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South East Asia: The Future of Power within the South China Sea

Eric M. Burlingame

Norwich University

SOCI406A AREA STUDIES

Abstract

The area of the South China Sea is one of the most contestedregions in the world, with six countries claimingsovereignty over portions of the sea and China-Taiwanclaiming sovereignty over all the region. Compoundingcomplicated issues related to geographic sovereignty and theLaw of the Sea are requirements for economic growth andsustainment influenced heavily by the varied demography andgeology of the region. Along with these issues is therequirement of the countries within the region to balancethe rising local power of China against the distant superpower of the United States. All of which is exacerbated bythe possible mineral and oil and natural gas reserves yetundiscovered in Deepwater, reserves which have the potentialto provide the low-cost local energy critical to continuedeconomic expansion of China and her seven neighbors in theregion. This paper will provide insight into the interplaybetween sovereignty, natural resources, demography and powerwithin the area of the South China Sea and provide

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projections as to the possibility of limited or general warin the region.

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I. INTRODUCTION

“Resolution of claims of sovereignty and access in this area has beencomplicated by uncertainties regarding the potential economic value of thenatural resources (fisheries, minerals, oil and natural gas) to be found in theSouth China Sea, and by the changing interests and ambitions of thesurrounding states.” (Antrim, 2013)

Uncertainty as to sovereignty, resulting in competing claims

to most all of the features in the South China Sea (SCS), has led

to the establishment of garrisons and human settlements on barely

or uninhabitable features in order to justify legitimacy of

claims, and has led to open conflict between China and the

Philippines and China and Vietnam. Geographically, the SCS is

bound by China and Taiwan to the North, the Philippines to the

East, Brunei, Malaysia and Indonesia to the South, and Vietnam to

the West, and contains five major groups of features, the Pratas,

the Macclesfield Bank, the Paracels, the Spratlys and the

Scarborough Shoal. While China and Taiwan together (China-Taiwan)

claim the Pratas and Macclesfield Bank, the Paracels are claimed

by China-Taiwan and Vietnam, the Spratlys are claimed by China-

Taiwan, Vietnam, Malaysia and the Philippines, though some

features reside within the exclusive economic zone (EEZ) of

Brunei, and finally the Scarborough Shoal, north of the Spratlys

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within the EEZ of the Philippines, are claimed by China-Taiwan

and the Philippines.1

Though on the surface the root of these conflicts would

appear to be simple and related to uncertain sovereignty rights

resulting from the unique geography of the region and to historic

versus modern claims to ownership, beneath are the interwoven

complexities of changing demographics, domestic and regional

natural resource and energy reserves, economic expansion rates

and necessities, and national power and power projection.

“Motivated by security concerns and economic interests, littoral

states began in the late 1950s to make overlapping sovereignty

claims to SCS islands. The SCS however, did first attract

international attention in the 1970s when geological studies

suggested the possibility of large petroleum and natural gas

deposits beneath the seabed. The littoral States have since

engaged themselves in a complex web of competing claims to island

territories, maritime jurisdiction and access to fisheries.”

(Gjetnes, 2000) While competing claims and associated conflicts

within the region have remained relatively modest, this has the

1 Gjetnes, Marius. The Legal Regime of Islands in the South China Sea. Oslo: University of Oslo - Department of Public and International Law, 2000. Print.

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potential to change in the very near future. A 2010 U.S. Geologic

Survey of the SCS stated the 23 provinces of southeast Asia could

contain as much as 21.6 billion barrels of oil and 299 trillion

cubic feet of undiscovered natural gas,2 while in contrast, “[i]n

November 2012, the Chinese National Offshore Oil Company (CNOOC)

estimated the area holds around 125 billion barrels of oil and

500 trillion cubic feet of natural gas in undiscovered

resources...” (U.S. Energy Information Administration, 2013)

Regardless of whether U.S. or Chinese estimates prove to be

closer to correct, the potential for yet untapped energy reserves

within the area of the SCS poses a real potential for the near-

term escalation within the region of conflict into war.

While untapped oil and natural gas reserves have accentuated

sovereignty issues related to the SCS and its many, mostly

uninhabitable features, the changing demographics and economics

of China and its Association of Southeast Asian Nations (ASEAN)

neighbors within the SCS is also contributing greatly to the rise

in conflict. Historically, with the exception of Vietnam and

Thailand, southeast Asia was a sparsely populated region of

2 Schenk, Christopher J et al. Assessment of Undiscovered Oil and Gas Resources of Southeast Asia, 2010. Washington, D.C.: United States Geological Survey, 2010. Print.

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dispersed ethnic and cultural groups posing no threat to the

dominate local power, culture and economy of China, however, by

the end of the first decade of the 21st century the combined

populations of the ASEAN states had risen to just over 616

million, or roughly half that of China. And while China’s economy

had returned as the largest in Asia at $8.3 trillion, the

collective economy of ASEAN also rose to a level roughly a

quarter of China’s at $2.3 trillion.3 Looking forward, with a

population projected to be 1.6 billion and an economy of $53.856

trillion by the middle of the century as opposed to 785 million

and $9.24 trillion4 for the ASEAN states, China would seem to

have the obvious advantage in Asia and the SCS into the distant

future. However, “[b]y contrast with some of its neighbours in

Asia, Southeast Asia has a relatively young population, which

gives it an advantage in terms of economic growth prospects as it

has a large and growing labour pool. This is particularly the

3 “ASEAN (Association of Southeast Asian Nations), established in 1967, is a largeeconomic bloc in Asia. Comprising 10 countries – Brunei Darussalam, Cambodia,Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Philippines,Singapore, Thailand and Vietnam –, the region boasts a population of over 600 million(chart 1), roughly half that of China’s or India’s and around 9% of the world’s total.ASEAN’s economic weight is also substantial, with a GDP of USD 2.3 trillion in 2012 –around 30% the size of China’s, roughly the same size as that of the UK and 25% largerthan India’s. Its GDP accounts for 3% of the world’s total.” (Deutsche Bank. 2012)4 JCER. World Economic & Population Outlook 2006-2050. Japan Center for Economic Research, 2012. Print

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case for the Philippines, Cambodia, Lao PDR and Indonesia. Across

the region as a whole, the median age is 27 compared with 45 in

Japan and 35 in China.” (Birol, 2013)

In addition to an aging population and mostly expended

youthful demographic bulge, China is faced with a dramatic male-

to-female imbalance and massive internal structural banking and

financial issues. When combined with the global financial crisis,

these demographic and structural issues have collectively lead to

a reduction in China’s GDP growth from 9+% per year to 7+%, with

GDP expansion rates projected to be even lower over time. These

interrelated forces means China is faced with an absolute need to

obtain low-cost energy to lessen rising tensions and open

conflict with its own population. The SCS nations on the other

hand, excepting for Vietnam with an aging population, are working

with more balanced male-to-female ratios and are just coming into

their youthful demographic bulges. This demographic divergence

between China and the ASEAN region means that though China’s

economy will continue to expand, the far greater portion of those

energies will be directed inwards towards programs that care for

the elderly and address internal strife by creating jobs through

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conversion to a consumption economy and through expansion China’s

military. In contrast, the energies of the remaining SCS nations,

while also emphasizing job creation, will focus externally with

efforts being directed towards exports through further regional

and international economic expansion, with some job creation

through expansion of military capabilities.

All of this adds to the following that,

“[i]f island and maritime claims in the South

China Sea are not resolved in the near future, there

exist four potential long-term outcomes. First,

political uncertainty may discourage all commercial

development of energy resources, and competing coast

guards may deter significant fishing activities.

Second, limited development activities may take place

under state military protection. Third, the regional

states may reach an agreement on an interim joint

development regime while retaining their jurisdictional

claims. Fourth, disputes may spiral into armed

conflict.” (Antrim, 2013)

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Despite a well-documented history extending back over four

thousand years, the current confluence of influences now

confronting China, both internally and externally, is unlike

anything ever before experienced in human history. As such,

current and traditional models for identifying intentions from

signals, related to whether China will use force to defend its

claims to portions of or the entirety of the SCS, are inadequate.

New models must be built in order to both correctly identify

intentions and likely outcomes and to plot appropriate responses.

This paper will begin with a discussion of the geology and

natural resources and many overlapping sovereignty claims within

the SCS to be followed with a discussion of the changing

demographics within the region with the aging of China and

Vietnam set against the youthfulness of the ASEAN SCS nations. In

the final two sections the changing economics of the region and

China will be highlighted leading to projections for energy

demand within and across the nations which border the SCS. The

final section, drawing upon the information in the previous

sections as inputs for a more holistic ‘intentions’ model, will

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provide projections as to the future potential for armed conflict

within the SCS.

II. SOVEREIGNTY & GEOLOGY

“The U.S. Energy Information Administration (EIA) projects total liquid fuelsconsumption in Asian countries outside the Organization for EconomicCooperation and Development (OECD) to rise at an annual growth rate of 2.6percent, growing from around 20 percent of world consumption in 2008 to over30 percent of world consumption by 2035. Similarly, non-OECD Asia natural gasconsumption grows by 3.9 percent annually, from 10 percent of world gasconsumption in 2008 to 19 percent by 2035. EIA expects China to account for 43percent of that growth.” (U.S. Energy Information Administration,2013)

Though there are the inevitable issues related to

sovereignty and rights in the SCS resulting from close proximity

Image #1: Claims in the South China Sea

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of nations and shared

coastlines, the greatest

potential for conflict

relates to the many islands,

reefs, and other features

beyond national coastlines

and EEZs, the status of most

all of which are in question

on multiple levels locally and internationally. In particular,

the uncertain legal status

of these features and the

mineral and fishing rights

derived as a result of

sovereign ownership is the

root cause of many of the

current and projected

conflicts in the region. This is due to the fact that as the

greater portion of the world’s energy demand shifts to Asia,

what is at stake is the potential for massive oil and natural

gas reserves and other untapped deposits of deep sea mineral

Image #2: LNG Trade Flows

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wealth5. “Oil exploration, especially if it results in major

finds or progresses to active exploitation, is the most likely

catalyst for conflict today. It is important to note, however,

that even if no major oil deposits are confirmed, the mere act

of exploration could trigger conflict, since such activity could

be seen as a direct challenge to another claimant's

sovereignty.” (Cossa, 1998)

In addition to access to substantial but rapidly depleting

fish stocks, seabed minerals and Deepwater oil and natural gas,

at stake is free trade, not just within the region but across the

world, as greater than 50% of the world’s goods and oil and

natural gas transits through the SCS. The United States, mostly

through its forward deployed units in South Korea and Japan and

through the projected power of the U.S. 7th Fleet, has committed

to ensuring freedom upon the seas. However, “[i]n 1958, the

[People’s Republic of

China] PRC issued a

"Declaration of Territorial Sea" that extended China's

territorial sea to 12 nautical miles (NM) and claimed the

5 Which does not account for the additional benefit of substantial, though rapidly depleting, fish stocks.

Image #3: Crude Oil Trade Flows

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territory (and

corresponding 12 NM

territorial seas) of

the Spratly (Nansha)

Islands, Taiwan, the

Paracels, Macclesfield

Bank, and the

Pescadores. In 1992,

the PRC’s "Law on the

Territorial Waters and

their Contiguous

Areas" added 24 NM

Contiguous Zones, and

reiterated the claims of the 1958 Declaration, and additionally

claimed the Senkaku islands east of Taiwan. It also authorized

the use of military force in defending these claims.” (Cossa,

1998)

The 1958 ‘Declaration of Territorial Sea’, and the 1992 ‘Law

on the Territorial Waters and their Contiguous Areas’6, which

6 “…in 1992, the Chinese legislature enacted a "Law on the Territorial Waters and their Contiguous Areas" which specifically authorized the use of force in defending

Image #4: China ‘nine-dash-line’

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identified large portions of the SCS to be under China-Taiwan

sovereignty where augmented in 2009 by the delivery of the ‘nine-

dash-line’ map to the United Nations (U.N.), with which China-

Taiwan claimed sovereignty over all of the SCS. China-Taiwan’s

tenuous claim to the entire SCS, including portions within

Japan’s territorial waters, is supposedly based on a five hundred

year old Ming Dynasty map, ancient court records and the language

of the 1943 Cairo Declaration, accepted by Japan at surrender,

and reiterated in the 1945 Potsdam Declaration.7 However,

delivery to the U.N. of the ‘nine-dash-line’ map, which in 1947

was the ‘eleven-dash-line’ and since 2009 has expanded to the

‘ten-dash-line’, has resulted in formal protests filed with the

U.N. by Japan, the Philippines, Vietnam, Indonesia and Malaysia.

China-Taiwan’s claim to all the SCS, based on the now ‘ten-dash-

line’ map, has been disputed not only by her SCS neighbors but by

Japan, the U.S. and is highly unlikely to be supported by the

U.N. with its opinions being based on the United Nationsand enforcing China's broad sweeping claim over all the island territories in the South China Sea.” (Cossa, 1998)7 China declared in 1941 that all contracts and treaties with Japan were abrogated.This was followed in 1943 by the Cairo Declaration which stated Japan would bestripped of all islands in the Pacific it had seized or occupied since the First WorldWar, as well as all territories taken from China, to include Formosa and thePescadores. Following the surrender of Japan in 1945, in the Potsdam declaration,Japan committed to the language of the Cairo Declaration.

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Convention on the Law of the Sea (UNLCOS) which contains precise

language regarding historical claims8.

Regionally and

internationally what is in

question is more than the

China-Taiwan claim itself

but also the legal status

of the mostly uninhabitable

rocks and features which

make up the features and

disputed island chains. The legal status of the many rocks and

features themselves has also not been answered, with respect to

whether these rocks and features benefit from the same EEZ,

continental shelf and other territorial rights as do habitable

islands and coastal regions. Despite this uncertainty as to the

rights derived from sovereign ownership and possession, China is

not the only nation in the region to establish structures, for

military or civilian habitation and garrison. The Philippines and

8 For an in-depth understanding of the legal issues involved, see: Gjetnes, M., 2000.The Legal Regime of Islands in the South China Sea. University of Oslo.

Image #5: Provable & Probable

Reserves

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Vietnam have also based troops and moved civilians to rocks and

islands in order to stake claim. China is however the only nation

to use island building technology to further its claim to all of

the SCS, this despite the fact that according to the, “…1982

Convention on the Law of the Sea: Artificial islands,

installations and structures do not possess the status of

islands. They have no territorial sea of their own, and their

presence does not affect the delimitation of the territorial sea,

the exclusive economic zone or the continental shelf,” and that,

“Article 121.3 of the [Law of the Sea] LOS Convention identifies

a subcategory of islands that do not generate extended maritime

zones…“[r]ocks, which cannot sustain human habitation or economic

life of their own, shall have no exclusive economic zone or

continental shelf”.” (Gjetnes, 2000)

While China’s original 1943 and 1952 claims to sovereignty

may have been based on history, national pride and a heightened

sense of national security requirements, China-Taiwan’s 1992 and

2009 claims are most certainly based on the fossil fuel reserves

of the SCS. This is due to the fact, “[t]he South China Sea

offers the potential for significant [oil and] natural gas

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discoveries, creating an incentive to secure larger parts of the

area for domestic production.” (U.S. Energy Information

Administration, 2013) Staking claim to sovereignty to the

totality of the SCS provides China-Taiwan with means by which to

obviate the many legal rulings required to address the unique

geography of the region, in which most of the

undiscovered/unproven oil and natural gas reserves are either in

the surround of lifeless rocks and features falling within the

territorial waters of more than one nation or in Deepwater.9

Regardless the immense divergence in U.S. and China-Taiwan

projections with respect to undiscovered fossil fuel reserves in

the SCS, there is still more than enough for China-Taiwan to

pursue aggressive defense of their claims.

Given that access to the potentially substantial untapped

reserves of local, low-cost energy is driving much of the ongoing

conflict over sovereignty in the SCS, and leading to what appears

to be an arms race across the region, those factors related to

9 “Overall, the assessment indicates that (1) more than 90 percent of the undiscoveredoil and gas resources are offshore, and (2) there is more than twice as muchundiscovered gas resource (298,761 BCFG, or 49,794 MMBOE) than undiscovered oilresource (21,632 MMBO) in the provinces of southeast Asia using a barrels of oilequivalent conversion.” (Schenk et al., 2010)

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energy demand and consumption must be taken into consideration in

any model designed to predict the likelihood of war in the

region. In particular, the opposite demographic trends in the

region, with China rapidly leaving its youth fueled advantage

while the ASEAN states are just entering their youth fueled

advantage, and the economic futures these trends represent, must

be clearly identified, with energy demand derived from economic

and social factors providing for the ability to determine

military and other non-obvious implications for the model.

III. IMPACT OF DEMOGRAPHY

“Although population growth in Southeast Asia has slowed and is likely toapproach zero sometime in the mid- to late twenty-first century, the legacy of thetwentieth-century’s growth eras has created huge national populations in manycountries in the region. This is particularly important in the international contextwhen the earlier modernization of Europe (and the West, more generally)sparked demographic transitions in the early twentieth century and much slowerpopulation growth in economically advanced regions. Large populations,especially poor ones with little human capital, are not considered to be aneconomic or even a military resource in the modern world. However, morepervasive and low-cost transportation and communications systems mean thateven distant populations can be considered as potential workers and customersfor international businesses. The increasing international prominence ofSoutheast Asia is partially due to its growing demographic weight.”(Hirschman & Bonaparte, 2012)

As with the Middle East and North Africa (MENA) with a

median age of 15-2410, and Sub-Saharan Africa (SSA) with a median10 Roudi, Farzaneh. Youth Population and Employment in the Middle East and North Africa: Opportunity orChallenge. United Nations Expert Group Meeting on Adolescents, Youth and Development,2011 Print

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age of 19.711, the ASEAN region, including those nations

bordering the SCS, is one of the most youthful regions in the

world, and unlike MENA and SSA which are greatly hindered by

violent conflict, lack of investment and disease, ASEAN is in a

position to exploit a positive demographic dividend with a median

age of 23.112. This is in stark contrast to the fact, “[t]he

demographic dividend China enjoyed over the past 30 years—

especially in 1980-2000—is now largely exhausted”13. (Wang, 2012)

Not only has China surpassed its youth fueled economic advantage,

it is projected that by 2055, China’s elderly population will

exceed that of North America, Europe and Japan combined, with one

quarter of China’s then 1.38 billion population over the age of

6514. Partially due to an aging workforce and partially due to

rising labor and production costs resulting from inflation, China

11 Janneh, Abdoulie. General Debate on National Experience in Population Matters: Adolescents and Youth. UNEconomic Commission for Africa, 2012. Print12 Excepting Vietnam with a median age of 29.2 years. CIA Factbook. Online13 China’s median age as of 2012 was 36.7 years. CIA Factbook. Online14 Kochhar, 2014. 10 Projections for the Global Population in 2050. Pew Research Center. Online

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is faced with rising unemployment15, while the ASEAN region is

realizing substantial gains in employment.

Additionally, while China has most certainly accomplished an

extraordinary feat of raising hundreds of millions out of poverty

in a single generation, there remain as many as 700 million16 who

are yet to benefit from the ‘China Miracle’.17 And the inevitable

inflation in the cost of labor within China as its overall

economy expands is itself greatly negatively impacting the rate

at which employment within China grows to provide opportunity to

those remaining 700 million. This is in stark contrast to the

ASEAN states with much younger, expanding and lower cost labor

forces. In addition to the expanding need for low-cost energy

required to offset labor and production costs in order to

continue to expand its employment base, China is also

increasingly faced with the need to provide services to an aging

15 “…China’s official unemployment rate has hovered at approximately 4% for the pastfew years, true unemployment in China may be 12–20 percent: because unemploymentfigures apply only to those who are formally registered in the hukou system, China’sfloating population (269 million), is excluded from unemployment figures. Comprisingjust 6 percent of the population in 2000, the floating population grew to 16.5 percentof China’s total population in 2010 and is expected to continue to increase eachyear.” (Hudson & Boer, 2014)16 “Between 1981 and 2010 it lifted a stunning 680m people out poverty…” The Economist.Not Always With Us. London: The Economist Newspaper Limited, June 201317 George J. Gilboy, 2004. The Myth Behind China’s Miracle. The Council on Foreign Relations:Foreign Affairs, July/August 2004. Print

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population, services which are at a cost and though expanding

internal GDP, take away from critical external manufacturing and

services productivity and revenues. China’s negative demographic

trend with respect to a rapidly aging population coupled with

rising longevity and unemployment rates and substantial

reductions in birthrates is further exacerbated by a substantial

gender imbalance brought about as an unintended consequence of

the one child policy.18

“China’s population is unique in terms of its size

(1.34 billion people), but also due to the fact that

men currently outnumber women by at least 34 million.

The gender imbalance in the population may in fact be

greater than suggested by recorded figures as our

analysis of China’s 2010 Census reveals significant

problems of undercounting…The dearth of women among the

young adult population is of particular concern to

scholars who estimate that the gender ratio of the

marriageable population will continue to rise and will

18 “Scholars testing the theory that high sex ratios lead to increased criminalactivity in China found that for every 1 percent alteration of the sex ratio in favorof males, there was a corresponding 3.7 percent increase in violent and property crimerates in China.” (Hudson & Boer, 2014)

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peak between 2030 and 2045, with the effect that at

least 20% of men will be unable to marry. A surplus of

40-50 million bachelors throughout the mid-to late-21st

Century will have a significant effect on China’s

stability and development as a nation.” (Hudson & Boer,

2014)

The disparity in the male to female population in China is a

major, if not the major factor, which must be taken into account

when predicting the possibility for the escalation of conflict in

the SCS to open war. There is historic precedent in China and

other parts of the world for just such a gender imbalance. China

itself faced this situation in the 19th Century with ‘bare

branch’19 related social disruptions, related to unmarried men

forming gangs and small armies, which combined into larger armies

and challenged the Qing Dynasty and Mandarin government across

China. In the 19th and 20th Century the ‘bare branch’ problem

contributed greatly both to the fall of the Qing and to the rise

of the Kuomintang and eventual domination by the Communist Party,

19 “They are called guang gun-er or "bare branches," because they are branches of thefamily tree that will never bear fruit. The girls who should have grown up to be theirwives were disposed of instead.” (Hudson & De Boer, 2004)

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a dramatic change in power. It is this dramatic and violent

change in power which current party leadership, academics and

China’s modern Capitalists are keen to prevent and which will

factor heavily in any decisions made as to the use of force to

ensure access to the energy sources of the SCS.

Despite a well-documented history, China has repeated many

of the mistakes of the Qing by dramatically increasing the

manpower of its armed forces and thereby arming and training an

increasing number of these ‘bare branches’. Though many see the

increase in the size of China’s military population as nothing

more than a natural progression of a nation moving towards

superpower status, it is quite possible that should instability

within China’s borders reach such a degree the government feels

threatened, the cost-benefit analysis related to the use of

military force to settle regional, or even global conflicts, will

dramatically move towards the use of military force. “Historical

examples demonstrate that one possible consequence of extremely

high sex ratios is a significant change in the cost-benefit

calculus of the state concerning conflict, even interstate

conflict. Deterrence of a state with abnormally high sex ratios

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may be more complicated than the deterrence of a state with a

normal sex ratio, and this is something that US policymakers

should keep in mind as they contemplate the rise of China as a

world power.”20 (Hudson & Boer, 2014) The so what related to

China’s negative demographic trends towards aging and a continued

imbalance between male and female population, is that without

continued growth in the Chinese economy, with rates necessary for

providing hope and for the absorption of energy, the nation will

be increasingly more likely to use force against its neighbors in

the resolution of disputes as a means of pressure release, if not

purposeful male population control. A large portion of this

growth will be contingent on the continued access to increasing

flows of low-cost energy sources over the coming two to four

decades, as the country reaches peak population and economic

development.

IV. ECONOMICS & DEMAND

“The ten members of the Association of Southeast Asian Nations (ASEAN) – alongwith China and India – are shifting the centre of gravity of the global energysystem towards Asia.…Energy demand in Southeast Asia has expanded by two-

20 “The floating population is linked to violent protests, some involving thousands ofpeople, in areas of unemployment or in response to government seizures of land orother government actions, as well as gang activity. According to the Chinese Academyof Governance, the number of protests in China has increased greatly during the pastdecade, rising to 180,000 reported mass incidents in 2010.” (Hudson & Boer, 2014)

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and- a-half times since 1990, its rate of growth among the fastest in the world.Economic and demographic trends point to further growth, lifting the region’senergy use per capita from just half of the global average today.” (Birol,2013)

The E.U. and the U.S. have continued to struggle

economically as they address long-term structural issues, China’s

GDP has dropped 2% per year for the foreseeable future and the

advanced economies of South Korea and Japan have continued to

adjust to two of the oldest workforces in the industrialized

world. Conversely, despite internal conflicts within Thailand,

Indonesia, Malaysia and the Philippines, lingering civil wars and

ethnic conflict in Myanmar and Laos and border disputes between

Thailand and Cambodia, the ASEAN states have benefitted greatly

from strategic location and natural resource reserves.

Collectively the region recovered quickly from the recent

economic crisis, realizing an average expansion in GDP of 5% per

year, resulting in the world’s 9th largest economy at $2.3

trillion.21 This rapid recovery from the global financial crisis

resulted from increasing ASEAN and ASEAN+322 economic

integration, positive demographics and access to low-cost energy.21 Syetam Hansakul, 2013. ASEAN Economic Community (AEC). Frankfurt: Deutsche Bank – DBResearch: Current Issues – Emerging Markets. Research Report22 Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore,Thailand, Vietnam + China, Japan, South Korea

S.E. ASIA 26

Ensuring continued economic growth and critically an expanding

job base for an expanding, youthful labor force is of paramount

importance to stability in the SCS, with economic growth

dependent on increasing volumes of energy. “In response to

Southeast Asia’s rapid economic and demographic growth, the

region’s primary energy requirements are projected to triple

between 2010 and 2030…Ensuring a secure supply of energy for the

future is therefore an overriding concern for national

governments…23” (Finlay, Bergenas, & Mufti, 2013)

23 “Southeast Asia’s energy demand increases by over 80% between today and 2035, a riseequivalent to current demand in Japan. This supports a near tripling of the region’seconomy and a population that expands by almost one-quarter. In the New PoliciesScenario, the central scenario, oil demand rises from 4.4 mb/d today to 6.8 mb/d in2035, almost one-fifth of projected world growth. After having grown at double-digitrates each year since 1990, coal demand triples over 2011-2035, accounting for nearly30% of global growth. Natural gas demand increases by 80% to 250 bcm. The share ofrenewables in the primary energy mix falls as rapidly increasing use of modernrenewables – such as geothermal, hydro and wind – is offset by reduced use oftraditional biomass for cooking. Southeast Asia’s energy-related CO2 emissions almostdouble, reaching 2.3 Gt in 2035.” (Birol, 2013)

Image #6: Non-OECD Asia Energy Demand 1990 -2040

Image #7: China Energy Demand 1990 -2040

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During this same period, as China’s economy continues to

expand and shifts from external to internal consumption, the

country’s energy requirements, already considerable, are also

projected to more than double. While many posit China as the

dominant regional power will take ownership of the oil and

natural gas reserves in the SCS by legal means or force, the

truth of the situation is far more nuanced and complex. This is

due to the interwoven nature of the economies of Asia and the now

globalized world economy, which while dependent on access to low-

cost and abundant energy, is also dependent on the continued

economic expansion of not just China but also the ASEAN states,

while concurrently sustaining the Taiwanese, Japanese and South

Korean economies. This arises from the fact, “[i]ntra-regional

exports have been growing in the past decade from 34 percent in

2002 to over 50 percent in the ASEAN+3 region. The rest of the

region is riding on China, even if the final products are still

destined for the huge consumer markets of the US and Europe.

Since 1993 China has been a net importer in regional trade. About

50 percent of China’s component imports are from Japan, Taiwan

and South Korea.” (Majid, 2012)

S.E. ASIA 28

In essence, accounting for the economic impact on the

likelihood of war over the energy resources within the SCS, it

must be considered that though China’s is the dominate economy,

China’s own economy is itself increasingly dependent on all the

nations of Asia, to include the ASEAN states. This arises due the

fact that in real terms, while China is the world’s leading

exporter, “…80 percent of the value of their exports is

imported…” into China and, “[w]hat these figures show is that it

is not simply ‘Chinese’ exports that determine the geoeconomic

terrain of the region. Instead, China is at the centre of

regional and international division of labour.” (Majid, 2012)

This impacts also South Korea, Taiwan, Japan, the U.S. and

European nations which export components to China and which each

have tens of thousands of business investments in China and

increasingly within the ASEAN states.24 Meaning, though China

24 “About 50 percent of China’s component imports are from Japan, Taiwan and SouthKorea. In terms of FDI, Japan has over 30,000 companies investing over $60 billion inChina; South Korea also over 30,000 investing more than $35 billion; Singapore isinvolved in over 16,000 projects with investments of over $31 billion. Even Taiwan,with whom China has a non- negotiable ‘core interest’ problem, has over $110 billioninvested on the mainland, and just in August this year signed an investor-protectionagreement with Beijing (Taiwanese firms are responsible for 60 percent of China’shardware exports). Furthermore, multinational companies account for 60 percent ofChina’s total trade, and 80 percent of the value of their exports is imported. Indeed,about 60 percent of all imports into the US emanate from US subsidiaries or sub-contracted firms operating in China.” (Majid, 2012)

S.E. ASIA 29

desperately requires additional energy resources, it must balance

these needs and the use of force within the SCS to obtain these

resources against the needs of its neighbors, whose economic

growth and expansion is also increasingly critical for China’s

own growth and survival, particularly as it transitions from

world’s exporter to world’s importer.

China’s 12th Five Year Plan, designed to ensure China not

fall into the ‘middle income trap’25, emphasizes a shift from the

world’s lead exporter to the world’s lead importer, from a

manufacturing only economic base to manufacturing, services and

consumption, thereby replacing the U.S. as the world’s leading

economy. “The real story is that China's going to be changing its

growth model a lot over the next five to ten years and will shift

from being a producer-driven economy to more of a consumer-driven

economy. That will be a transformative event on a global economy,

especially for growth-starved countries like the United States

that need new markets to export into.” (Roach, 2014) In effect,

the confluence of China’s economic engine conversion from export

to consumption, an aging and higher cost labor force confronted

25 The middle income trap is an economic development situation, where a country which attains a certain income will get stuck at that level.

S.E. ASIA 30

with rising inflation and unemployment collectively results in a

requirement for substantial improvements in low-cost energy

availability. Despite this critical need for increasing amounts

of low-cost energy, with China committed to increasing natural

gas from roughly 3% currently to 10% of energy production by

2025, China’s economic future is also increasingly dependent on

the low-cost labor of the ASEAN region, particularly the youthful

populations of the SCS nations of the Philippines and Indonesia,

which are also heavily dependent on widespread improvements in

low-cost energy availability. Despite this interdependence,

tensions have continued to rise within the SCS, with aggression

recently being employed on the part of China against here SCS

neighbors.

At its most basic, stability within Asia, particularly the

SCS, is heavily dependent on correctly addressing opposite

demographic trends each requiring expanding domestic and inter-

and intra-regional economies dependent on a doubling of energy

availability within each major economy and economic region by

2035.26 It is simply the complexity of competing and

26 “While Southeast Asia is considered to be a mature oil-producing region, there isstill potential to boost output, as there remain relatively unexplored areas that are

S.E. ASIA 31

complimenting economic necessities and interrelationships which

is at the heart of rising conflicts in the SCS however, other

factors such as demographic trends, with youth-to-elderly and

male-to-female population imbalances in China set against a

youthful and far better balanced male-to-female population of the

ASEAN states in the SCS also adding orders of complexity. These

interacting and interdependent forces, economics and demographics

must be taken into account in a new conflict-to-war prediction

model, which must also include the distribution and nature of

power within the region, to include that of regional players,

interested parties and the currently lone superpower, the United

States.

V. POWER IN THE SCS

“The U.S. military either abandoned or was evicted from its Southeast Asianbases decades ago. Amid concerns about China’s growing military power and itsclaims to disputed territories, however, Thailand, Vietnam and the Philippineshave cautiously put out the welcome mat for the Americans again…In response,Pentagon leaders have flocked to the region to speed up negotiations and fortifyrelations. The rapprochements so far have focused on limited steps, such as port

thought to hold significant resources particularly in deepwater. However, in someparts of the region, efforts to increase production are constrained by factors such aschallenging legal and ownership issues, difficulties in raising finance andtechnological issues...While most discoveries in the South China Sea to date residewithin uncontested coastal areas, deepwater prospects, which represent one of the fewopportunities to stem falling reserves and output, are likely to be in disputedterritory. A lack of exploration makes it difficult to gauge the full extent of theresource base.” (Birol, 2013)

S.E. ASIA 32

visits and joint exercises, but the administration hopes they will lead to a moreextensive and persistent U.S. military presence.” (Whitlock, 2012)

Post-World War II, the

U.S. has been the dominant

military power in Asia-Pacific,

however, faced with an aging

labor force and with economic

and financial sectors slowed

for perhaps decades to come,

the U.S. finds it must

carefully weigh options with

respect to the application of

aid, diplomacy and a superpower

military to the conflict in the

SCS. Despite this need for caution and with ongoing force and

budget reductions post Operation Enduring Freedom, the government

of the U.S. has openly committed to a ‘pivot to Asia’, or a

rebalancing of its global force to once again focus on Asia.27

27 “While the United States has spent a great deal on defense spending in the decadefollowing September 11, 2001, Campbell remarked that much of that spending was onpost-conflict reconstruction related spending. While many states in the region wereinvesting heavily in power-projection capabilities, the United States had not kept up.Moreover, while the United States had traditionally focused its attention in NortheastAsia, America had typically lagged in its engagement with countries in Southeast Asia.The pivot to Asia, Campbell said, will not be completed in a few years, but willrequire a sustained and different allocation of diplomatic and military resources.”

Image #8: Current U.S. bases &forces

S.E. ASIA 33

There is considerable uncertainty however within the U.S.

Departments of State and Defense and the nations of Asia-Pacific

as to what this pivot means28 beyond the permanent bases and

forces already maintained in Asia and recent movements on the

part of the U.S. Navy29.

Though force additions have

been mostly confined to the U.S.

Navy, which has repositioned and

committed to repositioning further

assets, 51 of the US Navy’s 289

ships are currently deployed to

Asia-Pacific with a projection of

67 ships by 202030, many ASEAN

Assistant Secretary Kurt Campbell, 2014. The Obama Administration’s Pivot to Asia. The ForeignPolicy Initiative. Video Interview28 “U.S. President Barack Obama's decision to cancel visits to two Asian nations andthe uncertainty surrounding his attendance at two key Asian summits has raisedquestions about Washington's commitment to rebalance its foreign policy focus towardthe fast-growing region where China's military and economic influence is growingrapidly.” Ponnudurai, 2013. Obama’s Asia Trip Uncertainty Raises U.S. Commitment Questions. RadioFree Asia. Online 29 Beattie, Victor. “US Navy ‘Shaping Events’ in South China Sea.” Voice of America 20

May 2014: 1–2. Print.30 As well, nations which once supported U.S. forces from bases established during theKorean and Vietnam wars, such as Thailand, Vietnam and the Philippines, are indiscussions with the U.S. government regarding the use of these facilities withpartner forces in order to provide a counterbalance to Chinese capabilities inSoutheast Asia. “The Navy is also pursuing options to conduct joint airbornesurveillance missions from Thailand, the Philippines and Australia, officials said.Pentagon leaders said one of their highest strategic priorities is to improve theirsurveillance of shipping traffic and military movements throughout Southeast Asia and

Image #9: Former U.S.bases

S.E. ASIA 34

participants have doubts due more to the actions of the

Department of State (DOS) than to those of the Department of

Defense (DOD). This is primarily due to the fact that unlike

China, the U.S. is not a signatory to and is generally absent or

only lightly represented in the forums in which issues related to

the SCS and the ASEAN region in general are addressed, such as

the ASEAN Regional Forum and the ASEAN Economic Community

meetings. And though the Administration has continued to publicly

support the ‘pivot to Asia’ the perception in the region is, “…

that US interest in the region has waned since 9/11…” which only

adds to concerns over current U.S. intentions as, “…there has

been an increasing anxiety among Southeast Asian states over

China’s military assertiveness in the region, and in particular

the inclusion of the South China Sea in those areas that China

considers constitute its “core interests”...in particular their

access to energy and other natural resources.” (Taylor, 2011) The

result of unclear U.S. commitment and China’s rising military

power, the countries of the SCS region, and ASEAN as a whole,

have increased their relationship building efforts with foreign

the Indian Ocean, home to some of the busiest trade routes in the world.” (Whitlock,2012)

S.E. ASIA 35

powers and significantly increased defense spending around

modernization.

In concert with its rising economic power, Southeast Asia is

projected to become one of the world’s leading defense markets

within the coming years, with many concerned about the potential

for an arms race in the region consuming funds for much needed

infrastructure and productivity investments. The following, taken

from a 2011 research paper delivered to the British House of

Commons31 and other sources, is a brief description of current

and planned power projection purchases by the nations which

border the SCS:

1. Thailand: In addition to increased spending on the Army, the

Thai military has committed to purchase 12 Gripen jet

fighters from Sweden, four submarines, Seahawk helicopters

and patrol vessels, in addition to the country’s current

aircraft carrier and harrier jump jets32;

2. Malaysia: Purchased two submarines and expanded its frigate

fleet, with stated intentions to expand the naval fleet and

to replace outdated fast jet combat aircraft. The country

31 Taylor, Claire. Military Balance in Southeast Asia. London: N. p., 2011. Briefing Papers.

32 McCartan, Brian. Thai Military Puts Up Spending Defense. Hong Kong: Asia Times, 2010. Print

S.E. ASIA 36

has also committed to increase its domestic defense industry

over the coming ten years;

3. Indonesia: The country will add to its two submarines while

enhancing littoral defense capabilities and the fast jet

platforms previously purchased from Russia and Brazil. The

U.S. has also agreed to sell 24 second hand F-16C/D

aircraft;

4. Philippines: While the Navy and Air Force have been identified

as priority investments, the Country is seeking to purchase

helicopter-capable patrol ships, patrol aircraft and air

defense radar systems for deployment to the Spratlys. Having

purchased the US Coast Guard Cutter Hamilton, two more

purchases are projected as well as a submarine fleet;

5. Vietnam: Committed to greatly expand its Air Force and Navy

with the purchase of fast jets, ships and a full-size

submarine fleet, with Russia as the provider of choice for

these purchases;

6. Singapore: Has a sizeable, well developed and advanced

national defense industry and is a Security partner in the

F35 Joint Strike Fighter program while the Navy has

committed to purchase of a next generation submarine fleet.

As to current major forces within the region, the 7th Fleet is

the largest U.S. presence in the Asia-Pacific theatre, with 51

ships, 300 aircraft and 40,000 Navy and Marine Corps personnel.

Centered on Carrier Strike Group Five, consisting of the USS

S.E. ASIA 37

George Washington Supercarrier33, the USS Antietam and USS Shiloh

missile cruisers, accompanying Destroyer Squadron 15 and the USS

Blue Ridge command ship. In addition to Naval and Marine Corps

assets in the area, the Fifth Air Force in Japan, the Seventh Air

Force in South Korea, the Eleventh Air Force in Alaska and the

Thirteenth Air Force in Hawaii provide substantial force

projection in Asia-Pacific with a large number of F-16C/D and F-

22 Raptors and supporting facilities and aircraft. Permanent U.S.

ground combat presence in Asia-Pacific includes the 2nd Infantry

Division and supporting units in South Korea, Special Operations

Command Korea, 1st Battalion 1st Special Forces Group in Japan,

Naval Special Warfare Unit - 1 and Mobilization Unit – 5 in Guam,

with rotations of Marine Special Operations units also into Guam.

Collectively the U.S. military presence in Asia-Pacific

represents substantial capabilities which can immediately

mobilize, however with the majority of these forces postured

against North Korea, any conflict within the SCS region would not

be met immediately by a U.S. military response from other than

33 To be replaced in 2014 by the Supercarrier the USS Ronal Reagan

S.E. ASIA 38

any minimal forces which might happen to be in the area at the

time.

Arrayed against both regional ASEAN, South Korean, Japanese

and U.S. forces, China with locally based troops, facilities,

ships and aircraft, has a single second hand aircraft carrier,

the Liaoning, fielding the reduced capability Chinese J-15

fighter jet34. Despite obvious technical and force limitations,

China does project power directly from within the SCS through its

submarine base and other military assets

on Hainan Island, off the coast of

Vietnam and north of the Paracel

Islands. In addition to the majority of

China’s Marines already housed there,

the DOD estimates China is capable of

housing five and later twenty nuclear

submarines, two carrier strike groups

or amphibious assault ships at the

Hainan facilities. As well, China’s South Sea Fleet, consisting

34 A 4th Generation Fighter Jet. 4th Generation Fighters are primarily those developedand fielded between 1970 and 1994, and include airframes such as the teen series inthe U.S. with key attributes related to multirole, maneuverability and advancedavionics.

Image #10: China

S.E. ASIA 39

of destroyers, cutters, frigates, submarines, aircraft and

landing craft is headquartered out of Zhanjiang, with 7 bases and

air stations across South China and presence on multiple islands

and features in the SCS. The prevailing wisdom though is that

with the U.S. fielding 4th and 5th Generation Fighters (4G & 5G)

in Asia-Pacific35, China is at a severe disadvantage, and as such

the U.S. has the combat power advantage in the region. However,

when developing and employing a model, the obvious needs to be

qualified with the less obvious, such as China’s heavy investment

in ballistic missile technologies instead of extremely high-cost

investments in advanced surface vessel and aircraft technologies

and systems, missiles which have the potential to obviate much of

the U.S. Navy and Air Force technological and force advantages in

the SCS.36 35 The U.S. has concluded sea trials for the VSTOL F-35B coinciding with Japan’s seatrials of its large flat-top destroyer the Izumo (DDH0183). It is projected thesemini-carriers, operated by the U.S. and allies will field either the F-35B or theVSTOL UAV now under development, greatly reducing China’s ability to limit strike orcounterstrike capabilities by targeting landed aircraft and air bases.36 “To shake the stability of enemy’s war system so as to paralyze his war capabilitieshas already become the core of the contest between the two sides in the modern high-tech local war. So, more attention should be paid to striking crushing blows againstthe enemy’s structure of the operational system . . . especially those vulnerablepoints which are not easy to be replaced or revived, so as to make the enemy’soperational system seriously unbalanced and lose initiative in uncontrollabledisorder…The future operational center of gravity should not be placed on the directconfrontation with the enemy’s assault systems. We should persist in taking theinformation system and support system as the targets of rst choice throughout. . . .fiIn regard to the supply system, we should try our best to strike the enemy on theground, cut the material ow of his ef cacy sources so as to achieve the effect offl fi

S.E. ASIA 40

It is difficult to project whether direct military force,

leading to the possibility of open war, will be used in the SCS.

China has used force against both Vietnam and the Philippines to

support its claims to SCS territories. However, “…Washington has

traditionally been unwilling to become involved in territorial

disputes over the semi-enclosed sea…from unwillingness on the

part of the United States to involve itself in the question of

sovereign jurisdiction.” (Emmers, 2013) An unwillingness to

involve the U.S. in territorial disputes through the application

of its diplomatic, economic and military might, coupled with the

lack of organic defense capacity of the smaller nations of the

SCS, has left China’s use of strong-arm tactics unanswered37 with

the possibility existing for increased force being used by China

to take possession of the SCS and its resources. With the rising

economic clout of ASEAN and the SCS nations, is a corresponding

rise in military power, which individually is no match for China,

however collectively provides for substantial sea and air power

taking away the rewood from the caldron.” (Yoshihara, 2010)fi37 In response to China’s deployment of a $1 billion dollar deep-sea oil rig in theParacels, “Scores of Vietnamese and Chinese ships, including coastguard vessels, havecontinued to square off around the rig despite a series of collisions after theplatform was towed to the area in early May. Until the May 26 incident, no ship hadsunk.” Blanchard, Ben. Video Shows Vietnam Fishing Boat Sink after Collision with Chinese Vessel.Hanoi/Manila: Reuters, Jun 2014. Print

S.E. ASIA 41

to be used as a balance against China. As well, “[i]n 2011,

Tokyo pledged $25 billion to promote initiatives for increasing

cooperation between members of the Association of Southeast Asian

Nations (ASEAN) and $7.4 billion for infrastructure projects in

the five Mekong states: Cambodia, Laos, Myanmar, Thailand, and

Vietnam.” (Finlay et al., 2013)

Prevailing wisdom would lead to a belief military forces

within the region would increase in capacity at a roughly even

rate, retaining the current balance of power, with the U.S. in

the advantage for large-scale warfare but China with the

advantage in smaller footprint, short duration, local and

regional military-to-military engagements. However, traditional

thinking must be qualified and augmented by modeling related to

the understanding of the unique economic and demographic

influences within the region and to the trigger signals related

to each individually and collectively.

VI. PROJECTION

“In January 2008 the China-Vietnam Steering Committee met in Beijing in anattempt to calm things down following the Chinese decision to create anadministrative centre on Hainan for the Spratlys, Paracels and Macclesfield Bankin December 2007. This initiative failed, and in June this year Vietnam passed alaw claiming sovereignty over the Paracels and Spratlys, as China raised SanshaCity in the Paracels to prefecture level and 45 legislators were elected in July to

S.E. ASIA 42

govern the 1,100 Chinese people in the claimed areas, covering 772,000 squaremiles of the South China Sea. To underline all this, later in July China’s CentralMilitary Commission approved deployment of two military garrisons – one army,the other navy – to guard the disputed islands.” (Majid, 2012)

With respect to an expansion of existing conflicts within

the SCS over proven and potential oil and natural gas reserves,

to more military conflict or war, it is unlikely any of the

parties will allow this to occur or would be desirous to do so

even if the capability to wage and win such a military engagement

or war were present. Instead, “[b]ased on ongoing interviews with

officials and policy-makers in several Southeast Asian countries,

it appears that the pattern of the regional order that these

states aim for and strongly prefer is a hierarchical regional

order…That is, Southeast Asian states prefer to bring about U.S.

dominance in the region, but a moderated and implicit type of

dominance, beneath which a hierarchy (in the true sense of the

word meaning layers) of other powers forms.”38 (Goh, 2005)

Despite this, and though the U.S. is interested to maintain the

power structure which has reigned in the region for more than

fifty years, it may prove to be impossible without the permanent

38 “…that looks like this: (a) Superpower overlay: US (b) Regional great power: China(c) Major powers in the region: India, Japan, South Korea (d) ASEAN…” (Goh, 2005)

S.E. ASIA 43

movement of combat troops to the region39 and without the removal

of political preconditions greatly limiting economic and

diplomatic integration. Meanwhile, Chinese corporations and

brands, Huawei, Lenovo and others, are reaching the level they

can and do compete with U.S. corporations and brands regionally

and globally, and Chinese economic and diplomatic integration

efforts are extensive and not bound by precondition, providing

China with the more favorable overall brand in the region,

providing China and the Chinese with substantially greater

influence than the distant and seemingly disinterested U.S.

Collectively this is resulting in the U.S. finding it

increasingly difficult to maintain its role as the dominate power

in the ASEAN region and the SCS, regardless the military power it

sustains and projects into the region, and the remonstrations of

the current Administration through the DOS.40

39 “The January 2012 strategic guidance noted that the United States will seek to“develop innovative, low-cost and small-footprint approaches to achieve our securityobjectives, relying on exercises, rotational presence, and advisory capabilities,”meaning no permanent troop repositioning, instead the U.S. is focused on using localbases on a rotational basis, “To date, the United States has made headway inAustralia, the Philippines and Singapore and continues to explore opportunities forenhanced training and access in Brunei, Indonesia, Malaysia, Thailand, Vietnam andelsewhere.” (Ratner, 2013)40 “The region has moved on from the time when American technologies and corporationswere singularly dominant.” (Majid, 2012)

S.E. ASIA 44

Difficulties in predicting escalation to open war are

exacerbated by the fact that when analyzing global geopolitics,

the majority of focus is still on the actions of Westphalian

nation-states and their militaries. This modeling based on the

traditional Westphalian State continues despite the fact that in

the era of globalization, “…power relationships are increasingly

defined in terms of economics, and competition is no longer

between rival nation-states but between rival markets...” and

though, “…they have not likely to eclipse nation-states in the

near future, markets are catapulting financial centers into the

spotlight and downplaying political capitals.” (Dalpino, 2008)

China, and the signatories to ASEAN, are well aware of this

migration of power from the State to the Market and as such China

and ASEAN are aggressively working towards greater regional

economic integration, with ASEAN peoples and leaders cognizant of

the rising economic power of China in contrast to the relative

decline of U.S. economic power.41 The caveat to this continued

reliance on economy and market integration as means by which to

41 Though in total the U.S. is still the largest single investor in Southeast Asia, with Japan the next largest major investor, China is closing the gap and is fastest-growing investor in the region.

S.E. ASIA 45

balance power within the region, and to address conflicts related

to the SCS, is however predicated on China’s ability to control

its internal strife while making structural changes necessary to

address demography derived problems. “In the complexity of causes

that have conspired to incite China’s actions, its unsteady and

erratic hand reveals a desire to be feared more than respected.”

(Majid, 2012)

While it is true the future of China’s own economy is

increasingly dependent on the economic success of all her ASEAN

neighbors, this reality is being offset by China’s rapidly aging

and heavily male-to-female imbalanced population, such that

projecting future intentions, actions and responses within the

SCS means,

“…the normal trajectory of aging nations, such as

we see in Europe, may not apply to China. China will

not gracefully relinquish its international power as

Europe will because China has yet to enjoy the zenith

of such power. We argue that China’s leaders, fully

cognizant of the intersection of its long-term trends

in terms of sex ratio, aging, and development, may come

S.E. ASIA 46

to the realization—as has Russia—that any power gains

it aims to make in the international system must be

made in the short-term, since in the long-term, its

prospects for such action will be severely compromised.

Highly abnormal sex ratios may aggravate that

perception...” (Hudson & Boer, 2014)

And given the uncertainty as to ‘root cause(s) for an action’ on

the part of China with respect to actions being driven by

combinations of economic, sovereignty, power projection and

demographic causes, provides that basic assumptions only can be

made with respect to China’s intentions and future actions in the

SCS. Also, as the U.S. continues with its own structural, social

and political issues related to an aged population, industrial

decline and prolonged unemployment, large corporate, State and

personal debts, and political infighting and deadlock, it is

difficult to project what the ‘pivot to Asia’ will actually look

like and what real power may be arrayed against future Chinese

aggression, particularly in the event of war within the region.

S.E. ASIA 47

Given these uncertainties, the following specific projections are

put forward:

P1. China will continue to use its superior economic standing

to develop oil and natural gas platforms which it will push

out into current and future proven fields, even in disputed

and contested waters and over the protestations of her SCS

neighbors;42

P2. China will use rising tensions in the SCS as justification

for increased investment in armaments and in the establishment

of greater combat capabilities within the region, with

periodic non-violent or moderately violent skirmishes with

ASEAN forces in the SCS;43

P3: The U.S. and SCS nations will use the rising power of

China’s military, and periodic activity in the region to

justify increased defense spending, with the U.S. using its

‘pivot to Asia’ more as an argument for increased arms sales

42 Economist. Rigged. Hanoi: The Economist, 2014. Print “Vietnam was taken aback inearly May when China parked an oil rig on its doorstep. The behemoth, which cost $1billion, lies 17 nautical miles (32 km) from the Paracel islands…”43 FPRI. China’s Naval Rise and the South China Sea: An Operational Assessment. Philadelphia: 2012.Print “…Beijing's seaward territorial concerns also reach far into the South ChinaSea. And it is there that the military balance has most swiftly swung in China's favoras a result of its modernization program.”

S.E. ASIA 48

to ASEAN participants than for any military action or

support;44 and

P4: China will continue to aggravate its SCS neighbors, using

moderate force to back its general and specific claims within

the region, while the U.S. will continue to talk a ‘pivot-to-

Asia’ without actually involving itself in the SCS conflict,

even should such low-intensity conflict lead to open war in

the region.45

All of this however is highly contingent on the ability of

China’s leaders to overcome the substantial structural and

demographic constraints which have already seen a 2% per year

reduction in GDP, a substantial increase in unemployment and

domestic instability and violence. In particular, China must be

able to constructively absorb the energies of its now 34 million

‘bare branches’ if it is to survive the transition of its economy

the world’s economy is dependent on.

44 Reuters. Analysis: U.S. Arms Sales to Asia Set to Boom on Pacific “Pivot”. Washington: Reuters, 2013.Print “U.S. sales of warplanes, anti-missile systems and other costly weapons toChina's and North Korea's neighbors appear set for significant growth amid regionalsecurity jitters.”45 This despite the fact the U.S. has long-standing Mutual Defense Agreements with bothThailand and the Philippines, with the supposition being based on lack of action inGeorgia and the Ukraine against Russian aggression and on the lack of combat supportfor other allies and partners such as the Philippines and Vietnam against Chineseaggression.

S.E. ASIA 49

VII. SUMMARY

“…[Y]oung adult men with no stake in society -- of the lowest socioeconomicclasses and with little chance of forming families of their own -- are much more prone toattempt to improve their situation through violent and criminal behavior in a strategy ofcoalitional aggression with other bare branches…Abnormal sex ratios may very well altersecurity calculations concerning threat and deterrence.” (Hudson & De Boer,2004)

A considerable amount of energy and attention is being

directed towards the South China Sea by the nations surrounding

and the U.S. and her allies in Asia-Pacific. The majority of

interest is on China and the aggressive posture China has

demonstrated with respect to ownership of the entirety of the SCS

and all the resources contained within, based on ancient and

modern claims. While the majority of thinking is that China is

committed to the use of force where necessary to gain control of

proven and potential energy reserves contained within the

sparsely populated area of the SCS, with some demonstration of

this with the use of Chinese military forces against Vietnamese

and Philippine forces in the area. However a more careful study

demonstrates that while this is in part true, that progress of

the Chinese economy is in need of the resources, China’s

activities and increased military presence and strength in the

SCS has more to do with its own looming demographic crisis than

S.E. ASIA 50

the simple argument regarding access to oil and natural gas. And

while to date peaceful means of dispute resolution and the

balancing of power between China and the U.S. has been the

preference of ASEAN and her SCS bordering nations, rising turmoil

within China related to a slowing economy, a rapidly aging

population and 34 million males without access to wives, requires

new thinking and models in order to correctly predict and

interpret the signs leaking out of China.

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VIII. REFERENCES

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Roach, S., 2014. Where Will China Go Next? , pp.1–8. Available at: http://insights.som.yale.edu/insights/where-will-china-go-next.

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Shively, G. & Smith, T., 2014. Natural Resources, the Environmentand Economic Development in Southeast Asia. In I. Coxhead, ed. Routledge Handbook of Southeast Asian Economics. New York: Routledge.

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Sukma, R., 2012. Regional Security Order in Southeast Asia: An Indonesian View.

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Tsai Tung-Chieh, Hung Ming-Te & Tony Tai-Ting Liu, 2011. China’s Foreign Policy in Southeast Asia: Harmonious Worldview and Its Impact on Good Neighbor Diplomacy. Journal of Contemporary East Asia, 10(1), pp.25–42.

U.S. Energy Information Administration, 2013. South China Sea, Washington, D.C. Available at: http://www.eia.gov/countries/analysisbriefs/South_China_Sea/south_china_sea.pdf.

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US Department of State - Humanitarian Information Unit, 2010. Southeast Asia: Conflicts Without Borders. , (January). Available at: http://reliefweb.int/map/myanmar/southeast-asia-conflicts-without-borders-sub-national-and-transnational-conflict.

Wang, F., 2012. Racing Towards the Precipice. China Economic Quarterly. June, (June 2012), pp.2010–2015. Available at: http://scholar.google.com/scholar?hl=en&btnG=Search&q=intitle:Racing+Towards+the+Precipice#0 [Accessed June 2, 2014].

Wang, Z. & Yang, Y., 2008. IS CHINA’S SOFT POWER DOMINATING SOUTHEAST ASIA? Views from the Citizens, Nottingham.

Whitlock, C., 2012. U.S. seeks return to SE Asian bases. The Washington Post.

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Yoshihara, T., 2010. Chinese Missile Strategy and the US Naval Presence in Japan. Naval War College Review, 63(3). Available at: http://indianstrategicknowledgeonline.com/web/CHINESE MISSILESTRATEGY AND THE U.S. NAVAL.pdf [Accessed June 22, 2014].

Resources:

Stanford University. The Freeman Spogli Institute for International Studies at Stanford University

Mapping Militant Organizations: http://www.stanford.edu/group/mappingmilitants/cgi-bin/Consortium for Research on Information Security and Policy:http://fsi.stanford.edu/research/consortium_for_research_on_information_security_and_policy/

The South China Seahttp://www.southchinasea.org/

Southeast Asia Resource Action Center (SEARAC) Resource Centerhttp://www.searac.org/

Conflicts w/o Borders: Dec 2009 Source: http://reliefweb.int/map/myanmar/southeast-asia-conflicts-without-borders-sub-national-and-transnational-conflict

Images:

Image #1: NewStatesman: Beware the Chinese Sea-Dragon

Image #2 & 3: EIA: South China Sea

Image #4: U.S. Central Intelligence Agency - Asia Maps — Perry-Castañeda Map Collection: South China Sea (Islands) 1988

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Image #5: I.E.A. – Contested Areas of South China Sea Likely HaveFew Conventional Oil and Gas Resources

Image #6 & 7: OECD – Energy demand in the non-OECD nations of Southeast Asia and China: 2012

Image #8: Thomson Reuters – U.S. Military in the West Pacific: April 2012

Image #9: Washington Post – National Security: A new U.S. military strategy, old bases near the South China Sea: June 2012

Image #10: Yoshinara – Chinese Missile Defense Ranges: Summer2010