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Tensions in the South China Sea may escalate when an international tribunal rules on China’s maritime claims. Europe may feel far removed from the conflict, but European involvement and transatlantic coordination could be instrumental in defusing the dangerous Situation.

Friction in the South China Sea shows no sign of abating as China continues its military build-up. The situation could further escalate when an international tribunal rules on a case brought by the Philippines after decades-long negotiations over territorial disputes with China had reached a dead end. A tense months-long standoff with China over fishing grounds around Scarborough Shoal in 2012 triggered Manila’s decision to seek outside help.

The tribunal, which was constituted under the United Nations Convention on the Law of the Sea (UNCLOS) at the Permanent Court of Arbitration in The Hague, will reportedly issue its ruling in May. It will consider whether certain maritime features in the South China Sea are ‘islands’ or ‘rocks’ – a decision which has implications for rights to maritime zones in the surrounding sea.

Potentially, the international judges will also decide on the legality of Chinese interference with Philippine fishing and exploitation of seabed resources, Chinese occupation of various reefs and artificial island building, and the so-called ‘nine dash line’, which China uses to demarcate its ‘historic rights’ in the South China Sea. 

China has made it clear that it plans to ignore the ruling, as it rejects the tribunal’s jurisdiction. Should the court rule in favour of the Philippines, Beijing might be tempted to take provocative, if not aggressive, action to reassert its claims. China’s neighbours should prepare for this contingency, as should the transatlantic partners. While Europe, unlike the US, may not have an obvious stake in the region, it could play a substantial role in defusing ever-heightening tensions.

Different approaches, common goals

Due to its status as a pacific power and its security partnerships in the region, the US monitors Chinese activities closely. Its assertive approach is symbolised by the so-called “freedom of navigation operations” (FONOPs). Washington uses these operations to counter what it considers excessive Chinese demands, for example that warships’ innocent passage through territorial waters would require prior notification or that no military exercises may be held in another state’s Exclusive Economic Zone. The US government and military officials have urged other nations to join these efforts, and American experts have even called for European participation in these operations.

Viewed from Europe, which has a very limited military presence in the region, the increasingly tense standoff is far away. At a recent law of the sea conference at the Japanese-German Center Berlin all sides said they recognized China’s challenge to international norms and security and called for compliance with the upcoming ruling.

At the same time, representatives of the German foreign ministry expressed scepticism towards European participation in US-led FONOPs, arguing that the EU lacked the US’s alliances and capabilities in the region. They also argued that such operations would neither stop Chinese land reclamation nor make China respect international court rulings. The former head of the German Federal Intelligence Service (BND), Ernst Uhrlau, spoke of a ‘frozen conflict’.

These statements mirror arguments exchanged at a recent MERICS China Dispute with experts from the Brookings Institution in Berlin as well as at a recent policy workshop at Chatham House in London. Policy-makers on both sides of the Atlantic perceive their interests and capabilities in the region quite differently. While the US is acutely aware of the strategic challenge Beijing poses, European policy towards China and Asia is mostly driven by economic and trade issues.

Another difference is that European policy-makers are more confident than their US counterparts that certain problems will resolve themselves over time. German experts predict that China will change its position on ‘freedom of navigation’, just as the USSR did. Once a state has a navy capable of projecting power globally, it tends to reject restrictions on innocent passage and military trainings. Meanwhile, German diplomats expect that further economic interdependence will lessen the chance of escalation. Both predictions, however, relate to long-term trends and leave open the question as to how open conflict can be avoided in the short-term.

Europe can help to buy time and build trust

Experts in all these forums agreed that closer transatlantic coordination is needed to address the tensions in the South China Sea, which presents a number of serious challenges to international legal order and security. Not only will China reject the tribunal’s ruling, but Chinese land reclamation and artificial island construction will continue as well. Potentially, China will also position oilrigs permanently in disputed waters, and will station coast guard ships and start land reclamation in other currently empty atolls. It might even denounce and withdraw from the UNCLOS.

As these complex issues cannot be solved overnight, it is important to buy time and prevent the situation from escalating. Precisely because it can carve out an independent position that can complement American efforts, but is not part of them, Europe could be well positioned to influence China’s behaviour through a mix of deterrence and engagement.

European leaders have to make it clear that China’s attempts to create facts and its refusal to comply with international tribunals’ decisions are inacceptable. On the other hand, European policy-makers should urge the US to ratify UNCLOS pointing out that its non-ratification is a major obstacle for closer transatlantic cooperation. Brussels and Washington could work together in a reinforced lobbying effort to support the adoption of a ‘Code of Conduct for the South China Sea’. China and ASEAN states declared their intention to bring about such a document in 2002, but it never materialised. Success on this issue could help build trust and calm matters, while the solution of underlying legal disputes could be tackled later on.

Europe could consider certain types of military aid

Parallel to these efforts, European governments could consider a much more controversial step. They could give tacit political backing to their defence companies’ exports to ASEAN naval forces. The potential impact might appear limited in light of China’s enormous defence budget, but the mere presence of sophisticated weapons systems certainly influences cost-benefit analyses in Beijing.

Secondly, they could consider the example of Japan, which already uses development funds to help the sale of sophisticated radar systems, surveillance aircraft and multirole response and patrol boats. Such an approach would certainly be highly controversial in Europe. But a new OECD definition of overseas aid could show a way out. Donors can now include certain types of military aid, such as training on disaster preparedness and “countering violent extremism” towards their international commitment to increase overseas aid. European funding of such programs would free up ASEAN states’ budgets to increase their naval deterrent.

Finally, Europe and the US should make space for rising powers in existing institutions in order to preserve the international order. Transatlantic partners should encourage the inclusion of a greater number of Chinese judges, arbitrators and other staff at international tribunals to increase China’s trust and feeling of ownership. They should at least be open to discussions about UNCLOS reform and actively seek out Beijing’s input.

Applying such a multi-pronged approach could not only open new channels for transatlantic cooperation, but it could also tip the scales in Chinese policy calculations.