In late October and early November, Beijing and the Association of Southeast Asian Nations (Asean) tried to re-launch friendly talks related to the territorial disputes of the Spratly Islands, a series of specks that from their location at the southern end of the South China Sea remain crucial to the region's geostrategic setting. They discussed broad Southeast Asian security issues and opened the way for possibly fruitful, structured diplomatic dialogue. The context, however, remains extremely complicated.

For a lackluster string of islets claimed in their entirety by four different nations -- China, Taiwan and Vietnam, and partially by three more -- Philippines, Malaysia and Brunei, the contested isles and reefs are a potential catalyst for major interstate conflict. In fact, all traditional geopolitical issues are at work: sovereignty, control of vital hydrocarbons, control of the sea lines of communication and the capability to project power and influence across a broad region.

At a time when China is emerging as a political and military as well as economic power whose strategic reach expands and involves new maritime ambitions, the South China Sea issue poses a huge challenge to Washington and its Asian allies. Beijing is adopting a complex policy predicated upon diplomatic openness to enhanced cooperation with Asean and, at the same time, on a self-confident, assertive stance on the South China Sea. Washington believes that Beijing's real goal is to make China the hegemonic power in Southeast Asia and multiply its influence on the global stage.

Energy, Trade and Power

Recent media coverage on the Spratlys issue has typically concentrated on the quest for fossil energy resources since natural gas and oil play an increasingly important role in power politics. The reasons for sovereignty claims, however, are in no way limited to the hydrocarbons extraction issue alone. Control of the sea lines of communication, with its effect on energy transport and strategic military advantage, is at least as important as the much wanted oil and gas reserves.

In Asian maritime geopolitics, the South China Sea functions as a vital gateway that links the Gulf's oil to East Asia via the Indian Ocean and Southeast Asia. Although during the recent decades of the Cold War the sometimes-aggressive Chinese policy toward Southeast Asian states was tolerated by Washington because of China's role as a counterweight to the USSR, after 1991 this state of affairs changed.

Certain figures display the importance of the Spratly Islands as a transport route: the South China Sea is the world's second busiest international sea lane and conveys roughly one-fourth of the globe's crude oil and oil products. Tokyo's tankers carry around 70 percent of Japan's oil on these sea lanes, while 90 percent of the oil needed by Washington's northeast Asian allies reaches its destination through the Strait of Malacca and the South China Sea. Liquefied natural gas, coal, and iron ore are conveyed through the above mentioned route. The waters are also the site of a massive fishing industry. A country that would have the capability to interrupt the free navigation of the sea lines would pose a significant threat to the other powers' energy security.

As for hydrocarbons in the Spratlys, the exact amount of available resources is not easy to determine, since China's analyses are significantly different and more optimistic than U.S. and European ones. A September 2003 brief issued by the U.S. Department of Energy suggests that oil production levels for the Spratly Islands would not exceed 183,000 barrels per day, while Chinese estimates claim that a level of 1.9 million barrels per day could be attained. According to other Chinese reports, the Spratly Islands should have around 225 billion barrels of hydrocarbons -- 70 percent of which would be natural gas. No Western analysis, however, confirms such data at the moment.

Regardless, without a doubt further exploration of the Spratlys is considered to be a major stake by all regional claimants and control over hydrocarbons will remain a crucial goal for all powers involved.

Multilateralism and its Interpretations

One of the most interesting developments in the debate is undoubtedly the different use and perception of multilateralism. As a matter of fact, all players are calling for multilateral engagement and cooperation to prevent the conflicting interests from leading to a clash. On October 29, before the start of the China-Asean meeting in Nanning, Philippine President Gloria Macapagal-Arroyo said that "regional security issues, aside from trade," would take center stage in Asean’s political-strategic dialogue with China.

Mentioning the Spratlys, Arroyo added that "instead of concentrating on conflicting claims," regional powers should "concentrate on what we can do together." Speaking at the Nanchang University the same day, she launched the proposal of a "joint exploration of the Spratly Islands," and expressed the view that the current "code of conduct" on the contested territories is "very weak."

For Manila, just like for Hanoi and Kuala Lumpur, multilateralism and a regional security approach is the best possible strategy to contain China's rising military power. Since Beijing is aiming at enhancing its deep blue navy, other regional players (among which Taiwan is the one that fears Beijing the most) wager on continued U.S. involvement in the region and Asean's enhancement.

On the contrary, China's approach to Asean and regional multilateralism appears that of a rising hegemonic power. Beijing's interests lie in avoiding major confrontations and, above all, direct confrontation with Washington in order to continue its relatively flawless pursuit of power. China's openness to strategic dialogue with Asean has the goal of lowering the risk of military conflict while gaining time to calmly, but steadily, develop its new military power.

In other words, China's waiting game is consistent with hegemonic ambitions, but it uses the tactics of progressively achieving strategic dominance and thus enhancing its negotiating capability and effectiveness.

Multilateralism could enable Washington to remain a decisive player in the Southeast Asian theater while avoiding the perils of automatic defense engagement via bilateral agreements. The United States, however, will work consistently to prevent China's domination of the South China Sea and Beijing's potential capability to choke freedom of navigation.

As expected, when U.S. President George W. Bush met with Asean leaders in Hanoi this month, he insisted -- consistently with the American tradition -- on the importance of free trade and economic liberty in Southeast Asia.

Clearly, China's persisting claim to sovereignty over most of the South China Sea, coupled with Beijing's ambitious military improvement, will hardly be seen as reassuring by Asean members and by Washington. On the other hand, the Sino-U.S. competition is not deterministically bound to lead to a showdown in the region, as it could instead end up in a new balance of power in which regional multilateral agreements may help Washington and Beijing solve or freeze the Spratlys issue and similar controversies.

Asean's role in the future of diplomatic attempts to resolve the Spratlys question appears to be increasing. The organization, however, will probably function as a tool in the hands of the great powers rather than as an autonomous power center. China's rise as Southeast Asia's main regional power will continue in the coming years. Since Washington needs to protect US vital interests such as the liberty of navigation and regional stability, the US will likely be called to a new and comprehensive engagement policy toward Beijing, which can be implemented if the reality of a new multipolar power configuration in Asia is acknowledged.

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