Asia Pacific | Anticipating a crisis in the South China Sea

This assessment was issued to clients of Dragonfly’s Security Intelligence & Analysis Service (SIAS) on 5 September 2023.

• Over this time frame, Southeast Asian nations including the Philippines appear intent on countering China’s claims with the support of the US and its allies
• Any security crisis is likely to lead to only the temporary disruption of and rerouting to commercial air and maritime routes

Recent skirmishes between China and the Philippines along with the coordinated deployment of multinational aircraft carriers point to the contestation of maritime space. Large-scale multinational naval patrols are likely to become the norm there over the coming year as regional military allies look to counter China’s claims.

A short-term crisis would be likely to mean that China and other regional militaries would restrict access to some contested areas at short notice, leading to temporary rerouting for commercial air and shipping. Neither recent skirmishes nor exercises have led to any major disruption to commercial shipping. And we assess that a wider military conflict in the South China Sea is improbable over the coming year.

More vessels in contested areas

We assess that the US and its partners are likely to increase the frequency and scale of their patrols in an effort to deter China’s pursuit of its territorial claims. The US, Australia and Japan conducted joint military exercises in late August. On 4 September, the US and Philippine Navy mounted their first-ever joint patrol west of Palawan Island, according to the Philippine Armed Forces. This followed a naval standoff on 5 August near the Second Thomas Shoal, in which China used water cannons and physically obstructed a Philippine navy ship from conducting a resupply mission.

There are no indications that China will stop its naval patrols. Beijing unilaterally claims the majority of the maritime area through what it calls the ‘nine-dash line’.  For several decades, it has tried to establish de facto control by building military bases on atolls and using its civil and military ships. It sees the actions of other states’ unapproved commercial and military actions within these contested areas as undermining its own claims. And it is almost certain that China will try to continue to use its considerable naval capability to impose those on Southeast Asian nations.

China has stepped up the frequency of its patrols in recent years. According to monitoring by the Asia Maritime Transparency Initiative, a US-based think tank, in 2022 China had almost doubled its number of patrols since 2020. Most of these take place in areas claimed by Southeast Asian states. And there has been a recent flurry of activity in Southeast Asia to counter China’s claims. The Philippines has publicised recent patrols and naval incidents and installed marker buoys earlier this year in an effort to highlight China’s actions in contested areas.

Standoffs probable in the coming year

More military vessels in the area will probably lead to further standoffs over the coming year. And periods of heightened tensions are somewhat likely to impede freedom of movement in the area. Based on its established procedure, China would be likely to close some maritime shipping areas for military exercises for up to a few days. And Chinese vessels, including civilian coast guard or maritime militia vessels, would be likely to try to obstruct or try to force rival ships out of contested areas. Vessels on all sides have in the past fired warning shots, boarded, used water cannons and in some rare cases rammed opposing vessels.

Short-term security crisis leading to limited operational disruption

We assess that a short-term security crisis would be likely to lead to limited operational disruption. Such an episode would most probably involve naval standoffs and China closing some air and maritime spaces in the South China Sea. Based on recent precedent around Taiwan and the South China Sea this would be amphibious exercises and live fire drills lasting a few days. At most, this would be likely to result in commercial aviation and shipping being temporarily rerouted in some contested areas. But other actions China could take are:

• Engaging in electronic interference against commercial air traffic
• Cutting submarine data cables
• Stopping and searching rival claimants’ commercial ships
• Interfering with rival claimants’ offshore hydrocarbon projects
• Implementing coercive economic measures against rivals’ major exports or imports

Southeast Asian states would be likely to monitor and contest China’s actions in such a scenario. Several states including the Philippines, Vietnam and Indonesia appear intent on pushing back against China’s actions. On current indications, we assess that Southeast Asian claimants would look to:

• Strengthen fortifications in claimed areas
• Mount larger joint patrols together with other claimants and regional allies
• Obstruct Chinese naval vessels
• Seize Chinese civilian fishing vessels and detain crew
• Make hostile diplomatic statements about China
• Mount diplomatic protests against Chinese companies and officials

We doubt that any side would use lethal force against a rival. This is because all sides, including the US and China, appear intent on preventing any conflict in the region. And we doubt any claimants would look to block major shipping routes in such a scenario given the negative impact it would have on all claimants’ economies. That said any brief crisis would be likely to lead to a period of heightened rhetoric and diplomatic tensions between major powers in the region.

Image: Chinese coast guard ships corral one of the civilian boats chartered by the Philippine Navy to deliver supplies to the Philippine navy ship BRP Sierra Madre in the disputed South China Sea on 22 August 2023. Photo by Ted Aljibe/AFP via Getty Images.