Published daily by the Lowy Institute

High waters, deep divisions in views of the South China Sea

One side’s freedom of navigation is the other’s territorial violation – and no code of conduct seems set to reconcile this.

Without agreed frameworks, incidents escalate according to capability rather than rules (Veejay Villafranca/Bloomberg via Getty Images)
Without agreed frameworks, incidents escalate according to capability rather than rules (Veejay Villafranca/Bloomberg via Getty Images)

When Chinese J-16 fighters and helicopters intercepted Philippine reconnaissance aircraft near Scarborough Shoal earlier this month, followed days later by a near-collision between Chinese and Philippine coast guard vessels off Sandy Cay, the two events aptly demonstrated the competing visions of maritime order in the South China Sea – a gap that the proposed Code of Conduct must bridge for meaningful implementation.

From Beijing’s perspective, what Western observers label as “unsafe” or “unprofessional” manoeuvres occur because foreign military aircraft and vessels have already entered what China considers sovereign territorial waters and airspace. When the United States, Australia, the Philippines and Canada conduct Freedom of Navigation Operations (FONOPs), whether explicitly labelled such or not, Beijing perceives territorial intrusions requiring defensive response, not legitimate exercises of international navigation rights.

A spokesperson for the Philippine Coast Guard backed the prospect of a Code of Conduct between China and Southeast Asian nations to manage disputes in contested waters. Yet when asked whether China would honour such agreements, his response was revealing: “There are a lot of treaties and international laws that they were signatories to, and that probably speaks for their behaviour.” The success of a Code of Conduct depends on whether parties share compatible understandings of the framework’s purpose.

China’s Defence Ministry urged the Philippines to “give up unrealistic illusions” and stated China “will continue to take resolute measures to firmly safeguard our territorial sovereignty and maritime rights and interests”. Put another way, China will continue to challenge foreign military operations within what it defines as sovereign waters and airspace. FONOPs may advance stated principles of international law, yet they substantially increase escalation risks when one party views them as territorial incursions.

So these competing perspectives continue to play out.

This month, Australia accused China of releasing flares “in close proximity” to its patrol aircraft, calling it “unsafe and unprofessional.” Beijing countered that Australian jets “illegally intruded” into Chinese airspace.

Earlier in the year, a Chinese helicopter flew within three metres of a Philippine surveillance flight, drawing accusations of “unprofessional and reckless” actions. China stated that Philippine aircraft had “illegally intruded”.

This sequencing matters. The United States, Australia, and the Philippines assert they exercise freedom of navigation in international airspace. From Beijing’s perspective, “dangerous manoeuvres” occur as responses to territorial violations under Chinese legal frameworks.

This divergence is also evident in other ways. China approaches talks about Scarborough Shoal as administrative management of sovereign territory, not of a disputed area requiring negotiated frameworks. Manila operates within paradigms of treating these waters as overlapping claims subject to the 2016 Permanent Court of Arbitration ruling that invalidated China’s expansive maritime claims. Beijing maintains the ruling does not apply to territorial sovereignty and exercised its right under UNCLOS to refuse arbitration. The tribunal did not rule on sovereignty over land features, leaving unresolved the fundamental question generating territorial waters disputes.

Yet in negotiations of the Code of Conduct, the implicit premise assumes that the parties accept overlapping claims requiring management through negotiated conduct rules. It is not clear how this is achieved if one party rejects this premise entirely.

Each FONOP and joint military drill reinforces Beijing’s concern about territorial containment, while strengthening Manila’s resolve but reducing the incentives for compromise.

The repeated attempts by the Philippines to resupply and reinforce the grounded BRP Sierra Madre at Second Thomas Shoal exemplifies this impasse. Manila views these missions as legitimate sovereign activities within its exclusive economic zone. Beijing sees unilateral attempts to consolidate illegal occupation during active negotiations over the Code of Conduct.

The fundamental challenge, not yet met, is to align perspectives. If the framework focuses on operational coordination – communication protocols, fishing management, environmental cooperation – without adjudicating sovereignty disputes, agreement becomes conceptually possible. However, such coordination cannot include provisions constraining what China views as legitimate territorial defence. Manila and Beijing are exploring a coastguard cooperation memorandum focused on search and rescue operations. The situation with the Philippines proves more intractable than with other regional countries because sustained non-regional third-party involvement – particularly through FONOPs challenging Chinese claims – has enhanced escalation risks.

Without agreed frameworks, incidents escalate according to capability rather than rules. The collision in August and repeated confrontation in October demonstrates how the absence of operational protocols increases accident risks.

Each FONOP and joint military drill reinforces Beijing’s concern about territorial containment, while strengthening Manila’s resolve but reducing the incentives for compromise. Pragmatic accommodation becomes more difficult even as escalation risks increase.

For the Code of Conduct, the Philippines’ turn as chair of ASEAN in 2026 creates immense pressure to produce agreement. Negotiators face a stark choice: produce a deliberately ambiguous document with significant interpretive flexibility allowing all parties to claim success while maintaining incompatible understandings, or acknowledge openly that consensus remains impossible. The former appears increasingly likely – a principles-based framework with vague language that defers rather than resolves fundamental disputes.

All parties share interest in peacefully managing disputes yet achieving this requires acknowledging that what one side considers legitimate navigation rights, the other perceives as territorial violations – and no diplomatic text can reconcile this definitional incompatibility.




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