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Thayer Consultancy

ABN # 65 648 097 123

Background Briefing: ASEAN Summit: Cambodia and the South China Sea Carlyle A. Thayer March 29, 2012

[clientnamedeleted] 1.ASEANisoneoftheonlyassociationsthatpullsChinaandmostofSoutheastAsia intomultilateraldialogue.ItseemslikeanopportunetimetodiscusstheSouthChina Seadispute.IfASEAN,ledbyCambodiaas Chair,shirkthediscussionon theSouth ChinaSea,whatdoesthissayabouttheAssociation'spoliticalrole? ANSWER:DonotconfuseASEANsformandsubstance.ThefactthattheSouthChina SeaisnotformallyontheagendafortheforthcomingASEANSummitdoesnotmean the issue will be ignored. ASEAN has a standard operating procedure to disguise controversialissues.Cambodia,asASEANChair,cannotpreventanyASEANheadof state from raising the South China Sea issue. Neither can Cambodia control the ASEANPlusOnediscussionswithChina.InJanuaryASEANmemberforeignministers andChinadiscussedimplementationoftheDeclarationonConductofPartiesinthe SouthChinaSea(DOC). 2. Ultimately, whomadethedecision?WasitanAseanconsensus?Or wasitmore uptoCambodiaasthisyear'schairman? ANSWER:Cambodiaaschairhasmovedtokeepthepeace.Bynotformallyputting theSouthChinaSeaontheagendaASEANavoidedaggravatingrelationswithChina. RecallthattheinauguralASEANDefenceMinistersMeetingwiththeireightdialogue partners(ADMMPlus)didnothavetheSouthChinaSeaontheagenda,nordidlast year's East Asia Summit, yet the South China Sea was raised in both fora. All the other ASEAN attendees will know that they are free to raise any issue of concern includingtheSouthChinaSea. 3.DoestheterritorialdisputeputCambodiainatightspotbetweenit'sbiggestpost KhmerRougeallyandit'sbiggestcurrentpatron?Couldyougiveabitofbackground ontherelationsofthethreecountries? ANSWER:CambodiaisintheboxseatthisyearbecauseitisASEANChair.Itwillbe courtedbyallthemajorpowers.Chinahaslargeandgrowingeconomicinterestsand CambodiahasbenefittedfromChineseinvestment.Atthesametimeithasamassed overUS$8billionindebtsfromChineseloans.Cambodiahastotreadcarefullyand hope for debt relief. Cambodia has remained silent on the South China Sea issue sinceitwasraisedbySecretaryofStateHillaryClintonattheJuly2010ARFmeeting.

2 Itwasalsooneoftwocountriesthatdidnotraiseitatlastyear'sEastAsiaSummit (along with Myanmar). Vietnam, as a member of ASEAN, will put pressure on CambodianottoundermineASEANconsensusonthisissue.Cambodiawillhaveto go along with this consensus. Vietnam also has a massive economic stake in Cambodia. Cambodia may lean towards China on many issues but there are constraints as to how far it can go. Vietnam has also had to accommodate China. Cambodiaisfullyawareofthis. 4.IsitinCambodia'sbestinteresttoremainquietontheissue?Why? ANSWER: It is in Cambodia's interest to play a less proactive role than Indonesia. Publicly Cambodia can give the appearance of not antagonizing China. In private CambodiamustreflectASEANconsensus.Cambodiaisnottheonlystumblingblock to ASEAN unity Thailand also wants to keep a low profile nonconfrontational posturetowardsChina. 5.Chinasaysitdoesn'twantto"internationalize"thedispute.Howlegitimateisthis giventhatthedisputedirectlyinvolvesseveralcountries? ANSWER:TheSouthChinaSeahasbeeninternationalizedinthenormalsenseofthe word.ButChina'suseofinternationalizereferstowhatitconsidersoutsidepowers. There are many South China Sea issues territorial sovereignty disputes and maritimedemarcationdisputes.Insomecasesthedisputeisabilateralmatter.Last year China and Vietnam reached agreement to work on disputed areas that only involved them. Other disputes are trilateral as between Malaysia, China and Vietnamwheretheirclaimsoverlap. NomatterwhatChinaprefers,theSouthChinaSeaissueincludesasetofconcerns relatedtofreedomofnavigation,overflightandunimpededcommerce.Thisissueis internationalbecauseitinvolvesallmaritimestateswhosewarshipsandcommercial vesselsplythesealinesofcommunication.Fifteenof18membersoftheEastAsia Summit (EAS) raised maritime security concerns last November. China argued that thiswasaninappropriatetopicfortheEAS.OnthissetofissuesChinacannothelp preventitfrombeinginternationalized.Italreadyisandwillcontinuetobeso.

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: China, Cambodia and the ASEAN Summit Carlyle A. Thayer March 29, 2012

[clientnamedeleted] 1.HuJintaoiscomingtoCambodiajustdaysbeforethe20thASEANsummitisheld inPhnomPenh.CambodiahassaiditwillnotputtheSouthChinaSeaissueonthe agenda, this in line with China's stance that the issue should not be discussed by countries that are not directly involved in the dispute.Do you think there is anyrelevancetothetimingofHu'svisit? ANSWER:HuJintao'svisitistimetobringmaximumChinesediplomaticinfluenceto bearonASEANtorecouplossesinthepasttwoyears.Huwilloffereconomiccarrots toinducebehaviourfavourabletoitsinterests.Hu'spresenceisalsodesignedtoput pressureonCambodiaasASEANChairtotakeChina'sconcernsintoaccount.Since ASEANworksbyconsensusallChinaneedsisonecountrytoopposeaunitedASEAN standagainstChinaonSouthChinaSeainterests. Cambodia has followed ASEAN's timehonoured standard operating procedures by notputtingcontroversialissuesontheformalagenda.ThiswillassuageChina.Butit willnotpreventanyASEANheadofstatefromraisingthisissueeitherattheASEAN SummitorattheASANPlusOnemeetingwithChina. 2.HowimportantisChina'sinfluenceinCambodiaandthegreaterASEANregion?Is thisinfluencegrowing? ANSWER:ChinaprobablyhasmoreinfluenceonCambodiathananyoftheexternal powers.Thisinterestismainlyeconomic.ButChinaisnottheonlycountrythathas influence in Cambodia. Vietnam has robust political and defence ties and some substantial economic interests. Cambodia and the US have developed ever closer defencecooperationoncounterterrorismandtrainingforUNpeacekeeping. China is the largest trading partner of most ASEAN countries. Cambodia's largest trading partner is the US. China and ASEAN has a Free Trade Agreement in effect thatwillshortlycovertheentireSoutheastAsiaregion.China'sinfluencehasgrown inthisarea. China's influence rose steadily since 1997 when it enunciated a "new concept of security." Between 19992000 China signed longterm cooperative framework agreements with all ten ASEAN countries. But Chinese assertiveness in the South ChinaSeaoverthepastfouryearshaserodeditsinfluenceandrekindledthe"China

2 threat"oftheearly1990s.Chinapromoteditsnewsecurityconcepttocounterthe Chinathreattheory.LastyeartheChineseForeignMinistrywasgiventheleadrole toherdthesocalled"ninedragons"competingcivilianagencieswithaninterestin the South China Sea and bring them into line. Two of the nine dragons, China Maritime Surveillance and Fisheries Enforcement played independent roles in exacerbatingtensionsintheSouthChinaSea. But Chinese assertiveness in the South China Sea has served to undermine China's "smiling diplomacy" of recent years. A majority of ASEAN countries of expressed concernaboutmaritimesecurityandSouthChinaSeaissuesandfavourabalancing rolebytheUnitedStates. 3.IntermsoftheSouthChinaSeadebate,whatkindofinfluencecouldASEANhave inresolvingthedispute? ANSWER:ASEANmembersandChinaagreedinJuly2011toGuidelinetoImplement the2002DeclarationonConductofPartiesintheSouthChinaSea.Theyhavesetup a Joint Working Group to implement this agreement. ASEAN and Chinese senior officialsmetinBeijinginChinaandagreedtosetupfourexpertworkinggroupsto address technical issues such as marine pollution and marine scientific research. Despite China proclivity for settling South China Sea issues bilaterally, China has nevertheless agreed to meet with ASEAN members. ASEAN is trying to negotiate a morebindingCodeofConductwithChina.TotheextentthatASEANmemberscan reachconsensusandmaintainunitytheycanexertconsiderableinfluenceonChina. IfASEANfails,Chinacandivideandconquer. 4. What other important political/security/economic concerns do you think ASEAN shouldaddress? ANSWER:ASEANhasalreadyadoptedacomprehensiveapproachtodealingwithso callednontraditionalortransnationalsecurityissues.Thisapproachisspelledoutin theBlueprintforanASEANPoliticalSecurityCommunity.Thiscommunityisone of threepillarsconstitutingtheASEANCommunitytobeestablishedin2015(theother pillarsareeconomicandsociocultural). On political issues: ASEAN needs to reach consensus on what role the East Asia Summit (EAS) is to play now that the US and Russia are members. Should the EAS adopt an oversight role over APEC, the ASEAN Regional Forum and the proposed ASEANMaritimeForumPlus. Onsecurityissues:ASEAN'sDefence Ministerswill meetinCambodia shortly.They needtogivedirectiontothestructuretheycreatedandaddresstraditionalsecurity challenges in a practical manner. Foremost among these issues is how to ensure safety of navigation and overflight when military vessels from different countries encountereachotherintheSouthChinaandEastChinaseas. On economic issues: ASEAN has got to reach consensus on the emerging Trans Pacific Partnership (TPP), Should ASEAN encourage the evolution of the TPP to embracetheentireAsiaPacificRegion,includingChina.

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: South China Sea: Renewed Chinese Assertiveness? Carlyle A. Thayer March 29, 2012

[clientnamedeleted] 1.Chinahaslaunchedalargescalepropagandacampaignwiththeparticipationof manyagenciestopromotetheUshapedlineintheSouthChinaSeaaswellasassert theirclaimattheEastChinaSea.Whatisyourassessmentaboutthismoveandits' consequences? ANSWER:Chinaisdivided.Thereareuptoninecompetingagencieswithamaterial interestintheSouthChinaSeaandEastSea,suchasChinaMarineSurveillanceand FisheriesEnforcement.TheyhavesettheirownagendaintryingtoimposeChinese jurisdictioninwaterscontainedwithinthe9dottedlineontheirmap.TheChinese ForeignAffairsMinistryhasbeengivenresponsibilityforrecoupingsomeofChina's lost prestige and influence due to the assertiveness of these agencies. A Foreign Ministry spokesman has stated that no country claims the entire South China Sea. This means that the waters inside the Ushaped line are not viewed as territorial waters,accordingtosomeanalysts.Analystshavetakenthisstatementtomeanthat Chinaisclaimingsovereigntyoversomeoralloftheislands,rocks,reefsetc.inside theUshapedline.ThisnewformulationbringsChinaclosertobutnotincompliance with international law including the United Nations Convention on Law of the Sea (UNCLOS). Insum,thereisjockeyingamongcompetingChineseagenciesoverSouthChinaSea issuesduringatimeofpowershiftintheleadership.Thisisapotentiallydangerous period where extreme nationalist sentiments could shout down the voices of moderationurgingadiplomaticsettlement. 2. China has been rather successful in spreading its ninedotted line claim and its claims on the Spratly and Paracels, e.gthe line has appeared in many scientific journalssuchasNature,Scienceaswellasmanymaps.WhatdoyouthinkVietnam can do to "countermove" China 's propagandas, limit the spreading of its false claimsandraiseawarenessofVietnam'srights? ANSWER:Idonotagreewithyourpremise.Whiletheninedottedlinemapmaybe printedinunofficialpublications,itisnotacceptedbytheinternationalcommunity. Chinahasnotmadeitsclaimsclear.Ontheonehand,itclaims"historicrights"and ontheother,arguesonthebasisofinternationallaw.Theseareincompatible.

2 Vietnam and other ASEAN states must continually press China to clarify its claims underinternational law.If thewatersinsidetheninedottedlinearenotterritorial waters,thenwhatisChinaclaiming?SomeanalystssayChinaisclaimingsovereignty overtheislandsandrocks.Chinacouldarguethattheislandsareentitledtoa200 nautical mile Exclusive Economic Zone (EEZ). This would mean Chinas EEZ would overlapwiththeEEZs claimedbythePhilippinesand Vietnam.Intheory thiscould form the basis of a settlement involving the delineation of maritime zones under UNCLOS.Chinatooneedstoclarifywhatislandsandrocksitisclaiming.DoesChina meantheislandsandrocksitoccupies,orisChinaclaimingotherislandsandrocks occupiedbythePhilippines,VietnamandMalaysia? Vietnam must double its efforts to ensure that ASEAN reaches consensus on this issueparticularlyinnegotiationonabindingCodeofConduct. Vietnam should also issue its own maps making clear the legal basis of its claims. PerhapsanotherWhitePaperoftheSouthChinaSeawouldbehelpful,outliningthe historicalandlegalbasisofVietnam'sclaims. Vietnam should never stop making diplomatic protests when China undertakes activitiesinareasunderdispute.

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: ASEAN Summit: China, Cambodia and the South China Sea Carlyle A. Thayer March 30, 2012

[clientnamedeleted] Q1.Whatdoyouexpectthemaintopicofdebate/themainconcernswillbeamong theASEANdelegatestotheSummit? AANSWER: ASEAN Summits cover an incredibly wide agenda. ASEAN is moving towardsitsselfimposeddeadlineOF2015tocreateanASEANCommunitybasedon threepillarspoliticalsecurity,economic,andsociocultural.Thereareaplethoraof programs and initiatives under each initiative. ASEAN is also promoting regional connectivity, lowering the gap between its less developed and more developed membersandattainingmillenniumdevelopmentgoals.Inotherwords,theagenda fortheASEANsummitisprecookedbythebureaucraticprocessleadinguptothe summit. Specifically, ASEAN senior officials will polish the drafts of various policy documents and statements that will be served up to ministers and heads of governmentforapproval. NodoubttheriseofChinaandSouthChinaSeaissueswillfeature.Thesehavebeen kept off the formal agenda by ASEAN Chair Cambodia. But that will not prevent concernedstatessuchasthePhilippinesfromraisingmaritimesecurityissues.Other ASEANcountrieswillbeconcernedtopositiontheregionalorganizationsothatitis not drawn into SinoAmerican strategic rivalry. This has an economic dimension. China and ASEAN have already agreed on a Free Trade Area. ASEAN and the Plus Three members China, Japan and South Korea are also promoting an East Asia free trade area. Opposed to this is the TransPacific Partnership (TPP) being supported by the United States. The TPP does not include China. ASEAN members will have to consider what is their preferred vehicle or mechanism for regional economicintegration. Finally, all ASEAN members will be concerned to assist Myanmar in its present reformist trajectory and see the elimination of sanctions presently imposed by the EUandtheUnitedStates Q2.AfterthestrongchairmanshipofIndonesiawhichsoughttomakethebodymore effective, do you think Cambodiacan keep that momentum going or should we expectaratherweakleadershipthisyear? ASEAN: Cambodia, as ASEAN Chair, will have to promote those issues on which ASEANmembershavereachedconsensus.Cambodiacannotuseispositiontoveto

2 anyproposalputbeforethebody.ButCambodiahassignaledthatitwillnottakethe leadthatIndonesia did inpushingdiscussionofmaritime securityandSouthChina Seaissues.CambodiaisalsoapartyprincipaltotheborderdisputewithThailand.It cannot effectively use its role as chair to pressure Thailand to accept Indonesian observers. Cambodia will focus on economic issues that are dear to ASEANs less developingmembersLaos,andMyanmar.Cambodiawillpressforincreasedaidto assistthesocalledCLMstatesovercomethegapbetweenthemselvesandASEANs moredevelopedmembers. Q3.WhatdoyouthinkofHuJintao'svisit(hearrivesinPhnomPenhtomorrow,will leave on April 2) so close to the ASEAN summit? What kind of message might Chinabetryingtosend?IsitpossibleChinawilltrytoremindcloseallyCambodiato keeptheSouthChinaSeadisputeoffthetable? ASEAN:HuJintaosvisitismuchmorethanabouttheSouthChinaSea,althoughthis issue is important to Beijing. Hu Jintao is making a pilgrimage to Phnom Penh to flatter its leaders on the eve of the ASEAN Summit. China is trying to recoup lost prestige caused by its assertiveness in the South China Sea over the past several years. Hus visit will also remind Cambodia and other ASEAN states that Chinas economic rise will lift their economic boats and that their futures are interdependent.ChinahasalreadysucceededingettingCambodiatokeeptheSouth China Sea off the formal agenda. And Chinese diplomacy has succeeded in shifting CambodiafromlendingitssupporttotheASEANclaimantstates.Chinacanofferno strings aid and assistance and outbid the US which offers aid with conditions attached. ASEAN works by consensus, Chinas strategy is to entice one or more members into adopting Chinafriendly policies and thus prevent an ASEAN united frontagainstChina,particularlyonSouthChinaSeaissues. Q4RegardingASEANEconomicCommunityby2015,isitfeasible? ANSWER: It is a process not an end states. Whatever further ASEAN economic integration is achieved between now and 2015 will form the basis of the ASEAN EconomicCommunity.Itwillcontinuetobeaworkinprogress.

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: ASEAN Summit: Can China Block Discussion of South China Sea Issues? Carlyle A. Thayer March 30, 2012

[clientnamedeleted] 1.TheSouthChinaSeatopsSoutheastAsia'ssecurityagendaafteraseriesofnaval clashesoverthevastregionbutCambodiahasdeclareditofftheagendaaheadofa regionalsummitnextweek.Willthismove,coupledwithCambodiastenureaschair ofASEANthisyear,portendagrimprospectforastrongcodeofconductdespitethe guidelinesforitsimplementationissuedlastJuly?If,sowhy?Ifnot,whynot? ANSWER: Cambodia is following ASEANs standard operating procedures to keep contentious issues off the formal agenda. But any ASEAN member will be free to raise the issue. Cambodia, as ASEAN Chair, cannot prevent this. Cambodias approachaddsinsulationtoprotectASEANfromChinasreactionsiftheSouthChina Seawereplacedontheofficialagenda. ASEANhasalreadyapprovedtoconceptofdrawingupaCodeofConduct(COC).At theForeignMinistersmeetinginJanuaryitwasagreedtoissueaproposalforadraft COC.Thisprocesshasbeensetintrain. ASEANfunctionsbyconsensus,CambodiaCOULDplaytheroleofspoilerbyrefusing to agree to united action by ASEAN in dealing with China. This could serve to constrainprogress. 2. Philippine officials say they are "very frustrated" over Chinese efforts to block discussion of the issue within ASEAN, but they will insist on raising the matter in PhnomPenh.IsthissomethingVietnamshouldfollow? ANSWER:VietnambenefitsfromthefactthatthePhilippineshastakentheleadrole onSouthChinaSeaissues.HanoicanfollowinManilasshadowanddeflectChinese ire. Nothing can prevent the Philippines from raising South China Sea issues and HanoishouldgiveitssupporttoManila. 3.GiventheleadershiplineupinASEANCambodiathisyearandBruneinextyear followedbyMyanmarandthenLaossomehavesaidASEANisfacingalitmustest in formalizing a binding, enforceable code of conduct as ASEAN's method of decisionmakingbasedonconsensus,consultation,andproceedinginastepbystep manner may not be appropriate for this task. Is it fair to say that ASEAN is flounderingonthecodeofconduct?

2 ANSWER: ASEAN is at an early stage in drafting a Code of Conduct among its members. The Philippines circulated a draft COC in February. This will take some timeforASEANtodigestandreachconsensus. The COC is not likely to be binding unless it includes provisions for enforcement. China,whichhasexempteditselffromthedisputesettlementmechanismcontained intheUnitedNationsConventionofLawoftheSea,isunlikelytoagreetobinding enforcement agreements. ASEAN must take the COC stepbystep. First, it must achieveconsensusamongitsmembers.ThenitmustnegotiatewithChina.Chinahas consistentlyputcaveats onthissayingwhenconditionsareappropriateor when conditionsareready. All the COC can do is place limitations on specific behaviour. It will then be up to signatoriestoshowgoodfaith.ThereisplentyofscopeforChinatoignorewhatit doesnotlike. 4.SomeskepticshavepointedoutthattheUSpivottowardASEANclaimantsmay makeitmoredifficultforASEANandChinatoagreeonacodeofconductbecause some claimants may be more assertive and even take riskier actions than they otherwisewould,increasinginstabilityintheSouthChinaSea.Whatisyourreaction tothis? ASEAN:TheUSmayemboldenthePhilippinestobemoreassertive,butthebottom lineisthatthePhilippinesmustconvincealltheotherASEANmemberstosupportits position. There is thus scope for compromise and watering down contentious proposals.IfASEANreachesconsensusitwillbealmostimpossibleforASEANtoback down.OnceASEANhasreachedconsensusitfacesthedifficulttaskofgettingChina toagreetoitsdraftCOC.ChinasupportstheCOCprocessbecauseitcutstheUSout of negotiations. China can thus play for time and gain advantage from divisions withinASEAN. 5. What should Vietnam do to enlist the support from ASEAN members who presumablyarefortheformalizationofacodeofconductbutmaynotwanttopush theissuetoohardvisvisChina? ANSWER: ASEAN has to step up bilateral diplomatic efforts. It must assemble a coalition of likeminded states and enlist them in lobbying the other ASEAN members.Vietnamcouldalsopursuelinkagediplomacy.ItcouldarguetoCambodia that in return for Cambodias support on South China Sea issues, Vietnam will supportCambodiainitsconcernsaboutChinesedambuildingontheUpperMekong. VietnamcanalsolobbyJapanandtheUnitedStatestobemoreproactiveingiving aidtoCambodiatoundercuttheappealofnostringsattachedChineseaid.Vietnam mustadoptanappropriatediplomaticstrategytoassistthefuturechairsofASEAN sotheyaresupportiveofVietnamspositionontheSouthChinaSea.Vietnamshould seek to create a middle power coalition of nonASEAN dialogue partners, such as AustraliaandNewZealand,tosupportitseffortsonmaritimesecuritybothwiththe ASEANRegionalForumandinASEANPlusOnemeetingswithdialoguepartners. 6.Yourfurthercommentswouldbeappreciated. Vietnam must approach South China Sea issues in a positive sum or winwin manner rather than zerosum approach. Vietnam and ASEAN should not make

3 Chinafeelitisbeinggangedupon.Inotherwords,theyshouldstresscooperation. Chinashouldunderstandthatifitdoesntcooperatethemajorpowerssuchasthe US and Japan may be invited to play a more proactive role. In other words, VietnamsdiplomacyshouldbeaimedatmakingthepriceofcooperationbyChina lessexpensivethanthepriceofnoncooperation.