On her China visit last week, Prime Minister Julia Gillard sought to enhance Australia’s commercial ties with its largest trading partner while downplaying differences in strategic outlook. These include Beijing’s controversial claims to sovereignty over much of the South China Sea, in the maritime heart of South-East Asia.
China is already one of the world’s largest offshore energy producers. It wants to become bigger still by finding more oil and natural gas in home waters or in zones close to home, to avoid becoming excessively dependent on foreign imports. However, its evolving energy security strategy could further complicate its relations with South-East Asia, and with countries like Australia, the US, Japan and South Korea that regard the South China Sea as an international highway for trade and free movement of military planes and ships.
A major focus of Beijing’s offshore search for energy to fuel its rapid economic growth is on the South China Sea, where it has overlapping territorial claims with Vietnam, the Philippines, Malaysia and Brunei.
China’s Global Times on 19 April published a special report on the South China Sea, which it dubbed the ”second Persian Gulf”. The paper said that the sea contained more than 50 billion tonnes of crude oil and more than 20 trillion cubic metres of gas. This is about 25 times China’s proven reserves of oil and eight times its gas reserves. No source was cited by the Global Times for its estimate but it quoted Zhang Dawei, a senior official in the Ministry of Land and Resources, as saying that an intensified offshore search was ”the key” to solving China’s energy predicament. China’s voracious appetite for oil to run its transport system has shifted the economy from oil self-sufficiency in the early 1990s to dependence on imports for 55per cent of consumption in 2010, exceeding what the Global Times called ”the globally recognised energy security alert level of 50per cent”. Not only is China’s oil import ratio rising fast, its reliance on foreign gas is increasing apace too as the Government encourages a switch from coal, China’s predominant fuel for generating electricity, to cut air pollution and global warming emissions.
A recent report by Australia’s Macquarie investment bank forecasts that China’s gas self-sufficiency ratio was set to decline from 90 per cent in 2010 to 65 per cent in 2020. State-owned energy companies are preparing to search the seabed off the Chinese coast for oil and gas at ever greater water depths and distances from China’s shores.
CNOOC, the flagship offshore oil and gas producer, has outlined plans for a major push into the area over the next few years. China’s navy and air force are rapidly acquiring the equipment and skills to project power into the South China Sea and protect Chinese energy companies there.
Until now, China’s energy search and production have been confined to the northern sector of the South China Sea off Hong Kong and Hainan Island. Only Taiwan contests China’s territorial claims in this area.
But just this month, Bejing reiterated its assertion of control over some 80per cent of the South China Sea and all the islands and reefs in a U-shaped claim extending deep into the maritime centre of South-East Asia. It did so in a letter of protest that was circulated to all member states of the United Nations.
In the letter, dated 14 April, China said that since the 1970s, the Philippines had ”started to invade and occupy some islands and reefs of China’s Nansha Islands”, known in English as the Spratly Islands. In defining the scope of its claim, Beijing’s letter went further than its previous UN protests at Malaysian and Vietnamese territorial claims in the South China Sea.
Beijing’s letter asserted that the widely scattered Spratly Islands were ”fully entitled” to their own Territorial Sea, Exclusive Economic Zone and Continental Shelf, even though most are uninhabited and barely visible at high tide.
There is no way that China could use current international law to justify a claim. But in the UN letter, China justified the claim based on two of its own controversial maritime laws, in addition to the 1982 UN Convention on the Law of the Sea.
The national laws validate China’s claims; the UN treaty does not. If the struggle to control the South China Sea is based on power politics instead of current international law, Beijing will have the upper hand against weaker opponents.
