[CA] South China Sea

South China Sea

The Permanent Court of Arbitration (PCA) in The Hague, Netherlands, has ruled that China’s claims of historical rights over South China Sea (SCS) has no legal basis. China has boycotted the hearings at the Permanent Court of Arbitration, saying it does not have jurisdiction to decide on the matter.

Flashback:

The case against China was initiated by the Philippines. The Philippines formally lodged its arbitration case under the United Nations’ 1982 Convention of the Law of the Sea, known as UNCLOS, in January 2013.

What did the arbitration panel rule?

The Hague-based PCA ruled that China has no legal basis to claim historical rights to islands in the SCS, and has violated Philippines’ sovereign rights. It said Beijing “had no historic rights to resources in the waters of the South China Sea” and that “such rights were extinguished to the extent they were incompatible with the exclusive economic zones provided for in the Convention.”

Why is South China Sea considered so important?

The SCS is a busy international waterway, being one of the main arteries of the global economy and trade. More than $5 trillion of world trade ships pass through the SCS every year. The SCS is also resource rich, with numerous offshore oil and gas blocks.

So what is the dispute about?

There are a few hundred small islands in the SCS, a part of the Pacific Ocean. Some of the main ones are Spratly Islands, Paracel Islands and Scarborough Shoal — the bone of contention between China and the Philippines. China claims most of these islands as its own. Vietnam, Malaysia, Brunei, the Philippines and Taiwan have rival claims. China has said it will not permit other nations to infringe on what it considers its sovereign rights in the strategically vital area.

Implications of this ruling

The ruling stands to further ramp up tensions in the region, where China’s increased military assertiveness has spread concern among its smaller neighbours and is a point of confrontation with the United States. This victory for the Philippines could spur Taiwan, Vietnam, Malaysia and Brunei, which also have overlapping claims, to file similar cases.

ä States and territories with borders on the sea (clockwise from north) include: the People's Republic of China (including Macau and Hong Kong), the Republic of China (Taiwan), the Philippines, Malaysia, Brunei, Indonesia, Singapore, and Vietnam.

ä Major rivers that flow into the South China Sea include the Pearl, Min, Jiulong, Red, Mekong, Rajang, Pahang, Pampanga, and Pasig Rivers.

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[CA/Culture] Maritime Silk Road

Current Affairs

Maritime Silk Road

(01) What is Maritime Silk Road (MSR) initiative?

(02) Why new MSR?

(03) How to implement MSR?

(04) India’s stand on Maritime Silk Road

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(01) What is MSR initiative?:

·        Chinese President Xi Jinping @ Shanghai Cooperation Organization (SCO) summit in Bishkek (in 2013)

·        Chinese PM (Premier) Li Keqiang @ ASEAN + China summit in Brunei (in 2013)

·        Connect 12 inland Chinese regions with 14 neighboring countries. (revive ancient silk road)

·        Get new export markets

·        Secure lanes to import raw material.

·        Counter the influence of USA and Russia.

(02) Why new MSR?:

Reason #1: Economic reasons

·        Subprime crisis => global economic crisis => Fed Tapering (less FDI and import orders from US and EU)

·        Result? China’s “Export & FDI” driven economic model is losing its effect.

·        China needs to find new export markets (those 14 neighbor countries).

·        Just like India has “Rich Coastal areas Vs poorly developed interior regions.”

·        The growing disparity between Coastal China Vs Inland China = creating social problems, helping extremists and junta demanding for democracy. Hence China needs to develop those 12 inland regions (mostly located in Western Part of China).

Reason #2: Defusing tension

·        Since 2011, because of South China Sea dispute, China’s relations became bitter with - Cambodia, Laos, Thailand, Malaysia and Japan. New Silk Road policy seems to be aimed at defusing tensions- via soft language and economic offer.

·        This can be seen as China’s “olive branch” to ASEAN countries.

Reason #3: Countering US + Russia

·        China wants to counter / balance following:

Ø     USA’s Pivot Policy in Asia Pacific

Ø     USA’s proposed Trans-Pacific Partnership (TPP)

Ø     USA’s support for democratic transition in Myanmar

Ø     USA’s security cooperation with Singapore, the Philippines, Indonesia, Malaysia, Thailand and Brunei.

Ø     Russia’s proposed “Customs Union” (now Crimea will give them access Black sea and Suez Canal.)

Reason #4: Strategic supply lines

·        Strait of Malacca= pirate infested waters but >80% of imports to China come from this route. China wants to secure this lane.

·        China wants to gain access to Bengal Bay and Indian Ocean = Need better relations with Myanmar and ASEAN.

(03) How to implement Maritime Silk Road?:

·        The gist of New Maritime Silk Route is

Ø     Develop port cities along the silk route

Ø     Above the wind region: Indian Ocean

·        Below the wind region: Malacca, South China Sea, Java Sea and Far East.

·        Via these port cities, link Asia and Africa with Chinese hinterland.

·        This will be implemented via 2+7 cooperation framework.

“TWO” = consensus on two issues

Strategic relation

Strategic relations with “good” neighbors. Signed strategic partnership agreements with Kyrgyzstan and Turkmenistan.

Economic cooperation

With Chillar countries in Central Asia, China signed preferential trade agreements, gave them cheap loans. Heavy investments via Chinese PSUs. Mainly in energy (oil-gas pipelines) and transport (railway, highway and ports). Joint infrastructure projects (rail-road-ports) Even proposed Asian Infrastructural Investment Bank. Its offices will be setup in the capital cities of various Maritime silk road countries.

 “SEVEN” proposals

·        Sign China-ASEAN good neighbor treaty

·        Get maximum benefit from China ASEAN FTA

·        Conclude RCEP by 2015. China led Regional Comprehensive Economic Partnership (RCEP) = the FTA between ASEAN and China, Japan, South Korea, India, Australia and New Zealand); eliminate trade barriers.

·        Regional financial cooperation (to prevent subprime/ BoP crisis) – recall that China gave maximum funding to BRICS Bank’s emergency fund against Fed Tapering.

·        Maritime cooperation- Already working on Gwadar (Pak), Hambantota (Sri Lanka) and Chittagong (Bangladesh). Proposal for Bangladesh-China-India-Myanmar (BCIM) corridor

·        security cooperation

·        People to people contact for culture, science and environment.

(04) India’s stand on Maritime Silk Road:

·        Chinese Officials discussed this with (former) NSA Shivshankar Menon and asked India to join in the Maritime Silk road (MSR) project.

·        But no decision taken

·        Presently, India has two opposite options:

Ø     Work together with China, let Chinese gain presence in Indian Ocean and reap the collateral economic benefits from this project.

Ø     Don’t work with China, and prevent Chinese influence in Indian Ocean.

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