When China decided to send its warships to the desolate Scarborough shoals located in the South China Sea, it intended to send a message primarily to the Philippines, but more importantly to the United States and other Asian countries in dispute with China over the South China Sea. The message for Asian countries was brutal as it was clear; that if you decide to take on China the consequences would not only be certain military defeat, but also political and economic. For the United States the message was to stay clear of inter-Asian disputes. China chose the area for confrontation rather well.
China contends that the Scarborough shoal is not included within the territorial limits of the Philippines as defined in the Treaty of Paris (1898), Treaty of Washington (1900), Convention Between the United States and Great Britain (1930), the 1935 Constitution of the Philippines, Republic Act No. 3046 of 1961 which defines the baselines of the Territorial Sea of the Philippines, or the 1987 Constitution of the Philippines. China asserts that when the United States took over the sovereignty of the Philippines from the then colonial power, Spain, the Scarborough shoal was not included within the territorial sovereignty of the Philippines. Strictly speaking, as per the facts presented, the Chinese contention is correct.
On the other hand, the Philippine Department of Foreign Affairs asserts that the basis of Philippine sovereignty and jurisdiction over the Scarborough shoal is not premised on the cession by Spain of the Philippine archipelago to the United States under the Treaty of Paris. By virtue of the Presidential Decree No. 1599 issued by President Marcos on June 1978, the Philippines claims an Exclusive Economic Zone (EEZ) up to 200 nautical miles (370 km) from the baselines from which their territorial sea is measured. In 2009, President Gloria Macapagal-Arroyo enacted the Philippine Baselines Law of 2009 (RA 9522). The new law classifies the Spratly Islands and the Scarborough shoal as a regime of islands under the Republic of the Philippines. The Philippines Department of Foreign Affairs further cites the Island of Palmas case, where the sovereignty of this island was adjudged by the International Court of Justice [ICJ] in favour of the Netherlands because of effective jurisdiction and control despite the historic claim of Spain. The Philippines claims to have exercised effective jurisdiction and effective occupation of the shoal since its independence. In international law this is a well recognised practice. And therefore it is no surprise that China is loathe to test its case before the ICJ.
Both China and Taiwan claim that the Scarborough shoal was first discovered and drawn in a map during the Yuan dynasty and was historically used by Chinese fishermen. In 1935, the then Chinese government regarded the shoal as part of the Zhongsha Islands. That position has since been maintained by both China and Taiwan. In 1947 the shoal was given the name Minzhu Jiao. In 1983, the People's Republic of China renamed it Huangyan Island, with Minzhu Jiao reserved as a second name. China reaffirmed its claim of sovereignty over the Zhongsha Islands in its 1992 Law on the Territorial Sea and the Contiguous Zone. China claims all the islands, reefs, and shoals within a U-shaped line in the South China Sea drawn in 1947 as its territory. Scarborough shoal lies within this area. None of the South-East Asian countries are prepared to accept Chinese claims.
To make the Philippines comprehend the gravity of the situation, China, while showing its mailed fist by sending its warships to the contested area, also took two important economic measures. Firstly, it held up Philippine banana exports to China. The Chinese market is very important for the Philippines, in that China absorbs nearly 25 per cent of the total Philippine banana exports. Nearly 1.2 million boxes of bananas are shipped weekly to China at about US $4 per box. The loss of the Chinese market would be a heavy burden for the Philippines, for in the weeks of confrontation the Philippines lost nearly US $33.1 million in exports. Secondly, the Chinese postponed any Chinese tourists from visiting the Philippines. This too was a weighty blow to the Philippine tourist industry as it employs a large number of people and the Chinese are one of the largest tourist groups that visit the country.
On the political front the visiting Chinese Defence Minister Liang Guanglie cautioned the United States against giving any encouragement to the Philippines in its confrontation with China. This being an election year and loathe to enter any new conflict, the US disclaimed any such intentions and quietly urged the Philippines not to give any provocation to the Chinese. A Chinese Vice-Minister of Defence visited Mongolia to meet with his Russian counterpart who was in Mongolia and a second Vice-Minister visited the key military commands to urge preparations just in case a conflict broke out.
The reasons why China took such strident measures is not far to seek. Having just got over the internal convulsions caused by the sacking of the Chinese politbureau member Bo Xilai, the present Chinese leadership did not wish to give the impression that it was ‘weak-kneed’ and could be bullied. Had such a perception prevailed it would have been fatal for the stability of the ruling group. Similarly, the incoming party chief and President, Xi Jinping, could not afford to start his innings by being seen as a push-over by a small country such as the Philippines. The upshot of this episode may be that the present incumbent, Hu Jintao, while giving up the state presidency as well as the party leadership, may continue for some time more as the Chairman of the Central Military Commission. This would lend the necessary stability to the smooth change-over expected at the 18th Party Congress.
China also wished to send a message to all other contenders in the South China Sea dispute, that while China would wish for a diplomatic solution it would react violently if sufficiently provoked and would not be pushed around. It also wanted to demonstrate that the United States would not necessarily militarily intervene in each and every occasion and that the countries of South East Asia might like to reconsider and keep this fact in mind. Economically, the Chinese demonstrated that the huge Chinese market could not be ignored and that was a hard lesson that the Philippines learned to its cost. Nevertheless, the Chinese are conscious of the fact that their bullying tactics might also have a reverse effect. Countries of South East Asia might be sufficiently perturbed to seek even more closer ties with the United States, Japan and even India and in the bargain unite to present a ‘joint front’; thus completely isolating China. It is important for China to realise that in such an eventuality it will be the big loser!