Abstract
As a measure to countervail the US strategy toward Asia and to take a bigger role in global affairs, China’s Belt and Road Initiative (BRI) is bound to evolve into, and to be decided by, a number of geopolitical games. In this paper a three-player, non-cooperative game is constructed for policymakers to handle the South China Sea disputes. Four cases—including (i) the Scarborough Shoal standoff (2012), (ii) the HYSY 981 drilling rig crisis (2014), and (iii) the US navigation incidents (2015–)—are briefly narrated and quantitatively tested. This chapter focuses the political and economic incentives for all the players involved in each case of the South China Sea disputes to reach a new mutual deterrence (subgame perfect) equilibrium.
Supported by China National Science Foundation Project entitled “A Study of China’s Industrial Agglomeration: Evolution and the Cultivation of New Driving Forces” (No. 71733001). An earlier version of this research was included in the “The Return of Geopolitics: An International Conference” (University of Arizona, April 4–5, 2016). In the present version, all mathematical formulas are removed so as to satisfy general readers.
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Notes
- 1.
Cited from Clinton (2011).
- 2.
Cited from Xi (2014).
- 3.
The Skirmish was an altercation that took place on March 14, 1988 between Chinese and Vietnamese forces over who would annex the Johnson South Reef in the region of the Spratly Islands in the South China Sea—see Barnes (2016) for a more detailed analysis.
- 4.
For example, oil and natural gas reserves in the Spratly region are estimated at 17.7 billion tons (Guo 2005, p. 113). The Spratly reserves place it as the fourth largest reserve bed worldwide.
- 5.
It should be noted that there had been many other factors and events—both domestically and internationally—that could have influenced the Philippines’ and Vietnam’s foreign economic performances. The best way to estimating the influence of a specific factor or event is to develop a multivariable, econometric model by which to control for the remaining explanatory variables (domestic and international factors and events).
- 6.
For example, the estimated coefficient on the natural log of distance is −1.256, which is statistically significant at greater than the 1% confidence level, suggesting that, with a one percent increase of distance between the United States and its trade partners, there would be a 1.256% reduction of the US export (Guo 2004).
- 7.
More details about China’s official statements about the so-called double-track mechanism, see https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1181523.shtml (accessed 2019-4-15).
- 8.
In general, three scenarios of the Sino-US war may exist: (a) A short-lasting, small-scale war, which would end in favor of the United States (since the latter may be decades ahead of China in terms of military technology), but which would likely evolve into a longer, larger-sized war thereafter. (b) A medium-scale war, which would end in favor of China (since the latter has distinct geographical advantages over the United States), but which would likely evolve into an even longer, more costly, and larger-sized war thereafter. (c) A large-scale war, which would eventually end with the mutual destruction of both China and the United States (since both of them have the military capacities to destroy each other) (Source: based on the judgment of an anonymous PLA general).
- 9.
According to an Aviation Week Intelligence Network (AWIN) analysis, between 2009 and 2023, the United States would have sold about US$79.2 billion worth of defense aircraft and related equipment, including both development and production costs, to Australia, India, Indonesia, Japan, Malaysia, Pakistan, Singapore, South Korea, Taiwan, and Thailand (Fabey, November 26, 2013).
- 10.
In 2014, the US exports to China accounted for 7.1% of total US exports, and the US imports from China accounted for 16.9% of total US imports (BEA 2015b).
- 11.
This can be witnessed by the fact that, in December 1992, shortly after the end of the Cold War, then Philippine President Corazon Aquino issued a formal notice for the United States to withdraw from the Subic Bay naval base by the end of 1992. Another example is that, after the Permanent Court of Arbitration ruled in favor of the Philippines in the South China Sea Arbitration on July 12, 2016—a result that has been generally believed to be sported by the United States, the new Philippine administration began to fawn on China instead of the United States.
- 12.
For example, China’s foreign trade as percentage of GDP has decreased from as high as 66% in 2007 to 42% in 2014 (World Bank 2015). Obviously, if the above trend continues in the years to come, the Chinese leaders will become more self-determined in dealing with international affairs.
- 13.
See http://www.southchinasea.com/documents/law/303-declaration-on-the-conduct-of-parties-in-the-south-china-sea.html (accessed 2019-4-15) for more details about the DOC.
- 14.
According to the United Nations Convention on the Law of Sea, “[a] low-tide elevation is a naturally formed area of land which is surrounded by and above water at low tide but submerged at high tide… Where a low-tide elevation is wholly situated at a distance exceeding the breadth of the territorial sea from the mainland or an island, it has no territorial sea of its own” (UNCLOS 1982, Article 13).
- 15.
Cited from Lo (1989, pp. 171–172).
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Guo, R., Yang, K. (2020). China’s Belt and Road Initiative and the South China Sea Disputes: Toward a New Mutual Deterrence Equilibrium. In: Chan, H.K., Chan, F.K.S., O'Brien, D. (eds) International Flows in the Belt and Road Initiative Context. Palgrave Series in Asia and Pacific Studies. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-15-3133-0_8
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