Thursday, April 12, 2012

Bulk and Container Shipping Companies Should Watch Troubles in South China Sea

Tensions Over Sovereignty Continue to Gather
Shipping News Feature

SOUTH CHINA SEA - Recent events in the South Sea mean that tensions slowly mount in the region as China and its neighbours continue to eye each others attempts to exploit potential fishing, gas and oil reserves around the Spratly Islands, various parts of which are claimed by the PRC, RoC, Vietnam, the Philippines, Malaysia and Brunei. The danger now is that there is a distinct possibility that innocent bystanders such as passing container shipping or bulk freight vessels in the region may get caught up in the burgeoning crisis.

This week has seen the Philippines Navy Frigate the BRP Gregorio del Pilar involved in a stand off with two Chinese ‘surveillance vessels’ after stopping Chinese fishing vessels in the area, with the Philippine’s recently dispatching another vessel to the region demonstrating that, despite assurances from both countries governments, this situation is far from resolved.

The Chinese have also stated that it hopes “irrelevant parties” will stay out of the South China Sea, a reference to Russian oil company Gazprom’s recent deal with Vietnam to develop gas fields off the Vietnamese coast.

The latest in a long line of confrontations in the region, this week’s developments have also seen some aggressive statements coming out of the Chinese press, with one article in Thursday’s China Daily, titled “Don’t Play with Fire”, warning of “blatant challenges to China's territorial integrity.” The article also accuses the United States of “using the disputes as a stepping-stone to interfere in Asia.”

Though the Chinese have long been firm on their demands on the Spratly’s (including fighting a short conflict with Vietnam in 1988) their tone seems to be increasingly aggressive. This is probably due to internal problems concerning the scandal besetting the Communist party over the sacking of Chongqing party secretary Bo Xilai and his possible involvement in the murder of a British businessman – events that have seen the closing down of forty-two websites in China and the deletion of hundreds of thousands of web posts. After all, nothing distracts people better than a territorial dispute with the neighbours (Sean Penn take note).

Whatever the reason, the continued problems over sovereignty in the South China Sea is certainly looking like good news for Western and Russian defence companies. The Vietnamese last year fielded frigates and fighter aircraft and next year will start to take delivery of six new Kilo-class submarines, providing a quantum leap in their capability. In addition the Philippines Air Force, which disbanded its last few fighters in 2005, has suddenly become very interested in acquiring F-16’s from the USA.

The possibility of an arms race between the disputants should be watched closely by the international shipping industry, missiles don’t tend to be choosy on what they hit once fired and with so many ‘hats-in-the-ring’ the possibility of conflict escalates.

Despite Chinese assurances that they want to resolve territorial issues with their neighbours peacefully the emergence of a new super power on their doorstep has got those same neighbours jumping in alarm. Interested parties have noted how Burma, after years under military junta, can’t wait to start opening up to the joys of democracy.

With China now ordering Russian interests out of the South China Sea, shipping lines should also be wary that the Great Bear, largely dormant since the ending of the Cold War, might decide it’s time to flex its own naval muscles.

Photo: Philippines Navy Frigate the BRP Gregorio del Pilar at anchor.