On 12 July, the Tribunal of the Permanent Court of Arbitration in The Hague supported the Philippines on almost all the points it had raised in its case against China’s maritime claims and activities. It was expected that the Philippines would win most of the case given the legal underpinnings of some of these, but the ruling was more wide-ranging and negative for China than was assumed. The Tribunal concluded that there is no legal basis for China’s stipulations on historic rights to the resources within its “nine-dash line”. It argued that to the extent China may have had any such rights in the past, these were extinguished by the enactment of UNCLOS and its system of allocating maritime zones.
This has implications for other Chinese claims in the area based on the notion of historical rights, such as those on the maritime resources around the Paracel Islands (which are also claimed by Vietnam). Moreover, although the Tribunal does not have jurisdiction over the sovereignty of the islands, it did state that none of the Spratly Islands have the legal status of an island. It means that none of the land features can generate an exclusive economic zone (EEZ) of 200 nautical miles which could overlap with that of the Philippines, as a result of which certain sea areas (and their resources) have been declared to belong to the Philippines. The Tribunal significantly ruled that it had the jurisdiction to conclude that Itu Aba, the largest (natural) island of the Spratly Islands, which is occupied by Taiwan but also claimed by Beijing, is legally only a rock and therefore also does not give China the right to an EEZ.
The judgement thus represents a clear refutation of China’s claims in the region and there is no ambiguity or positive aspect for Beijing to hold on to.
On its part, Beijing has refused to participate in the proceedings and accept the outcome, denying the jurisdiction of the Tribunal. Instead, China launched an unprecedented media campaign to rally domestic and international public opinion behind its case. This involved interventions by Chinese ambassadors in the international media, English and Chinese language videos explaining China’s position and daily articles in Chinese media (highlighting or exaggerating domestic and international support for China). In this campaign China’s claim to historical rights is consistently emphasised (for example by releasing sets of historical documents that strengthen its claims) and the U.S. is directly or indirectly blamed for disputing China’s “indisputable sovereignty” and setting other countries up against Beijing, leaving China as the victim.
China has also attempted to de-legitimise the Tribunal itself by calling the case a “farce” and accusing the Tribunal’s judges of being prejudiced against China. After the judgement, Chinese Vice Minister Liu Zhenmin went so far as to suggest the judges had been bribed. China, he declared, reserved the right to impose an Air Defense Identification Zone (ADIZ) over the disputed territories if it feels its security is under threat. There is a precedent for this: in 2013 China established an ADIZ over the East China Sea in order to press its claims over the Senkaku/Diaoyu Islands, which are the subject of a dispute between China and Japan.
This media campaign has fuelled nationalist sentiment, increasing the risk of a confrontation. Since the 1990s, China’s leadership has partially based its political legitimacy on nationalism – the one factor that unites different social groups – making the leadership vulnerable to claims from grassroots nationalists that it does not sufficiently stand up for China’s territorial sovereignty. Therefore, President Xi Jinping will find it difficult to resist strong domestic pressures to reassert China’s claims (especially if the Philippines uses the judgement to shame China through public statements) with new land reclamations, the proclamation of an ADIZ or maybe even by quitting UNCLOS. Any of these actions would represent a serious escalation of the dispute and would also likely lead to a strong US response in the form of an expansion of its naval operations in the region.
By refusing to adhere to the judgement, which is legally binding on both parties according to UNCLOS, China positions itself outside of the international order and greatly harms its own international reputation and soft power. China’s international support has been less impressive than it has claimed, and its media campaign is unlikely to have eased the existing worries in neighbouring countries over their territorial disputes with China .
A renewed internal debate over China’s approach could be influenced by these rising geopolitical costs. Zhu Feng, director of the Centre for Collaborative Studies of the South China Sea in Nanjing, earlier this year acknowledged the risk to China’s reputation when he noted that other countries could use a negative judgement (for China) to “demonise” it. Shen Dingli, a professor at Fudan University in Shanghai, recently argued in India Today that China’s interests might be served better by a more moderate approach.
Soon after the judgement, India supported the released a statement urging all the parties “to show the utmost respect for the UNCLOS” and exercise self-restraint. India not only has an interest in stability in the South China Sea, but also provides an example of how a big power should respond to losing a legal case. In 2014, the same Permanent Court of Arbitration ruled largely in favour of Bangladesh after a longstanding dispute with India regarding overlapping maritime claims. India accepted the judgement, which enhanced goodwill between the two countries and boosted India’s reputation as a country that adheres to international law.
Despite China’s intransigence, there is a possibility that in the wake of the ruling, the Philippines could use the newly gained leverage to its advantage through bilateral negotiations. China has called on the Philippines to leave the judgement aside and resume talks. The new Filippino President Rodrigo Duterte wants to repair ties with China. He has been meeting the Chinese ambassador in Manila and had already announced he would send a special envoy to China after the ruling for talks – to which China has responded positively. There have been media reports that after his election Filipino fishermen were again allowed to fish around Scarborough Shoal, one of the disputed areas, as a sign of goodwill from China.
Duterte will face domestic pressures after the legal victory to press the Philippines’ claims, but knows his country does not have the capabilities to enforce the result. Instead, Duterte may be pragmatic and use this ruling to de-escalate the dispute and gain some concessions from China, such as attracting Chinese investments (which have so far been relatively limited, comprising a mere $692 million in 2013) which will boost the economy of the Philippines, and by persuading China to refrain from new land reclamations. This may lead to progress regarding the joint development of resources (such as oil and gas) by China and the Philippines, and shared access to fishing waters – although an overall compromise remains unlikely for now.
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