China's strategy for development of resources in S. China Sea

Recently, the China National Offshore Oil Corporation announced the second batch of 26 oil areas in the South China Sea which allows foreign companies'joint development in 2012. China's pace of exploiting the oil of the South China Sea has obviously accelerated.

These areas are all around the Beibu Gulf and far from Nine-Dotted Line. It indicates that China still holds a relevantly cautious stance in developing the oil resources of total 55 billion tons in the South China Sea.

Different from China, the five countries of Vietnam, Malaysia, the Philippines, Brunei and Indonesia around the South China Sea are maintaining rapid paces in exploiting oil resources of the South China Sea.

In dealing with oil and gas development disputes with countries around the South China Sea, the government of China always sticks to the principle of "China having the sovereignty and the related sides putting aside disputes and developing them jointly." But the current situation shows that these countries have dissimilated this principle.

On the one hand, certain countries bordering the South China Sea have long used force to occupy the Nansha Islands and sent garrisons and built related facilities there. While one island after another has been occupied, China has not taken fierce countermeasures, and thus failed to draw mutually recognized maritime boundaries with these countries. At present, the country itself only recognizes China's sovereignty over the Nansha Islands.

On the other hand, China once tried to take advantage of the ASEAN Plus One mechanism to settle the territorial disputes in the South China Sea, but the U.S. intervention ruined this strategy.

As the policy of "safeguarding sovereignty and shelving disputes" has been marginalized, the principle of "joint development" has naturally failed to be implemented effectively or produce any tangible results.

In fact, disputes over oil and gas in the South China Sea have become an international issue due to the intervention of the United States and some other outside powers. In such a complex, sensitive, and potentially explosive situation, the use of military force may only bring losses to all parties involved, so the Chinese government will continue to use smart strategies to settle the disputes.

China should focus on developing its oil and gas resources independently, while still seeking to conduct "joint development" in disputed sea areas with related countries.

The United States has taken firm steps to "return to Asia," making it unrealistic to expect the superpower to stay out of the South China Sea issue. However, China can still deal with or even counterbalance the United States through certain measures, including joining forces with Russia and enhancing cooperation with U.S. oil companies in developing oil resources in the South China Sea to increase common interests with the United States.

Striking down enemies one by one is China's core strategy for dealing with the other five countries that each claim parts of the South China Sea. As Indonesia and Brunei's sovereignty claims have little overlap with China's nine-dotted line, and the two countries have not issued any clear territorial claims, China can increase investment and support for the two countries.

As for Vietnam, the Philippines, and Malaysia, China can impose economic sanctions against them and restrict imports from the three countries through a variety of trade measures. If China can bring huge economic losses to these risk takers and weaken the leadership of their ruling parties, these countries will definitely return to the negotiating table. The real victory in safeguarding territorial waters and natural resources is not defeating enemies, but intimidating them into not initiating a vicious game with China over oil and gas resources in the South China Sea in the first place.