Gentlemen’s Competition in the South China Sea:
How Will China and the United States Fight Over the FON?

The freedom of navigation in the South China Sea is the subject of a war of words between China and the United States, despite recent military manoeuvres by the United States. Could growing international concern, especially from the US, escalate into military action?

On October 26, the USS Larssen, a US guided-missile destroyer, entered the waters within 12 nautical miles of the Subi and Mischief reefs off the Spratly Islands in the South China Sea. It was a well-prepared freedom of navigation (FON) operation conducted by the US Navy. As The New York Times stated, the major purpose was to ‘challenge Beijing’s ambitions in the South China Sea’. Both the Subi and Mischief reefs are artificial islets China has created through its massive land reclamations in the disputed Spratly Islands since 2013.

China’s reactions were well-calibrated. On the one hand, China issued strong diplomatic warnings and protests against US ‘illegal trespassing’ of waters near features in the South China Sea, which ‘threatened China’s sovereignty and security interests.’ A strong anti-American hegemony campaign was launched by the Chinese media to satisfy the domestic audience. But China did not intercept the US destroyer militarily, although Chinese naval vessels monitored and followed the USS Larssen from a safe distance for the entire operation. For the international audience, Chinese behaviour is a constrained response to the US challenge.

Why did China only act strongly in words but more pragmatically in deeds in the Larssen operation? Since this type of FON operation will not be the last one conducted by the US Navy in the South China Sea, will China stay calm in the next encounter? What actions might other nations take regarding the dynamics of US-China relations?

The major reason for China’s behaviour is the “timing.” China is not yet ready to respond to US challenges militarily right now. However, things can change overnight, especially if other countries get involved. How to strengthen practical “rules of law” in the South China Sea is an imperative task for policymakers in the Asia Pacific.

Not the right time to take risks

Chinese leaders may not see US operations in the South China Sea as ensuring the freedom of navigation or safeguarding the UN Convention of the Law of the Sea (UNCLOS). Rather, it is about power politics between the existing hegemon and the rising power. Is it the right time for China to respond militarily to US challenges? The answer is no, for at least two reasons.

First, time seems to be on China’s side. Since the global financial crisis in 2008, China’s strong economy has been an engine of world recovery. China’s new economic initiatives, such as the “one belt and one road” project and the Asian Infrastructure Investment Bank, seem to attract worldwide attention. European countries, including the UK, Germany and France, have lined up to welcome China’s investments and economic cooperation.

President Xi Jinping’s visit to the UK seems to signify the coming “golden age” of Chinese century. Although Xi’s visit to Washington was not as successful, the United States and China agreed to work on cyber security issues. Currently, Chinese leaders, especially Xi, are gaining with these diplomatic successes. According to prospect theory in behavioural economics, people are less likely to take risks when they are in an advantageous situation of gain.

Second, domestically Xi has strengthened his political authority through the anti-corruption campaigns. Unlike his predecessors, Xi came to power with limited political constraints and burdens. Through anti-corruption campaigns, Xi not only took down his political rivals, but also consolidated his political authority within the Party and the society. Although the West still criticises eroding political freedom and democratic governance in China, Xi’s political authority in Chinese society is rising dramatically. People have started to compare Xi with Mao Zedong.

With booming international status and domestic popularity, Xi is definitely in a domain of gains. The US FON operations in the South China Sea, though irritating, did not change Xi’s actions. Not surprisingly, President Obama is reported to have informed Xi of the United States’ intended action in the South China Sea during Xi’s visit to Washington. Therefore, Xi understandably “takes the Larssen operation easy,” because it is just not worth taking a risk!

Things can change overnight

However, that is not to say that China will keep a low profile toward the United States in the South China Sea. Two things can move Xi from a domain of gains to a domain of losses.

If the United States elevates its FON operations to a new level by inviting other nations to patrol, China will feel cornered. Recognising US military primacy is one thing, while feeling “bullied” by others is another. In Chinese culture, “saving face” is more important than material interests. The United States can send another destroyer to the South China Sea in the name of FON, and China might just protest as usual. However, if the United States mobilises a group of states to join the patrol, China will lose face with both domestic and international audiences if it continues to ignore such challenges.

Another scenario is a dramatic change in China’s domestic politics. For example, if the economy deteriorates and if social unrest shakes the communist regime, Xi and the Chinese leadership will lose domestic authority and political legitimacy in the society. If the U.S. Navy conducts a FON operation in the South China Sea at the same time, it may become the “last straw” to push China to respond forcefully, as the risk Xi will have to take if he wants to reverse a disadvantageous domestic situation.

Practical “Rule of Law” in the South China Sea

Asia Pacific states all pledged to adhere to the UNCLOS, but offer different interpretations of the law, making it difficult to resolve the disputes in the South China Sea. It is time to consider some practical “rules of law” for the South China Sea.

The Association of Southeast Asian Nations (ASEAN) has negotiated with China on the code of conduct (COC) in the South China Sea for many years. China should consider reaching an agreement with ASEAN on the COC so that both China and other claimants of ASEAN states can constrain their behaviour, and monitor others’ through a binding mechanism. Although the COC is not the final solution for the South China Sea disputes, it will at least calm the turmoil there and provide a prerequisite for a peaceful solution.

The United States and China should consider developing some practical mechanisms to strengthen the “rules of the road” for their future encounters in the South China Sea. Both the United States and China signed the multi-national Conduct for Unplanned Encounters at Sea (CUES) in 2014. The CUES is a non-binding agreement aiming to prevent an escalation of incidents at sea. Strengthening military-to-military dialogues – even conducting joint exercises – are other means to put the “rules of the road” into practice, and avoid, military conflicts.

Other nations should adopt a “keeping-my-distance” strategy to stay out of the competition, especially in the South China Sea. Other states should encourage the United States and China to engage each other politically, diplomatically and militarily. Picking sides between China and the United States will not be wise, and will complicate the situation. Competitions or even confrontations between the United States and China are not desirable, but might be still manageable. History tells, however, antagonisms between two militarised blocs will cause more conflicts, especially proxy wars. Other countries should let the United States and China know clearly that no matter how they compete or even fight in the Asia Pacific, they should do it by following the rules. One gentleman’s rule is to keep collateral damage to a minimum.

Kai He is Associate Professor of International Relations in Griffith Asia Institute and Centre for Governance and Public Policy, Griffith University, Australia. He is the author of China’s Crisis Behavior: Political Survival and Foreign Policy after the Cold War (Cambridge University Press, 2016). This article can be republished with attribution under a Creative Commons Licence.

This article was originally published in the Australian Institute of International Affairs. Read the original article.