A New Phase for Japan-China Ties After the South China Sea Ruling

Japan Chair Platform

The ruling on July 12 by the Permanent Court of Arbitration (PCA) denied China’s sovereignty claims in the South China Sea. Based on the UN Convention on the Law of the Sea (UNCLOS), the court concluded that the “Nine Dash Line” claimed by China, which covered most of the South China Sea, had no legal basis. The award looks like an overwhelming victory for the Philippines and its supporters, including the United States and Japan. But the situation is not so simple. While the PCA attempted to establish rules for managing maritime competition in the South China Sea, the ruling lacks an enforcement mechanism, and all parties will use it to support their own strategic interests over the long term. In the short term, if Japan and China can use the ruling as an opportunity to improve bilateral relations, that will contribute to regional stability as a whole.
China at a Crossroads
China’s strategy in this case has seemed erratic throughout the process. To manage disputes in the South China Sea, in 2002 China agreed to the Declaration of Conduct (DOC) with the Association of Southeast Asian Nations (ASEAN) countries. Members promised to promote mutual trust and not resolve disputes by the threat or use of force, though the DOC was nonbinding. This framework was meaningful, and the DOC still gives China some basis for the assertion that it has made efforts to resolve disputes through bilateral dialogue with the countries concerned. But China has been reluctant to accept ASEAN’s request to upgrade to a Code of Conduct (COC), which would prohibit members from many activities in the South China Sea.
In 2006, the Chinese government opted to exclude disputes concerning maritime delimitation in a declaration on optional exceptions under Article 298 of the UNCLOS. This action was based in part on lessons learned from the case of the Preah Vihear Temple, the center of a territorial dispute between Cambodia and Thailand. In a verdict delivered in 1962, the International Court of Justice accepted Cambodia’s claims and ordered Thailand to withdraw its military from the Hindu temple and surrounding areas, even though it had been under Thailand’s effective control. “Our conclusion was that issues related to sovereignty should not be judged by any third-parties; we have to control situations by ourselves,” a Chinese official of the Ministry of Foreign Affairs told me during a meeting with ASEAN in 2013.
In spring 2012, China allowed fishing boats to go toward Scarborough Shoal, 250 kilometers off the Philippine coast, and sent coast guard vessels to protect them. Chinese and Philippine coast guard vessels faced each other for a long time, and this incident was considered an explicit demonstration of China’s policy to expand its maritime rights. But this conflict prompted the Philippines to file a complaint with the Permanent Court of Arbitration in January 2013. China likely did not predict this action, and five months later China suddenly changed its attitude toward the COC with ASEAN. China had been reluctant but agreed to launch talks to push forward with the COC at a ministerial meeting with ASEAN held in Brunei in June 2013. However, the Philippines and other countries including the United States were already deeply aware of China’s ambitions and serious mistrust was sowed among the countries concerned.
As a result of a decision to rely on its own power rather than international law, China’s strategy with respect to the PCA in The Hague was to ignore it and deny its jurisdiction by refusing to participate in the proceedings. After the ruling, these tactics became a source of whispered debates among Chinese intellectuals or journalists. One Chinese expert, who spoke to me on the condition of anonymity because of the risk of facing harsh criticism in his country, said “the judgment is predictable if you understand the law. Our government did not analyze nor estimate its political impact.” Given the unfavorable consequences, it is fair to say that China’s diplomatic strategy has failed.  
As the New York Times described, China’s response to the ruling is a test of what kind of country China is becoming—a global leader committed to international law or a superpower willing to take unilateral action against its neighbors.1 This is a critical standard of estimating the meaning of this ruling. If it makes China act in a more provocative way, none of the parties will benefit.
China has conducted military patrols in disputed areas since the ruling, following strong signals from senior officers in the People’s Liberation Army (PLA). On July 18, Wu Shengli, the commander of the PLA Navy, stressed in a meeting with his U.S. counterpart, Admiral John Richardson, that “we will never stop our construction on the Nansha [Spratly] Islands halfway” and noted “China will push forward and complete island construction as planned.”2 Two days before Wu met with Richardson, Sun Jianguo, an admiral and deputy chief of the Joint Staff Department of the powerful Central Military Commission, said at a forum in Beijing that the freedom of navigation patrols by foreign navies could “play out in a disastrous way” and that the PLA will improve its capabilities so that “the military can play a decisive role in the last moment to defend our national sovereignty and interests.”3 Their remarks elevated concerns that China might increase tensions by engaging in provocative actions such as further constructing artificial islands or setting up an Air Defense Identification Zone (ADIZ) in the South China Sea.
Even though these formal remarks were rather aggressive compared to others made by Chinese officials in recent years, we have to watch carefully whether they are aimed at other countries or at the citizens of China. It is important to remember that China is facing serious pressure after the ruling, and when Chinese authorities face a crisis of legitimacy, they have to protect their dignity in the court of domestic public opinion. The Chinese Communist Party (CCP) and the central government rarely give up on their policies in public, but that doesn’t mean they never intend to modify the practical execution of those policies. For example, in a statement after the PCA ruling, the Chinese government mentioned a willingness to explore joint development in the Spratly Islands, a policy first introduced by Deng Xiaoping in the 1980s. Deng recognized that China had to be more moderate in its approach to the Spratly Islands given their great distance from China’s coast, while he declared exclusive sovereignty over the Paracel Islands closer to China’s shores. The current president, Xi Jinping, can take advantage of that precedent to create some room for compromise.
In this context, the inauguration of a new president in the Philippines is a valuable gift for China. President Rodrigo Duterte signaled a willingness to resume dialogue with China in remarks just after the PCA ruling, and Liu Zhenmin, a vice minister of diplomacy, stressed China’s close attention to Duterte’s comments during a press conference in Beijing the day after the ruling. It is not clear whether Liu’s stance represents a consensus of the Chinese government, but such ideas are being discussed among diplomatic officials at least. The problem is that the Foreign Ministry does not have much decisionmaking power in the system.
Cui Tiankai, China’s ambassador to the United States, made a speech at a seminar held at the Center of Strategic and International Studies (CSIS) on July 12 shortly after the ruling and denounced the outcome, though he also said “we are confident that China and the other parties concerned, if we are not disturbed, we will be able to resolve the disputes over time through negotiations and consultations.”4 Chinese diplomats have repeatedly expressed a willingness to resolve differences through bilateral negotiations based on a successful experience with Vietnam. The two countries reached agreement on the boundary in the Gulf of Tonkin in 2000, and China allowed Vietnam to possess 53.23 percent of the Gulf area. Cui’s comments were consistent with traditional Chinese diplomacy: use tough words but also find ways to manage problems.
The Role of Japan
Professor Shen Dingli, associate dean of the Institute of International Studies at Fudan University, also addressed the CSIS seminar and pointed out that China’s compromises, such as the boundary agreement with Vietnam, “happened at a time when we did not have WeChat [China’s most popular social network site, like WhatsApp]. WeChat makes things impossible, makes diplomacy less possible.” Shen seemed to express concern about growing nationalism in China.
After the PCA ruling, nationalistic reactions appeared in some cities in China. Kentucky Fried Chicken (KFC) restaurants in Hebei and Zhejiang provinces were surrounded by people who appealed for a boycott of U.S. products. According to images unveiled on Weibo, another Twitter-like social media platform, Beijing municipal authorities appeared to be issuing internal orders to preserve social stability. They likely became very nervous about managing such situations. Renmin Ribao, or People’s Daily, a media organ of the CCP, along with other newspapers urged people to demonstrate restraint in successive articles. (One example is an editorial in the newspaper Xin Jing Bao dated July 19, 2016, titled “Patriotism Is Not an Excuse for Crime.”5)
These developments are somewhat reminiscent of the situation in 2012 when Japan-China tensions increased over the two nation’s sovereignty claims over the Senkaku Islands. Outbursts of nationalism erupted all over China beyond the government’s control, and Japanese automobile dealerships and other businesses were vandalized. During this downward spiral in the Japan-China relationship, nationalism gained power in both countries, and people with moderate views lost their voices, limiting the policy options of both governments. Though the recent uptick in nationalism in response to the PCA ruling is not as extreme, there is potential for a domestic backlash to erupt if the situation is not handled skillfully. If we expect China to take a more pragmatic policy in the South China Sea, we should be careful not to drive it into a corner too much and instead find ways to reduce tensions. Japan has a responsibility to urge China to abide by international law, but Japan has to take a cautious approach with respect to the South China Sea. To manage the situation, it is necessary to prevent a resurgence of nationalism.
We should not forget that there is historical sentiment behind China’s claims for the South China Sea. China claims the islands and waters on which they have had “historical rights” were invaded by Japan during World War II. “Japan is not a party to the South China Sea issues, and considering its shameful history, it has no rights whatsoever to accuse China on the matter.” This is how Chinese Foreign Ministry spokesman Lu Kang responded to Japanese foreign minister Fumio Kishida’s remarks on July 25 calling on China to accept the rule of law.
At the recent ASEAN Regional Forum (ARF) in Laos, Chinese foreign minister Wang Yi met with Kishida and “warned” that “Japan, which is not a claimant in the South China Sea disputes, should avoid interfering in and hyping up the maritime spats.”6 On the same day, he talked with U.S. secretary of state John Kerry and said he “expected the United States to take steps to support China and the Philippines in resuming their talks over the South China Sea issues.”7 The difference in tone obviously reflects China’s frustration toward Japan.
China also is deeply concerned that the United States, Japan, and neighboring countries will use maritime disputes in the South China Sea to strengthen the alliance system, which Beijing perceives as a threat to its strategic interests. From Japan’s perspective, strengthening ties with the United States or other countries makes sense in terms of maintaining stability in the maritime domain and protecting the Senkaku Islands in the East China Sea. But Japan’s military presence is not helpful in maintaining stability in the South China Sea and could cause serious tension between Japan and China.
In April of this year, Taku Yamasaki, former vice president of Japan’s ruling Liberal Democratic Party, visited Beijing. He is known to have close ties with officials in China and met with senior government representatives and members of the CCP. The first priority of his visit was to share his concerns about developments in the South China Sea. According to a member of his delegation, Yamasaki noted that if tensions in the South China Sea continue to increase, Japan could send vessels of the Self-Defense Forces to the area to help protect U.S. vessels, a scenario that just became possible under new security legislation passed in Japan’s Diet (parliament) last year. He explained that tensions in the South China Sea could significantly change the landscape of the region’s power balance. Song Tao, the head of International Department of the CCP, paid close attention to Yamasaki’s remarks and promised to report to leaders of the party.
The potential for a Japanese military presence in the South China Sea is not a desirable story for China. China should be and hopefully already is aware of the risk that further provocations in the South China Sea would give Japan more reason to expand its engagement. This will lead to another downward spiral in Japan-China relations and also destabilize the East China Sea. China should modify its behavior and refrain from coercive activities.
Japan in turn should explore new avenues for diplomacy. In this context, we should recognize some signals from China since the ruling. Prime Minister Li Keqiang met with Prime Minister Shinzo Abe in Mongolia on July 15 during the Asia-Europe Meeting (ASEM), and they affirmed the importance of cooperation on economic issues and antiterrorism. And China welcomed Shinsuke Sugiyama, Japan’s vice minister for foreign affairs, who visited Beijing recently to lay the groundwork for a meeting between Abe and Xi during the G20 Summit in September. It is worth noting that Foreign Minister Wang Yi, who has shunned meetings with Japanese officials over the Senkaku dispute and history issues, met with Sugiyama as well.
Wang’s appearance probably signaled China’s will to restore its “Neighborhood Diplomacy,” including relations with Japan, after an embarrassing diplomatic setback, and this diplomatic approach should last at least until China hosts the G20 Summit in September. During this period, Japan should use the ruling to improve bilateral relations. This will help to ease the domestic pressure on the Chinese government and potentially lead China on a more moderate and responsible path. Such diplomacy would further Japan’s contributions to stability in the Asia-Pacific region.
Nozomu Hayashi is a CSIS Japan Chair visiting fellow from Asahi Shimbun. He served as Beijing correspondent for Asahi from January 2012 to May 2016.

1 Jane Perlez, “Philippines v. China: Q. And A. on South China Sea Court Case,”  New York Times, July 10 2016,
2 “PLA navy chief urges China-U.S. cooperation in handling South China Sea,” Xinhua, July 18, 2016.
3 “Freedom of navigation patrols may end ‘in disaster’—Chinese admiral,” Reuters, July 18, 2016, http://in.reuters.com/article/southchinasea-ruling-idINKCN0ZY0FF.
4 Cui Tiankai, “China’s Response to the South China Sea Ruling” (speech at the Center for Strategic and International Studies, Washington, DC, July 12, 2016),
5 “Patriotism Is Not an Excuse for Crime,” Xin Jing Bao, July 19, 2016, http://epaper.bjnews.com.cn/html/2016-07/19/content_644659.htm.
6 “Chinese FM warns Japan against intervention in South China Sea issues.” Xinhua, July 25 2016.
7 “Chinese FM expects U.S. to back resumption of China-Philippines talks over South China Sea,” Xinhua, July 26 2016.

Japan Chair Platform is published by the Office of the Japan Chair at the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
© 2016 by the Center for Strategic and International Studies. All rights reserved.

Nozomu Hayashi

Visiting Fellow, Japan Chair