Posturing and bluff in Asia\'s phony war

Politicians plant flags on Southeast Asian atolls, mysterious structures appear on rocks miles from dry land, ships flit in and out of territorial waters, and diplomats trade verbal salvoes. The oil-rich South China Sea, where half a dozen countries have bickered for more than fifty years over who owns what, is occupying regional policymakers, and has provoked fears that an argument will blow out into war. The reality is more complicated, and less dramatic. \"While the absolute worst case scenario -- military confrontation between China and the Southeast Asian nations, backed by the U.S. -- is clearly extremely serious, the probability of this taking place is incredibly low,\" said Tai Hui, regional head of research for Southeast Asia at Standard Chartered in Singapore. \"All parties have much to lose, not only militarily, but also economically.\" Though not a party to the dispute, key to it is the United States, which traditionally has a strong relationship with the Philippines, and newly enhanced ties with Vietnam, both of which have had recent scrapes over the South China Sea with China. Vietnam, recently visited by the U.S. navy, and the Philippines are China\'s most vocal rivals in the area. In mid-July, a group of Philippines lawmakers landed on Pagasa (Hope) Island in the South China Sea and, amid anthem-singing, politician Walden Bello declared Filipinos were \"willing to die for their soil.\" \'Chinese aggression\' is often blamed for many of these stand-offs, and fingers are quickly pointed at China\'s rapidly growing military might: this month, Beijing said it would test its first aircraft carrier soon, and in June dispatched its largest civilian patrol ship through the disputed waters. China\'s smaller neighbours are hyper-sensitive to any perceived threat from a nation so economically and militarily dominant. This drives them to press their claims in the South China Sea urgently, which in turn needles Beijing. \"What it means for Vietnam and other claimants is that they have a very narrow window before China has the area under lockdown, that\'s why they are upping the ante, and trying to persuade the U.S. to back them,\" said Gary Li, intelligence analyst at Exclusive Analysis. \"This is seen as provocation by Beijing.\" \"PETTY SQUABBLES\" Trying to gain leverage through numbers, Vietnam wants to build a bloc against China, which would include Malaysia and the Philippines. \"You are seeing this bloc slowly forming, which is another problem for China,\" Li said. \"What\'s happening now is the U.S. is getting involved as the senior partner in an anti-China bloc -- this is how Beijing sees it.\" The other countries laying claim to South China Sea territories are Brunei, which has remained largely silent, and Taiwan, which has a far bigger problem of sovereignty to resolve with Beijing. While this annoys China, it is deeply embedded in the regional economy through trade as well as direct investment. Beijing exports more to Vietnam than it imports from there, and if it were to try exerting pressure by threatening to pull investment it would in many cases be self-defeating. \"China\'s direct investments in Southeast Asia are often led by its need for commodity resources, hence it would be in China\'s interest also to see these through,\" Standard Chartered\'s Hui said. The tone of the rhetoric this year has at times indicated the United States and China were headed for major disagreement. Washington irked Beijing when it said it had a national interest at stake in ensuring freedom of navigation and trade, while China has told the United States not to get involved, accusing it of stirring up trouble by holding naval drills in the region. Then in late July, both China and the United States tried to calm tensions. On Friday, America\'s top diplomat Hillary Clinton and Chinese Foreign Minister Yang Jiechi hailed new conduct guidelines for the South China Sea agreed between Beijing and ten-nation Southeast Asian grouping ASEAN. American attention may discourage China from bullying its rivals, though direct military intervention from U.S. forces, stretched in Afghanistan and Iraq, is hugely unlikely. \"The more active participation by the U.S. in the South China Sea probably implies China would be more inclined to negotiate, instead of leaning on its Southeast Asian neighbours,\" said Hui. For all the recent talk of higher tensions and the threat of violence, the last major clash in the area was in 1988, when China and Vietnam fought a short naval battle. Private deals with rival claimants are likely: China\'s style is to try to settle border disputes bilaterally, rather than in an international forum. The biggest risk is if one of the smaller states feels sufficiently emboldened to push hard against China -- which claims more of the area than anyone else -- and pricks it into responding with force. But this remains unlikely. \"The highest leadership in China know full well that they need to avoid getting sucked (or suckered) into such scenarios,\" said Bill Durodie, associate fellow at think tank Chatham House. \"China has much to lose from such petty squabbles and knows full well that it needs to keep a low profile in international affairs for at least another generation in order to get its own house in order first.\"