Storm Over the South China Sea

---

By Youliang Ren

In the eve of the forthcoming 7th US-China Strategic and Economic Dialogue (S&ED) which was scheduled for late June 2015, the disputes over territorial waters in Asia Pacific generally and in the South China Sea in particular become explosive.

The author of this article participated in the negotiation process of entering the first Sino-US Joint Exploration Program in the Spratly Islands in early 1990s and knew, to some extent, the immense historical, legal, economic and environmental complexities involved.

On May 29, 2015, Inaugurating Asia’s biggest security forum, the Shangri-La Dialogue, Singapore’s Prime Minister Lee Hsien Loong called on countries to break the “vicious cycle” of the South China Sea row, in a hope to persuade the leaders of the region to refrain from any and all inappropriate, irresponsible, and inflammatory remarks.

The Singaporean leader said that if the rise of China in the international order was to remain peaceful, U.S.-Chinese relations had to remain strong. “No country wants to choose sides between the US or China. The historical factors of the South China Sea should be taken into account by all parties concerned, if appropriate.” He added.

Right after this meeting, on June 1, 2015 President Barack Obama told a group of young Southeast Asian leaders visiting the White House that the US does not have a territorial claim to the region, but wants the disputes over the waters China and other countries are claiming to be settled peacefully.

“We’re not parties in the dispute,” President Obama said. “But we do have a stake in making sure that they’re resolved peacefully, diplomatically in accordance with internationally established standards…”

The American leader told the Young Southeast Asian Leaders Initiative fellows that “the truth is that China is going to be successful, it’s big, it’s powerful, its people are talented and they work hard and, “ he added, “it may be that some of China’s territorial claims to the waters are legitimate. “

The comments made by leaders above would be considered constructive, positive, and might be very helpful in resolving tough problems in the region. Certainly they would create a good atmosphere for the upcoming US-China S&ED.

The situation above also reminded me of a similar event 23 years ago when a petroleum contract in the Spratly Islands was entered and signed by China’s National Offshore Oil Company (CNOOC) and an American private oil company Crestone Energy Corporation. This contract, however, went around the government of the US and permitted a link up with a nongovernment US company.

Back in 1992, I was working as a senior geological advisor for this Denver-based Crestone Energy Corporation and was coordinating various agencies in China in cooperation with Crestone for oil exploration in the South China Sea.

It happened that I had the opportunity to accompany a US delegation to China with a draft of a tentative petroleum contract for a joint venture exploration program in the Spratly Islands, the sovereignty of which was disputed by surrounding nations.

Will this potentially oil-rich contract be signed or disapproved for political reasons? China and Vietnam both claimed the area as their own. What’s more, China sank several Vietnamese boats during a naval battle just four years ago (1988) over the disputed waters. Even if the contract was signed, would it be possible to get the full support of China’s navy to protect the implementation of the contract by an American company?

By that time Xi, Zhongxun (Father of China’s new leader Xi, Jinping, hereinafter referred to as Xi Sr.) was First Political Commissar of Guangzhou Military Area Command which covered the defense of five southern provinces and the South China Sea as well. In addition, He was then elected as Vice Chairman of China’s Congress. His comments on South China Sea maritime affairs were regarded as the most valuable advice for senior officers in Beijing.

A Request for Instructions was sent to his desk by then Minister of Energy Resources (covering hydro-electrical and fossil fuel industries). Xi Sr.’s reply was prompt and simple: “As approved by the central leadership, to implement the existing policy of ‘shelve rivalry, jointly develop’, you will have the full naval support behind you.”

The author of this paper witnessed this historical event and had the honor to be invited to the signing ceremony of the first Sino-US offshore petroleum contract in the South China Sea (Wan’an Bei-21 Block, an area of 25,155 square km*) between CNOOC and Crestone of the US, which was held in the Great Hall of the People, the seat of China’s ceremonial legislature in Beijing on May 8, 1992.

Following the ceremony, the world media applauded this brave and smart move in the direction of peaceful resolution. One member of press commented that China had succeeded in indirectly enlisting the US as an ally, which was very clever way of going around the government of the US by linking up with a nongovernmental US company. In a word, this event had set up an example of a “balanced and pragmatic approach” to international crises.

A week later the minister of MOE arranged to have me carry the documents in both Chinese and English versions including the petroleum contract and an executive summary, and to accompany her to brief Xi Sr. in Guangzhou. Xi Sr. still had good memories of his visit to the US in 1980 when I interpreted for him during his tour to a molybdenum mine near Denver.

Regarding the situation in the South China Sea, Xi Sr. told both CNOOC President and Crestone CEO that “Just as Mr. Deng said, “I believe in negotiation. I don’t think there will be military conflicts with Vietnam for the time being. In modern history, shared interests transcended the differences between counterparts. Progresses have been made by negotiation rather than conflict.”

Just as Xi Sr. put 23 years ago, “if one compares the China-U.S. long-term stable and cooperative relationship to a steamer sailing in a rough sea, the mission of a win-win strategy can be viewed as the sturdy ballast to ensure that the ship will not be running the risk of being capsized while braving fierce storms and monstrous waves. ”

Now it is anticipated that the U.S. and China will discuss their common interests and challenges in the region as well as the shared goal of maintaining peace, stability, and prosperity in the upcoming S&ED. The two sides have decided to address pressing regional issues and to strengthen cooperation in the Pacific Islands. We wish fruitful results for both countries.