The South China Sea issue has become one of the major irritants in the China-US relations in recent years, over which the public opinion in the two countries are very critical of each other. There are even frictions in the sea between the two navies. The South China Sea seems like an outlet for the rivalry and confrontation that are building up of late between China and the US. As a result, the two sides seem to be reassessing each other’s intentions on a strategic level. The latest rhetoric is about “militarizing the South China Sea”, and on the part of the US, announcements to carry out “freedom of navigation operational assertions”. Hawkish voices are growing louder in both sides of the Pacific. Such frictions surrounding the South China Sea are leading to further strategic mistrust and hostility. The American scholar David M. Lampton was straightforward when he observed worriedly in reference to the existing situation, “A tipping point in the U.S.-China relations is upon us”. It is obvious that the South China Sea issue is a major catalyst for the troubled China-US relations, if not the key contributing factor.

Opinions diverge in both countries on what has led to the current situation in the South China Sea. In China, it is widely believed that it is the US’s Asia-Pacific rebalance strategy, its taking sides on disputes in the South China Sea, and its direct intervention that have escalated the tensions and made the issue more complicated. In the US, accusations are strident of China’s defiance of international law, coercion of smaller neighbors by force and attempted denial of access to the US, in its bid to gradually take control of the South China Sea using a salami-slicing strategy and to eventually turn it into a Chinese lake.

It is obvious from the incidents and events that have unfolded in the South China Sea over the years that all disputes are centered on sovereignty and rights over the Nansha Islands and their surrounding waters. In fact, such disputes were not uncommon in third world countries in modern history, including during the Cold War era. But the discovery of abundant oil reserves in the Nansha waters in the late 1960s and the introduction of international arrangements concerning the EEZs or the continental shelf, such as the Convention on the Continental Shelf and the United Nations Convention on the Law of the Sea, provided fresh incentives for other claimants to covet and grab China’s Nansha Islands. The disputes then spilled from those islands and reefs to wider maritime areas, but without spinning out of control. A good proof was the “golden era” of the China-ASEAN relations from 1991 to the end of 2010, during which bilateral cooperation flourished and trade ballooned nearly 37 times, from no more than 8 billion to 300 billion USD. During this period, China’s GDP rose rapidly, and most Southeast Asian economies expanded more than five-fold.

Tensions started to build up in 2009 and have escalated since 2012. How have things festered against a backdrop of peace of development, and following a sustained period of regional cooperation? It is obvious that no single event or cause could have escalated and changed the situation in the region. So it is worth examining the incidents and behavior that have happened, the reactions they triggered, and the consequences incurred, in the leading up to the current state of affairs. This paper provides an overview of the chain of events contributing to the escalation of tensions in the South China Sea, as well as the context in which they occurred and potential connections they have. It is hoped this paper will help those concerned about the disputes see the bigger picture and get to the heart of why things have happened that way. It also serves as a warning against further deepening of misunderstanding and spiraling of tensions for all countries concerned.

Imperial Japan’s Occupation of the Nansha Islands and Post-war Arrangements

The South China Sea is the largest marginal sea in the West Pacific region, covering an area of 3.5 million km2. It is located south of mainland China and the island of Taiwan, west of the Philippines, north of Kalimantan and Sumatra, and east of the Malay and Indo-China peninsulas. It connects the Pacific through the Bashi and Balintang channels in the northeast, and the Mindoro and Balabac straits in the southeast; joins the Java Sea through the Karimata and Gaspar straits, and is linked with the Indian Ocean through the Strait of Malacca in the southwest. Rich in fisheries resources and oil and gas reserves, the sea plays an important role in the economic development of the coastal countries.

China has sovereignty over four archipelagos in the South China Sea, namely, the Xisha, Nansha, Zhongsha and Dongsha Islands, which are indicated by the dash lines on the map drawn in 1947. The Nansha Islands (or the Spratly Islands; coordinates: 3°40'-11°55' N; 109°33'-117°50' E) comprise over 230 islands, islets, sandbanks, rocks and shoals that are scattered along a 1,000 kilometer span from the southeast to the northwest of the Sea. This area in question was initially discovered and named by China as the Nansha Islands, over which China was the first to exercise sovereignty and that exercise has been ongoing. [i] Before the 1930s, there was no dispute over China’s ownership of them, as reflected in many maps and encyclopedias published around the world.

Beginning in the 20th century, western colonial powers, including the United Kingdom, Germany and France, followed by Asia’s emerging power Japan, kept coveting the Nansha Islands as they colonized Southeast Asia and invaded China. Most of their territorial ambitions ended in failure due to strong resistance from China’s Late Qing government, the succeeding Nationalist government and the general public. Japan was the first to have seized some of the islands in the South China Sea, including the Nansha Islands. In 1939, Japan occupied part of the Nansha Islands in an effort to control Southeast Asia and in preparations for an invasion of Australia. [ii]

The Cairo Declaration of November 1943, signed by the heads of the governments of China, the United States and the United Kingdom, proclaimed that “…Japan shall be stripped of all the islands in the Pacific which she has seized or occupied since the beginning of the first World War in 1914, and that all the territories Japan has stolen from the Chinese, such as Manchuria, Formosa, and the Pescadores, shall be restored to the Republic of China.” The Potsdam Declaration of July 26, 1945 also stipulated in its eighth article that “the Japanese sovereignty shall be limited to the islands of Honshu, Hokkaido, Kyushu, Shikoku, and such minor islands as we determine, as had been announced in the Cairo Declaration in 1943.”

In December 1946, a year after the defeat of Japan, the Nationalist government of China sent warships to occupy Taiping Island (Itu Aba Island) and Zhongye Island (Thitu Island) and set up a base on Taiping Island. In 1947, the Ministry of the Interior of China’s Nationalist government renamed a total of 159 islands, islets and sandbanks, including those of the Nansha Islands, historically under China’s jurisdiction in the South China Sea. Meanwhile, the Nationalist government officially published a chart of its territorial waters that China had owned in the South China Sea demarcated by an eleven-dash line. For a long time afterwards, the US made no objections whatsoever. Given it being a long-term ally of Taiwan and its heavy presence in postwar Asia, the US had every reason to be aware of the existence of the chart. Obviously, China’s position was recognized and acknowledged.

In the face of the division of both sides of the Taiwan Straits, the outbreak of the Cold War and tensions between the two Camps, the US opted for a pragmatic attitude toward the ownership of the islands and reefs in the South China Sea. This pragmatism was reflected in the Peace Treaty of San Francisco between Japan and some of the Allied Powers. Signed on September 8, 1951 and entering into force on April 28, 1952, the document served to end the Allied post-war occupation of Japan and establish Japan's role in the international arena. It officially renounced Japan's rights to the land it occupied including “renounces all right, title and claim to the Spratly Islands and to the Paracel Islands”. Its Article 2(6) provided that "Japan renounces all right, title and claim to the Spratly Islands (the Nansha Islands) and to the Paracel Islands (the Xisha Islands)", but did not specify the ownership of these islands.

However, as the biggest victims of the Japanese militarism and one of the four major victors in WWII, the PRC was not invited to the treaty talks held in San Francisco. In reaction to that, on 15th August, the Chinese government issued the Declaration on the Draft Peace Treaty with Japan by the US and the UK and on the San Francisco Conference by the then Foreign Minister Zhou Enlai, affirming China's sovereignty over the archipelagos in the South China Sea, including the Nansha Islands, and protesting about the absence of any provisions in the draft on who shall take over the South China Sea islands following Japan's renouncement of all rights, title and claim to them. It reiterated that "the Chinese government of the day had taken over those islands" and that the PRC's rightful sovereignty "shall remain intact".[iii]