South China Sea Geopolitics Simplified

It’s pretty much impossible to discuss the geopolitical realities of China (or Southeast Asia as a whole, for that matter) without putting the South China Sea situation in the spotlight. We can consider it a textbook “elephant in the room” case study. Or, in other words, a situation which has been complex for decades without causing acute problems but at the same time, the (economic as well as geopolitical) stakes are so high that it’s… well, a looming presence.

Why? For quite a few reasons, such as:

1. Of course, the resources which are most definitely worth mentioning, including roughly 500 trillion cubic feet of natural gas and over 100 billion barrels of oil to mention the main culprits when it comes to energy or over $20 billion as far as the fishing supply dimension is concerned (roughly 10% of the worldwide supply)
2. Trade, with previous estimates indicating that over $5 trillion in trade volume passes through the region on a yearly basis, whereas current estimates tend to be more conservative but still lie in the $3.4 trillion zone. China is, of course, the most economically interested party in this equation, as roughly two thirds of its trade volume passes through the South China Sea region, but other nations such as Japan (with over 40% of its trade passing through it) also consider the South China Sea to be of systemic economic importance
3. Even for non-neighboring nations, the South China Sea area is of vital economic importance. For example, almost 15% of the US trade volume passes through the South China Sea region
4. The vital strategic importance of the South China Sea area in the event of a military confrontation
5. The fact that the countries with a significant stake in the game consider the South China Sea dimension a core national security pillar

… whether we’re talking about economic, military or geopolitical reasons, let’s just say there is no shortage of them.

Who are the most interested players? Let’s order them based on their South China Sea export volumes:

1. China, with its roughly $900 billion in exports
2. South Korea, with approximately $250 billion
3. Singapore, not far behind, with $214 billion
4. Seven other entities, with exports in the $100 to $200 billion range, ordered from highest to lowest: Thailand, Vietnam, Japan, Hong Kong, Indonesia, Germany and Malaysia

As can be seen, the stakes are high and it just so happens that for China, they are both nominally and as a percentage higher than when it comes to the other players. This, of course, begs the question: what is China doing about it? Can a nation such as China afford to be passive when there are almost $1 trillion in exports on the line, to give just one example?

Of course not.

Just like when it comes to many other issues, be they (geo)political or economic, China plays a very calculated long-term game. There is a reason why there hasn’t been any dramatic confrontation due to issues pertaining to the South China Sea: China’s combination between being aggressive and making calculated steps. Analysts tend to refer to it as China’s “creeping expansionism” and as the name suggests, the strategy primarily revolves around making several small steps which are not important individually to be anywhere near game-changers but in aggregate, represent just that.

Almost half a century ago, China’s implication in the region was for the most part limited to relatively benign fishing-related incidents. However, one step at a time, its grip on the region became firmer. At this point, China is without a doubt the dominant entity in the South China Sea equation, with frequent man-made atolls as well as military outposts enabling it to very strictly control anything from fishing expeditions to military developments.

However, China also seems to believe that one can catch more flies with honey than vinegar. Leaving the previously-mentioned dominant measures aside, it has frequently embarked on journeys meant to not only appease potential regional adversaries but on the contrary, turn them from potential adversaries into allies. Of course, this didn’t and doesn’t come cheap. When it comes to the Belt and Road Initiative alone, China will spend as much as $8 trillion on infrastructure projects involving various countries to beef up its geopolitical profile. With other initiatives such as the Asian Infrastructure Investment Bank helping it achieve the same results, it is clear that China doesn’t mind reaching for its wallet so as to gradually get closer to its ambitions long-term goals.

Of course, it’s hard to over-simplify the South China Sea dynamic… but not impossible. At the end of the day, China’s attitude is not all that hard to understand. Whenever there is a region that is of systemic economic as well as geopolitical importance to a country that is emerging as an economic superpower and gradually building up geopolitical influence as well, it is hardly a matter of rocket science to assume the nation in question will end up with a firm grip on that region in the absence of game-changing developments.