Forecast
- South China Sea tensions will rise in the long-term as China exhausts its near-shore fisheries and continues to push outward to secure further stocks.
- In Asia, consumption of fish will increase with population and industrialization, boosting pressure on claimant countries to control their waters.
- Fishing vessels will continue to spark short, sharp crises and risk further upset to the delicate balance in Asia's disputed waters.
Analysis
China is pushing outward. The country has made steady moves to reclaim its role as the pre-eminent power in the Pacific Rim. This expansion, however, differs from those made at any other time in its history. For most of China's existence, it was a continental power endowed with sufficient resources with an economy driven by self-contained markets. External trade was a factor but moved mostly by land, primarily via the Silk Road. Sea trade also did occur, but China's coast was generally a liability — a point of incursion to protect from raiders and hostile powers. China was not compelled to explore the seas and seek new lands.
See: Japan Wades Further Into the South China Sea Dispute
Until recently, modern China hewed to this pattern. This began to change by the late 1990s, when China's economic boom started to strain domestic resources. At the turn of the century, imports of key commodities began to outstrip domestic production, exports ballooned and China became reliant on maritime transport. The very success of China's economic growth brought new vulnerabilities.
Because the United States maintains effective control of the world's oceans, this is a difficult move for China. Beijing has opted for a two-pronged strategy: diversifying away from sea routes with its Belt and Road Initiative and building up its naval strength, capacity and reach. But the push to solidify its claims to maritime territory is upsetting the balance of power in the Pacific Rim and challenging a pillar of the US-centric world order: freedom of navigation.
Many Waters
China's reorientation toward the sea is particularly disruptive given Asia's geopolitics. Although Europe and Asia share the Eurasian landmass, their geopolitics differ fundamentally. Europe, a continent crowded with nations vying for space, is defined by land borders that ebb and flow like the tides. East Asia, by contrast, is defined by the sea and ringed by populous coasts, a space defined by maritime transit and resources. The sea serves as both the barrier and the pathway between the mainland and the archipelago. Europe's land borders might be contentious, but they can at least be clearly delineated. Maritime borders are ephemeral and subject to diverse concepts of use and passage.
What has emerged is a rising sense of competition and even potential conflict in the South and East China seas, driven by fear of losing control of key supply lines, competing maritime territorial claims, differing interpretations of maritime agreements, and competition for resources in these seas themselves. Much has been said about competition over sub-sea mineral resources, from claims of vast potential reserves of oil and natural gas to seabed methane and ocean mining. Although oil and natural gas reserves are actively exploited around the periphery of these seas, little significant exploration has been done in much of the contested areas, and assertions of a "second Arabian Gulf" are greatly exaggerated.
But there is one very real and actively exploited resource in those waters that is often overlooked: fish and other marine foodstuffs. Clashes over fishing grounds are frequent, volatile and mostly out of the control of the various regional governments. Given the size of the seas, maritime patrols are infrequent. The absence of strong regulation or enforcement allows room for gray areas to be exploited and territorial waters to be violated. Poor regulation and enforcement of boundaries make the security situation even more opaque and complex. Fishermen are both exploited by and exploit nationalist government sentiments and willfully push the boundaries of fisheries. As with the agricultural sector, the fishing industry and its countless small-scale producers, can have a disproportionate effect on political decision-making.
Feeding Asian Growth
In Asia, fish and other marine foodstuffs play a greater role in diets than in the West. Seafood production is an important source of employment and a vital component of national economies. Asian fisheries make up half the global total capture production, and six of the top 10 producers of marine products are in Asia.
In South Korea and Japan, seafood makes up about 20 percent of the protein supply and contributes more than 15 percent in Cambodia, Indonesia, Malaysia and the Philippines. It makes up more than 10 percent of protein supply in Taiwan, Thailand and Vietnam, and while it was at around 8.5 percent in China, between 2008 and 2011 there was a 13 percent increase in the role of seafood in China's national protein consumption. By comparison, seafood provides a little over 5 percent of protein consumption in the United Kingdom, a little less than 5 percent in the United States and less than 4.5 percent in Germany.
In addition to its important role in national diets (and national food security), seafood also plays an important economic role. There are an estimated 1.72 million fishing vessels plying the waters of the South China Sea alone, employing some 5.4 million people. And Asia's fleets are growing faster than those of the rest of the world. Since the late 1980s, the overall size of the world's fishing fleets has stabilized, but the Asian fleet has nearly doubled, comprising around three-quarters of the world's powered fishing vessels. In 2014, Asia contributed a third of global seafood exports, with China alone accounting for 12.5 percent of total global exports, up from just 7 percent in 2007, with the value of China's exports growing nearly 200 percent over the same period. In Indonesia, fisheries contribute more than 3 percent to total national gross domestic product. In other countries, the numbers are harder to come by, as fisheries are often included with agriculture and forestry in statistics. Many countries in Asia have sizable local fishing communities, and as with agricultural concerns, these often have a greater political impact than their economic share might suggest.
Fish and other maritime products are particularly important to China. After the 1978 economic opening and reform program, Beijing actively sought to expand its fishing fleet and activities. Since then, China's seafood production has grown at a rate of 7.6 percent per year, making China the largest single producer of seafood in the region and second only to a combined Southeast Asia.
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The value of the fishing industry in China has risen to 1.9 trillion yuan (9 billion) in 2013, with fish now its top agricultural export. There were nearly 10,000 fish processing companies in China in 2013, employing 400,000 workers, predominately in Shandong, Liaoning and Fujian. Overall, the fisheries and marine foodstuffs industries in China provide nearly 14.5 million jobs, and China boasted 695,000 fishing vessels in 2013, a sharp rise from the 52,225 in 1979. Chinese fishermen earn almost 50 percent more than their farming counterparts, and as of 2010, China was spending billion a year in subsidies to the industry.
Dwindling Resources
The marine fishing industry has long been important in Asia, and in the 20th century, it saw several boom and bust cycles with the expansion of mechanized fishing fleets and increased consumption and export patterns. The United Nations Convention on the Law of the Sea (UNCLOS), signed in 1982 and designed to clarify maritime use and international regulations, may have inadvertently spurred both an expansion of regional fishing and increased competition and confrontation in the enclosed waters of Asia. The creation of UNCLOS introduced a use-it-or-lose-it element to exploitation of maritime resources, and Asian countries responded with increased fishing activity. Already strained fisheries grew even less productive, triggering a further expansion of fishing outward from the coasts to the formerly common and now contested waters farther out. UNCLOS also defined what a nation could claim as its exclusive economic zone (EEZ), spurring countries to claim previously unimportant landmasses in order to capture a larger EEZ.
In 1978, China set the goal of self-sufficiency in fishery products, finally achieving it in 2002. But as elsewhere in Asia, this rapid rise in activity saw depletion of stocks along the Chinese coast. In 1985, nearly 90 percent of Chinese fishing was inshore, but by 2002, the last year for reliable statistics, that had fallen to just under 65 percent, and the share of offshore fishing continues to rise. Chinese government plans to expand fishing, fish processing and exports of fishery products will impact this trend even more. The Chinese fish processing industry is operating at only around 70 percent of capacity, failing to reach the full utilization rates called for in the 12th Five-Year Plan, which ran from 2011-2015. China's 2015 agriculture report contains calls for even more overall fish production, with goals of 73 million tons annually by 2020 and 77 million tons by 2024, and a call to increase exports to 5.4 million tons by 2024.
As much as China's expansion of regulatory and defensive activity in the South China Sea is driven by strategic security and protection of transport routes, it is also driven by the immediate realities of China's maritime products production and consumption. China couches much of its activities in the South China Sea as focusing on the safety of fishing fleets and argues that the waters are Chinese waters traditionally, thus open for Chinese fleets. In the face of criticism from neighbors, China has argued at times that its fleets need to fish, and if they cross into others' waters accidentally, this is not something China can always stop or control. In 2012, the Chinese government assessed its main fishing areas — the Bohai Sea, the Yellow Sea, the East China Sea and the South China Sea. The survey recognized the significantly reduced stocks in the Bohai and Yellow seas and called for a reduction in fishing to allow stocks to replenish. But it argued for an increase in fishing in the East and South China seas, and Beijing encouraged fishing through fuel subsidies and surveys of fishing stocks around the disputed Spratly Islands.
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Confrontations over fishing are one of the most active and visible forms of competition in the South China Sea and the enclosed waters of Asia. The increase in fishing, the decrease in near-shore stocks, government subsidies to spur the maritime industry, and rising consumption of fisheries products at home and abroad are only adding to the frequency of clashes over fishing fleets — clashes that have the potential to explode into more active military confrontation. Looking north to the two Koreas, at least two recent maritime incidents between the two countries, ones that led to the sinking of ships and killing of naval personnel, occurred as each country sought to protect its claimed fishing waters in the Yellow Sea. Throughout Asian waters, fishing vessels are engaged in violent confrontations with other nations' coast guards, ships' crews are arrested and detained, and vessels are confiscated and scuttled. These contribute to national tensions and social distrust among nations.
Governments are also exploiting their fishing fleets at times to reinforce nationalist sentiments and territorial claims. It is not unusual to see reports of massive Chinese or Taiwanese fleets setting off adorned with nationalist slogans and asserting rights to fish around contested islets. In 2014, amid a standoff between China and Vietnam over China's moves to build a permanent oil platform near the South China Sea's Paracel Islands, both countries encouraged fishing fleets to enter the area to disrupt their adversaries' plans and to complicate matters for the others' maritime security forces. But such exploitation has unintended consequences. Fishing fleets often pursue their catch into contested areas, assuming that their governments will provide protection. Governments at times are forced to try to rein in these very fishing fleets that they encourage, or at least turn a blind eye to. And with the massive fleets at sea, each seeking whatever advantage it can garner, even if that means fishing contested waters or violating national maritime territories, the chances for unintended confrontations grow. This is a process that may be relatively easy to turn on but hard to turn off.
Subsea mineral resources, national sovereignty and critical supply lines are all drivers of regional maritime policy and sources of friction, but fisheries are an active and somewhat uncontrollable force that can serve as the spark of confrontation. Expanding fisheries activities in enclosed waters means greater chances for accidents, illegal activity and confrontation. As the drive for agricultural land drove conflict and expansion on land, the drive for maritime resources, particularly fisheries products, is driving a "land grab" in Asia's enclosed seas. Maritime security and naval forces are growing in size, assertions of national sovereignty are becoming more concrete, and keeping track of the 1.72 million fishing vessels in the South China Sea alone is not only a daunting task, it is one that can draw neighbors into more active confrontation.
Lead Analyst: Rodger Baker
Other Analysts: Amelia Harnagel, Evan Rees
Fish: The Overlooked Destabilizer in the South China Sea was originally published by Stratfor, a geopolitical intelligence and advisory firm based in Austin, Texas.
