The ongoing Second Thomas Shoal incident between China and the Philippines — now more than 20 days old, as of this writing — has the potential to become a turning point in America’s Indo-Pacific strategy if it continues into September. The dynamics of the bottom-line game around Thomas Shoal will become more evident as time goes on.
The latest incident has once again brought China-Philippines relations back into a cycle of crisis management. The South China Sea dispute remains deadlocked, with the bilateral relationship serving as a litmus test for the overall situation in the region. From the end of the Cold War in 1991 to the current incident, the dispute has caused China-Philippines relations to experience two cycles of ups and downs. The first occurred with the Mischief Reef incident in 1995, but this also led to crisis management efforts between the two countries regarding the South China Sea. This continued until the end of the 20th century.
During the Gloria Arroyo presidency, China-Philippines relations experienced a warming trend lasting roughly a decade from 2001 to 2010. It is worth mentioning that in 2002, China and ASEAN countries, including the Philippines, signed the Declaration of Conduct in the South China Sea, a consensus and political commitment to resolve disputes through peaceful negotiations and consultations.
The second cycle occurred during the presidency of Benigno Aquino III, when China-Philippines relations hit rock bottom due to the Scarborough Shoal incident in 2012 and the arbitration case in 2016. It was not until President Rodrigo Duterte took office that the situation began to turn around with efforts to properly manage the issue.
China-Philippines relations experienced an upgrade between 2017 and 2022. However, since the beginning of President Bongbong Marcos’s term in early 2023, against the backdrop of deteriorating China-U.S. strategic relations, the Philippines policy has once again gone astray. Constant friction in various fields has rapidly accumulated and deteriorated, and the Second Thomas Shoal incident became a flashpoint. This may signify that China-Philippines relations will once again enter a protracted period of crisis management.
The Second Thomas Shoal incident holds significant implications for the broader 30-year landscape of peace and development between China and ASEAN. Since the end of the Cold War, the South China Sea has remained a thorny issue between China and some ASEAN countries that make sovereignty claims in the region. It has become a de facto regional security problem, impacting the overall relationship between China and Southeast Asia.
Fortunately, China and ASEAN have gradually explored a regional norm of exercising restraint to manage disputes in the South China Sea and create an environment of peaceful development. A milestone in this regard was the signing of the DOC in 2002. Subsequently, China has been engaged in bilateral management of maritime disputes with countries such as the Philippines and Vietnam, while also working toward upgrading the DOC to Code of Conduct.
In July this year, China and ASEAN concluded their second reading of the draft COC text, taking another step toward its finalization. However, just at this critical juncture, the Second Thomas Shoal incident erupted. If both sides fail to effectively manage the situation and instead allow it to escalate, it will delay the conclusion of the COC. Moreover, this will exert immense pressure on the upcoming 43rd ASEAN Summit in September — themed “Enhancing ASEAN Community Capacities —and potentially affecting ASEAN’s internal unity and the construction of the China-ASEAN Community of Shared Future.
The Second Thomas Shoal incident seems to be a replay of history. It reminds us of the failure of ASEAN countries to issue a joint statement at the 2012 ASEAN Foreign Ministers’ Meeting in Phnom Penh, Cambodia, due to differing opinions regarding the South China Sea. This created a de facto division within ASEAN.
The essence of the incident lies in the coordinated advancement of the U.S. Indo-Pacific Strategy. The Philippines serves as a crucial pivot point for the strategy in the South China Sea. During President Marcos’s visit to the United States in May, the U.S. secretary of defense publicly linked the mutual defense treaty between the Philippines and the U.S. to the maritime situation, aligning U.S. and Philippine stances on the issue.
Simultaneously, based on the enhanced defense cooperation agreement between the Philippines and the United States, the Philippines has opened up military bases near the Taiwan Strait for use by the U.S. On Aug.15, the Philippines released a new version of its national security policy, elevating the Taiwan Strait to a matter of significant concern and seeking to enhance threat response capabilities.
Further, the joint statement of the U.S.-Japan-South Korea Trilateral Leaders’ Summit on Aug. 18 mentioned the South China Sea and the Taiwan Strait, using strong language to accuse China of engaging in “dangerous and aggressive” actions. India not long ago explicitly supported the Philippines in the arbitration result for the first time. The U.S., Japan, and Australia also plan to conduct joint naval exercises in waters near the western coast of the Philippines.
All these actions by the U.S. and its Indo-Pacific allies have provided impetus for the subsequent structuring of the Indo-Pacific similar to NATO. From this perspective, the crisis management between China and the Philippines over the Second Thomas Shoal incident is essentially a confrontation between China and the U.S. Indo-Pacific strategic system. The symbolic significance of the incident lies in the fact that, while the majority of ASEAN countries do not choose sides between China and the United States, the Philippines has, in fact, taken a side.
Therefore, the incident serves as a structural flashpoint between China and the U.S. in Southeast Asia. It also represents a systemic flashpoint between the U.S. Indo-Pacific Strategy and China’s vision of an Asia-Pacific community with a shared future. If the multifaceted crisis management efforts surrounding the incident prove ineffective, it could disrupt long-established peaceful development in the South China Sea and become a turning point in the coordinated advancement of the U.S. vision of an Indo-Pacific order.
To prevent a regression of the regional order due to this incident, the strategic contest between the parties involved should focus on a critical aspect of crisis management: the bottom-line game. First, it is crucial to understand the bottom lines of all parties involved. The U.S. has consistently referred to the applicability of its defense treaty with the Philippines, and the game revolving around the Second Thomas Shoal incident can help China grasp the limits of the alliance’s collective actions.
Second, this necessitates preventing the situation from breaching these established limits. Crisis escalation often stems from mutual misperception, so all parties should adopt a bottom-line mindset to avoid losing control, making misjudgments or exacerbating contradictions.
Last, accumulating experience from negotiations centered on bottom lines is crucial. The current crisis may become a regular occurrence, and China needs to adapt to the ongoing situation. It is imperative not only to effectively utilize the maritime crisis management and control mechanisms in the South China Sea but also to adeptly address focal points, crises and conflicts within the framework of the Sino-U.S. strategic rivalry. This demands a comprehensive approach to crisis management, encompassing multiple interconnected strategies. Of particular significance is the adept management of conflicts that potentially breach foundational principles, necessitating a readiness to fight back militarily if forced.
