East Asian Economic Integration and South China Sea Disputes

Economic integration in East Asia is deepening in the 21^st century. Trade among countries in the region has been growing in double digits yearly since the inception of the China-ASEAN FTA in 2010. Investment flows among countries in the region has also been growing significantly.

Theoretically, the ongoing economic integration in East Asia should have some positive impacts to the maintenance of peace in the region. Increasing interdependence is expected to reduce conflict potentials among states according to classical liberals. It generates incentives for peace and cooperation on the one hand, and increases costs and risks of conflict on the other hand.

However, this has not been the case in the South China Sea disputes. Despite deepening integration in the region, disputes settlement among the claimants remains an unresolved agenda. Dialogues between ASEAN and China on the Code of Conduct of the parties have so far been producing only limited progress. Tensions between China and ASEAN claimants remain high on this particular issue.

Several ideas had been discussed to solve the problem. Joint development and exploration as one alternative solution to spill the ongoing integration over onto the area, as functionalism argues, and put aside political and sovereignty claims has been discussed since the 1980s. This implies that ASEAN and China are ready for development and cooperation. The major obstacles to further progress in joint development are the absence of detailed agreement (Djalal, 2000; Townsend-Gault, 1998), lack of compliance to the 1991 Declaration (Djalal, 2000), and the parties independent act (Hyer, 1995) and negotiating behaviour. Informal negotiation through track-2 dialogues progressed, but only with little impact, if not none.

Economic integration so far has taken different track of development from the settlement of the South China Sea issues. Whether or not the integration will spillover onto the economic cooperation and development in the disputed South China Sea is yet to be seen. The chance for cooperation is there, but the actualization will depend on how both China and ASEAN manage the issue.

This blog post has been written by Meidi Kosandi. Meidi is a PhD candidate in International Relations at Ritsumeikan University, Japan and a Junior Fellow for 2012 under the ASEAN-Canada Research Partnership. For more information on the ASEAN-Canada Research Partnership, please click here.