Sunday, April 18, 2010

395) China's maritime ambitions

Foreign Policy Research Institute
Over 50 Years of Ideas in Service to Our Nation

by Xinjun Zhang
April 16, 2010

Xinjun Zhang is Associate Professor, School of Law, Tsinghua
University and, for 2009-10, is a Fulbright Scholar in
residence at the School of Law, University of Pennsylvania.
This essay is based on his November 5, 2009 presentation to
FPRI's Asia Study Group, chaired by Jacques deLisle.

China's rise naturally raises concern among its neighbors
about Beijing's agenda. China has emphasized that its "rise"
will be "peaceful," but China also will seek to remove
impediments to its rise, in part by invoking existing
international rules, and shaping new international rules, to
serve its interests. As a result, there will be more "legal
confrontations" between China and other states. Such legal
disputes are contentious but peaceful, compatible with
China's ideal of a "harmonious world" and agenda of peaceful
rise, and preferable to less law-governed alternatives.
China's approach to territorial disputes during the last
twenty years and recent developments in the Sino-Japanese
dispute over the East China Sea, including a "principled
consensus" between the parties in 2008, illustrate the
virtues and potential-as well as the limits-of China's
reliance on international law to address a chronic source of
friction and instability in China's foreign relations.

China's Numerous, Long-Running Territorial Disputes

China's long land borders, numerous neighbors and long,
complicated and sometimes crisis-ridden history of relations
with adjacent states have generated border disputes. These
have sometimes brought crisis and violence, including
several armed conflicts from the 1960s to the 1980s.
Especially since the 1990s, China and its continental
neighbors have worked hard to reach boundary agreements,
successfully settling most of the long-standing disputes
with formal treaties. For example, China and Vietnam reached
a comprehensive land boundary agreement in December 1999.
China and Russia reached an agreement concerning the western
part of the border in September 1994. With respect to the
more contentious eastern part of their border, the two
powers reached an initial agreement in May 1991, a
supplementary agreement in October 2004, and a supplementary
protocol in July 2008, which is said to be a final
settlement of the 4300 kilometer frontier. China and India
are engaged in ongoing talks to address China's last
unsettled land boundary.

Maritime boundary issues, in contrast, have only recently
emerged on China's foreign relations agenda, and there has
been little progress in settling most of them. China has
overlapping maritime territorial claims with three countries
in the East China Sea and five countries in the South China
Sea. The only formal delimitation agreement so far has been
reached with Vietnam (the Beibu Gulf Delimitation Agreement,
December 12, 2000, and entered into force on June 30, 2004)
and addresses only part of the two states' maritime
boundary. In 2002, China and ASEAN agreed on a Code of
Conduct for the South China Sea-a relatively informal
declaration that did not resolve territorial claims or
rights to exploit resources. In 2005, China and North Korea
concluded a Joint Development Agreement -- China's first
joint development agreement, but the text of the agreement
has not yet been made available to public. On June 18, 2008,
China and Japan reached a "Principled Consensus on the East
China Sea Issue," but the accord was followed immediately by
sharp discrepancies in the parties' interpretations of the
document, and an apparent stalling of the process for
negotiating the further measures required to implement the

China's Policy Goals and the Relevance of International Law

What lessons can be drawn from Chinese practice in the past
twenty years in dealing with boundary issues? First, China
sees boundary stability as vital for creating a harmonious
international (and, specifically, regional) environment that
is essential for China's agenda of a peaceful rise (and
peaceful development). In Chinese diplomatic and foreign
policymaking circles, references to weiwen-maintaining
stability-are common. This policy goal is evident in Chinese
efforts during the past 20 years to address disputed land
boundaries. In handling those issues, China discarded the
"naturalist" position which holds that territory is divine
and sovereign issues (including boundary issues) is non-
negotiable[1]. Most strikingly, China moved beyond two
centuries of intermittent bloodshed over competing claims to
territorial sovereignty on the Sino-Russian border to a
conventional international legal agreement delimiting the
two states' territories.

Second, the policy of peaceful rise requires China to
develop a more comprehensive and global perspective in
defining its national interests. Here, the focus is not on
weiwen (maintaining stability) but on weiquan (upholding
rights). China's territorial interests increasingly include
traditionally slighted ones, such as hydrocarbon resources
in the continental shelf and national security interests in
a more extended offshore maritime area. Although such newly
emphasized concerns can reduce China's focus on nettlesome
maritime boundary issues, they also can pose challenges
because China is rather new to these questions and has not
fully assessed and articulated its interests. Still, it does
seem clear that the rights China seeks to uphold are those
generally accepted in the existing international order,
particularly those defined by the law of the sea.

It is therefore unsurprising that China increasingly turns
to international law as a policy instrument in these areas.
China repeatedly highlights the importance of international
law in addressing maritime issues. This is not mere lip-
service; it has a foundation in serious policy
considerations and Chinese approaches to foreign policy.

International legal rules and institutions, including the
WTO, have been beneficial to China's national interests
throughout the period of reform and opening to the outside
world that began three decades ago. Even amid significant
uncertainty about the future trajectory of world order,
international law still promises to provide means to protect
and advance China's national interests, especially as China
assumes a greater role in making international law (as has
been occurring, for example, in international negotiations
to address climate change).

Using international law to address disputed boundaries
serves China's high priority goal of maintaining domestic
stability. China's modern history-including the May Fourth
Movement that reacted against the Versailles Treaty's
acceptance of Japanese colonial encroachment on China and
that gave birth to modern Chinese nationalism and, in turn,
the Chinese Revolution-teaches the danger of domestic
turmoil and threats to the regime that can come from failed
diplomatic efforts to address highly sensitive territorial
issues in China. Although understandable in light of the
historical context, the political and diplomatic compromises
that characterized the U.S.-China Joint Communiques
similarly failed to resolve fully crucial international
legal issues and thus sowed seeds of future conflicts.
Giving territorial settlements a clear basis in
international law makes them easier to accept for Chinese
public opinion (which is expressed today in newly strident
nationalist tones via the Internet), and therefore helps
prevent such agreements from triggering political crisis. A
firm international legal basis also facilitates other
parties' acceptance and implementation of territorial
accords with China, smoothing ratification by their
legislatures and other steps required by other states'
constitutional structures. This in turn promotes regional
stability, which is in China's interest.

China has grown more confident in relying on international
law. This new confidence reflects China's growing power.
China's previously suspicious attitude toward international
law was based on the belief not that international law was
unreasonable but that it was unreliable because China lacked
national power. As one Chinese international law scholar has
characterized this view, "if there is right without might,
the right will not prevail."[2] In addition to acquiring
more of the requisite "might," elites in China have gained
international experience and perspectives and are thus more
likely to perceive international law in more than a narrowly
instrumentalist way. They increasingly understand the
normativity of international law and thus feel less
alienated from the initially Western partly law-based
approach to foreign policy.

Nevertheless, even under current conditions and against the
backdrop of a broader Chinese tradition of pragmatism in
foreign affairs, there are still some significant obstacles
to China's employing international law in foreign
policymaking. For example, China's lack of a strong legal
culture and tradition domestically can make it less likely
that foreign policy makers will give full consideration to
international law in pursuing international dispute
settlement. Traditionally in Chinese society, people were
discouraged from going to court and invoking law to solve
their problems because the "win or lose" result of a
judicial proceeding could be devastating to a party's
reputation. Instead, norms and practices favored informal
conciliation outside courts, with "saving face" and ending
overt conflict being primary concerns, sometimes at the cost
of setting aside or papering over the issues in dispute.
When aspects of this tradition carry into foreign policy, it
can encourage the view that it is not important to have a
basis in international law for China's positions. In
maritime and territorial issues, the well-known Chinese
policy of "setting aside disputes and undertaking joint-
development" may illustrate this problem although the policy
also can be defended as reflecting strategic thinking and
calculations about what serves China's national interests.

Another factor impeding China's effective use of
international law in foreign policy is China's still-
insufficient study of international law. Although China's
leaders have called for enhanced study of international law
since the late 1970s,[3] Reform-era China started from a
comparatively low baseline. It trails other big powers that
have strong traditions in the study of international law and
ample well-trained international lawyers. While it is
uncertain how large a role international law will play in
various aspects of China's foreign policy, there are signs
of significant growth. One example is the recent
establishment of the Department of Boundary and Ocean
Affairs, which is located in the Chinese Foreign Ministry,
staffed from the Ministry's Department of Treaties and Law,
and reflects enhancement of international law as a
consideration in managing maritime boundary and territorial

On balance, international law has come to be seen as a more
important and necessary means for China to achieve its
foreign policy ends, even though obstacles and uncertainty
persist. Moreover, China's turn to international law has
been uneven, and unsurprisingly so. International law is
more likely to be an appealing instrument for China where
the other party to a dispute is a near-peer in political,
economic and military power (as is the case, for example,
with Japan), or where the other parties are significantly
less powerful than China (as is the case, for example, with
the ASEAN countries). In the first type of case,
international law is useful because there is comparatively
little room for one party to prevail through simple pressure
or manipulation. In the second context, using international
law can help to reassure weaker parties worried about
China's rise. Beijing's recent approach to the East China
Sea dispute with Japan illustrates the first pattern.

International Law and the Sino-Japanese Dispute over the
East China Sea

China and Japan assert overlapping claims to the East China
Sea (ECS). The territorial dispute involves two questions,
neither one easy. The first is sovereignty over the Diaoyu
Islands (the Senkaku Islands in Japanese). The second is
title to the continental shelf and maritime delimitation in
an area where the maximum distance between the east (Japan)
and west (China) coasts is less than the 400 nautical miles
needed to give each country the full 200 nautical mile zone
in which coastal states ordinarily enjoy exclusive rights
over economic resources and activities.

On the issue of sovereignty over the Diaoyu/Senkaku Islands,
each side has made arguments grounding its positions in
international law. The strengths and defects of those
arguments have been examined extensively elsewhere and will
not be revisited here. In addition, China has long proposed
"setting aside the [sovereignty] dispute and pursuing joint-
development" of the resources adjacent to the islands. In
contrast, Japan simply denies that there is a credible
dispute over the islands and refuses to discuss the issue in
diplomatic talks.

On the question of legal claims to the continental shelf,
the relevant history begins with an international agreement
to which China was not a party: the 1974 Japan-ROK Joint
Development Agreement (provisional agreement) concerning the
northern part of the ECS. China protested the agreement
because it threatened to infringe China's rights and
interest in the ECS continental shelf. Notwithstanding the
Chinese protest, Japan and South Korea explored three shelf
sites for energy resources between 1980 and 1986. Those
explorations failed to find any economically viable fields.
China began feasibility studies in the 1980s, and in the
1990s explored and developed four groups of oil and gas
fields to the Chinese side of the geometrical median line of
the ECS (which was the line Japan asserted for
delimitation). China's moves drew no diplomatic protest from
Japan. Indeed, in the late 1990s, a project to construct
pipelines to Shanghai from some of the fields received
financial aid from Japan, directly through its Export-Import
Bank and indirectly through Japan's contributions to the
Asian Development Bank. The Sino-Japanese dispute did not
emerge until a May 2004 Japanese news report on China's
development of the Chunxiao oil and gas fields publicized
the field's production and its location only several miles
west of the median line and Japan's claimed zone.

In addressing this dispute, both sides have relied
extensively on international law, and specifically on the
law of the sea and its rules on the continental shelf. Both
have invoked especially Article 76(1) of the 1982 Law of the
Sea Convention, to which the two countries are parties,
which provides:

The continental shelf of a coastal State comprises the sea-
bed and subsoil of the submarine areas that extend beyond
its territorial sea throughout the natural prolongation of
its land territory to the outer edge of the continental
margin, or to a distance of 200 nautical miles from the
baselines from which the breadth of the territorial sea is
measured where the outer edge of the continental margin does
not extend up to that distance.

China has argued for application of the "natural
prolongation" principle in the treaty and under the
preexisting customary international legal rule articulated
by the International Court of Justice in the famous 1969
North Sea Continental Shelf Case. On this view, China's
portion of the ECS continental shelf includes its natural
prolongation to the Okinawa Trough, where the 2000-meter-
deep trough marks the geologic end of the shelf and, thus,
the area under Chinese title.

Japan's legal arguments have been more complex and in some
respects inconsistent. Japan has invoked the "200 nautical
miles" portion of Article 76(1), rejecting the possibility
of a claim based on natural prolongation beyond 200 nautical
miles. On this view, the continental shelf in this area
(which is narrower than 400 nautical miles) legally must be
divided at the median (equidistance) line between the two
states' coasts. At the same time, Japan also has argued that
the "baseline" from which the 200 nautical mile zone should
be measured is not Japan's main coast but, rather, the
coast of the Ryukyu Islands (Liuqiu in Chinese), which would
trump China's claim based on natural prolongation for a
significant portion of the ECS continental shelf. Finally,
Japan also has argued that the Okinawa Trough is a mere dent
in the continental shelf, not its endpoint. This
position-which invokes a factually flawed application of the
natural prolongation argument and thereby rejects the 200
mile zone and equidistance principles-was Japan's central
argument when negotiating with the Republic of Korea for
their 1974 provisional joint-development agreement.

Against the backdrop of this largely legal confrontation,
China and Japan engaged in eleven rounds of consultations
from October 2004 to November 2007. Finally, after the
exchange of visits of leaders resumed in the post-Koizumi
era, the two countries issued Joint Communiques calling for
cooperation in making the ECS a "sea of peace, cooperation
and friendship." With this top-level political commitment to
maintaining stability in bilateral relations, the foreign
ministries of the two countries concurrently released a
"Principled Consensus on the East China Sea Issue" on June
18, 2008.

The "Principled Consensus" is the product of the two sides'
disputing in strikingly international legal terms, but it
did not augur a legal resolution of their dispute. The
Consensus is by nature an interim arrangement "in the
transitional period prior to delimitation" as stipulated in
the Law of the Sea Convention, Article 83, paragraph 3.
According to that same article, this kind of arrangement is
not to prejudice the legal positions of the parties (as the
first part of the Consensus also states). The substantive
provisions in the Consensus are: first, a small block,
sitting astride the median line, is marked for joint
development; second, the Chunxiao field, already initially
developed by China, is to be open to "cooperative
exploitation" pursuant to a clause stating, "Chinese
enterprises welcome the participation of Japanese legal
persons in the development of the existing oil and gas field
in Chunxiao in accordance with the relevant laws of China."

Almost immediately, the "Principled Consensus" ran into
trouble that seemed to cast doubt on the utility of an
international legal approach to the dispute. Formally, the
document had an uncertain status, having appeared as a pair
of concurrent press releases, lacking signatures and a date,
and thus inviting much doubt and speculation about its

Soon after the Consensus was released, the two countries
fell to quarrelling about its meaning, adopting sharply
contradictory interpretations of its two substantive
provisions. On the Chinese side, the Deputy Minister of
Foreign Affairs (within a week after the Consensus was
announced) and the Minister himself (a few days later)
explained: that China never recognized the so-called "median
line" that defined the joint development zone; that there
was no issue of drawing any "median line"; and that the
agreement on cooperative exploitation of the Chunxiao field
meant that Japan accepted Chinese jurisdiction and
recognized China's sovereign rights over the field. Japan's
Chief Cabinet Secretary and Foreign Minister publicly
rejected the Chinese interpretations.

The Utility of Legal Confrontation

Thus, it may seem that the fate of the Principled Consensus
casts doubt on the usefulness of framing a political (and
economic) dispute as a legal confrontation. But such a
pessimistic conclusion is too simple or, at least,
premature. The Consensus and the broader turn to
international law can contribute to stability in China-Japan
relations and regional stability more generally, provided
that two further, interrelated conditions are satisfied.

First, the Consensus (and other measures) must reflect the
legitimate-and legal-national interests of the both parties.
Second, in implementing and moving beyond the initial
Consensus, China and Japan must adhere to two overarching
international legal principles: good faith and reciprocity.
Good faith is especially important because the Consensus
includes merely interim measures "in the transitional period
prior to delimitation" and thus contemplates further
negotiations in which each side will seek to advance its
interests within an ongoing legal confrontation. During this
process, reciprocity is also vital to maintain stability and
to sustain negotiations toward a final settlement that takes
adequate account of both sides' good faith legal claims and
legitimate interests.

On these issues, the evidence so far is mixed. China's
claim, based on the principle of natural prolongation, has
sufficient legal foundation that it clears the threshold of
a good faith claim. Under the doctrine of "inter-temporal
law" (which holds that the applicable international law is
the law as it stood at the time when the claimant purports
to have acquired a right, in this case to ownership of
portions of the ECS shelf), the relevant legal principle
arguably is the "old" customary rule of natural
prolongation, not the more "mixed" principles of Article
76(1) of the 1982 Law of the Sea Treaty. Alternatively,
China's claim to the ECS is a plausible reading of Article
76(1) of the Treaty. Moreover, China's position is further
reinforced by principles of estoppel, which could bar
elements of Japan's competing claims on the ground that
Japan has accepted the so-called median line (which stops
short of 200 nautical miles from Japan's coast) and that
Japan has accepted and indeed supported China's development
of the Chunxiao field, which China has claimed is in its
portion of the ECS.

On the other hand, Japan's invocation of the 200 nautical
mile principle also has sufficient legal plausibility to
meet a "good faith" standard. Post-Law of the Sea Treaty
state practice and judicial decisions offer some support for
the view that the natural prolongation principle is subject
to interpretation and limitation under Article 76(1).

If each party accepts that other's position reflects a good
faith legal argument, this can increase the likelihood that
the two sides can lower the temperature of their conflict
while also setting aside the fine points of their contending
legal claims and moving forward with provisional
arrangements for joint development. To some extent, the
"joint development block" provision in the Consensus offers
a concrete example of what can be achieved consistent with
the principles of good faith amid unresolved, but legally
framed and cabined, conflicts. The joint development
arrangement does not accept the median line as the legal
boundary and thus sets aside the core legal issue. At the
same time, the joint development zone remains within the
geographic area each side claims as its own under legal
analyses consistent with good faith principles.

The Consensus fares less well in satisfying the norm of
reciprocity, especially Japanese reciprocity toward China.
The Consensus's interim arrangement, if made permanent,
would be fully consistent with Japan's preferred principles
of a 200 nautical mile limit, with equidistance in the
context of seas less than 400 nautical miles wide. Yet, the
Consensus is heedless of China's, as well as Japan's, claim
to the Diaoyu (Senkaku) Islands and the rights to the
adjacent ECS and continental shelf that sovereignty over the
islands could bring. The Consensus also gives no place to
China's natural prolongation-based claim to a wider swath of
the ECS shelf or its claim to the Chunxiao field, where
China had already begun to explore and invest. It would be a
significant step for reciprocity and, in turn, stability in
bilateral relations if Japan were to go beyond the language
of the Consensus and acknowledge China's sovereign rights
over Chunxiao-even if the operative regime remained the
"cooperative exploitation" envisaged in the Consensus.
Unfortunately, Japan's post-Consensus interpretations of the
Consensus indicate that this is highly unlikely.

Overall, the China-Japan Principled Consensus on the East
China Sea Issue is an example of how legal rules and
arguments, when animated by political prudence, can help to
contain and manage conflict, and foster more harmonious
relations between China and a similarly powerful neighbor.
To be sure, the Consensus remains limited and flawed. It is
only a "first step," after which the two sides "will
continue to conduct consultations in the future." It helped
contain and define, but also left open, legal questions that
quickly became the focus of new, if more bounded, disputes.
The Consensus's potential is undermined by its failure to
provide greater reciprocity.

Nonetheless, the common ground that the Consensus defined,
the good faith legal arguments to which the parties mostly
limited themselves, and the commitments the Consensus
embodied to continuing to address a significant dispute in
largely legal and cooperative terms are hopeful signs. The
Consensus, and the broader effort it represents to embed or
frame bilateral disputes as legal confrontations, promises
to help the two parties to find firmer footholds in climbing
out of the troubled waters of the East China Sea. Beyond
that, it strengthens international law's potential to help
an increasingly competent and confident China and its
expanding international partners to stabilize their
relations while they grapple with complex disputes.


[1] Jacques deLisle, "Sovereignty Resumed: China's
Conception of Law for Hong Kong, and Its Implications for
SAR and US-PRC Relations", Harvard Asia Quarterly, Summer
1998, p.23.

[2] Li Zhaojie, "Legacy of Modern Chinese History: Its
Relevance to the Chinese Perspective of the Contemporary
International Legal Order", Singapore Journal of
International and Comparative Law (2001), p.317.

[3] The Chinese leader Deng Xiaoping in 1979 issued a simple
but important instruction "we should also strengthen our
study of international law." As a result, Chinese Society of
International Law was founded in February 1980.

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