A Change of Guard

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Friday, 15 July 2016

South China Sea dispute is not driven by oil: Chinese energy expert

South China Sea dispute is not driven by oil: Chinese energy expert

By Krystal Chia and Lin Xueling  Posted 14 Jul 2016 CNA

A Filipino activist holds a Philippine flag on a ship while a Chinese coast guard ship sails by at the Scarborough Shoal in the South China Sea. (Photo: AFP)

Rather than oil being at the centre of the dispute, an energy policy professor tells Conversation With that fishing rights may be the real issue.
BEIJING: China’s far-reaching claims on the South China Sea are not driven by the potentially large oil and gas resources that may exist in disputed area, says Zha Daojiong, a professor at Peking University.

Prof Zha, who specialises in energy policy and food and water security in Asia, argues that the amount of oil in the contested sea is largely unknown and that it would probably be cheaper for China to buy the oil on the open market than engage in costly drilling in the deep waters of the sea.  

“Oil is one element of it, but it’s certainly not the most tangible element. I don’t see oil as the single most compelling argument that’s behind the South China Sea matter,” said Prof Zha in an interview with Channel NewsAsia in Beijing.

His comments come against a backdrop of heightened tensions in the region, with the Permanent Court of Arbitration in The Hague ruling Tuesday in favour of the Philippines in a closely watched case against China. The United Nations-backed court found that China, which claims 80 per cent of the South China Sea, had violated the Philippines’ petroleum and fishing rights.

Predictions about how much oil and other resources might be found in the South China Sea vary greatly. A Chinese government department estimates that the sea might contain 23 to 30 billion tonnes of oil and 16 trillion cubic metres of natural gas, which would be equivalent to a third of China’s total oil and gas resources. China is currently the world’s second-largest consumer of oil after the United States.  

But rather than oil, fishing rights may be the real issue in South China Sea, says Prof Zha, who has also been a consultant with various Chinese government agencies, including on the board of counsellors of the Chinese Association for International Understanding under the administration of Department of International Affairs of the Chinese Communist Party.

China’s run-ins with its neighbours have not been limited to Manila bringing the case to the Permanent Court of Arbitration. Last month, a Chinese fishing boat was detained by the Indonesian navy in waters near the Natuna Islands. While Jakarta has said the boat was in its exclusive economic zone, the Chinese government argued the vessel was in “China’s traditional fishing grounds”.

To resolve such disputes, countries should focus on an equitable division of fish stocks rather than go back to territorial line drawing, said Prof Zha.

“Countries (should) begin with saying: ‘Let’s figure out what is the species, how they migrate … let’s try to restrain ourselves from exploitation and preserve the stocks.' The sad reality is that for the South China Sea, nobody is even talking about it,” said Prof Zha.


Prof Zha was also adamant that China and the Association of Southeast Asian Nations (ASEAN) can maintain good relations despite the increasingly fractious South China Sea claims.

Tensions between China and the Southeast Asian bloc came to the fore just a few weeks when a meeting of China-ASEAN Foreign Ministers failed to reach a joint statement, apparently due to a disagreement over the wording of a section on maritime issues.

“ASEAN is like a house which rests on many pillars. The South China Sea issue may be one of the pillars, so why not have a separate track? Let’s not let one pillar that’s a little shaky to turn out and, somehow, miraculously break down the other pillars of the community.”

“ASEAN should not belittle itself. It’s very powerful, but it must now move,” Prof Zha added.

Looking further ahead, Prof Zha warned that China may need to be more sensitive to its Southeast Asian neighbours and the perceived threat of a “return of Chineseness” in their societies.

“The last thing China should do … is become another Soviet Union, and to become expansionist, to try to line up a group of countries under some sort of ideology and to actively rally a group of countries to do battle with another so-called bloc.”

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