Sunday 9 December 2018
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Businessinsider - 26 days ago

The South China Seas are fabled for their hidden energy reserves and China has moved to block outsiders like the US from finding them

China has a plan in motion to lock down potential oil and gas assets in the resource-rich, but hotly contested South China Seas. If successful, the move would effectively ban exploration by countries from outside the region, further isolating local powers from US support. China is using drawn-out negotiations over the issue to further divide its South East Asian neighbors on the issue. Premier Li Keqiang says he hopes talks will be completed in about three years from now. China is preparing to lock down potential oil and gas assets in the resource-rich, but hotly contested South China Sea by effectively banning exploration by countries from outside the region. The Nikkei Asian Review reports that China, as part of a longer-term strategy that seeks to divide its South East Asian neighbors on the issue, has embedded the proposal in part of a long-awaited code of conduct for the contested waters. Beijing s proposal, which is helping drag out tense negotiations over the code with southeast Asian nations, is a likely deterrent targeting US oil interests from securing access to the seas claimed by a host of nearby Asian powers. China hopes its talks with southeast Asian nations on a code of conduct in the South China Sea will bear fruit in about three years, visiting Chinese Premier Li Keqiang said in Singapore on Tuesday. Xinhua reports that Li said in a speech at the 44th Singapore Lecture, titled Pursuing Open and Integrated Development for Shared Prosperity ( 在开放融通中共创共享繁荣 ) that China reckons it would like to draw a line under talks on the COC by 2021. According to a report in the Nikkei on Sunday, people close to the COC negotiations said China inserted the oil exploration ban into a working document proposal in August. With officials from the Association of Southeast Asian Nations (ASEAN), including US vice president Mike Pompeo gathering this week in Singapore, calls have grown for the language s removal, suggesting the ban is at odds with standard international maritime laws. The South China Sea is a critical commercial gateway for the world s merchant shipping, and consequently an important economic and strategic flashpoint in the Indo-Pacific. Moreover it is the growing focus of several complex territorial disputes that have been the cause of conflict and angst. China, as it continues to develop its energy technologies and oil extraction infrastructure has in all likelihood inserted the latest sticking point language knowing full well that any delay suits its long-game strategy. Knowing that a bloc of ASEAN members can and will not accept the proposal, secures China more time ahead of a finalized code of conduct while Beijing s power in the South China Sea grows and its influence among sympathetic ASEAN nations grows. ASEAN members are already split when it comes to making space for China and on its role in the region, particularly the South China Sea. Cambodia and Laos have in recent years fallen further and further under Beijing s dynamic influence as China has invested heavily in supporting public works that secure the regimes in Phnom Penh and Vientiane. Meanwhile, firebrand Filipino President Rodrigo Digong Duterte, has enjoyed his role as a regional disrupter, at once isolating the US while hedging on Beijing. Duterte has embraced the confusion apparent in ASEAN waters as leverage for Manila, leaving a fractured bloc at the table with US and Chinese negotiators ahead of the East Asia Summit in Singapore. The South China Sea comprises a stretch of roughly 1.4 million square miles of Pacific Ocean encompassing an area from the strategically critical passage though Singapore and Malacca Straits to the Strait of Taiwan, spanning west of the Philippines, north of Indonesia, and east of Vietnam. Countries as diverse and numerous as Brunei, Cambodia, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Vietnam and, of course, China are all connected to the South China Seas, which goes some way to explain the waters inherent dangers to regional security. It s quite a minefield. The major contested island and reef formations throughout the seas are the Spratly Islands, Paracel Islands, Pratas, the Natuna Islands and Scarborough Shoal. The islands are mostly uninhabited and have never been home to or laid claim by an indigenous population, making the issue of historical sovereignty a tricky one to resolve - China for example likes to say it has historical roots to the region established sometime back in the 15th century. But their are many other aggravating maritime and territorial factors in this increasingly dangerous part of the world. As ASEAN s economic intensity has continued to build under the shade of China s decades-long economic boom, so has the waterway become a critical channel for a growing percentage of global commercial merchant shipping. China itself still depends heavily on access through the Malacca Straits to satiate its appetite for energy and resources. Nearby Japan and South Korea, both net importers, also depend enormously on free access to the South China Sea for unhindered shipments of fuel, resources and raw materials for both import and export. On top of that, these are oceans rich and unregulated when it comes to natural resources. Nations like Vietnam and China furiously compete through fleets of private fishing vessels organised with state backing in a rush to exploit fishing grounds in dire need of governance. Yet, the source of the most intense friction is the widely held belief that the South China Seas are home to abundant, as yet undiscovered oil and gas reserves. China and ASEAN have been discussing changes to a 2002 declaration on the peaceful resolution of disputes in the South China Sea that would give the rules legal force. As it stands, the declaration has proved wholly unable to stop Chinese island-building in the waters. South China Sea nations including China, Vietnam and the Philippines seek opportunities to develop the plentiful reserves of energy that the sea is thought to hold. But with the notable exception of China, backed by its heaving state-owned behemoths, like Sinopec and CNOOC these countries independently lack well-developed oil industries. Which is where the US enters the frame. Beijing has obvious and probably well founded concerns that the US will seek to engage and then use joint oil development projects with ASEAN countries to build a legitimate commercial toehold and thus a greater presence in the sea. The Nikkei Review noted that the South China Sea s lack of clear maritime boundaries makes it a difficult place to ban oil exploration by outside countries, according to a specialist in international law. As part of the code of conduct, China has also proposed barring outside countries from taking part in joint military exercises with ASEAN countries in the South China Sea. ASEAN members including Singapore have not agreed to this provision, creating another obstacle to concluding the negotiations. ASEAN is moving to strengthen ties with China, as shown by last month s first-ever joint military exercises. At the same time, the Southeast Asian bloc plans to hold naval exercises with the US as early as next year. Meanwhile, this week Chinese president Xi Jinping will travel to Port Moresby in Papua New Guinea to meet with the leaders of the eight Pacific islands that recognise China diplomatically and welcome Chinese investment. Beijing this week warned no country should try to obstruct its friendship and cooperation with Pacific nations that have already received over $3 billion in Chinese investment.Join the conversation about this story NOW WATCH: Why you shouldn t be afraid to fly, according to a pilot with over 20 years of experience

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