SOUTH CHINA SEA TENSIONS
The post-COVID era has been punishing for global trade.
HOW & WHY?
- Lockdowns and factory closures sparked supply chain delays worldwide and helped fuel decades-high inflation.
- The Suez Canal was closed for a week in 2021 after a container ship got stuck. Attacks on shipping by Yemen-based Houthis and Iran over the past 10 months have forced a rerouting of container vessels from the Red Sea via Africa.
- And now China’s military standoffs in the South China Sea could also impact the smooth flow of trade.
THE SOUTH CHINA SEA DISPUTE
- The Philippines has accused Chinese coast guard vessels of “intentionally” colliding with its vessels on a resupply mission in a disputed part of the South China Sea.
- “Four Sha” (Four Sands archipelagos) are the four island groups in the SCS region over which China claims it has “historical rights”, named Dongsha Qundao, Xisha Qundao, Zhongsha Qundao and Nansha Qundao.
- Internationally they are known as Pratas Islands, Paracel Islands, the Macclesfield Bank area and the Spratly Islands.
- China stakes claim to 90% of the South China Sea, and this claim is based on the U-shaped nine-dash line etched on the map in the 1940s by a Chinese geographer.
- The Nine-dash line has a Geopolitical significance.
9 DASH LINESIGNIFICANCE OF SCS
- Maritime trade: The region is one of the busiest sea routes of the world and more than 60% of the global trade passes through this sea.
- Natural Reserves: The region is said to host vast reserves of Oil, Natural Gas, Coral Lime, high Silicate, Sand, quality Gem, natural pearls.
- Fishing grounds: The sea is warm throughout the year and is considered as one of the major commercial fishing regions of the world.
- Freedom of Navigation: Acknowledging the claims of China will affect the freedom of navigation in the region, which may set a wrong precedent for such claims in other parts of the world too.
BIGGEST CHOKEPOINTS IN SCS
- While the main current tensions are between China, the Philippines and Taiwan, the real threat to trade in the South China Sea could come in the Malacca Strait, which lies further south between Malaysia, Indonesia and Singapore.
- Last year, 7 million barrels of oil and petroleum products were moved through the strait per day, according to the US Energy Information Administration (EIA). The figure was 13% higher than through the Strait of Hormuz.
- The Malacca Strait is just 64 kilometers wide at its narrowest point and is already vulnerable to congestion and collisions. Over the years, the waterway has seen many incidents of robbery and piracy.
- Some geopolitical and military experts have predicted that if China were to invade Taiwan, for example, the US and its allies could blockade the Malacca Strait, limiting Chinese access to oil as well as exports from Asia’s largest economy.
CONCERNS FOR INDIA
- Freedom of Navigation: India’s trade routes pass through the South China Sea, making freedom of navigation a priority.
- Indian vessels need to cross them safe and secure to reach the Pacific nations.
- Nearly 55% of India’s trade with the Indo-Pacific region passes through these waters
- Economic Interests: India has economic interests in the region’s resources and fisheries.
- ONGC Videsh Limited (ONGC-VL) along with Petrovietnam is exploring for Oil reserves in the region, which could help to secure India’s energy needs
- Regional Stability: Tensions can affect the broader Indo-Pacific region.
- Strategic Partnerships: India’s alliances with affected nations make it invested in the issue.
- Rule of Law: India supports resolving disputes based on international law.
- Act East Policy: South China Sea is a part of India’s regional engagement strategy.
- Bilateral Relationships: India has partnerships with nations involved in the dispute.
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