Home / Articles / Uncertain Prospects: South China Sea Code of Conduct Negotiations
For nearly two decades, diplomats from Southeast Asian countries and China have met to discuss the implementation of a “code of conduct” for the South China Sea. The goal of that code is to manage the tensions that may arise from disputes between the region’s claimants, including Brunei, China, Malaysia, the Philippines, Taiwan, Vietnam, and more recently Indonesia. Back in 2002, they signed the “Declaration on the Conduct of Parties in the South China Sea,” which set the stage for a formal code that was to follow. The declaration’s terms were as narrowly crafted as they were brief. The signatories simply pledged to peacefully settle their differences and “exercise self-restraint in the conduct of activities that would complicate or escalate disputes and affect peace and stability.” The declaration gave no indication that the code would seek a resolution to the disputes in the South China Sea, nor require its parties to adhere to its terms.
Still, at the time, the Association of Southeast Asian Nations (ASEAN) hailed the declaration as a great accomplishment. It had persuaded China to sign a declaration that would put at risk its international standing should it violate its spirit. Southeast Asian leaders hoped that the declaration would be the first step towards convincing China that multilateral consensus and a focus on economic cooperation are preferable to interstate confrontation, what they refer to as the “ASEAN Way.” But as time has passed, the international environment in which the declaration was hashed out has changed. So too have the “facts on the ground” (or water, as the case may be) in the South China Sea. Together, those changes have made it even harder for the declaration’s signatories to agree on a code of conduct that can deescalate the ongoing tensions in the region, let alone put them to rest.
Peace in Our Time?
The idea for a code of conduct was hatched by ASEAN in the late 1990s. It arose because of ASEAN’s desire to head off rising tensions in the South China Sea without prompting great-power competition. ASEAN countries well remembered how such competition spawned strife that ravaged Southeast Asia during the Cold War. So, most ASEAN countries were wary of inviting the United States into the region to directly balance China. They also understood how difficult it would be to settle the jumble of conflicting maritime and territorial claims in the disputed waters, given their own divisions and paucity of power. Hence, they believed their best strategy would be to get China to buy into their “ASEAN Way.” And, for a time, it seemed to work. Not only did a reluctant China sign the declaration, but it also joined ASEAN’s Treaty of Amity and Cooperation in Southeast Asia the following year.
Yet, that hopeful mood was short-lived. By the second half of the decade, the claimants resumed asserting their sovereignty. Malaysia and Indonesia pursued offshore oil exploration; Vietnam encouraged tourism in the Spratly Islands; and China began to reclaim land around its outposts. Eventually, China would reclaim over 3,200 acres of land, nearly 19 times as much as all of the other claimants combined. It would also fortify those outposts with airfields, ports, radars, and other military facilities, despite Chinese General Secretary Xi Jinping’s promise to the contrary. Meanwhile, standoffs at sea, mostly between China and other claimant countries, would become more frequent, last longer, and involve larger numbers of ships than ever before.
Promise and Reality
Clearly, neither the declaration on a code of conduct between ASEAN and China nor their negotiations on how to implement it has done much to lower tensions in the South China Sea. One big reason why can be traced back to ASEAN’s cardinal principle of “non-interference” in the affairs of other countries. In part because of that principle, the 2002 declaration was written in such a way as to avoid any infringement on its signatories’ ability to exercise their national sovereignty. That has made managing disputes that arise from overlapping sovereignty claims especially difficult. The problem was already evident during talks over the declaration in 2000. When the Philippine government proposed that a code of conduct should include specific provisions to “govern a range of activities, from marine research and the exploration and development of the area’s resources . . . to the building of structures on the disputed islets,” the language was opposed, not by China, but by one of ASEAN’s leading members, Malaysia.
The prospect for a code of conduct has also done little to foster more cohesion among Southeast Asia’s claimants to the South China Sea. Given their overlapping claims, they have remained wary of one another. So, rather than cooperate in the face of an ever more powerful China, they have generally pursued independent strategies to deal with it. Vietnam built up its maritime forces to resist Chinese assertiveness at sea. Meanwhile, Indonesia and Malaysia played down their differences with China, in the hopes that discrete diplomacy would persuade it to back off. In the meantime, the Philippines oscillated between both approaches. At first, it accommodated China, going as far as discussing joint energy exploration with it. Then, Manila reversed itself and openly challenged Chinese maritime claims at an international court. (It was during this time that the Philippines and Vietnam came closest to cooperation.) But then, Manila changed tack again, not only cozying up to China, but also distancing itself from its security treaty ally, the United States.
Talks on a South China Sea code of conduct were supposed to have shown China the value of the “ASEAN Way” and encouraged greater consensus across Southeast Asia. Yet, reality has fallen short of those expectations. China has continued to harass Malaysian and Vietnamese fishing and energy exploration vessels; effectively barred the Philippines from access to Scarborough Shoal; and even started to intrude into Indonesia’s exclusive economic zone off Natuna Island. Meanwhile, the lack of cooperation within Southeast Asia may have even reinforced China’s long-held preference to negotiate with the other claimants individually, rather than as part of a multilateral body. Certainly, ASEAN has not moved China much closer to its way of thinking. The opposite seems truer. China seems to have convinced most Southeast Asian countries that opposing it would come at the expense of their future prosperity, whether through reduced trade with China or investment from its Belt and Road Initiative.
Progress towards a code of conduct in the South China Sea has moved ahead at a painfully slow pace. It would take three years after the declaration on a code of conduct was signed in 2002 for ASEAN and China to draw up the first draft of the guidelines to implement it. Even then, they would not adopt those guidelines until 2011. Six more years would pass before they settled on a framework which listed the issues that their code of conduct would address. Finally, in 2018, ASEAN and China agreed to a single draft negotiating text for the code of conduct itself. Though plenty still needs to be negotiated, they aim to complete it by 2021.
Among the issues that must be tackled are: the code’s geographic scope (China prefers one that corresponds to its “nine-dash line” claim; ASEAN prefers one that is smaller); bans on further land reclamation in the region (ASEAN favors that; China likely opposes it); and whether the code will be legally binding (ASEAN favors that; China opposes it). Some other issues have been less visible, but are no less important. One is the code’s dispute resolution process. Given the frequency of incidents in the South China Sea, careful attention should be paid to how that process is designed, as it may be often invoked. Another is whether countries that are not party to the code should be allowed to hold military exercises in the region without the consent of all the claimants. Naturally, that is a point that China is keener on than ASEAN, as it would effectively give Beijing a veto over military exercises between the United States and the countries of Southeast Asia.
As things stand now, possibly the most salient feature of the single draft negotiating text may be what it omits rather than what it includes. The text contains no language that limits the claimants’ sovereignty claims to the waters, features (islands, reefs, rocks, shoals, etc.), or exclusive economic zones in the South China Sea. That, of course, maintains the current status quo, but it undermines the code’s ability to manage tensions. For without limitations on rival sovereignty claims, disputes between claimants are bound to recur and flare tensions anew.
In the meantime, the backdrop for the talks over the South China Sea code of conduct has been transformed since the declaration was signed in 2002. At that time, American power (and willingness to use it) was at its zenith. China (just admitted, with American help, into the World Trade Organization) had set economic growth as its top priority. And Southeast Asian countries were benefiting from a regional stability that was implicitly guaranteed by the United States, which asked little from them in return. None of that was true by 2020. The United States had retrenched; China had grown comfortable throwing its weight around. And American treaty allies had begun to openly question whether Washington could ensure a favorable balance of power in the Western Pacific, even as it was asking Southeast Asia to do more.
Of course, China has made its own changes to the situation in the South China Sea. Two decades ago, China had a limited ability to enforce its claims there. But after years of turning the features it occupies into artificial islands, building airfields, ports, and radar stations on them, and beefing up its naval, coast guard, and maritime militia forces around them, China’s capabilities have grown remarkably. Beijing can now maintain a round-the-clock presence in the area and, should it choose to do so, ratchet up pressure on other claimants. On balance, the changes in the international environment since the 2002 declaration have made it harder for ASEAN to conclude a code of conduct with China that will lower tensions in the region.
Cracking the Code?
Despite all the years of debate and discussion over a South China Sea code of conduct, it is easy to see how that code could fall short of expectations. As it is currently envisioned, the code avoids addressing the issue of overlapping sovereignty at the heart of tensions in the region. Moreover, the behavior of the countries involved in the negotiations over the code since 2002 hardly inspires confidence that they will adhere to its spirit in the future. Nor have the lengthy talks over the code led to greater ASEAN unity or brought China any closer to shelving its irredentist claims. And by 2020, changes in the international environment and the “facts on the ground” have made it less likely that any code will do much more than keep tensions at their current levels.
For the moment, the COVID-19 pandemic has slowed negotiations over the code of conduct. Little headway was made during the virtual ASEAN foreign ministers’ meeting in September 2020. Plenty of stumbling points remain. Ideally, the claimants could create (and abide by) straightforward rules for the code. But that is tough without at least a partial agreement over how to deal with overlapping sovereignty claims. That being said, Southeast Asia’s claimants could strengthen their negotiating hand if they could first settle some of their disputes among each other, thereby enabling them to approach China with greater unity. What they ought not to do is present a fractured front to China, which has already proven adept at steering them into dealing bilaterally rather than as a group.
Both ASEAN and China still hope to agree on a final South China Sea code of conduct sometime in 2021. So far, events in 2020 have suggested that it will be a slog to the finish line. Indeed, even before the military exercise one-upmanship between China and the United States over the spring and summer, tensions were already on the rise in the South China Sea. In February 2020, for the first time, a Chinese warship trained its gun-control director on a Philippine patrol vessel during an encounter near Commodore Reef. The action violated not only the spirit of the code, but also international law prohibiting such threats on the high seas. In such an atmosphere of heightened tensions, having a code of conduct that manages them would be helpful. But it is unlikely to be a silver bullet.
The views expressed in this article are those of the authors alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.
 Association of Southeast Asian Nations, 2002 Declaration on the Conduct of Parties in the South China Sea, Phnom Penh, Cambodia, Nov. 4, 2002, p. 1.
 “Arroyo Strikes a Spratlys Deal with China,” Far Eastern Economic Review, Sep. 16, 2004, p. 32.
 Association of Southeast Asian Nations, “Joint Communiqué of the 53rd ASEAN Foreign Ministers’ Meeting,” Sep. 10, 2020.