THE PAPER | South China Sea : Oil, Trade, and Sea Lanes by Jason J. Blazevic

THE PAPER | South China Sea : Oil, Trade, and Sea Lanes by Jason J. Blazevic

By Jason J. Blazevic 

The South China Sea lies strategically between two major choke points – the Strait of Malacca and the Taiwan Strait. Its sea lanes link the Pacific and Indian Oceans as well as Africa and the Middle East with Southeast and East Asia. More than 41,000 ships passed through the South China Sea in 2000, which was double the number that pass through the Suez Canal and triple for the Panama Canal.

THE PAPER | South China Sea : Oil, Trade, and Sea Lanes by Jason J. Blazevic

In 2009, over 50,000 ships passed through the sea and in 2012 over half of international commercial shipping tonnage and 5.3 trillion USD of trade passed through the sea (Cronin 2012; Glaser 2012: 3; Ji 2001: 2; Rodrique 2009; United States Senate 2009b: 1). Of course, oil encompasses a vitally important part of shipping tonnage. The Strait of Malacca (second busiest after the Strait of Hormuz) is, according to Singaporean Naval Major Victor Huang, witness to 60,000 ships transporting a “third of the world’s trade and half its oil transits” (Kang 2009: 15). J. Peter Burgess posits that the sea is the second busiest international sea-lane with more than half of the world’s petroleum-bearing traffic (Burgess 2003: 7–8). The sea serves as the key economic lifeline for the region as eighty per cent of China’s oil imports and ninety per cent of Japan’s and South Korea’s oil imports were shipped utilizing the sea in 2012 (United States Energy Information Administration 2012a, 2012b, 2012c). 

South China Sea - Sea Lanes

Within the sea are the Pratas Islands and Macclesfield Bank as well as the Paracel and Spratly Archipelagos in the north western and southern ends of the sea respectively. The Paracel Archipelago (Paracels) is over 170 nm from China and Vietnam, although it is nearer Vietnam. The Paracels consist of thirty features (islands, reefs, cays and shoals) encompassing 15,000 square kilometres (skm). The Spratly Archipelago (Spratlys) is over 500 nm from China, while the archipelagos’ eastern edge is 160 nm from Vietnam and the western edge is 50 nm from the Philippines. The Spratlys consist of 750 features encompassing over 410,000 square kilometres and little more than three square kilometres of land space (Chang 1991: 399; Joyner 2002: 17; United States Department of Defense 2010: 17; Valencia, Van Dyke and Ludwig 1997: 226–230). The Paracels, claimed by China and Vietnam, are completely occupied by China while the Spratlys are disputed by China and Vietnam as well as other littoral nations. Nearly fifty of the Spratlys largest features are permanently or periodically occupied by China and Vietnam as well as Taiwan, Philippines, Malaysia and Brunei (United States Department of Defense 2010: 17). The disputes between China and Vietnam involve territorial waters, Exclusive Economic Zones (EEZs) and the continental shelf. China’s claim to over eighty per cent of the sea and the entire Spratly Archipelago (occupying seven in 2011) is enhanced by military installations at features such as Mischief Reef. Vietnam also claims a significant portion of the sea, nearly as much as China, and claims all of the Spratlys, occupying nearly thirty of the features (United States Energy Information Administration 2011a).

The South China Sea, itself holds seven billion barrels (BB) of oil with additional estimates of 28 BB of oil by the United States Energy Information Administration (USEIA) and the United States Geological Survey (USGS) in 2011.

South China Sea - Oil and Natural Gas proved and probable reserves via EIA


In 2011, China estimated over 100 billion barrels (BB) of oil under the Spratlys and another 100 BB under the rest of the sea with total estimates at 213 BB. Such energy resources are viewed by some Chinese defence planners and energy experts as a “second Persian Gulf,” with the potential to decrease foreign oil dependence (Erickson and Goldstein 2009: 53; United States Energy Information Administration 2011b). China’s increasingly assertive behaviour in the sea is due to rapid economic growth, which is projected to push China towards becoming the largest oil consumer by 2030. China’s oil consumption reached 9.8 million barrels per-day (MBD) in 2012 while production stood at 4.2 MBD (Buszynski 2012: 141).

China's Oil Production and Consumption, 1993 - 2016 by EIA

Vietnam is also experiencing oil import growth, which will become more significant due to the state’s rapid industrialisation. The possibility of large amounts of energy resources in the sea is of great interest as Vietnam’s oil reserves stand at just 4.4 billion barrels. Accordingly, PetroVietnam concluded 60 energy exploration and production contracts with foreign energy firms in the sea in 2010 and 2011 (Buszynski 2012: 141). Vietnam’s oil consumption reached nearly 360,000 TBD (thousand barrels per-day) in 2012 while production reached nearly 330,000 TBD (Index Mundi 2012a; United States Energy Information Administration 2012c). 

Vietnam's Crude Oil Production and Demand Estimation (kbpd) by PVN, VPBS Research

Increasing energy needs have led to overlapping claims to undeveloped blocks off the Vietnamese coast, but within or just beyond Vietnam’s internationally recognised Exclusive Economic Zone (EEZ). For example, the Big Bear block, closer to Vietnam’s EEZ, is claimed by Vietnam, but contested by China (block referred to as Dai Hung) while Wan’ Bei-21, located in the western Spratlys, is claimed by China and contested by Vietnam (referred to as blocks 133, 134 and 135) (Global Security 2011; Vietnam Business 2010).

China and Vietnam - Off Shore Oil Drills at South China Sea by GRENATEC

Co-development is problematic as both nations view the blocks as lying within their respective maritime zones. Additionally, in 2012, after Vietnam’s passage of the Law of the Sea, China National Offshore Oil Company (CNOOC) offered bids to foreign energy firms within Vietnam’s claimed EEZ and continental shelf (Fabi and Chen 2012). The PLAN has also harassed PetroVietnam oil survey vessels searching for deposits outside and within Vietnam’s EEZ. Moreover, Chinese authorities have increasingly warned American and other energy firms such as, Oil and Natural Gas Corp (India), Talisman Energy (Canada) and Exxon-Mobil to cease partnerships with Vietnam in disputed areas or face unstipulated economic consequences (Buszynski 2012: 142–143; Glaser 2012: 1; Kotani 2011).

Vietnam and China perceive each other engaging in the maximization of absolute power, which must be countered by ambitious strategies. However, such perception may be a misconception as both nations may simply desire survival rather than power for powers sake. For example, China’s increasing dependence on the sea lanes has magnified feelings of vulnerability as the sea lanes can be threatened, thereby harming economic and national security. Leaders believe sea lane and resource security in the South China Sea can be achieved by controlling the continental shelf and archipelagos, which can “serve as safe sanctuaries for basing naval platforms as well as safe passage to the open sea” (Buszynski 2012: 146). 

This approach is part of a larger strategy calling for self-preservation through domination of the first island chain followed by the extension of national interests into the western Pacific and Indian Ocean. Accordingly, Huang Kunlun of the Liberation Army Daily states that China’s security interests have moved into the “vast oceans traversed by Chinese freighters” (Global Security 2011; Lam 2009: 3–4). However, such strategy is largely dependent on the reigning in of littoral nations such as Vietnam (Global Security 2011).

Vietnam and China perceive each other engaging in the maximisation of absolute power, which must be countered by ambitious strategies. However, such perception may be a misconception as both nations may simply desire survival rather than power for powers sake. For example, China’s increasing dependence on the sea lanes has magnified feelings of vulnerability as the sea lanes can be threatened, thereby harming economic and national security. Leaders believe sea lane and resource security in the South China Sea can be achieved by controlling the continental shelf and archipelagos, which can “serve as safe sanctuaries for basing naval platforms as well as safe passage to the open sea” (Buszynski 2012: 146). This approach is part of a larger strategy calling for self-preservation through domination of the first island chain followed by the extension of national interests into the western Pacific and Indian Ocean. Accordingly, Huang Kunlun of the Liberation Army Daily states that China’s security interests have moved into the “vast oceans traversed by Chinese freighters” (Global Security 2011; Lam 2009: 3–4). However, such strategy is largely dependent on the reigning in of littoral nations such as Vietnam (Global Security 2011).

Defensive realism posits that the objective of states within the international system must be survival. Accordingly, Chinese leaders are engaging a strategy of survival in order to secure “command of the sea” and control “strategic passageways for energy” (United States Department of Defense 2009: 17, 2010: 39). The strategy’s early manifestation was known as offshore defence, which evolved to a more current far sea defence calling for military modernisation and forward basing to secure the continental shelf, the first island chain and adjacent sea lanes leading to eventual expansion into more distant deep water (Chelala 2009; Global Security 2011; Wong 2010). Such aspects are characterised by the PLAN’s Chief Admiral Wu Shengli as a “maritime defense system” consisting of a “two pronged strategy” (Buszynski 2012: 145; Kotani 2011). The strategy calls for first, access denial to the South and East China Seas for foreign naval powers and second, securing access to resources in the Middle East and Africa through gradual power projection into the Strait of Malacca and Indian Ocean (Kotani 2011; O’Brien 2011). 

For Vietnam, the sea carries great geostrategic significance. Vietnamese authorities fear that China’s intentions are to enforce its claims by force if necessary, which threatens Vietnam’s claims, freedom of navigation and trade. Specifically, they perceive that China’s strategy is not defensive, but meant to alter the status quo and reorder the balance of power in the immediate region and beyond (Glaser 2012: 1). Indeed, they perceive threats to not only the national security of Vietnam, but regional and global security as well. According to Duc Hung Nguyen of the Southeast Asian Research Foundation.

China’s claim in the South China Sea is comparable to a claim by one person to all the oxygen in the air […] that South East Asia can be dominated and nations that need to traverse through the South China Sea can be choked (Nguyen 2010). 

Ultimately, Chinese success in controlling the sea would enable the maximization of absolute power through the control of sea resources and sea lane traffic as well as the expansion of the PLAN toward strategic choke-points and oceans (Guruswamy, Mohanty, and Abraham 2008: 172–173). 

About The Author:

Jason J. Blazevic is an Assistant Professor of Political Science at Georgia Gwinnett College, Lawrenceville, GA, USA. He has published articles on issues related to energy and sea lane security, as well as on international relations theory and cooperative regimes.

Cite This Article (From Original Source) : 

Blazevic, Jason J. (2012), Navigating the Security Dilemma: China, Vietnam, and the South China Sea, in: Journal of Current Southeast Asian Affairs, 31, 4, 79- 108. ISSN: 1868-4882 (online), ISSN: 1868-1034 (print) 
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Publication Details:

This is an extract from a research paper authored by Jason J. Blazevic for Journal for Current South Asian Affairs under the title "Navigating the Security Dilemma: China, Vietnam, and the South China Sea" , Published by GIGA German Institute of Global and Area Studies, Institute of Asian Studies and Hamburg University Press. Click Here to Download The Complete Paper 

Data and charts are Sourced from EIA.gov with relevance to current scenario
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