Tensions continue to rise in the South China Sea following the Obama administration’s foreign policy ‘pivot’ toward Asia late last year.

There are many reasons for the pivot, but a principal motivation was to protect the freedom of navigation in the Malacca Straits and the South China Sea.

The issue was discussed at the East Asia Summit in Bali on 19 November 2011, although the chairman’s statement of the proceedings is silent on the issue. Just days after the meeting, the Philippines protested to China that three Chinese naval vessels had intruded into its waters near the Sabina Shoal in the South China Sea. The Philippines navy subsequently sent its new acquisition from the US, the Gregorio Del Pilar — a 46-year-old coast-guard cutter — to protect its interests in the area. And early in 2012, India’s Oil and Natural Gas Commission Videsh announced that it was resuming drilling in a hydrocarbon block in Vietnamese territorial waters disputed by China — while at the same time the China National Offshore Oil Corporation announced its intention to send out its first deep-water survey vessel to search for oil and gas prospects in the South China Sea.

With energy demand rising rapidly in China, Japan and South Korea — not to mention the smaller economies of Southeast Asia — the passageway through the South China Sea is of increasing global strategic importance, as energy shipments from the Middle East pass through the area. Moreover, the South China Sea itself holds gas and oil reserves of anywhere between 20-200 billion barrels of oil equivalent (in comparison, Saudi reserves are about 260 billion).

There are three festering problems in the South China Sea that have become a source of international tension and threaten peaceful passage through this waterway. First, there are competing claims between China, on the one hand, and Vietnam, the Philippines, Brunei, Malaysia and Taiwan on the other, over the 200-odd Spratly and Paracel Islands (as well as a competing claim between China and Indonesia over an area just north of the Natuna Islands). For the parties concerned, there is little alternative but to arrive at a negotiated settlement, and therein lies the rub — China wants bilateral negotiations, but the other countries would prefer multilateral discussions through ASEAN.

Second, China’s interpretation of the rights of international navigation in the extended economic zone do not permit the passage of foreign military vessels conducting surveillance, reconnaissance and intelligence gathering — an interpretation that is not shared by the overwhelming majority of nations, including the US.

Finally, there are overlapping claims to the continental shelf made by China, Vietnam and the Philippines in response to a call to register such claims by the UN Commission on the Limits of the Continental Shelf.

Disputes over the South China Sea go back a long way — at least back to 1973, and probably beyond. The 2002 Declaration of the Conduct of Parties in the South China Sea (signed by ASEAN and China) imposed a freeze on claims. Although it has by and large stuck, actions to defend sovereign rights in these waters, especially by China, have escalated over the years. To defuse tension, the parties started negotiating a code of conduct in late 2010 — reflecting a change in China’s stance, as it had previously objected to taking a multilateral approach.

Despite these negotiations, three developments suggest that tensions in the South China Sea will only rise: the increased technical capability of China’s armed forces to assertively protect the country’s claims; a rising level of nationalism and self-confidence within China, articulated by an increasingly vocal press; and now the rebalancing of American foreign policy toward Asia, which — with the 60-70 ships and 200-300 aircraft deployed by the United States Seventh Fleet in the Pacific region — has the capability of intervening if coercion or conflict erupts.

What is needed now is careful diplomacy on all sides and a collaborative approach to resolving a range of issues confronting the public ‘commons’, including fisheries, riparian rights, climate change, disaster risk management and health pandemics. Adopting such a multi-track approach toward engagement between China, the US and Southeast Asia will ensure that points of tension such as the South China Sea are outweighed by the benefits of constructive partnerships in solving regional problems.