Thayer Consultancy Background Briefing:

ABN # 65 648 097 123

South China Sea: China and the
Code of Conduct
Carlyle A. Thayer
January 11, 2020

We request your assessment of the following matters:

Q1. What are the latest developments in negotiations on a South China Sea Code of
Conduct (COC)? In order to conclude the COC, what challenges do the concerned
parties need to overcome and which challenge is the biggest?
ANSWER: In October last year Vietnam hosted the 30th ASEAN-China Joint Working
Group (JWG) on the implementation of the Declaration on Conduct of Parties (DOC)
in the South China Sea and the 18th ASEAN-China Senior Officials’ Meeting (SOM) on
the implementation of the DOC in the South China Sea in Da Lat. China pushed hard
to claim that these meetings were the second of three readings of the ASEAN-China
Single Draft South China Sea Code of Conduct Negotiating Text. Vietnam successfully
blocked China and put its energies into improving the efficiency of the JWG-DOC
through greater empowerment of ASEAN senior officials.
The JWG-DOC will hold its thirty-first meeting from 4-6 February. The JWG-DOC is
scheduled to hold its thirty-second meeting in May/June followed by the nineteenth
Senior Officials Meeting on the Implementation on the DOC. It is likely that several
claimant states such as Vietnam, Malaysia and possibly Indonesia will raise concerns
over “recent developments.” ASEAN members will come under pressure by China to
speed up negotiations and conclude the second of three readings of the Single Draft
Negotiating Text.
China wants to speed up the process before ASEAN can reach consensus on a number
of outstanding issues. These include: cooperation between maritime law enforcement
agencies, military activities, geographic scope, dispute settlement, legal status, and
role of third parties.
The two most important issues are the legal status of the Code of Conduct and the
dispute settlement mechanism. A third issue involves the role of third parties who
have a direct interest in the South China Sea.
Q2. China has recently taken aggressive actions against the countries involved in the
South China Sea dispute, namely Vietnam, Malaysia, the Philippines and Indonesia. Do
China’s actions contradict China’s proposal on completing the COC within a three-year
timeline made at the 51st ASEAN Foreign Ministers’ Meeting in Singapore in August
2018?
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ANSWER: China is simultaneously pursing a dual track approach. The first track
involves continued pressure on the ASEAN claimant states to accept China’s claims
and pressure to prevent ASEAN states from forming a united front. The second track
involves diplomatic negotiations with ASEAN states on a Code of Conduct. China would
like to conclude the negotiations early before ASEAN can reach consensus on a
number of key issues.
At the same the time, the three-year time frame favours China for three reasons. First,
Rodrigo Duterte, who is a friend of China, will still be president of the Philippines.
Second, the Philippines will still be ASEAN country co-ordinator for dialogue relations
with China. China has made clear this is its preferred channel to ASEAN rather than
the ASEAN Chair. Third, the ASEAN Chair will pass from Vietnam to Brunei and then to
Cambodia. Brunei and Cambodia are unlikely to stand up to China.
Q3. Recent estimates show that China is currently facing serious domestic problems,
including instability in Hong Kong and its economic growth rate expected to drop to
below 6%. Thus, unemployment will have a negative impact on social stability. What
is the relationship between China's domestic problems and China's growing
aggression in the South China Sea?
ANSWER: Xi Jinping’s signature policy is the rejuvenation of the Chinese people after
a prolonged period of victimhood. Xi will use nationalism and Chinese claims to
“indisputable sovereignty” over the South China Sea to rally domestic support. In
other words, Xi will use the South China Sea issue to distract from domestic problems.
Xi needs to negotiate on the South China Sea from a position of strength not weakness.
Q4. In 2019, China's geological survey ships have repeatedly violated Vietnam's
sovereignty, and its coast guard vessels have hindered Vietnam's oil and gas activities
in the South China Sea. What do you think about the possibility of that scenario
recurring in 2020 when Vietnam will assume the role of ASEAN Chair and non-
permanent member of the UN Security Council? Is another scenario possible – in
which direction could it go? What measures should Vietnam take to settle South China
issues from 2020 onwards?
ANSWER: There will be no change in China’s sovereignty claims in 2020. A recent
incident between China and India in the Andaman Islands is illustrative. A Chinese ship
conducted survey activities within India’s Exclusive Economic Zone (EEZ). It was forced
to leave when challenged by the Indian Navy. China then announced it would instruct
all relevant agencies to seek prior approval before surveying in another country’s EEZ.
China has a similar policy in effect for foreign vessels in its EEZ. But in an important.
clarification, China said this policy would not apply in disputed areas.
In other words, China can be expected to conduct surveying in areas demarcated by
the China National Offshore Oil Company that fall in the area where China’s nine-dash
line overlaps with Vietnam’s legitimate EEZ. Also, if Rosneft Vietnam resumes oil
exploration activities in the Red Orchard block, China Coast Guard will surely harass
operations.
In 2019, Vietnam called on the international community for support. In 2020, Vietnam
will be on a firmer ground as ASEAN Chair and as non-permanent member of the UN
Security Council. But this will not be enough. If China resumes its intimidation Vietnam
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will have to resort to international arbitration following the example set by the
Philippines.

Suggested citation: Carlyle A. Thayer, “South China Sea: China and the Code of
Conduct,” Thayer Consultancy Background Brief, January 11, 2020. All background
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.