CONFLICT OVERVIEW
The SCS conflict is centered on overlapping territorial and maritime claims between China, Vietnam, Malaysia, Brunei, the Philippines and Taiwan over maritime features (shoals, reefs, rocks, and islands) in the resource rich SCS. Asserting their territorial claims, these countries (except Brunei) have constructed outposts on 70 reefs and small islands, according to the Asia Maritime Transparency Initiative. China lays historical claim to 90% of the SCS on the basis of the nine-dash line and has asserted control by engaging in coercive tactics, as well as building civilian and military installations in disputed areas.
China’s continued assertiveness in the SCS has pushed the Philippines to shore up relations with regional powers like Australia and Japan, which maintain interests in protecting the freedom of navigation in the SCS waters despite not being direct claimants. Australia has signaled a long-term commitment to ensuring its military forces have the capability to act further afield to defend against regional threats to peace and stability, including in the SCS, evident from the AUKUS agreement. Notably, Manila has sought to seek closer security ties with the US, which has resulted in the revival of the 2014 Enhanced Defense Cooperation Agreement (ECDA) in February 2023 and increased joint military drills and patrols in the SCS.
Seerist Deep Dive: South China Sea
The simmering regional conflict between China, the Philippines and its allies
The Second Thomas Shoal and Scarborough Shoal have been the site of frequent maritime skirmishes between China and the Philippines since 2023. Coercive measures used by China such as the deployment of maritime militias and the Chinese Coast Guard (CCG) which have engaged in dangerous maneuvers have led collisions and direct confrontations.
Despite ongoing provocations, land reclamation, inadequate regional diplomacy, and increased civilian and naval deployments which remain key drivers of the SCS conflict, the substantial economic cost of disrupting the USD 5 trillion-worth of global trade which transits through the wider SCS is likely to discourage countries from engaging in open conflict. Given the VERY LOW likelihood of war in the coming months, Control Risks has identified the SCS conflict as a simmering conflict with the potential to disrupt global supply chains.
Timeline of Conflict
Incidents between Filipino and Chinese vessels in the SCS (2023 – present).
5 August A Philippine Coast Guard (PCG) claimed its vessels were blocked and fired at with water cannons by the Chinese Coast Guard (CCG) during a re-supply mission at the Second Thomas Shoal.
22 October Two collisions occurred between CCG and PCG vessels, allegedly due to “dangerous blocking maneuvers” undertaken by the CCG near the Second Thomas Shoal.
9 December A CCG vessel reportedly used water cannons to blockade three Philippine government ships attempting to resupply fishing boats near the Scarborough Shoal.
10 December The CCG engaged in a confrontation with four Philippine vessels on a resupply mission to the grounded navy ship at the Second Thomas Shoal.
10 February The PCG accused four CCG vessels of conducting “dangerous and blocking” maneuvers against a PCG vessel near the Scarborough Shoal.
5 March CCG vessels allegedly caused two collisions with Philippine vessels and water cannoned a boat, wounding four crew members during a resupply mission near the Second Thomas Shoal.
23 March A PCG vessel was “impeded” and “encircled” by a CCG vessel and two Chinese maritime militia vessels, isolating a Philippine resupply boat at the Second Thomas Shoal.
Scarborough Shoal
Second Thomas
Shoal
Monitoring Developments in the SCS
11 August 2023
Seerist analysis published on the 5 August encounter
23 October 2023
Hotspot AI triggered a day after the collisions between the PCG and CCG
13 December 2023
Seerist published analyses on the collisions on 9 and 10 December
10 February 2024
Emotions AI recorded a 42-point increase in Anger in China after the PCG accused CCG vessels of conducting “dangerous and blocking” maneuvers
5 March 2024
Pulse AI recorded a 6-point drop in the Philippines after two collisions were reported
23 March 2024
Daily Sentiment recorded a 12% increase in negative data in the Philippines after a PCG vessel was impeded by a CCG vessel
Defence and security remain one of the cornerstones of Philippines-Australia relations, with geopolitical tensions in the Asia Pacific region likely to drive closer relations in the coming years. While the security relationship has traditionally been multifaceted, including counterterrorism and humanitarian assistance, South China Sea (SCS) maritime security co-operation will likely be a key focus of relations in the coming years. Australia is not a direct party to the SCS disputes, but remains an active participant in freedom of navigation operations in the region. Australia has signalled a long-term commitment to ensuring its military forces have the capability to act further afield to defend against regional threats to peace and stability, including in the SCS. This is evident by its strategic policy announcements and procurement decisions, and most prominently through the AUKUS agreement, a trilateral security partnership with the US and UK.
Alignment of strategic priorities to underpin closer security and defence ties in the coming years, 29 February 2024
SCS Conflict: In Focus
US President Joe Biden hosted South Korean President Yoon Suk-yeol and Japanese Prime Minister Fumio Kishida on 18 August 2023 for a trilateral summit. The summit, which Washington said will inaugurate “a new era of trilateral partnership”, reflects escalated efforts under Biden to strengthen alliances with countries across the Indo-Pacific, in part to counter China and North Korea. In a joint statement, the three countries called out China for its “dangerous and aggressive behaviour supporting unlawful maritime claims” in the South China Sea, and condemned North Korea’s nuclear and [ballistic missile programmes]. The leaders agreed to consult with each other during crises and to co-ordinate responses to regional provocations and threats. The summit saw a series of agreements aimed at institutionalising trilateral co-operation in multiple areas. The leaders agreed to establish a multi-year trilateral exercise plan comprising “annual, named, multi-domain trilateral exercises."
Trilateral co-operation to heighten in multiple areas amid increasing regional tensions, 28 August 2023
The Marcos administration’s apparent commitment to continually test the Chinese Coast Guard’s rules of engagement increases the risks of a tense naval standoff between China and the Philippines. Future missions are anticipated to be increasingly escorted by Philippine Navy vessels and senior personnel. Unless naval assets of the US, the Philippines’ main defence partner, are deployed to escort these resupply missions, which would invite the Chinese Navy’s involvement, China's response will likely remain limited to its Coast Guard. Despite escalating tensions, China, the Philippines and the US will all likely remain unwilling to risk broader military conflict, due to the significant consequences that would entail.
Risk of acute tensions, standoffs heightened amid escalating tactics in disputed sea, 25 March 2024
Though maritime encounters between Chinese and Philippines vessels around disputed South China Sea features are likely to occur throughout 2024, both China and the Philippines will strive to avoid a major military conflict in the coming years and make efforts to engage in continued bilateral dialogues. China is unlikely to perceive the increased skirmishes with the Philippines since 2023 around disputed islands as a significant escalation of tensions. However, Beijing in the coming years will continue to strengthen investment in its maritime capabilities, including its coast guard, navy and other maritime assets to bolster maritime claims and respond to pressures from the likely increase in US security presence in the form of more frequent joint drills, such as the enlargement of Exercise Balikatan, an annual military exercise between the US and the Philippines, in the area.
Heightened tensions to persist amid frequent and intense skirmishes at sea, 11 March 2024
Risk of War
Regional Security
Risk of War
Regional Security
Global Supply Chains
Global Supply Chains
The South China Sea hosts critical shipping routes and boasts abundant fishing grounds. The US Energy Information Administration estimates significant maritime gas and oil reserves in the area. A conflict in this region would likely disrupt shipping and trade flows globally. USD 5 trillion-worth of global trade transits through the wider South China Sea area on an annual basis, according to the journal China-US Focus.
The Malacca Strait, crucial for Chinese oil and gas imports from the Middle East and China's global exports, would be particularly affected if Malaysia was involved in a conflict or if an adversary attempted to blockade China from there. The extent of disruption would depend on the countries involved in the conflict, with naval battles, blockades and attacks on island outposts being likely military strategies.
Unilateral decisions by countries to explore energy resources in disputed waters and an intentional or unintentional collision between rival militaries, law enforcement or exploration vessels are key indicators to monitor which would signal an escalation in the conflict.
Big Picture series: Five simmering conflicts with potential to disrupt global supply chains, 26 February 2024
Risk of War
Regional Security
Global Supply Chains
Monitoring the SCS Conflict with Events AI and Future Events
Building custom keyword searches using Events AI empowers Seerist users to track SCS-related developments from country-specific sources and monitor media narratives.
Custom keyword search with ‘United States’ and ‘Philippines’ country filter applied.
Custom keyword search with ‘China’ country filter applied
Japan’s participation in Exercise Balikatan captured by Future Events, a calendar which covers events that could cause operational disruption, heightened security threats or result in significant political decisions.
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Risk of War
Regional Security
Global Supply Chains
Risk of War
Regional Security
Global Supply Chains
