Oil and Gas in the South China Sea – Comparison with Other Regions)
Trade and investment foster shared interests and motivations. For China and the Philippines, greater economic interdependence could provide a basis for rebuilding trust as tensions rise in the South China Sea.
As members of the Association of South East Asia Nations (ASEAN), the Philippines are covered by the (hereafter “Agreement”) signed in 2009. The objective of the Agreement is to promote investment flows and to create a liberal, facilitative, transparent, and competitive investment regime in China and ASEAN through the following:
The oil transported through the Malacca start from the Indian ocean, en route to east Asia through the south china sea, is triple the amount that passes through the Suez Canal; and fifteen times the amount that transits the Panama Canal” (Kaplan,2015) It has estimated 125 billion barrels of oil and has gained the reputation for becoming the second Persian Gulf.
Afghanistan supports China’s stance in the South China Sea Dispute.
One such national interest that much of the literature focuses on is possible oil or gas reserves underneath the Spratlys. The U.S. Energy Information Administration (EIA) estimates that the South China Sea as a whole contains 11 billion barrels of oil and 190 trillion cubic feet of natural gas. However, the EIA also claims that the Spratly Islands in particular have “virtually no proved or probable oil reserves.” Nonetheless, many claimant states have already been in contact with major oil exploration companies. In addition to this, the global decrease in fishing stocks and growing populations mean that the fishing rights and stocks that the Spratlys hold are very attractive to the claimant states.
Kaplan’s Asia’s Caldron: The south china sea and the end of a stable Asia pacific: “The South China Sea functions as the throat of the Western Pacific and Indian oceans—the mass of connective economic tissue where global sea routes coalesce.
The China-Philippines relationship is further strengthened by their participation in the China-ASEAN Free Trade Area (CAFTA), established through the Framework Agreement on China-ASEAN Comprehensive Economic Cooperation in 2002. This landmark agreement enhances economic and trade relations between China and the ASEAN member states, promoting regional economic development and integration. Following an upgrade in 2015, CAFTA continues to facilitate trade in goods and services, reduce tariffs, and create a transparent investment environment.
The South China Sea represents a nexus of geopolitical intricacy and intensified rivalry. Abundant in fishery resources, it accounts for approximately , playing a vital role in the livelihoods of millions in the region. Additionally, its untapped reserves of are significant, estimated to contain around 11 billion barrels of oil and 190 trillion cubic feet of natural gas. These resources contribute to the wealth and potential economic growth of bordering nations.
Recent Military Clashes in the South China Sea.
The PRC bases its claims on historical evidence of Chinese presence on some of the islands. These claims go back to the Xia Dynasty (21st-16th centuries B.C.). The PRC claims that they were the first to “name, map, study, use and patrol the South China Sea and the islands therein”. The PRC refers to different types of evidence of occupancy such as old maps depicting the Spratly Islands, the discovery of old Chinese coins on the islands and the referral to the islands in ancient Chinese history books. Thus according to the PRC argument, the Spratlys have not been terra nullius for about 2000 years at least. The PRC today occupies 9 reefs, however, claim all of the Spratly Islands.
South China Sea dispute – latest updates
The South China Sea, where the Spratly Islands are found, borders many states and is very tellingly also known as the West Philippine Sea and the East Sea in Vietnam. There is some confusion as to the number of islands, reefs, rocks and atolls that the Spratly Islands consist of. Some academics claim up to 230 while others speak of 150 “named landforms” and some only include 40-50 islands and reefs. Even the CIA seems uncertain in its estimate when writing that the Spratlys consist of “100 or so islets”.
Above and beyond the territorial disputes between China and the
Some scholars such as Min Gyo Koo have also focused on the strategic importance of the Spratlys. The South China Sea is the second busiest sea lane in the world and much of the world’s trade passes through it. Further to this, the South China Sea is a militarily important passage; countries controlling the Spratlys could potentially prevent enemy navies from passing and the Spratly Islands themselves represent important observation posts.
. (2019) 'Conflicts in the South China Sea'. 11 July.
Filipino activists and fishermen, some with props that portray fishing boats, march in front of the Chinese Consular Office to hold a protest against China's "aggressive actions" in the South China Sea, ahead of Independence Day in Makati City, Metro Manila, Philippines, June 11, 2024. Photo by Eloisa Lopez/REUTERS.
Assessing the Prospects of Hostility in the South China Sea
The South China Sea’s strategic importance extends to international commerce, acting as an essential conduit that accommodates over . It is a critical passage for trade, carrying goods valued at annually and connecting major economies in Asia with markets in Europe, Africa, and the Americas. Consequently, the South China Sea becomes a central stage for competing territorial demands and intersecting maritime jurisdictions, underlining its global economic significance.