Is This the Year We Finally Get a Code of Conduct in the South China Sea?

When China and the 10 member states of the Association of Southeast Asian Nations (ASEAN) signed the Declaration of the Conduct (DoC) of Parties in the South China Sea in November 2002, they pledged to work toward formulating a more formal, binding Code of Conduct (CoC). As the DoC put it, “the adoption of a code of conduct in the South China Sea would further promote peace and stability in the region.”

Fifteen years later, the CoC remains beyond the grasp of regional diplomacy. However, there are reasons to think that this year might be the year a CoC finally comes to fruition. China is generally acknowledged to be the hold-out preventing such an agreement, and has often been accused by ASEAN diplomats of dragging its heels on the diplomatic process. But in 2017 the political and diplomatic stars might be aligned in just the right configuration for the benefits of a CoC to outweigh the costs in Beijing’s calculus.

First and foremost, there’s the obvious clue: in August 2016, China and ASEAN members came away from a regular meeting on the implementation of the DoC with a pledge to approve a draft framework for the CoC by midway through 2017. This goal was met with healthy skepticism from South China Sea watchers; there has been so much talk – and so little action – on finalizing a CoC that most analysts are wisely taking the attitude of “I’ll believe it when I see it.” Yet while the mid-2017 target is far from a hard deadline, negotiators – including China’s representatives – would not have put it on the table if it didn’t seem realistic.

So what makes 2017 – unlike every other year since 2002 – a good year to conclude a CoC from China’s perspective? For one thing, China has a stronger bargaining position now than it has had in some time, thanks to the new administrations of Rodrigo Duterte in the Philippines and Donald Trump in the United States.

Duterte has turned the preceding Aquino administration’s diplomatic playbook on its head. Instead of challenging China on the South China Sea and bolstering the U.S. alliance, Duterte is criticizing the United States and strengthening ties with Beijing. As a result, the Philippines, previously one of China’s most strident critics on the South China Sea issue, is now willing to put the disputes on the backburner. That honeymoon likely won’t last forever; nationalism in the Philippines runs as deep as it does in China, and Duterte overlooks that to his own peril. But for now, Beijing can take advantage of favorable political winds to lock in a CoC that meshes well with China’s interests in the region.

In fact, as luck would have it, the Philippines holds the ASEAN chair for 2017, so Manila will have more sway than usual in setting the terms for negotiations. By contrast, the 2018 chair – Singapore – has generally been one of China’s tougher critics (despite not being a claimant in the dispute). Plus, Duterte has already intimated that he’d like to see a CoC concluded this year, and Philippine officials have made clear doing so is at the top of the agenda for this year’s ASEAN Summit.

It would be a nice feather in Duterte’s cap for a long-awaited deal to be struck on his watch, and Beijing may look to reward him for his willingness to play nice. A CoC is also not a bad trophy for Chinese President Xi Jinping himself to collect ahead of this fall’s National Party Congress, which will set the stage for Xi’s second term as Party secretary-general.

Meanwhile, the new Trump administration in the United States has the rest of ASEAN concerned about U.S. retrenchment. With the United States’ support now in question, the other three ASEAN claimants – Vietnam, Malaysia, and Brunei – may be willing to strike a deal that tilts toward Beijing rather than forgo a CoC altogether. Vietnam in particular pledged to work constructively with China on the South China Sea issue during Communist Party of Vietnam Secretary General Nguyen Phu Trong’s visit to China. The joint communique issued during his visit also included boilerplate language on striving for the early completion of a CoC. According to Vietnamese experts, the visit overall served as a “reset” of the relationship with China, and thus a signal of friendlier faces in Hanoi.

While the political situation in Southeast Asia is more favorable toward China than it has been in years, China’s own ambitions also provide a strong case for securing a CoC. China’s recently issued white paper on Asia-Pacific security cooperation (addressed in more detail by The Diplomat’s Ankit Panda later in this issue) reinforces Beijing’s favorite theme: that Asian countries (led by China, naturally) should decide amongst themselves how to handle Asian security issues and set Asian rules.

“International and regional rules should be discussed, formulated and observed by all countries concerned, rather than being dictated by any particular country,” the white paper said. If China wants to put its money where its mouth is, it will need to actually start “discussing, formulating, and observing” new rules – and a CoC, which has been in the works for well over a decade, is the best place to start. A completed CoC would give China a tangible accomplishment in rule-making and norm-setting – and, as an added bonus, without the United States involved. China has long insisted that Asian countries are capable of handling the South China Sea issue without external “interference” (read: U.S. input). Again, if Beijing wants to prove that assertion true, finalizing a CoC is an important step.

Meanwhile, concluding a CoC would further help wash away the bad taste left by China’s refusal to recognize (much less comply with) a damaging international ruling on its South China Sea conduct. Once a CoC is in place, Chinese officials can plausibly claim these regional rules, hammered out with Beijing’s input and incorporating China’s red lines, supersede the broader international rules laid out in the UN Convention on the Law of the Sea. China has already tried this tactic with respect the non-binding DoC, arguing that the Philippines’ right to invoke outside arbitration (as laid out in UNCLOS) was forfeit thanks to a clause in the DoC stating that all parties “undertake to resolve their territorial and jurisdictional disputes by peaceful means… through friendly consultations and negotiations by sovereign states directly concerned.”

Finally, to be cynical, China already has most of what it wants in the South China Sea – largely uncontested use of the waters by its military, coast guard, and civilian assets (notably fishing vessels), bolstered by new military-capable facilities on artificially constructed islands. Having strengthened its position notably over the past four years, China is in a better position to agree to limits, or even a freeze, on activities like construction and land reclamation in the future.

In fact, Beijing could also gain much needed goodwill in ASEAN by offering minor concessions now – for example, agreeing to allow all claimants to fish in disputed waters. That would be welcome news for Southeast Asian claimants, who often see their fishing fleets muscled out of the area by Chinese vessels, but it would also satisfy China. Cementing China’s right to fish, even if only alongside everyone else, in the far reaches of the South China Sea would help legitimize China’s concept of these waters as its “traditional fishing grounds.”

There’s still no guarantee that a CoC will actually come to fruition this year, but the signs are more hopeful than we’ve seen so far. However, the larger question of whether a CoC, particularly the watered-down sort likely to be agreeable to Beijing, would actually help ease tensions in any meaningful way remains unanswered.