China is once again causing concern in the South China Sea, this time by moving surface-to-air missiles to the Paracel Islands.

Over several years, this dispute has evolved into a clash of opposing strategies, with China steadily expanding its territorial, economic and military footprint in the South China Sea while other countries counter with either ‘balancing’ or ‘rules-based order’ strategies. So far, China’s strategy has proved more successful. Why have these ‘balancing’ and ‘rules-based order’ strategies failed? What strategies might succeed?

Balancing strategies stress building greater relative power, usually military. A state can then threaten or employ violence to dissuade an adversary from taking unwanted actions. An example is Vietnam, which is modernising its naval and air forces, improving its paramilitary forces (Coast Guard and Fishing Patrol Agency), purposefully strengthening relationships with India, Russia, Japan and the US, and expanding its defence industry. Less obviously, the freedom of navigation transits through the South China Sea by US Navy warships are also examples of balancing with the implicit threat of armed response in the event of trouble.

Such strategies, however, play to China’s strengths, and so far have been easily countered.

In any test of relative power, China has advantages over all those involved in the South China Sea dispute except the US (and even here, some predict China’s GDP will surpass America’s in time). Moreover, while a significant proportion of the world’s merchant shipping transits the area, much of it is en route to China. So China has the greater stake in this dispute, and thus greater credibility. The notion of waging a war with China over ownership of small islands in the South China Sea therefore seems far fetched. The costs would be too high, the returns too low.

To read the full “South China Sea: Beijing is winning, but here’s how to retake the initiative” article by Griffith Asia Institute Visiting Fellow Peter Layton, please visit The Lowy Interpreter.