Executive Summary

1. Several bilateral and multilateral approaches have been utilised to attempt to manage the tensions involved in the South China Sea territorial disputes. Suggestions for a fresh alternative to the existing approaches include the adoption of a minilateral approach (i.e. trilateral or quadrilateral ad hoc groupings).

2. The changes in the Philippines’ approach to the South China Sea under President Duterte (which includes his apparent move away from the U.S. towards China and his reluctance to emphasise the 12 July 2016 arbitral tribunal ruling) has significant implications for the region. This is especially so since 2017 is the year in which the Philippines takes on the role of ASEAN Chair.

3. With Donald Trump as the next U.S. President, there is a great deal of uncertainty for the future of U.S.-ASEAN relations. If the U.S. does not engage ASEAN substantially and support its multilateral efforts in managing the South China Sea issue, Southeast Asian claimant countries might move towards an increasingly bilateral approach with China. This would then have implications for ASEAN’s centrality in the regional security architecture.

4. Now that the Trans-Pacific Partnership (TPP) is unlikely to be realised during Trump’s Presidency, the Regional Comprehensive Economic Partnership (RCEP) is likely to have a larger role to play in the region. Therefore, it is important to examine the future of the RCEP and how ASEAN centrality could shape it since these issues would have implications for regional economics and security.

5. China’s economic strategy in relation to the South China Sea has been to use “commercial diplomacy” to bring the ASEAN member states closer to China. This is also done with the hope that the ASEAN member states’ respective South China Sea policies will be more accommodating of China’s sensitivities.

6. It was argued that China has been using economic incentives/disincentives to influence the Philippines’ South China Sea policy. Under President Aquino, who had adopted a more hardline position towards China, it was noted that China had been tougher on the Philippines in economic terms. However, since Duterte became President and changed the Philippines’ approach to the South China Sea disputes, China has responded favourably by lifting its travel warning to the Philippines and eased up on its previous ban on the import of bananas.

7. There needs to be more awareness of the economic implications of environmental damage in the South China Sea since the perceived lack of immediate economic effects by governments may hamper any efforts to implement real change. Even in the environmental sphere, a multilateral effort is essential for any successful outcome to materialise in the South China Sea.

8. The South China Sea’s rich biodiversity must be protected from its two main threats of coral reef destruction and overfishing. The building of artificial islands and the increase in the trade of endangered species have contributed to the destruction of huge coral reef systems throughout the South China Sea.

9. Overfishing in the South China Sea could quickly turn into a huge security concern — the lack of fish in the region could lead to food insecurity for millions in the region, thereby causing unrest and poverty. A possible solution could be to set fishing quotas, which was something that Norway and the then Soviet Union had managed to agree to in the Arctic during the tension-filled years of the Cold War.