South China Sea Tensions Surge After Taiwan Deploys Frigate, China Warns Of "Air Defense Zone"

Following the much anticipated ruling by the international court which found yesterday that China does not have a right to claims on the South China Sea, an unexpected supporter for China's position - which has vocally warned it won't comply with the tribunal's ruling - emerged overnight when Taiwan, which shares territorial claims with China in the disputed area - sent a naval frigate to patrol the disputed waterway Wednesday, to show the government’s “determination" to defend its national interest.

The order from Taiwan's president Tsai Ing-wen came just hours after the Permanent Court of Arbitration found found that the largest natural feature in the contested Spratly Islands, the Taiwanese-held Itu Aba, was a "rock" rather than an island and didn’t qualify for a 200-nautical mile (370 kilometer) exclusive economic zone. The frigate’s planned patrol included a resupply stop at the feature, which Taiwan calls Taiping, a defense ministry spokesman said.

Taiping island

As Bloomberg writes, confirming what we said yesterday after the tribunal's ruling, the decision to deploy the warship could further escalate tensions in the area. China has said it doesn’t recognize the court’s jurisdiction. Overnight, China firmly rejected the verdict claiming its ruling on the South China Sea is both "null and void" with no binding force. Chinese Foreign Minister Wang Yi Tuesday called the South China Sea arbitration a political farce made under the pretext of law.

As a reminder, the ruling, resulting from a challenge brought by the Philippines, invalidated China’s “nine-dash line” claim. China’s assertions cross over with those from countries like Malaysia, Vietnam and the Philippines, and are based on a map created by Taiwan’s Republic of China government in 1947. Taiwan has administered Itu Aba since the 1950s.

The chart below, showing that 40% of Chinese oil imports pass through the contested region, explains why the disputed territory is of vital importance to China. The region is also home to 10% of the world’s commercial ocean fish stock, and lies above an estimated 11 billion barrels in oil reserves.

China also warned Wednesday it was ready to set up an air defense identification zone over disputed waters, repeating a threat it first made one month ago. "If our security is being threatened, of course we have the right to demarcate a zone,” Chinese Vice Foreign Minister Liu Zhenmin said on Wednesday

A new air defence identification zone (ADIZ) would likely increase tensions not only with the Philippines, but also with other rivals to claims in the South China Sea, including Brunei, Malaysia and Vietnam. China declared an ADIZ over disputed islands in the East China Sea in 2013, a move which caused anger with Japan and the United States.

Vice minister Liu said the islands were China's "inherent territory", as he launched a policy paper in response to the ruling. "We hope that other countries will not take this opportunity to threaten China and to work with China to protect the peace and stability of the South China Sea, and not let it become the origin of a war," he told reporters.

For now, however, focus is on naval deployments, and China's Vice Foreign Minister Liu Zhenmin on Wednesday praised Taiwan’s efforts to defend rights shared by the one-time civil war foes. "The arbitration has damaged the rights of all Chinese, and it’s the common interest and responsibility of both sides to protect the maritime rights of the South China Sea," Liu said at a briefing in Beijing. He accused the tribunal judges in the case of bias and a lack of common sense.

While China refused to participate in the tribunal proceedings, it did submit a paper outlining its position and worked behind the scenes to lobby the court, according to the decision. Taiwan, under former President Ma Ying-jeou, filed a brief to the panel stating a case for an exclusive economic zone around Itu Aba, citing its ability to support life.


As Bloomberg adds, in a statement echoing China’s own response Tuesday, Tsai said the Hague ruling had no binding effect on Taiwan and undermined her government’s rights. The former law professor, who ousted Ma’s Nationalist party in a landslide election in January, called for multilateral talks to promote stability in the region.

What is most surprising is that the president's remarks put Taiwan’s new leader at odds with its chief security protector, the U.S., which has called on China to abide by the ruling. They also provide a rare area of agreement between Tsai and Communist Party leaders, who have cut off communications over her refusal to affirm the contention the two sides represent "one China."

Tsai’s Democratic Progressive Party officially supports independence for Taiwan. New York University law professor Jerome Cohen, a specialist in Chinese law who counts Ma among his former students, said Tsai was struggling to "adjust to an uncomfortable situation."

"Today’s response openly rejecting the decision is a big mistake and different from what even Ma would have done," Cohen wrote in a blog post Tuesday. "Tsai will be criticized at home for following Beijing’s lawless line at the same time that Beijing was responsible for excluding Taiwan from participation in the arbitration."

Taiwan’s Coast Guard Administration also stations vessels at Itu Aba, and another Wei-Shin frigate arrived at the feature late Tuesday, the agency said.

Tsai Ing-wen’s position “is really hard” because the claims of Taiwan and China are practically identical, said Nick Bisley, a professor of international relations at La Trobe University in Melbourne. “How you chart a course that maintains a Taiwanese position without sounding like you are China is very tricky. ”

"Suddenly, you are back to large areas of the South China Sea that are high seas, open to freedom of navigation and travel," said Eric Shrimp, a former U.S. diplomat who’s now a Washington-based policy adviser at law firm Alston & Bird. "The question then becomes: how do the interested parties cooperate to secure those high seas?”

The answer: it will be increasingly more difficult for them to do so.

Meanwhile, defense stocks were mixed in Wednesday trading on Chinese exchanges. AVIC Aircraft Co. and AVIC Helicopter Co. fell 0.8% while Jiangxi Hongdu Aviation Industry Co. slipped 1%. AviChina Industry & Technology Co. rose 1.4% and AVIC Jonhon Optronic Technology Co. gained 3.1%.  Expect these to surge if and when the territorial conflict escalates further, as it is almost certain to do in the aftermath of the international court's politically-motivated ruling.