Major hurdles – and rewards – as China and Philippines try to forge deal to share South China Sea resources


If the two sides manage to reach an agreement, an outcome that is far assured given the myriad political and legal complexities, it could radically alter the dynamics of a vexing geopolitical dispute.

Ahead of President Xi Jinping’s expected visit to Manila in November, the Philippines and China have taken a major step towards resolving their maritime disputes. Last month, the Philippine government announced the formation of a technical working group to iron out the legality of a resource sharing agreement with China in the South China Sea.

By the end of September, the two neighbours expect to finalise a basic framework for a joint exploration agreement in their overlapping areas of claim. The big prize is the disputed Reed Bank, located within the Philippines’ exclusive economic zone (EEZ), as well as China’s nine-dash-line claim that encircled as much as 90 per cent of the South China Sea.

Given the political sensitivity and legal complexity of the issue, the Philippines and China are looking at a joint exploration scheme as a preliminary step before an actual Joint Development Agreement (JDA) in the South China Sea.

If the two sides manage to pull off a resource sharing deal, an outcome that is far assured, it could radically alter the dynamics of the most vexing geopolitical dispute of the century.

From China’s point of view, any resource sharing arrangement builds on Deng Xiaoping’s age-old formula of peaceful dispute management with neighbours: “[S]overeignty remains ours; shelve disputes; pursue joint development.”

Drawing in Deng’s advice, the Jiang Zemin and Hu Jintao administrations managed to resolve 17 of 23 border disputes, particularly those in continental Asia. As a compromise, China either reduced the scope of its claims or, in few cases, abandoned its original claims.

What’s China’s ‘nine-dash line’ and why has it created so much tension in the South China Sea?
The South China Sea disputes, however, have proven to be a much more difficult diplomatic puzzle, with China tussling with multiple southern neighbours, including the Philippines, Malaysia and Vietnam.

The United Nations Convention on the Law of the Sea enjoins disputing parties to make “every effort to enter into provisional arrangements of a practical nature”, which will enhance “spirit of understanding and cooperation”.

It also calls on countries “bordering an enclosed or semi-enclosed sea” to “cooperate with each other in the exercise of their rights and in the performance of their duties”. Both China and the Philippines are signatories to the convention.