THE South China Sea (SCS) is a linchpin for global economic activity, acting as a crucial artery for international trade with an estimated annual commerce volume of $3.5 trillion to $5 trillion. Its significance as a strategic maritime hub lies in its ability to connect major Asian economies, fostering economic interdependence and generating diverse investment opportunities. This maritime region is essential for facilitating international trade and plays a pivotal role in strengthening regional connectivity among members of the Association of Southeast Asian Nations (Asean), China and other stakeholders. Key industries, such as container shipping, energy transportation (including oil and liquefied natural gas) and fisheries, are the main drivers of maritime trade in the SCS. Additionally, investment trends are evident in expanding ports, shipbuilding, logistics and the burgeoning growth of digital trade and e-commerce-related shipping.
Moreover, the economic landscape of the SCS is significantly influenced by regional economic integration initiatives and trade agreements. The Regional Comprehensive Economic Partnership, for example, shapes the dynamics of maritime trade in the area. Meanwhile, the Belt and Road Initiative (BRI) has made substantial positive contributions. Through the construction of modern, smart ports and the development of advanced infrastructure, the BRI has enhanced the efficiency of maritime trade. Investments in sustainable shipping and green logistics, part of the BRI’s broader goals, have further improved regional supply chain connectivity and streamlined cross-border trade facilitation, solidifying the SCS’ status as a vital economic and trade corridor.
Challenges
However, this shared prosperity faces geopolitical tensions, security risks and environmental concerns. Geopolitical tensions and territorial disputes affect investor confidence. Hence, the most imperative and critical question is: How can the long-standing SCS disputes be managed or resolved among claimant states, especially between China and the Philippines?
Employing a multifaceted strategy for SCS claimant states like the Philippines and China is necessary to address the tensions there effectively.
First, strengthening multilateral engagement: A unified stance via the Asean could push for a binding code of conduct (COC) in the SCS, offering a clear framework to manage disputes and clarify contentious issues.
Second, direct dialogue: Complementing multilateral efforts, and targeted bilateral and trilateral dialogues with China, could address specific concerns, fostering a more tailored approach to the complex issues at play.
Third, public diplomacy and strategic communication: Claimant states like the Philippines and China should consistently emphasize their commitment to international law and peaceful dispute resolution, utilizing effective communication to reinforce a collective commitment to regional peace, security and stability.
Fourth, multidimensional diplomacy: Southeast Asian claimants like the Philippines can expand diplomatic channels beyond political talks to include cultural, educational and economic exchanges with China. These relationships build mutual understanding, fostering a more resilient foundation for peace and mutual understanding.
Fifth is moving away from a Western-oriented direct confrontational megaphone diplomacy or way of resolving or settling disputes toward a more oriental or Asian way of dispute resolution, which puts a premium on the preservation of harmony, frictions are kept low-key and as much as possible at the minimum, and exchanges between parties are pleasant and respectful.
Sixth, there should be a shift in mindset from a “winners-takes-all” mentality and attitude toward a more collective outlook. Again, the SCS should be treated as a zone of peace, cooperation, joint development and resource management.
Seventh, it is also vital for the Asean to continue to pursue and play a more active, neutral/nonaligned role in regional security through the Asean Regional Forum and other venues.
SCS COC
Most importantly, constructive relations between and among claimant states, coupled with multilateralism within the ambit of international laws and the Asean, and pushing for the China-Asean COC for the SCS, are also essential considerations for settling the dispute.
As far as the COC on the SCS is concerned, following the conclusion of the third reading, and as far as where Philippines-China relations look like, based on realities and the ground situation, the third reading of the SCS COC marks progress in the process, but not necessarily in substance. This is mainly because there are still divergent interpretations among Asean members and China regarding key provisions of the COC, such as freedom of navigation, militarization and resource exploitation. The COC’s scope and language are often seen as ambiguous, leaving room for unilateral interpretations. All these are things that need to be considered as the COC negotiations continue.
The COC may serve as a tool for crisis management, but not necessarily conflict prevention. Nevertheless, the COC plays a critical role in managing the SCS dispute and reducing the potential for conflict. The COC is a viable diplomatic mechanism, as it can provide international rules-based order for the SCS. Likewise, the COC is essential, as it provides a framework of rules, principles, norms and decision-making procedures for managing and resolving disputes among SCS claimant countries. Furthermore, the COC will create new forms of commonality and cooperation among the parties through dialogues and negotiations.
However, equally important for the COC to be effective, it must be supplemented by the institutionalization of additional multilateral and bilateral negotiations among claimant countries on matters related to fishery management, marine environmental cooperation, and oil and gas development, among others, which are important economic issues that might trigger potential conflicts if not addressed adequately, however, might trigger dispute resolution if pursued in good faith.
Realities
Moreover, regarding the ground realities, there are continued tensions between the Philippines and China. Despite diplomatic dialogue between the two sides, the situation in the SCS continues to be tense, especially in areas like the Second Thomas Shoal and Scarborough Shoal.
Under President Ferdinand Marcos Jr.’s administration, relations between the Philippines and China are on a “knife’s edge” even in the post-third reading stage of the COC, as far as the SCS is concerned. They are likely to be somewhat diplomatically cordial but operationally confrontational. Dialogue will continue, but maritime skirmishes and rhetorical exchanges will persist.
In this regard, the role of external powers should be considered. The United States, Japan, Australia and the Western alliance are stepping up their military (naval) presence in the disputed SCS in support of the Philippines. China sees this as containment, while the Philippines sees it as deterrence.
Conclusion
Indeed, achieving a sustainable and peaceful resolution in the SCS depends on a committed, multifaceted approach blending multilateral and bilateral dialogues with innovative cooperative frameworks. Beyond traditional diplomacy, shared regional interests, such as marine environmental protection, sustainable resource management and disaster response, offer pathways for collaboration that can build trust and confidence among claimant states. By focusing on these “regional commons,” claimant states can establish pragmatic mechanisms that serve mutual interests, fostering a stable, peaceful and cooperative regional order.
Transforming the SCS into a zone of peace and cooperation, rather than conflict, requires all parties to be open-minded, constructive and committed. Recognizing our shared responsibility to uphold the region’s peace, security and stability, governments, think tanks, stakeholders and people must advocate for peace-driven policies. Only through these efforts can the SCS evolve into a sea of peace and cooperation, ensuring the welfare and prosperity of the entire region.
Source: The Manila Times
https://www.manilatimes.net/2025/04/26/opinion/columns/navigating-shared-prosperity-maritime-trade-and-investment-synergies-in-the-scs/2099426
