Thayer Consultancy Background Briefing:

ABN # 65 648 097 123

South China Sea Issues and
Secretary Tillersons Visit to
China
Carlyle A. Thayer
March 16, 2017
[client name deleted]
Q1. Media reports that China is starting another round of construction in Paracel
Islands, based on the satellite taken by March 6. Do you think this will affect
Secretary Rex Tillerson's trip to Asia this week?
ANSWER: The main purpose of Secretary Tillerson's visit to Japan, South Korea and
China is to get agreement on how to deal with North Korea's provocative ballistic
missile tests and its threat to conduct another nuclear explosion. President Trump
has made this a top priority. Tillerson will also lay the groundwork for a summit
meeting in April between presidents Trump and Xi Jinping at Mar a Largo. It is likely
that Chinese assertiveness in the South China Sea will come up in Tillerson's
discussions but they will not dominate.
Q2. In addition, last week, China's foreign minister said that a draft Code of Conduct
(COC) has been completed. What do you think is behind Chinas statement, given
that they had been trying to delay such an agreement in South China Sea for years.
Why has Beijing chosen this time to push for the COC?
ANSWER: China announced at last year's ASEAN Ministerial Meetings that a new
page had been turned on the South China Sea and that a framework agreement on
the Code of Conduct could be reached in the first half of this year. Why? Mainly
because of the China tilt by the Duterte Administration in Manila and Duterte's
deliberate downplaying of the Award by the Arbitral Tribunal. China has every
incentive to make political and economic inroads on a compliant Philippine
government. China is also responding to initial bellicose remarks by Rex Tillerson
during his confirmation hearing. China is now pushing the line that the trend in the
South China Sea is positive and that China and ASEAN members are working
positively. In other words, the U.S. should stay out and not disrupt this peaceful
trend.
The bottom line is that China's ultimate goal of hegemony over the South China Sea
has not been shelved. China has strung out discussions on the COC to suit its
interests. China is now stepping up discussions to divide ASEAN from the Trump
Administration. China has always insisted that the Declaration on Conduct of Parties
(DOC) be implemented in full first. Not one cooperative activity has commenced. So
China has plenty of room to delay reaching a legally binding COC. Meanwhile, since
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the July 12, 2016 Arbitral Tribunal Award, China has built reinforced hangars next to
its airfields on three artificial islands, added Close in Weapons Systems and surface-
to air missiles to protect the airfields, and built housing for advanced surface to air
missiles on all seven of its artificial islands. China has continued to conduct naval
exercises in the South China Sea.
Xi Jinping will try to convince Donald Trump they can make deals on global issues
and that the South China Sea should not be of major concern to the United States.

Suggested citation: Carlyle A. Thayer, South China Sea Issues and Secretary
Tillersons Visit to China, Thayer Consultancy Background Brief, March 16, 2017. All
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Thayer Consultancy provides political analysis of current regional security issues and
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