As an extension of this concept, the United States could seek to expand the range of allied ports, bases and airfields through which it rotates, stations and supports American military assets in the region. For instance, the Indian-controlled Andaman and Nicobar Islands are strategically located and hold tremendous potential due to their proximity to the vital sea-lane that runs through the Strait of Malacca, which ships often transit when entering and exiting the SCS. The United States and India should explore opportunities for joint investments and perhaps the rotational stationing of U.S. vessels and aircraft at Indian bases in the islands.

In Australia, the United States is already planning to expand its military infrastructure, increase the number of U.S. Marines in-country and intensify joint U.S.-Australian training exercises. These laudable initiatives should enjoy bipartisan support going forward. However, the United States needs its military footprint to be more than just an expensive training location—it should facilitate U.S. and ally power projection in the region.

 Of course, any steps by the United States and its allies must be predicated on the recognition that Beijing responds primarily to power. If the United States and its regional allies and partners fail to deploy and sustain sufficient military power in the SCS, Beijing is unlikely to change course. Deterring China means that America and its partners must make sufficient investments in defense. 

At the highest level of policy, the United States must implement the Navy’s fiscal year 2020 shipbuilding plan, which will allow the service to deploy more vessels to the SCS over time. If possible, the Navy’s shipbuilding plan should be accelerated. Under the current plan, the Navy will not reach its 355-ship target until 2034. 

In addition, it is essential that the Pentagon continue to prioritize developing technologies and systems that will be pivotal to U.S. and allied military supremacy in the SCS. These include hypersonic weapons, stealth bombers, ground-mobile missile delivery systems, long-range anti-ship missiles, improved ballistic missile defenses and underwater unmanned vehicles. These systems will depend on cutting-edge artificial intelligence-enabled software and innovative warfighting doctrines.

The administration took a positive step towards enabling improved Indo-Pacific deterrence when it formally withdrew from the Intermediate-Range Nuclear Forces Treaty. With the restrictions the treaty imposed now gone, the United States is free to produce ground-based intermediate-range missiles (500km–5,500km) and deploy them to the Indo-Pacific region—a capability crucial to countering China’s overwhelming missile advantage in the region. Secretary Esper indicated this past August that the United States plans to do just that. Indeed, that same month, the Department of Defense successfully tested a new ground-launched cruise missile which accurately hit its target after more than 500 kilometers of flight. If missiles of sufficient range are properly positioned, they could bring significant additional American deterrent capability to the SCS and surrounding areas. 

In the short term, the United States should increase combined military activities. The 2019 U.S.-Japanese exercise in the South China Sea—involving the USS Ronald Reagan strike group and the Japan Maritime Self Defense Force’s largest carrier, the JS Izumo, and its escorts—is a model for such combined operations. Plans to deploy U.S. Marine Corps’ F-35s aboard a British aircraft carrier in 2021 represent another positive step toward integrating U.S. and friendly forces within the Indo-Pacific. European allies that depend on the free flow of commerce in the SCS should be encouraged to increase their military presence in the region and expand their participation in U.S.-led multilateral patrols and exercises. Vietnam and other countries in the region are also important players that the United States should seek to integrate into these efforts. 

Working with these allies and partners, the United States should also implement a robust public diplomacy campaign related to the SCS. Ideally, the United States and its allies and partners would carry out this public relations battle, whenever possible, to make clear that Beijing’s actions are a threat to many nations. After all, China can advance in the region more easily when its intimidation is met with silence or the protest of only a single country. It is essential that the United States and its partners together highlight China’s strong-arm tactics, so it is forced to consider the impact of reputational damage before embarking on a South China Sea gambit.

An effective media campaign would create a stronger international awareness and consensus regarding the PRC’s malign activities in the SCS. It would also help build a more robust international coalition to push back against China’s actions, increasing the diplomatic costs of aggressive actions in the SCS. Congress would be wise to require the administration to submit a public diplomacy strategy for the SCS.

IN ADDITION to these military and diplomatic measures, the United States must also employ economic tools of national power. The administration should thus prioritize the Indo-Pacific region for investment through the newly created U.S. International Development Finance Corporation.

The IDFC is the U.S. government’s revamped development finance organization as mandated by the build Act of 2018. It mobilizes and facilitates private sector capital for overseas projects in support of U.S. foreign policy interests. Though currently funded at a fraction of the size of China’s efforts, which include the Belt and Road Initiative (BRI), the IDFC nevertheless has an important role to play in securing American regional support. In particular, its market-oriented initiatives—focused on transparency, sustainability and anti-corruption—provide a sharp contrast to the neo-colonial Chinese approach focused on resource extraction and debt as a means of control. From a development perspective, partners in the region do not want Washington to force them to pick sides in the struggle with PRC. They do, however, welcome a choice. The United States seeks independent and prosperous partners. Beijing seeks dependent and indebted vassals for exploitation. If the United States can present that choice, Washington will undercut Beijing’s ability to utilize debt to coerce, control or intimidate countries in the broader SCS region.

The PRC has long used BRI resources to advance China’s strategic footing, such as when it attempted to bribe its way into lucrative railway and pipeline projects in Malaysia. Revelations surrounding a possible Chinese naval base in Cambodia serve to underscore Beijing’s infrastructure ambitions in the SCS region. To provide a transparent alternative, Washington should prioritize the SCS as a target location for IDFC resources. This would provide local countries with an alternative to PRC debt, including the political influence that comes with it, and help thwart PRC attempts to acquire vital SCS infrastructure through financial coercion.

To supplement this effort, Washington should consider leaning on policy instruments that blend economic and military power, such as the foreign military sales, and potentially even foreign military financing programs. The United States should actively encourage and enable regional partners to purchase U.S. military equipment through FMS and potentially a modified version of the FMF. This would increase the capability and capacity of partner militaries—reducing the burden on the U.S. military and increasing deterrence vis-à-vis the PRC. FMS and FMFs also strengthen the U.S. economy and defense industrial and innovation base, decreasing the unit cost for the Pentagon and U.S. taxpayers while depriving countries like Russia of desperately needed revenue. Though FMF has historically been primarily a grant initiative, the Trump administration has considered shifting aspects of the program to include a lending function with modest interest rates designed to cover costs rather than to create long-term indebtedness. Revisiting this question might make sense if the overall FMF portfolio is to enlarge. 

Common equipment permits the United States and partner militaries to operate together more effectively in training and in conflict. Given the focus of the National Security Strategy and the National Defense Strategy on the Indo-Pacific, combined with the benefits detailed above, it would be appropriate to look for opportunities to bolster the U.S. FMF and FMS program in the region. This could put the purchase of U.S. weapons within the reach of regional countries, such as Vietnam and the Philippines, and could redound to America’s benefit militarily, politically and economically—particularly if tailored to the overall U.S. SCS strategy.

Finally, the U.S. Treasury Department may have a role to play in blunting China’s SCS gray zone strategy. Treasury’s formidable Office of Foreign Assets Control (OFAC) has the power to designate entities and impose sanctions on them—effectively cutting them off from the U.S. economy and access to the U.S. dollar system. OFAC has been used to devastating effect against a litany of U.S. adversaries from Iran to Venezuela. If applied to the SCS, U.S. sanctions policy could impose an economic cost on China for its misconduct.

According to the Defense Department, the PAFMM has raised its fleet by renting fishing vessels through a combination of private individuals, companies and state-owned entities. Beijing has now built a state-owned fishing fleet to form part of its maritime militia. All of these parties represent pressure points and potential OFAC targets. Today, the PRC has little incentive to show restraint in its use of the PAFMM. The specter of a U.S. sanctions campaign might convince decisionmakers in Beijing to proceed with more prudence.