published the Statement on Mischief Reef in March 1995.ASEAN countries couldn’t contend with China for military supremacy over the South China Sea, so they began to utilize their conference diplomacy for the peaceful settlement of the South China Sea conflict.
The ASEAN leaders began to explore ways for the peaceful settlement of the South China Sea conflict at the ASEAN Regional Forum (ARF) that they had begun in 1994, and ASEAN-China Summit Meetings that they had begun in 1997. They planned the Regional Code of Conduct for the South China Sea (COC) to check Chinese claims in the South China Sea. They negotiated with their Chinese counterparts for some years, and finally agreed on the Declaration of the Conduct of Parties in the South China Sea (DOC) at the ASEAN-China Summit on 4 November 2002.
Regarding the actual occupation of the features of the Spratly Islands, a Philippine scholar said that “China occupies 7, Taiwan occupies 1, Vietnam occupies 21 Malaysia occupies 5, and the Philippines occupied 9 (total 43),” though the PLA officer asserted that the Vietnamese occupied 29 features, and a Chinese scholar asserted “China occupied 6 features”. China delineated the broken U-shaped line in the South China Sea (See Fig-1), and the Chinese diplomats called the broken U-shaped line a boundary line of Chinese historic waters in ambiguous way and the Chinese law of the territorial waters claimed the sovereignty of all the South China Sea Islands including the Spratly Islands.
China’s claim on the Spratly Islands is very weak because it was not based on the historical inhabitation of Chinese nationals. The four ASEAN countries’ claims are also not so persuasive for the same reason. An established Japanese scholar said that no claimant can show definite evidence of an effective occupation of the Spratly Islands in pre-modern history, and every claimant has the right to join in negotiation of a settlement of the territorial issue.
 New York Times, 23 April 2010. “China’s core interests,” in reference to territory, usually means Taiwan, Tibet, and Xinjang.
 Ji Guoxing, The Spratlys Disputes and Prospects for Settlement, Institute of Strategic and International Studies (ISIS) Malaysia, 1992, p. 1.
 Akira Ishi and Kazuhiko Fuji, Sekai Wo Ugokasu Sekiyu Senryaku [World Oil Strategy], Chikuma Publishing, 2003, pp. 136-140. China’s Ministry of Land Resources has optimistically claimed that the South China Sea might hold 23-40 billion tons of oil reserve (168-220 billion barrels), and more than 2,000 trillion cubic feet (Tcf) of natural gas reserves, though a 1993/4 US geological survey puts the oil reserves at 28 billion barrels and the US Energy Information Administration listed proven oil reserves at just 7 billion barrels. Ralf Emmers, Geopolitics and Maritime Territorial Disputes in the South China Sea: From Competition to Collaboration?Joshua Ho, ed., Realising Safe and Secure Seas for All, Select Publishing, 2009, p. 147.
 Guo Wenlu and Huang Shuolin, Nanhai Zhengduan Yu Nanhai Yuye Ziyuan Quyu Hezuo Guanli Yanjiu [Research of the South China Sea Conflict and the Cooperative Management of South China Sea Fishery Resources], Haijun Chubanshe, Beijing, 2007, pp. 91-104.
 Shigeo Hiramatsu, Chugoku No kaiyo Senryaku [China’s Naval Strategy], Keiso Shobo Publishing, 1993, p. 27.
 Tatsuo Urano, Nankai Shoto Kokusai Funso Shi [History of the International Conflicts over the South China Sea Islands], Tosui Shobo Publishing, 1997, Tokyo, pp. 1106-1175.
 Jane’s Defence Weekly, 28 May 1988, p. 1072, Shao Yonglin, Haiyang Zhanguoce [The Chinese Naval War Strategy], Shiyou Gongyue Chubanshe, 2010, p. 165. Shao Yonglin is a professor of the Second Artillery Division Academic Institute, and the PLA senior colonel.
 New Straits Times, 10 July 1992, Declaration on the South China Sea, ASEAN Ministerial Meeting, Manila, 22 July 1992.
 Far Eastern Economic Review, 23 February 1995, pp. 14-16, Straits Times, 11 November 1998.
 Statement by the ASEAN Foreign Ministers on the Recent Developments in the South China Sea, ASEAN Ministerial Meeting, Singapore, 18 March 1995.
 ASEAN ministers call their principle of conferences the “ASEAN Way,” though the rules of conferences are rather vague. Therefore this author organized the “ASEAN Way” of conference diplomacy along a set of six features. First, decision-making procedure based on consensus; second, the maintenance of dialogue takes priority over the settlement of conflicts among conference attendants; third, ASEAN takes a collective negotiation with external dialogue partners; fourth, ASEAN holds new conferences according to changes in the international environment; fifth, ASEAN reserves all or part of the right to sponsor and chair these conferences; sixth, ASEAN establishes informal meetings, including ministerial retreats. These six features of ASEAN’s conference diplomacy constitute a set of rules that this author calls the “ASEAN Regime.” Koichi Sato, “The ASEAN Regime: Its Implications for East Asian Cooperation – A Japanese View,” Tamio Nakamura ed., The Dynamics of East Asian Regionalism in Comparative Perspective, Institute of Social Science, University of Tokyo, 2007, pp. 19-30.
 Straits Times, 21 July 1999.
 Declaration on the Conduct of Parties in the South China Sea, Phnom Penh, 4 November 2002.
 Rommel C. Banlaoi, Renewed Tensions and Continuing Maritime Security Dilemma in the South China Sea: A Philippine Perspective, Tran Truong Thuy ed., The South China Sea: Cooperation for Regional Security and Development, Diplomatic Academy of Vietnam, 2010, p. 148, Shao, op. cit., p. 202, Li Guojiang, Zhongguo Chugoku To Shuuhen Kokka No Kaijou Kokkyo Mondai [The Maritime Frontier Issue between China and its Neighboring Countries], Kyokai Kenkyu [Japan Border Review], No. 1, Slavic Research Center, Hokkaido University, p. 50.
 Far Eastern Economic Review, 27 April 1995, p. 28, People’s Daily, 26 February 1992.
 Hidekuni Takeshita, Minami Shina Kai Funso No keii To Ryouyuuken Mondai [The History of the South China Sea Conflicts and the Territorial issues], the second volume, Ajiatorendo, 1992, IV, P. 91.
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