Sink or Swim: Navigating Simmering Tensions in the South China Sea

In this explainer, Lead Analyst Juliana dissects the escalating tensions in the South China Sea. She contends that the likelihood of an effective resolution is low, a challenge compounded by intensifying fragmentation within Association of South East Asian Nations (ASEAN). 

Image: The Guardian 

Executive Summary:  

• The Philippines has taken a more assertive stance against China, strengthening military ties with the US and Japan to counterbalance against Chinese maritime activities. 

• In contrast, Malaysia maintains a non-confrontational yet firm approach by gradually building up its military presence in contested areas while pursuing diplomatic gestures to preserve economic ties with China and remain in its good graces. 

• The diverging strategies across ASEAN highlight the region’s growing fragmentations, as member states act independently based on national interests, limiting prospects for effective resolution.  

  
  

More than 50 Chinese Maritime Militia (CMM) vessels surrounded the Rozul Reef, which lies within the Philippines’ Exclusive Economic Zone in the disputed South China Sea. In a separate incident, the Chinese coast guard blasts a Philippine government vessel with a water cannon near Panatag Shoal (Scarborough Shoal). Both naval clashes occurred only within the span of a week.  With military confrontations growing more frequent, tensions between both nations have only been deteriorating, as they scramble to assert control over the contested maritime territory.  

Despite the 2016 arbitral tribunal ruling formed under UNCLOS, China claims almost the entirety of the South China Sea encompassed by its 'nine-dash line,' which includes the EEZs of Brunei, Malaysia, the Philippines, and Vietnam.  

The territory’s overflowing stream of wealth, consisting of an estimated 11 billion barrels of oil worth around $2.5 trillion, makes it a highly desirable asset for China and the other nations within that area. Thus, in response to China’s aggressive claims, the affected countries have varying responses to maintain their ownership of the maritime region.  

The Philippines has adopted a more assertive stance against China—one that is continuously fueled by heightened political rhetoric and escalating military clashes. This approach could be explained by the transition from former President Duterte to President Marcos, pivoting the country’s foreign policy toward the US. Whereas Duterte pursued closer ties with Beijing, which undermined the Philippines’ claims in the South China Sea, Marcos has revived traditional strategic alliances with the US as a critical security partner.  

This alignment has been exemplified through US support for the Philippines’ maritime operations, such as the provision of over $500 million in military aid exempted from the US aid freezes, and most recently, the deployment of the USS George Washington to patrol disputed waters in the South China Sea. Such continued backing is a manifestation of the US’s broader effort to project its influence in the Asia-Pacific, positioning the Philippines as a strategic foothold amid China’s expanding influence across the region. 

In addition to the US, the Philippines has received increasing support from other international actors, including Japan, which has deepened its involvement through participating in joint maritime drills and naval activities alongside the US and the Philippines. These actions serve as coordinated efforts to deter further Chinese advances, reflecting their mutual commitment to safeguarding freedom of navigation as defined under international law.  

In contrast, with China remaining as Malaysia’s primary trading partner since 2009, Malaysia has adopted a quieter and non-confrontational strategy in managing its contested waters. Despite regular Chinese incursions into its EEZ near the Luconia Shoals, Malaysia has steered clear of public escalation and pursued diplomatic engagement instead, as seen in their joint statements emphasizing the importance of maintaining stability in the South China Sea. Yet even alongside this diplomatic posture, Malaysia has cautiously expanded its military presence in Sabah and Sarawak, upgraded air surveillance capabilities, and strengthened maritime patrols—subtly reinforcing its territorial claim while simultaneously preserving strong economic ties with China. 

From a wider scale, the tensions in the South China Sea reveal fractures within ASEAN, as member states respond based on their individual relationships with China rather than forming a unified stance. This cautious strategy may ultimately limit their ability to arrive at concrete resolutions that could meaningfully ease tensions.  

If you would like to learn more about the implications for your business, please contact us at ceo@northstar-insights.com