 The South China Sea is an area of particular interest internationally and regionally at the moment, I'm sure you're all very aware, but it is currently disputed between six different governments directly over the islands within the sea and by extension the waters around those islands and indirectly there is an overlap between a Chinese claim to maritime sovereignty or maritime territorial waters and Indonesia's EZ near Natuna Island. So this is a very complex multilateral dispute that we have in the South China Sea that's recently become much more intense, owing to a variety of different factors. You'll also be aware that we've seen a growing intensity in other maritime disputes in Asia, particularly around the East China Sea recently between China and Japan, but also in the Dr Takashima Islands between South Korea and Japan, the northern limit line between the two Koreas, even Ayodo Island between South Korea and China. I think there are reasons why all of the Asian maritime disputes are now much more intense than they have been in the past. The first is obviously the economic growth of the region has increased the importance of overseas trade and maritime interest generally. Countries such as China where previously they may have been self-sustaining and self-sufficient in various areas of food and energy now have to rely on overseas trade to supply those demands. An increase in need resources from these energy hungry countries means they're constantly seeking other and secure supplies of hydrocarbons and also food supplies from overseas. And if they can find them those in waters to which they have exclusive sovereign rights, then all the better for them for security. Equally, since the Second World War, various countries in East Asia have suffered from instabilities domestically. If we look at Vietnam, for instance, which went through a cycle of three very intense wars within 30 years, China has had periods of instability through the Cultural Revolution, through the Great Leap Forward, through the Gang of Four as well. Those situations are to some extent resolving themselves, and so the countries are turning their attention away from the domestic instabilities towards their peripheries, which is where we find these maritime interests. More esoterically, there's something of a return to the sea from these countries. Asia has always been a very maritime region. But countries such as China have always had this difficult decision to make between its continentalism, its land-based interests and its maritime focus. And over the last 60 to 70 years, certainly, and also during the Qing Dynasty, it was very land-focused in the Qing Dynasty. It was in fact overtly focused on the land and banned many forms of naval or maritime expeditions. But now these countries are returning to the sea and seeing their interest in the sea through a different light. And finally, one factor certainly affecting all of these disputes is the rise of China, which is shaking up the regional order and has a variety of effects on how countries are dealing with each other and their perceptions of threat. With all these factors affecting international relations in East Asia, the South China Sea is something of a crucible for these international relations and is really reflective of how the regional order is changing. It's important for a variety of different reasons. It's a major thoroughfare for maritime trade. Over half of the world's merchant fleet tonnage every year will go through the South China Sea. And that's not important only for the East Asian countries, but about 20% of the more than $5 trillion in trade that goes through the South China Sea is the US commerce as well. There's obviously extra-regional interests in the South China Sea. It's very important for resources. We all know about oil and gas and China claims somewhat unbelievably, but it still claims there may be more than 200 billion miles of oil in the sea. Other estimates are much more conservative. Nonetheless, there are some hydrocarbons in there that could be useful for the littoral countries. Fisheries is also very important and often overlooked. There are perhaps several million people who are directly employed in the fisheries industry around the South China Sea and it's an important source of nutrients for large populations in Southeast Asia. Finally, there's a military strategic aspect, which while the very small islands in the South China Sea are not necessarily of any military utility themselves because they're so small, the South China Sea is very important for countries such as China, which currently is hemmed in to its east by Japan, Taiwan, South Korea, and those chains of islands there. So Caesar's South China Sea is probably the main route it has to the open ocean through the Luzon Strait. It's for this reason that it's building a major base on the south coast of Hainan Island on the South China Sea, and within that base will likely be its future nuclear ballistic missile submarine fleet, which will then be able to easily transition towards the open ocean in the Pacific through the South China Sea. So the South China Sea is certainly of strategic utility and importance, not just for the countries in the region but elsewhere. The question is why has it become more intense and contested over recent years? Most countries and most academics would argue it's because of Chinese assertiveness in the South China Sea. And this is a phrase that gets used quite a lot to the assertiveness of China ever since 2008 or 2009. A variety of different incidents seem to suggest this assertiveness was to blame. The USNS Impeccable, which is a US civilian manned naval ship, surveillance ship was harassed by Chinese vessels in 2009, which immediately alerted the US to the possibilities of difficulties in freedom of navigation in the area. It wasn't the first such instance, but it was certainly the most direct challenge to that principle. Vietnam and the Philippines have both complained that Chinese civilian and maritime paramilitary vessels have tried to cut survey cables towed behind their exploration ships that are hired by their national oil companies. And earlier this year we saw a stand-off lasting several weeks between the Philippines and China over Scarborough Reef, which is an almost entirely submerged reef with only a few rocks jutting out from above the sea at low tide. So that particular stand-off involved maritime paramilitaries in the beginning of Philippine warship hovering close to each other in a relatively tense stand-off and the coercive economic diplomacy of the banning of bananas, which is probably the first time we've ever seen coercive banana diplomacy as a phrase in international relations. Now China would suggest that it's not being assertive, it is in fact being reactive. And there is something to that argument. Vietnam and the Philippines have been much more forthright in their exploration of hydrocarbons in the South China Sea in recent years. And China sees this as a challenge to its position. It doesn't like to see a change in the status quo in these disputes because it suggests that reactions are necessary. This reactiveness or reactive assertiveness is a very debatable point, but I think we can certainly say that China is a lot more confident in its diplomacy in the South China Sea whether or not you state is assertiveness. This in turn has led to reactions from other states as well, Southeast Asia as well as the US. And those reactions are often in response to the perceived military rise of China and it's the rapid development of China's military, particularly its navy, and the opacity of its military that is a concern to various states both in the region and beyond. If we see this year, for instance, China has developed a new relatively advanced destroyer, the Type 52D, which will for the first time probably be deployed with navalised land attack cruise missiles. Land attack cruise missiles are necessarily an offensive weapon. You don't need cruise missiles to attack someone else's land unless you are attacking them. Obviously, China had only really had navalised anti-ship missiles rather than land attack cruise missiles. Various other aspects, the aircraft carrier being commissioned this year, which is seen as a very emotional and significant development in China's navy, although the aircraft carrier itself is not a very significant asset given its age and its relatively limited capability, but it is the start of an aircraft carrier fleet that China will be developing over recent years. In response to this military development, and those are just two examples of a much broader full spectrum development of China's military, Southeast Asian countries have been also engaging in relatively rapid military procurement. This has, in turn, incited fears of an arms race in the region. I would argue that we're not seeing an arms race per se, but we are certainly seeing military competition. One of the aspects that people often refer to is the procurement of submarines in the region. Vietnam has signed a contract for six kilo-class submarines, which will be its first conventional, non-coastal submarines ever deployed. The Philippines has received two cutters from the US, one of which is now its flagship, which is really a sign of the paucity of Philippine capabilities rather than anything else. Malaysia and Singapore have recently bought new submarines as well. Indonesia has launched a contract and signed a deal with South Korea to buy three Type 209s. There is a strange rash of submarine purchases throughout the region. The fact that these submarines are being purchased is largely a reflection of the fact that Southeast Asian countries can no longer compete with China on the surface of the water. They are turning to that ultimate sea-denial weapon, the submarine. Submarines are, ton for ton, the most expensive naval vessel you can buy, but they are also a great force multiplier. Just one submarine in the water can deny large areas of the sea to an opponent, and given their necessary clandestine nature, they sow seeds of doubt into a rival relatively easily. The reasons for the purchase of submarines are varied. Vietnam, I think, is clearly purchasing submarines to compete with China's growing naval hegemony within the region, but Malaysia's purchase of submarines are less clear-cut. Arguably, and I would argue this, Malaysia has purchased submarines because of its traditional rivalry with Singapore rather than any concern of the Chinese capabilities. Also, it is potentially arguable that these navies are simply developing full-spectrum of capabilities as their economies also develop. These sub-regional dynamics between countries such as Malaysia and Singapore, on the one hand, or Singapore or Indonesia, suggests that while we may not be seeing a regional arms race, what we are seeing is a very complex multilateral interwoven series of military competitions that is changing the tenor of military procurement in the region. We've also seen some diplomatic reactions from Southeast Asia, in particular countries such as Vietnam and the Philippines, attempting a unified diplomacy from Southeast Asia through ASEAN towards China in these disputes. More recently, we've seen some failures in that attempt at a unified diplomacy, particularly with the failure of ASEAN to issue a communique at the end of its foreign ministers meeting in July for the first time in its more than four decades history. At the recent meeting in November in Cambodia, there was an open spat between the Cambodian Prime Minister and the Philippine President over the involvement of the US in the South China Sea dispute. While ASEAN is an organisation that thrives on the rhetoric of consensus and community, in reality there are many tensions behind the scenes between the ASEAN states. South East Asian countries, in particular Vietnam and the Philippines, have tried to internationalise the issue by encouraging greater US engagement in the region, but also engagement from countries such as Russia, India and Japan. They've done it through a variety of different ways. Vietnam has started to build closer defence links with the US, which is a relatively startling development, given how antagonistic they were towards each other in the latter part of the 20th century. Vietnam has also opened up Cameron Bay, which is a former Soviet and US naval base in the east of the country, to international ship repairs. So the US has now sent several ships to be repaired there for the first time since the Vietnam War. This engagement to the US has borne fruit, as we've seen with the US pivot, which although some would argue has been going on for several years, is the most clearly elucidated in late 2011 by Hillary Clinton in an article in a foreign policy magazine, and then very specifically elucidated by President Obama and Defence Secretary Panetta in January when they launched a new strategy, which suggested the US would have necessity pivot towards Asia. They've since dropped the word pivot, it's not really amenable to their demands. The US diplomats often have a tendency to use sporting metaphor whenever they talk about international relations, and sometimes it's lost on international audiences because they're American sports, which as we see in their World Series don't really include other countries. But also the idea of a pivot is necessary temporary, and that's why they stopped talking about a pivot and now talk about a rebalance. There are three real arms to this rebalance. There's a diplomatic arm where the US is aiming to show up a lot more at regional conferences, and we'll note that the first overseas visit by President Obama after his re-election was to Southeast Asia. There's an economic rebalance, particularly through the Trans-Pacific Partnership, which is a regional economic cooperation agreement that the US is trying to develop. But what's called most people's eye is the so-called military rebalance or pivot, which has thus far included the deployment of up to 2,500 marines to Darwin in Australia on a rotational six-month basis, and also in the future, up to four littoral combat ships being deployed to but not based in Singapore. In reality, the military rebalance is very modest in the amount of capabilities that it will send to Asia, and it's partially simply rebalancing after drawing those capabilities away from Asia to the Middle East to fight wars in Iraq and Afghanistan. Beyond the littoral combat ship and Darwin, there isn't really much of note in terms of an increase in offensive military capabilities. There is, however, a rebalance within the region, if not so much a rebalance to the region. 9,000 marines are being moved from Okinawa in Japan to Guam, Hawaii and Australia. And this is being done in conjunction with two new operational concepts, one of which nests within the other, the joint operational access concept and the ASC battle concept. The joint operational access concept is unclassified, the ASPC is still classified, but in reality what they aim to do is disperse US forces throughout the region, hence increasing their presence in Australia, Guam and Hawaii, which has the primary benefit of moving many US forces out of missile range of some of the Chinese missiles, but also the secondary benefit and perhaps most importantly for the US of complicating the Chinese ability to track and therefore intercept any US lines of communication from these bases towards Chinese waters or the near abroad. These are designed to complicate China's, what's known as anti-access area denial capabilities, which are those military capabilities that are designed to prevent arrival entering or operating freely within a certain theatre of operation, so submarines, anti-ship missiles, fast attack craft, even anti-satellite weapons. In reality, the pivot in combination with Joe Acony ASPC is not necessarily a major military development in terms of capabilities deployed, but is a major diplomatic one, because it's aimed at building closer ties to countries in the region, sending Marines to Australia for instance, demonstrates a commitment to Australia that wasn't there before, so it's reassuring allies in the region that the US is still there to play a pivotal role in the region. But it's also sending a discreet message to China that it's actually moving US forces away from the front line with China, and therefore this is meant to be perceived as a defensive rather than an offensive move. The US is not eager to be involved in any conflict with China currently. It would be expensive in both blood and treasure, and not really in anyone's interests. Whether that is clearly perceived within Beijing is another matter, but certainly the US does not want its allies being emboldened by its engagement, and therefore drawn into a reckless conflict. It's notable for instance that during the Scarborough Reef stand-off in April to May this year, the stand-off really started because the Philippines sent its flagship to the region before any maritime paramilitary vessels. That flagship is a US donated cutter, which therefore implicitly ties the US into a stand-off it didn't really want to be in. And that's one of the reasons the Philippines lacked regional support over the Scarborough Reef stand-off at the time. So what we're seeing certainly is a shift in the regional order already. The US pivot is for the first time really adding a note of bilateral and direct military competition between the US and China, which didn't previously exist. Even if the pivot is limited in its deployments, it's not limited in its rhetoric. The ASBC, by its very nature, would require the US to launch offensive operations deep in Chinese territory to deal with the anti-access area denial capabilities on land, which is an extremely escalatory response and is attempted to deter China rather than actually go to war with China. So while it might be premature to call it an arms race, there are military competitions between various states within the region. But I would also argue there's no current desire for conflict, as we've just discussed with the US and its pivot, but also the fact that countries that are disputing these areas in the South China Sea are usually using maritime paramilitary vessels to do so. This is done because it's seen as less escalatory and less offensive. Often it's very difficult to control ships out at sea when communications can be quite difficult. So not having large guns and missiles on board makes it much more difficult to start a war you didn't want. But also maritime paramilitaries allow a state to affect day factor sovereignty over a particular area, even if there is no day jury sovereignty. It allows China to say, for instance, we must own or at least have exclusive economic rights over these waters because we're policing them. Why would we bother policing them if they weren't ours? It's not really a very strong legal argument, but it's quite a useful rhetorical one. Even though there's not going to be any conflict, the South China Sea disputes still matter very much, not just because of the strategic significance of the sea itself, but because, and not because they are a game changer in themselves, because they reflect the changing game in Asia currently and the future of the game in Asia for the 21st century. I will very briefly, if I may, just sketch out three possible future scenarios in the South China Sea. I've given them relatively pithy titles to make them easier to remember and probably easier to say. The first one is what I would call Nobody's Sea, which involves both China and the US to some extent withdrawing from the South China Sea because the US has withdrawn some of its forces further away from the Chinese coastline and is unwilling to engage fully to the extent the Southeast Asian countries do owing to budgetary or sterotry, but at the same time, China does not have the military or diplomatic forces in this scenario to fully affect a regional hegemony. The upshot of this scenario would be a relatively tense situation, but one in which there would be less likelihood of conflict than might otherwise be the case. The second scenario might be called Somebody's Sea, whereby either the US or China are able to affect full hegemony over the sea itself and therefore over the littoral states in Southeast Asia. This could be owing to a military defeat or it could be owing to domestic crises that lead to a withdrawal or a downgrading of military capability. This would probably be in the most stable scenario, even though it would be the least desired from a Southeast Asian perspective because it would be the one in which we have the least agency. Finally, there's a possibility of it being everybody's sea. That is to say, it's a continuation of the status quo. There's a level of management's trust. The Southeast Asians encourage greater US engagement, which the US follows up with to a certain extent, but China continues to challenge that engagement and challenge US principles of freedom of navigation as perceived from Washington. This scenario, which is probably the most likely, is also arguably the least stable because it is the one that has the greatest possibility for unnecessary or undesired clashes that lead into some form of escalation afterwards. I don't want to end on a pessimistic note, but it's probably the likelihood that we are currently seeing.