Where is America Going in the South China Sea?

The Trump administration’s new National Security Strategy is remarkably critical of China, warning that its "efforts to build and militarize outposts in the South China Sea endanger the free flow of trade, threaten the sovereignty of other nations, and undermine regional stability.” Yet even as U.S. leaders have championed a “Free and Open Indo-Pacific,” they have yet to explain how this approach will apply to and be implemented in the South China Sea. Meanwhile, the situation there has reached a critical stage as Chinese advances accumulate, America’s room for maneuver diminishes, and observers throughout the region wonder whether the United States is up to the challenge.

As we discuss at greater length in a recent article in the Naval War College Review, America’s standing in the Indo-Pacific largely depends on its ability to uphold existing rules of the road. In particular, the United States and its allies and partners have championed “freedom of navigation and overflight, respect for international law, and the peaceful resolution of disputes.” Thus, from a geopolitical standpoint, the struggle over the South China Sea is not about rocks and shoals, but about who sets the geopolitical framework for the region, and whether states in Southeast Asia and the greater Indo-Pacific region will align with the United States or China.

The Obama administration struggled to develop an effective strategy for countering China’s drive for hegemony in the South China Sea, which has featured island-building, militarization of disputed features, harassment of U.S. vessels and aircraft, coercion of U.S. allies and partners, and other salami-slicing tactics designed to gradually provide Beijing a position of overwhelming advantage. So far, the Trump administration has fared little better. Administration officials initially took a hard line, with Secretary of State–designate Rex Tillerson suggesting that Washington might physically prevent Beijing from accessing its artificial islands in the Spratlys. Then the issue appeared to recede from the policy agenda as the administration focused on bilateral trade and North Korea as the dominant issues in U.S.-China relations. Although the U.S. military has stepped up freedom-of-navigation operations (FONOPs) to challenge China’s (and other states’) excessive claims, the administration has given the impression that it lacks an overall strategy for addressing Chinese advances.

Four Strategic Options

Getting America’s South China Sea strategy right requires thinking systematically about what Washington should seek to achieve and what it should hazard in the effort. It has become common, in recent years, to hear calls for the United States to get tough with China over its assertive and frequently coercive behavior. Yet it is far less common to hear in-depth discussion of what the long-term goal of such a program should be, whether that goal is actually achievable, and how much cost and risk the United States should accept along the way. What is needed is to elevate the strategic debate by identifying and assessing the options for countering China’s assertiveness in the South China Sea. Four main strategies are possible: rollback, containment, offset, and accommodation.

Rollback: The most ambitious strategy would aim to reverse China’s gains. This approach would seek to force Beijing to withdraw from key features in the South China Sea, or at the very least to demilitarize those features by removing the military facilities and capabilities. In addition to barring access to the islands, a rollback strategy might attempt to force Beijing to walk back its maritime claims in the South China Sea—in particular, to abandon the nine-dash line and accept the 2016 arbitral tribunal ruling, which held that China must derive its maritime entitlements from legitimate claims to land features.

The core premise of a rollback strategy is that China’s increasing dominance in the South China Sea poses an unacceptable risk to U.S. interests, and that the South China Sea will become a “Chinese lake” unless Beijing’s advance is not simply halted but reversed. The trouble, however, is that this approach probably cannot be executed at acceptable cost. Even in the best-case scenario, rollback would lead to a severe disruption of the U.S.-China bilateral relationship and alienate many U.S. allies and partners who want Beijing’s advance stopped—but not at the cost of full-on confrontation. At worst, it could plunge Washington and Beijing into precisely the military conflict that American policy makers long have sought to avert. For these reasons, it is highly unlikely that rollback will be attempted; indeed, only a handful of the most hawkish U.S. national security experts have advocated such a strategy, and even then only in private rather than public settings.

Containment: Should the risks associated with rollback prove prohibitive, a second strategic option is containment. The goal here would be to stop China from using force or coercion to alter any element of the status quo in the South China Sea, and particularly to prevent it from building additional features or seizing features held by other nations. The basic logic of this approach is that, while rollback may be too dangerous, any further erosion of the situation in the South China Sea is unacceptable. Additional Chinese gains would undercut the credibility of American leadership and guarantees in the region and risk allowing Beijing to complete its dominance incrementally.

Containment would permit Beijing to keep what it has, but it would draw the line firmly against further advances. The United States would issue sharp, clear warnings against further Chinese expansion or coercion, coupled with hard-edged policies—perhaps including the use of force—meant to substantiate those warnings. The United States would, for instance, station substantial military forces in and near the South China Sea to respond quickly if Beijing sought to seize features held by other nations; it might also consider landing U.S. forces on features controlled by American allies and partners to discourage aggressive Chinese moves.

Containment is thus a hard-edged, confrontational policy. Its primary selling point is that it is both less risky and less difficult to execute than rollback because it relies on deterrence—preventing China from seeking new gains—rather than compellence—requiring Beijing to accept the humiliation of giving up gains it has pocketed already. Containment is nonetheless difficult, costly, and potentially dangerous to execute, and would require enormous patience and persistence. Critics such as Hugh White have asked whether the South China Sea is worth a war for Washington; containment, like rollback, requires the United States to answer that question in the affirmative.

Offset: If U.S. leaders are not willing to accept the risks inherent in more-aggressive strategies, a third option would be to focus on offsetting—and penalizing—Chinese gains rather than directly preventing them. The United States would respond to Chinese moves in the South China Sea by imposing costs—diplomatic, economic, and otherwise—on Beijing; Washington would also work to strengthen the relative positions of America and its allies and partners. In practice, this might entail slapping economic sanctions on Chinese firms engaged in island-building or other coercive activities, suspending broader bilateral economic initiatives such as negotiation of a bilateral investment treaty, or incrementally expanding the U.S. defense relationship with Taiwan or other regional parties. At the same time, the United States would aggressively exploit the regional unease created by Chinese advantages to continue broadening defense relationships and opportunities for basing access with countries throughout Southeast Asia and beyond.

This strategy would accept some short-term competitive losses in hopes of offsetting those losses through longer-term competitive gains. An offset strategy therefore requires that U.S. officials walk a tightrope: acting forcefully enough to convince regional actors that Washington is serious about preventing Beijing from dominating the region, but not so aggressively as to unnerve allies and partners who often try to avoid explicit alignment. As Singaporean diplomat Bilahari Kausikan notes, “[t]o the countries of Southeast Asia, the American porridge is always going to be too hot or too cold; countries will always fear the United States entangling them in its quarrels with rivals or being left to deal with other major powers without adequate support.” Moreover, although an offset strategy reduces the prospect of near-term military confrontation with Beijing, the penalties imposed must still be severe if they are to affect China’s calculus over the long-term—which is critical because an offset strategy does not directly forestall Chinese advances in the short-term. Thus, although an offset strategy may carry some competitive advantages, it also remains fraught with difficulties.

Accommodation: In contrast to the first three strategies, the goal of accommodation is not to stop Beijing’s destabilizing behavior ultimately, or even to maintain a dominant position in the South China Sea and the broader Asia-Pacific region. The primary goal, rather, is primarily to avoid conflict with China over the South China Sea, with a subsidiary objective of conserving the resources that would be needed to compete more effectively.

To that end, the United States unilaterally would make concessions to wind down tensions in the South China Sea. It would avoid military, diplomatic, or legal challenges to Chinese activities, essentially acceding—whether tacitly or explicitly—to Beijing’s island building, militarization, and coercion of its neighbors. FONOPs would be phased out; military exercises and presence would be reduced, if not terminated.

The core premise of this approach is that resisting Chinese dominance of the South China Sea is a fool’s errand. China already controls much of the area, this argument runs, and there is little that Washington can do short of threatening—and perhaps waging—war to halt Beijing’s progress. Rather than making Scarborough Shoal or Second Thomas Shoal the West Berlin of the twenty-first century, the United States simply would recognize that Beijing’s rise makes it inevitable that the South China Sea eventually will become a Chinese lake. The obvious downside, of course, is that this approach would surrender the South China Sea to Beijing—and cast severe doubt on Washington’s ability to uphold its other interests and commitments in the broader Asia-Pacific region.

A Hybrid Strategy

So where does this analysis leave the United States? Neither of the extreme options—rollback or accommodation—represents an approach that the Trump administration is likely to adopt. Rollback has rhetorical appeal, but it would require Washington to accept extremely high levels of cost and risk. Indeed, this strategy would require Washington to accept far more risk than U.S. allies and partners themselves have accepted, and might thus endanger the very relationships the strategy is meant to protect. Conversely, an accommodation strategy effectively would abandon most of Southeast Asia to China. This would constitute a strategic disaster for the United States under any administration, but for an administration that has proclaimed itself determined to adopt a strong China policy, an approach that resembles appeasement is likely to be particularly unattractive.

This leaves two strategic options: containing or offsetting Chinese actions in the South China Sea. Containment has worked in isolated cases, and it holds some promise of altering Chinese behavior through deterrence rather than compellence. Yet containment is still a costly and potentially dangerous strategy, one that an opportunistic—and increasingly powerful--adversary presumably will find numerous opportunities to test in the coming years. An offset strategy, for its part, would have the benefit of avoiding near-term military confrontations, while focusing U.S. leaders on the long-term objective of imposing costs on and enhancing regional balancing against China. Unfortunately, an offset strategy is difficult to execute in its own right and it risks permitting further Chinese changes to the status quo and thereby undermining U.S. credibility with friends and adversaries alike. Containment and offset are certainly superior to the extreme options, but neither one is an ideal strategy in and of itself.

Containment and offset are not mutually exclusive, however, so the best approach for U.S. policy makers would be to combine the most compelling aspects of these two strategies, while seeking to avoid some of their associated liabilities. Specifically, the United States should contain the most destabilizing Chinese activities while offsetting and penalizing less threatening behavior.

The containment elements of a new strategy would demonstrate that the United States is willing to accept short-term risk—including military risk—to prevent China from coercing regional states and consolidating control of additional features in the South China Sea. The United States has shown episodically that—when it draws redlines clearly and credibly threatens to enforce them—it can deter Chinese efforts to take features from other claimants (as in the case of Second Thomas Shoal in 2014) and to build on contested features (as in the case of Scarborough Shoal in 2016). If U.S. leaders are willing to issue clear deterrent threats, and to back up those threats with potential military, economic, and diplomatic sanctions, they may be able to mitigate the worst aspects of Chinese aggression by preventing Beijing from seizing or reclaiming additional disputed features.

The offsetting elements of the strategy, meanwhile, would seek to ensure that China suffers long-term losses whenever it obtains any short-term gains coercively. Unfortunately, no U.S. containment policy is likely to prevent China from using its maritime militia to harass other countries’ vessels, violating the 2016 arbitral tribunal decision, further militarizing its existing artificial islands in the Spratlys, or declaring an ADIZ around the South China Sea. The United States is just not likely to go to war, or even threaten to do so, in response to such run-of-the-mill coercion, and Beijing knows as much. U.S. leaders therefore have little option but to impose economic and diplomatic penalties on Beijing in response to such actions, while offsetting such gains by enhancing the U.S. military posture in the region and working to build regional support for deeper American engagement and tougher policies toward China.

There is no guarantee that this hybrid strategy will work, of course; were there an obvious solution to China’s challenge in the South China Sea, U.S. policy makers surely would have found it by now. A contain/offset hybrid still will entail many of the liabilities that inhere in the separate strategies: it will not reduce China’s existing military-geopolitical footprint, for instance, nor will it preclude all forms of Chinese assertiveness and coercion in the region. This strategy, moreover, will be difficult to execute and will become ever harder to implement over time as China’s power grows. Indeed, for the United States to accomplish even the limited aims of this approach, it must be willing to accept greater risks, incur higher costs, and impose more-serious penalties on China than it has been willing to do to date. A contain/offset strategy will not allow U.S. policy makers to avoid dangerous crises and daunting dilemmas—even if it does represent the best approach for navigating them deftly enough to preserve America’s key interests in the South China Sea.

America has limped along without a clear or coherent approach in the South China Sea for several years. If the Trump administration is serious about its promise to “compete with all tools of national power to ensure that regions of the world are not dominated by one power,” then now is the time to get serious about this strategy. In the final analysis, a strategy that blends the most compelling aspects of containment and offset is best suited for protecting U.S. interests at a reasonable cost—and for steering the proper course in a turbulent South China Sea.

This piece is based on an article in the winter 2018 issue of the Naval War College Review.