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Analysis: US challenges Beijing in South China Sea

28 Oct 2015 11:42 GMT
Analysis: US challenges Beijing in South China Sea

Singapore, 28 October (Argus) — Energy producers and shipowners in east Asia are facing a new level of uncertainty in the South China Sea after the US made its strongest attempt yet to challenge China's territorial claims in the region.

The US navy vessel USS Lassen passed within 12 nautical miles (22km) of Chinese-controlled reefs in the Spratly islands yesterday, in what China's foreign ministry described as an illegal entry into its waters. This is the first time the US has directly challenged China's claims to the control of disputed islands in the South China Sea since Beijing began large-scale land reclamation and island building activities in 2013.

China said it has "indisputable sovereignty" over the Spratly islands and adjacent waters, which are also claimed in part by countries including Vietnam and the Philippines. The US government said it does not take sides in the territorial disputes, but the decision to transit close to the reefs as part of a freedom of navigation operation is in effect a rejection of China's activities. The reefs only naturally protrude above water at low tide, which under the UN Convention on the Law of the Sea does not entitle them to the territorial zone that China claims.

Chinese vessels monitored and warned the USS Lassen, the foreign ministry said. It has framed the incident as a breach of its sovereignty, in contrast to the US' justification that it is upholding the principle of free navigation. The different interpretations placed on the incident by Washington and Beijing suggest further disagreements may be in store.

It is unclear whether the US intends to repeat the patrols or conduct similar missions near to disputed islands controlled by Vietnam, the Philippines or others. But any further challenges to Chinese claims, potentially leading to confrontations at sea, could worsen regional tensions. Fishing boats and coastguard vessels from China, Vietnam and the Philippines have regularly clashed near disputed territories in the last few years, notably when China's state-controlled producer CNOOC deployed a deepwater drilling rig in May 2014 in an area also claimed by Vietnam.

The South China Sea may hold proven and probable reserves of around 11bn bl of oil and 190 trillion ft³ (5.4 trillion m³) of natural gas, US government agency the EIA said. But a lack of exploration and territorial disputes makes it hard to judge reserves, with most of the viable deposits near coastal shelves rather than in disputed areas such as the Spratlys. CNOOC said last year it had found an unspecified amount of gas in its Paracel island drilling, but most of the firm's South China Sea discoveries have been made nearer to the Chinese mainland.

But the South China Sea is one of the world's busiest shipping routes, with the huge majority of seaborne oil and gas imports to China and northeast Asia passing through the region. This means China "cares more about navigation safety and freedom in the South China Sea than any other countries", the Chinese foreign ministry said. Ensuring the free flow of commerce and navigation is "critically important" to the global economy, the White House said this week. But the prospect of the US and China using their navies to back up differing interpretations of freedom of navigation and maritime law threatens to complicate an already fragile regional security situation.