As expected, Beijing lost no time in rejecting the unanimous ruling of an international tribunal at The Hague that China has no legal basis for much of its claims on the South China Sea. But given the tribunal’s lack of powers to enforce its rulings, a resolution of the dispute with the Philippines will have to be the stuff of international diplomacy. Generally, this is not such a bad thing as judicial verdicts on issues of contested sovereignty can trigger a nationalist backlash. The court at The Hague ruled that China’s claims to the waters within the so-called “nine-dash line”, with wide-ranging economic interests, was in breach of the UN Convention on the Law of the Sea. The case was brought to the court in 2013 by the Philippines, centring on the Scarborough Shoal, but Beijing chose to boycott the proceedings. Yet, Vice Foreign Minister Liu Zhenmin, while asserting China’s sovereignty over the South China Sea, has committed to negotiations with the Philippines following the ruling. Indeed, China now has more compelling reasons to reconsider its overall position.
The setback at The Hague comes at a critical juncture in China’s bid to bolster its global economic status. This relates to its long-standing ambition to be accorded recognition as a market economy under the World Trade Organisation. As the 2016 deadline looms, China insists the upgrade is automatic as per WTO rules. The European Parliament thinks otherwise, and voted overwhelmingly in a non-binding resolution in May to delay a decision. Currently, Brussels levies anti-dumping tariffs on imports from Beijing to mitigate the effects of supposedly unfairly low prices on a range of commodities. Against this backdrop, the Chinese leadership is unlikely to allow itself any distraction in the form of a long-drawn confrontation in its backyard, with its adverse diplomatic fallout. Instead, Beijing is more likely to rally support to its cause for increased trade. History bears witness to a more constructive play of diplomatic forces in similar high-stakes inter-state disputes. For instance, although Washington ignored a 1986 verdict of the International Court of Justice, concerted pressure led to the eventual end to U.S. backing for Nicaraguan insurgents. In the current case at The Hague, the U.S. can’t exert much moral pressure as it has not even ratified the United Nations Convention. Conversely, as a party to the law alongside Manila, there is more pressure on Beijing to comply. It is possible that big-power plays on the South China Sea will now be behind us. After three years of litigation, this does not seem like a bad thing after all.