Can China and the Philippines Save Their South China Sea Understanding?

After 18 months of intensifying incidents and an acrimonious diplomatic charade, China and the Philippines announced in July an understanding on Second Thomas Shoal, currently the most fiercely disputed feature of the Spratly Islands – and immediately contradicted each other as to what they have agreed upon. Have Chinese and Philippine negotiators merely papered over essential disagreements? It would not be the first time in the three decades-long diplomatic efforts of the South China Sea that immediate disagreement about what exactly was agreed buried a provisional arrangement. But it would also not be the first time that an understanding of a remarkably minimal scope has prevented further incidents.

While it is too early to say whether the understanding will stand the test of time, an analysis of the Philippines’ recent resupply mission to Second Thomas Shoal suggests that the understanding can, in fact, satisfy both sides’ red lines.

Spratly Island Arrangement on a Tightrope

The Philippine presence on Second Thomas Shoal, one of the Spratly Islands, rests on the BRP Sierra Madre, a rusting ship intentionally ran aground on the shoal in 1999. This vulnerable Philippine presence is constantly in need of resupply, and China’s attempts to block resupply and rotation missions have previously resulted in high levels of tension. The confrontation reached a peak on June 17, with a direct run-in between Chinese and Philippine vessels resulting in injuries to Philippine marines. Shortly after that, China and the Philippines announced an understanding on principles for Philippine resupply missions.

China and the Philippines published seemingly contradictory statements on what exactly was agreed during negotiations in July 2024 and how the understanding was put into action during the first resupply mission following the understanding. China insists the Philippines accepted two conditions for Philippine resupply missions to Second Thomas Shoal, namely that resupply is subject to prior notification and “on-site verification” by the China Coast Guard. The Philippines, however, unequivocally denies that these conditions are part of the understanding.

China also claims that the Philippines’ resupply mission of July 27, the first and so far only reported resupply mission following the understanding, fulfilled these conditions. China’s Ministry of Foreign Affairs stated that “China had been informed of the resupply before it was carried out” and the China Coast Guard confirmed “on-the-scene” that it comprised only living necessities.

The Philippines, however, pushed back against China’s description of the resupply mission. The Philippines asserted that China “mischaracterized” the resupply and rotation mission because Manila did not seek previous permission and no boarding and inspection took place.

The arrangement is therefore at risk of falling apart because the competing views on prior notification and verification have already derailed previous negotiations. A bit of flexibility and interpretative goodwill, however, can help reconcile the competing readings of the understanding.

Vessels of the Philippine Coast Guard and the China Coast Guard reportedly communicated “for coordination” on July 27. Communication between several vessels approaching a shoal is certainly in line with standards of professional conduct at sea and this reported communication may be just that – standard professional conduct. Whatever the exact nature and timing of the information exchange, it appears that it has satisfied China’s demand for advance notification.

Moreover, China’s claim to have “monitored” the resupply “on-the-scene” is arguably also sufficiently ambiguous to accommodate the Chinese and Philippine readings of the understanding and resupply mission. Videos released by the speaker of the Philippine Coast Guard show the presence of the China Coast Guard. They were “on-the-scene” but did not board the Philippine vessels. Apparently, observing the resupply mission from a certain distance has satisfied China’s demand for “on-site verification.”

More important than reconciling ambiguities about what was agreed and how this was implemented is the fact that the understanding allows both sides to maintain their publicly stated red lines on Second Thomas Shoal.

The Understanding Respects China’s and the Philippines’ Red Lines

Beijing has repeatedly stated that China will not allow the Philippines to build a permanent occupation of Second Thomas Shoal. The series of confrontations of the past 18 months have not least served to signal China’s resolve about this position. The agreed understanding, however, does not enable the Philippines to expand or fortify its presence on the shoal. To monitor whether the Philippines establishes a larger outpost on the shoal, it is not necessary for the China Coast Guard to board and inspect Philippine resupply vessels. In that sense, the understanding seems to respect China’s red line.

The Philippines’ red line is also clear. The Philippines must be able to continue the resupply and rotation of personnel to the Sierra Madre to sustain the presence on Second Thomas Shoal. This resupply cannot be subject to Chinese conditions, such as boarding and inspection of the Philippine vessels, which Manila deems as acquiescence in China’s control of the shoal. After all, Second Thomas Shoal is located on the Philippine continental shelf pursuant to the South China Sea arbitration award of July 2016. From what we know about the first resupply mission following the understanding, the Philippines’ red line has also been respected.

What Is Missing

The understanding, however, leaves an underlying source for serious tensions unaddressed. China appears to consider the Sierra Madre a temporary occupation of Second Thomas Shoal, not a permanent one. In fact, given erosion of the Sierra Madre, the Philippine presence on Second Thomas Shoal may sooner or later become untenable. This will create a dangerous dilemma for the Philippines.

What will happen when it becomes barely possible to hold out on the Sierra Madre? The Philippines then faces a choice between abandoning Second Thomas Shoal and seeing China taking control of it, or creating a new outpost, which will inevitably be resisted by China. The fear of being driven out of Second Thomas Shoal motivates the Philippines to sustain its position on the shoal. The current understanding, however, has no answer to the question of whether China would refrain from seizing Second Thomas Shoal if the Philippines was forced to withdraw.

To diffuse the underlying tensions, the following commitment is missing. China has attempted to deny the Philippines the possibility of permanently occupying Second Thomas Shoal but has not committed to refrain from seizing the shoal itself. While the Declaration on the Conduct of Parties in the South China Sea of 2002 contains a commitment not to inhabit “presently uninhabited” features, this has not prevented China from expanding its outposts on several features of the Spratly Islands or from taking control of Scarborough Shoal in 2012. Therefore, to diffuse tensions at Second Thomas Shoal in a more sustainable way than the current understanding, China needs to commit not to take possession of the shoal if the Philippines had to withdraw.

In sum, China and the Philippines have reached an understanding on a practical aspect of the currently most escalatory shoal in the South China Sea. Because the understanding remains fragile, careful public signaling is necessary to prevent the divergent interpretations of what was agreed from becoming the dominant message. This is even more important because the positions of China and the Philippines are not necessarily too far apart to keep this understanding alive.

This understanding does not threaten either side’s red line. It does not result in a vulnerability for either side or compromise either side’s position as no side can use the understanding to advance its claim. The understanding thus fulfills a condition that has been pivotal in the South China Sea’s negotiation efforts over the past three decades.