Sea Disputes Loom Over Asean Summit

March 29, 2012,
The Wall Street Journal
By JAMES HOOKWAY

Tiny Cambodia is emerging as a key pawn in the diplomatic struggle over one of the world's busiest stretches of water: the potentially energy-rich South China Sea.

The country of 15 million people is this year hosting a series of regional summits in which China's claims to the waters could loom large. Its sea tussles with countries such as Vietnam and the Philippines has raised security fears in an already jittery region. The U.S. has further angered China by saying it wants to keep the South China Sea, which carries around half the world's total trade, free and open to navigation.

Ahead of a summit by leaders of the 10-member Association of Southeast Asian Nations next week. China's President Hu Jintao is embarking on his own four-day state visit to Cambodia Friday in what some analysts interpret as a not-so-subtle reminder of where the host nation's sympathies should lie, and a ploy to encourage Cambodia to play down the South China Sea controversy wherever possible.

Cambodia is the latest Asian country to have its ties to China come under closer scrutiny. China for years has been the biggest provider of foreign aid and investment in Cambodia. Chinese investors have transformed Phnom Penh's skyline with ever-taller buildings and Chinese tourists flock to the country's burgeoning casinos.

In return, Cambodia, which has no claims in the South China Sea, steadfastly maintains a neutral stance toward the contest for control of its waters.

Now, in a year when Cambodia will host Asean's meetings, analysts suggest China is counting on its ally to slow the momentum for a stronger, unified Asean response to Beijing's claim of sovereignty over the waters.

Mr. Hu's visit just before the Asean leaders' summit "is putting the pressure on Cambodia and showing that China is willing to work its patch," said Carlyle Thayer, a professor with the University of New South Wales at the Australian Defence Force Academy. Chinese Foreign Ministry spokesman Hong Lei reiterated China's view Wednesday that its sovereignty over the entire sea is "indisputable".

China tried but failed to stop the South China Sea from being discussed at the latest Asean summit, said participants in that meeting, in Indonesia last year. It is not yet known whether the topic will be on the agenda this year.

Teeming with fish and believed to lie atop larger reserves of oil and natural gas, the South China Sea is emerging as a major security flash point that has the potential to destabilize the entire East Asian region. Japan's economy, for instance, depends almost entirely on oil shipped through the area.

China claims the whole sea as its sovereign territory, while the Philippines, Vietnam, Taiwan, Malaysia and Brunei also claim parts, leading to increasingly frequent dust-ups over oil exploration and fishing rights. The Philippine and Vietnamese governments both accuse Chinese vessels of sabotaging oil exploration within their waters, as defined by the United Nations' maritime laws, while Beijing has repeatedly warned its smaller neighbors not to develop energy resources in the region without its permission and not to engage in military maneuvers that could raise stress levels in the area.

Vietnam and the Philippines are now developing stronger military ties with the U.S., and with each other, as they step up military spending in response to China's growing naval and economic power. Vietnam is awaiting delivery of six submarines from Russia, while the Philippines is renewing its sometimes prickly military relationship with the U.S., the islands' former colonial ruler. Manila recently took delivery of a former U.S. Coast Guard cutter to help bolster its dilapidated navy and Congress in February approved the transfer of a second vessel.

In a recent interview, President Benigno Aquino III said that the U.S.'s re-engagement in East Asia after a decade focused on the Middle East and Afghanistan is helping smaller countries such as the Philippines develop a more equal, balanced relationship with China, the regional superpower. Philippine officials say Mr. Aquino will push Asean to adopt a code of conduct on how to handle disputes, but it is unclear whether Cambodia, as host, will allow the proposals to be discussed.

American officials worry that Cambodia, lodged between Thailand and Vietnam, has fallen under China's sway over the past decade. During a brief stop there in late 2010, U.S. Secretary of State Hillary Clinton urged Cambodia not to be too dependent on China, and pledged to look for ways to retire $450 million in debt accrued by Cambodia's Vietnam War-era government. U.S. officials said privately the stop was intended at least in part to demonstrate U.S. support for the country amid China's expanding influence there,

China's large aid donations and backing for infrastructure projects are seen as an important tool for China to boost its popularity in Cambodia, which was ravaged by years of civil war and the atrocities of the China-backed Khmer Rouge regime in the 1970s The country's former monarch, King Norodom Sihanouk, has an especially strong relationship with Beijing, once seeking refuge there and regularly obtaining medical treatment in the country.

But recent shifts in the diplomatic winds in Asia underscore how such Chinese support doesn't always buy loyalty.

Until relatively recently, the Philippines, for one, was perceived to be increasingly close to China. It accepted large amounts of development aid from Beijing while at the same time giving China a greater say—at least temporarily—in how the Philippines planned to exploit energy resources in its territorial waters. The country has reversed course under the leadership of Mr. Aquino, who was elected in 2010, repositioning itself as one of the U.S.'s strongest allies in the region.

Military-dominated Myanmar also is beginning to break away from China's orbit. Last year it suspended a controversial Chinese-financed hydropower project which would have sent masses of electricity back to China. Now, an army-backed government is pursuing a series of reforms which analysts believe are designed to persuade the U.S. and European Union to drop stringent sanctions and enable Myanmar to develop stronger trade relationships with the West instead of depending too heavily on China.

"This is a point which China either doesn't get or refuses to acknowledge: They accuse the U.S. of causing trouble, but it's countries such as Myanmar, Vietnam and the Philippines which are reaching out to the U.S. to counter China, not the other way around," said Walter Lohman, director of the Asian Studies Center at the Washington-based Heritage Foundation.

Write to James Hookway at james.hookway@wsj.com