Following the enlistment of Chinese companies under sanctions by the US for involvement in SCS for reclamation of islands, there has been increasing pressure on Chinese establishment for course correction. In total, about twenty-four Chinese companies, and their management individuals have been listed under the US sanctions. These 24 companies have been placed in the sanctions list, and the US companies are barred from entering into any trade or investment dealings until unless they have specific permission from the US government. This effectively means that any transfer of technology, software, and associated agreements will be presumed as denied from the US government.
One of the critical companies which will be majorly affected and has been engaged in infrastructure projects such as ports development and highway construction would be China Communications Construction Company(CCCC) which has been involved in more than 80 projects across the world. These sanctions have been complimented with visa denial and restrictions on Chinese individuals who are responsible and are directly involved in the large-scale reclamation, construction, or incremental militarization in the disputed seas. The visa restrictions have been comprehensive, and includes individuals and their immediate families.
Following this US response to the Chinese island reclamation activities, NATO countries such as France and Germany have already outlined their Indo Pacific strategy and have try to take cognizance of the fact that island reclamation and militarization in the South China Sea would be detrimental to their interests in the region. The US sanctions on the Chinese companies would have comprehensive impact as many other nations which would be doing business with this companies would be apprehensive of collateral impact from US, in case they engage these companies in the long term projects in their countries.
Closely following the NATO partner Germany, the UK and France have also made a representation to the UN in the form of a note verbale submitted to the UN on 16th September on the developments in South China Sea. This buttresses the Malaysian representation made to the UN in December 2019 related to the commission on the limits of the continental shelf. This note verbal also reposes faith in the United Nations Convention on the Law of the Seas (UNCLOS) as the framework under which the activities related to the oceans and the seas must be addressed.
The provisions of UNCLOS resonated under the PCA ruling on the issue of Philippines and China dispute related to contested islands in South China Sea. The PCA ruling had adjudicated that the UNCLOS should be the reference for resolving disputes related to maritime zones, territorial seas, and defining the Exclusive Economic Zones (EEZ)of the islands which are uninhabitable. Given the fact that France and the UK are the permanent members of the UN Security Council while Germany is a UNSCaspirant, this note verbalegains significance in the current context. This also reinforces the fact that Indo-pacific would be the epicenter of development in the region and in order to safeguard their interests the European countries cannot ignore intimidating tactics adopted by the China at the sea.
While it is understandable that France has a number of territories in the Indo-Pacific region which comprise more than 80 per cent of its total EEZ but Germany taking an anti-China stance shows shifting priorities. Germany foreign minister during press briefing has expressed that Germany would like to work together with the countries in the Indo Pacific region and would be a participant in the rules based order. The three countries -the UK, France, and Germany are critical in pressurizing China to adapt to the international regulations related to the law of the seas and must acknowledge that freedom of navigation, overflight, and the right of innocent passage are the legitimate rights of the littoral countries as well as extra regional powers which have trade and commercial interests in the region. The US has not acceded to the UNCLOS but the three countries have acceded to it. It is also seen as the fact that the US is trying to galvanize NATO countries in support of its initiatives and military deployments in the South China Sea. The three countries also have extensive business and trade interest in the region, and have trade relations with Korea, Japan and Taiwan. Therefore, increasing tensions in the South China Sea would increase their freight costs as well as insurance costs. This would make their exports expensive and would affect the market dynamics.
The increasing resistance to Chinese assertive activities started in in December 2019 when Malaysia made a representation to the UN about the extended continental shelf. This has been supported by identical representations and statements made by littoral countries of South China Sea which included Vietnam, the Philippines, Indonesia and even a public statement by Brunei. The US also made a strong rejoinder to the case and extended support on major issues that have been highlighted by the various countries include the issue of baselines, the low tide elevations of the rocks, islets and uninhabitable islands, and the issue of Chinese concocted history which is in contravention to the established international order.
In response to these submissions made by the three European countries, China has stated that it treats the UNCLOS as an established order but abhors its use as a political tool. Citing reservations to the UNCLOS, it has stated that it does not cover everything related to the maritime order. Citing paragraph 8 of the UNCLOS it has stated that “matters not regulated by this convention continue to be governed by the rules and principles of general international law”. This clearly means that China wants to derive new meaning which suits its own interests and reclamation activities in the South China Sea. The UNCLOS has made it very categorical that parties which have acceded to UNCLOS must comprehensively and correctly interpret the rule of the law of the seas. In its representation China has stressed that it has a long history, and the Chinese governments under different leaders have expressed their sovereign rights on the islands in the South China Sea. In the submission China has completely castigated the PCA ruling of July 2016, and stated that the sovereign rights of China on those disputed islands cannot be prejudiced by the illegal awards made under any arbitration or ruling .The biggest irony in the statement is the fact that it believes that UNCLOS is not effective neither implementable in the context of South China Sea but China claims that territorial baselines related to the islands and rocks are in conformity to the provisions of UNCLOS; clearly showing the dichotomy between conditional acceptance and comprehensive selective utility.
The long response that China has made with regard to submission by the three European countries clearly highlights the fact that China is under pressure to accept legal provisions and maintain law and order at the sea. In the letter in response to these representations, China has made it very clear that it is making sincere efforts through friendly consultations with the ASEAN countries. The representation made by UK, Germany and France has brought about an international dimension to the whole issue. In total the number of countries which have raised objections to China’s reclamation activities have increased to more than 10 countries which have been seen as regional powers and have clout in the UN.
This also empowers Vietnam which is the current chair of ASEAN to undertake wide-ranging discussions on the topic during the summit meetings and in a way coerce China to undertake effective course correction measures. The hyperactivity which China has shown with regard to Taiwan, and military exercises in the South China Sea, have brought about international attention and raised serious concerns with regard to the developments in the region. The US exercises has been matched by China with undertaking surveillance sorties, scrambling of advanced fighter jets and infringing on EEZ of littoral countries. Therefore, it requires effective countermeasures as well as international condemnation of the Chinese activities. One can very well understand the fact that with China being at the receiving end of the international criticism in the wake of the coronavirus and subsequent domestic dissent shows that China would try to rake up hyper nationalism so as to protect President Xi from stigma. However, with majority of UNSC members expressing dissent the pathways for China are going to get tough in future.