China’s state-owned enterprises are increasingly engaged in various activities in the South China Sea. Their involvement, usually mingled with nationalism in China, further complicates Beijing’s policy on the dispute.

On 12 July 2016, a special arbitral tribunal under the United Nations Convention on the Law of the Sea (UNCLOS) issued its verdict over the case brought by the Philippines against China in the South China Sea dispute. Since the start of the arbitration, China has steadfastly held on to its stance known as the Four Nos: No Participation, No Acceptance, No Recognition and No Execution.

Many analysts attempted to interpret China’s reaction to the arbitration from Beijing’s strategic and regional security policy perspectives. What is missing in all the analyses is the increasing role of Chinese corporate players, many of which are state-owned enterprises (SOEs). Exploring the role of these Chinese SOEs helps to enrich our understanding of China’s behaviour in the dispute. In fact there is a case to be made that China’s tourist industry is playing a complicating role in China’s positioning in the South China Sea dispute.

… Xue Gong is a senior analyst with the China Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.