China Steers a Perilous Course in the South China Sea
China has risked isolating itself internationally with its high-handed conduct in the South China Sea. Bonji Ohara looks at the reasons for Beijing’s hardline policy and recent shifts in Chinese diplomacy.
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In mid-September this year, Chinese and Russian forces engaged in joint military drills in the South China Sea. The drills themselves were not a new development; China and Russia have been conducting such exercises, dubbed Joint Sea, every year since 2012. While Russia sent two Udaloy -class destroyers and a Ropucha -class landing ship, the overall scale of the exercise was no larger than usual.
The real issue was the location chosen for the exercise. This was the first time that the drills were held in the South China Sea, where China has caused widespread alarm by building artificial islands and establishing military outposts in an effort to make a fait accompli of its sweeping and hotly disputed territorial claims. In fact, it was only in July that the Permanent Court of Arbitration in The Hague, ruling on a case brought by the Philippines, issued a wholesale rejection of Chinese claims.
What are the motives driving Beijing’s risky conduct and hardline foreign policy in this region? In the following, I hope to shed some light on China’s perplexing behavior over the past few months.
Why China Needs to Control the South China Sea
The basic rationale for China’s claims and conduct in the South China Sea is national security. Driving its foreign policy in the region is a concern that, absent a major deterrent, the United States will use its military might to defend its own interests in the face of China’s drive for economic expansion. Viewed in this light, control over the South China Sea is an urgent priority from the standpoint of safeguarding Chinese security. This does not alter the fact that unilateral action by China in the South China Sea poses a threat to other countries and constitutes an aggressive challenge to the international order, but it does provide insight.
Underlying Beijing's view of the United States as a genuine threat to China’s security is a victim mentality and a sense of entitlement stemming from real and perceived historical injustices extending back to the era of great-power imperialist intervention in China, which the Chinese refer to as the “century of humiliation.” History has taught the Chinese that international relations is a big-power game in which the stronger countries prey on the weak, and that the only way for China to guard against being preyed on again is to surpass the United States in military might. Like the proponents of offensive realism, China’s leaders seem to believe that “status quo hegemons” have a strong motive for aggression against rising powers, and they have fashioned their foreign policy accordingly, with a view to countering perceived threats from the United States and Russia.
Also rooted in history is Beijing’s belief that China, as one of the World War II victor nations, is entitled to play an integral role in the design of the international order.
The Chinese government has repeatedly stressed the idea that international relations today are characterized by a “lack of justice, equality, and fairness.”  Speaking in Beijing on September 3, 2015, at a ceremony commemorating “the victory of the Chinese people against Japanese aggression and the defeat of fascism,” President Xi Jinping called for “a new type of international relations featuring win-win cooperation.”  The specific target of dissatisfaction is the international trade and investment regime, which China feels is stacked against developing and emerging economies like its own. The message is that recent setbacks to China’s growth are the fault of unfair rules adopted under the economic leadership of the United States and Europe.
As the Chinese government sees it, the continued expansion of Chinese trade and overseas investment is fundamental to the nation’s stability. If economic development is arrested before living standards rise sufficiently across the board, it could lead to social unrest and undermine the legitimacy of the Communist Party’s rule. For this reason, China must continue to pursue its overseas economic interests vigorously, regardless of American-led obstruction.
The white paper on China’s military strategy, issued by the State Council in May 2015, makes the case that military strength is needed to safeguard the nation’s economic interests.  This reflects the belief of China’s strategists that the United States and its allies could resort to military means if necessary to counter China’s rise and its challenge to the existing economic order.
At the same time, China’s leaders are well aware that, as things stand, China cannot win a war with the United States. For now, it must avoid any direct military confrontation and focus on changing the rules governing international economic activity. In the meantime, effective control over the South China Sea would constitute a powerful deterrent to a feared US aggression. In conjunction with the One Belt, One Road infrastructure initiative linking China primarily with the rest of Eurasia, it would also help China in its bid to compete with the United States in enhancing its global military presence.
Playing Chicken in the China Seas
With these considerations in mind, Beijing made it clear even before the Permanent Court of Arbitration handed down its decision on July 12 that it had no intention of honoring an unfavorable ruling. On July 5, at a US-China dialogue in Washington, DC, former State Councillor Dai Bingguo dismissed the forthcoming decision (widely expected to go against China) as “a scrap of paper.” In a July 6 telephone conversation with US Secretary of State John Kerry, Chinese Foreign Minister Wang Yi echoed those sentiments, calling the tribunal “a farce.”
This diplomatic defiance continued after the ruling was issued. On July 13, immediately after the court handed down its decision, Beijing published its official response in the form of a position paper titled “China Adheres to the Position of Settling through Negotiation the Relevant Disputes between China and the Philippines in the South China Sea.” In it, the government maintains that “pursuant to China’s national law and under international law . . . China has, based on Nanhai Zhudao [islands in the South China Sea claimed by China], internal waters, territorial sea, contiguous zone, exclusive economic zone, and continental shelf. In addition, China has historic rights in the South China Sea.” 
At around the same time, China stepped up its provocations around the Senkaku Islands, the disputed Japanese-administered group of islets in the East China Sea. On June 6 this year, a Chinese naval vessel entered the contiguous zone around the Senkaku Islands for the first time. Early in August, large numbers of Chinese fishing boats and Chinese government vessels appeared in the area, making incursions into the territorial waters around the islands. On August 26, some 200–300 Chinese fishing boats were observed in the contiguous zone. Moreover, a group of as many as 15 Chinese government vessels entered the contiguous zone prior to 8:00 am.  This is the kind of behavior described as “salami slicing”—a strategy of incremental encroachments to gradually assert China’s presence and alter the territorial status quo without going so far as to provoke a military confrontation.
The Chinese government has tied the dispute over the Senkakus to historical issues that have long divided China and Japan, and having done so, it is unlikely to back down. However, sovereignty over the Senkakus—unlike the ability to control the South China Sea—is not an urgent strategic priority for Beijing. What, then, accounts for this escalation in provocative behavior?
Given the timing, it seems reasonable to posit some connection with the case on which The Hague issued its unfavorable ruling in July. A commentary published by Xinhua on July 5 portrayed Tokyo’s reaction to the decision—in a dispute in which it was not directly involved—as having an ulterior motive. The Japanese government, explained the author, was trying to isolate China internationally (and further its own ambitions for expansion into the South China Sea) while keeping China so preoccupied with the legal controversy that it would ease off on Japan in the East China Sea.  A Chinese expert with whom I communicated suggested that the intensification of Chinese activity around the Senkakus was a retaliatory gesture against Tokyo’s alleged stratagem.
However, China was fast isolating itself internationally through such conduct in the South and East China Seas. This trend was accelerated, moreover, by the tough, intransigent posture of the Chinese Foreign Ministry.
Given the widespread expectation that the decision by The Hague would go against China, Beijing should have been doing its utmost around that time to secure the trust and friendship of its neighbors in Southeast Asia. Instead, it provoked an angry reaction from Indonesia and Malaysia, who complained of the disrespectful attitude and high-handed tone taken by Foreign Minister Wang Yi and a deputy foreign minister at the June 14 China-ASEAN foreign ministers’ meeting in Yunnan Province. 
Following the ruling from The Hague, the first order of business for Beijing was hammering out an agreement with the Philippines. Reaching an understanding with the plaintiff in the case would have gone a long way toward softening criticism from the international community. Yet according to then Foreign Secretary Perfecto Yasay Jr. of the Philippines, Wang Yi used menacing language in his request for bilateral talks with the Philippines, and Manila declined.  With such diplomatic missteps, China exacerbated its own predicament.
China’s provocative behavior around the Senkaku Islands in August was another error in judgment. Beijing must have known that Japan would protest such an incursion vigorously, and it could have predicted that Tokyo would make its case to the international community. Indeed, following the August 26 incidents, the website of the Japanese Foreign Ministry released detailed information in English on the movement of Chinese vessels around the Senkaku Islands that month.
It cannot have been advantageous for China to receive such negative publicity on the eve of the Group of 20 summit in Hangzhou (September 4–5). For China to come under criticism at the summit it was hosting would surely undermine President Xi Jinping’s prestige. It was looking as if China would end up thoroughly isolated.
However, signs of diplomatic flexibility began appearing around mid-August. At a series of high-level working meetings between Chinese and ASEAN officials, the parties agreed to draft a code of conduct in the South China Sea by mid-2017. In essence, Beijing was acceding to precisely the kind of multilateral framework that it had previously rejected. The members of ASEAN, for their part, were content to refrain from criticizing Beijing in international forums like the G20 as long as they could look forward to China’s cooperation in the drafting of rules and avoid a confrontation.
As a gesture toward Washington, meanwhile, Beijing announced its ratification of the Paris climate change agreement just before the G20 summit opened. This paved the way for Washington to join with Beijing in formally joining the agreement, an achievement avidly sought by President Barack Obama in the final legacy-building phase of his presidency. In his talks with Obama before the summit opened, Xi was able to present an image consistent with his call for a “new model of great-power relations,” one in which China and the United States, despite their differences, would avoid military confrontation and cooperate in areas on which they can agree.
Where Japan was concerned, the Chinese managed to present an outwardly conciliatory demeanor without actually yielding an inch. Japanese Prime Minister Shinzo Abe was eager to sit down with Xi on the sidelines of the G20 summit to urge China to conduct itself with restraint in the South and East China Seas and abide by international law. Xi agreed to a bilateral meeting on the afternoon of September 5, immediately after the summit’s close, but the talks took place in a notably simpler room than that in which Xi had received other heads of state, and the cordial smiles with which Xi had welcomed Abe to the summit were totally absent. 
In response to Abe’s request that China exercise restraint in the East China Sea to avoid raising tensions, Xi made it clear that while China had its own views on that subject, “the two sides must protect the peace and stability of the East China Sea," and he proposed accelerating the pace of discussions aimed at creating a hotline and other mechanisms to prevent unintended military encounters. By shifting the subject to conflict avoidance in the future, he made it difficult for the Japanese side to resume its protests over past actions.
In his remarks at a press conference following the bilateral summit, Abe referred repeatedly to the G7, a group the China regards with resentment and suspicion. This may have been his way of registering his dissatisfaction with the outcome of his meeting with Xi.
From the standpoint of the Chinese government, which escaped harsh censure during the G20 summit, the event can be considered a resounding success, particularly when viewed as a performance for domestic consumption. After driving to the very brink of international isolation with its intransigent hardline diplomacy, Beijing deftly changed course just in time to avert a foreign relations disaster.
Vagaries of Internal Politics
What supplied the impetus for this diplomatic course change? To answer that question, it may be helpful to return to the escalation of activity around the Senkaku Islands that began on August 5.
The movement of vessels around the Senkakus during August clearly took China’s provocative behavior to a whole new level, and Tokyo’s statements on the South China Sea issue seem inadequate to account for such a sudden escalation. In terms of bilateral relations between Japan and China, there was nothing on the front burner that could explain the outburst in activity around the islands at that time.
On the other hand, the heightened maritime activity occurred just as top current and former leaders of the Communist Party were gathering in Beidaihe (the site of an annual informal “summer summit”) to mull basic policy and personnel issues with an eye to the 2017 National Congress of the CPC, held every five years. This suggests that the display around the Senkakus may have been more for internal consumption than anything else.
Signs of a diplomatic shift began to appear immediately after that, and it may be that internal politics played a key role here as well. One clue may be the profile of Foreign Minister Wang Yi carried in the August issue of the magazine Huanqiu Renwu (Global People ), published on August 6. Typically, the magazine’s coverage of government figures highlight top-ranking Communist Party leaders past and present; for example, the July issue featured Xi Jinping’s deceased father Xi Zhongxun, secretary general of the State Council, along with Deng Xiaoping, and the March issue profiled Xi Jinping himself. The choice of Wang Yi, who ranks significantly lower in the party hierarchy, could be a sign of favor from Xi. Such a vote of confidence would doubtless give Wang and his ministry more discretion to set diplomatic policy.
Since 2002, there has been no representative of the Foreign Ministry within the Politburo, the CPC’s top decision-making body, and this is often cited as a reason for China’s all-too-frequent diplomatic blunders. Some Chinese experts have raised the possibility that Wang Yi could receive such an appointment.
Whatever the case, it seems probable that the real explanation for China’s shift to a combination of hardline assertiveness and flexible diplomacy lies in internal considerations and machinations on which we can only speculate. And if internal politics are behind this foreign policy shift, it follows that the future could hold further surprises for Japan and other countries in the region. We need to understand China’s long-term strategic goals and remain focused on the big picture so as to avoid overreacting to short-term swings.
 Liu Yandong, “Join Hands to Create a Bright Future of Peace and Prosperity,” address at the opening ceremony of the Fifth World Peace Forum, Tsinghua University, July 16, 2016, http://www.fmprc.gov.cn/mfa_eng/wjdt_665385/zyjh_665391/t1384919.shtml .
 “China, as a large developing country, still faces multiple and complex security threats, as well as increasing external impediments and challenges. Subsistence and development security concerns, as well as traditional and non-traditional security threats are interwoven. Therefore, China has an arduous task to safeguard its national unification, territorial integrity and development interests.” http://eng.mod.gov.cn/Press/2015-05/26/content_4586805.htm .