What The South China Sea Showdown Means For Australia

It's been another choppy week in the heavily disputed waters of the South China Sea.

US Navy images capturing the moment a Chinese warship came within 45 yards of a US destroyer as it conducted a "freedom of navigation" patrol near the Gaven Reefs have again brought tensions in the region to the surface.

The Luyang Destroyer performed an "unsafe and unprofessional manoeuvre," a spokesman for US Pacific Fleet said.  The Chinese Foreign Ministry, however, claimed the US were taking "provocative actions" in the region and "violated basic norms governing international relations."

USS Decatur (left) and a Chinese Destroyer (right) in the South China Sea. Image: US Navy
USS Decatur and a Chinese Destroyer in the South China Sea. Image: US Navy

Following the incident, CNN reported the US Navy's Pacific Fleet had drawn up a classified proposal to carry out a global show of force as a warning to China, which would reportedly include a series of operations in November.

This near-collision was yet another moment in a long-standing and complex dispute between several nations.

What's The South China Sea Dispute About?

At the heart of the dispute are competing claims over territory by nations including China, the Philippines, Vietnam, Taiwan and Malaysia.

The disputed territory is made up of ocean areas, a number of small land formations and two chains of islands, the Spratlys and Paracels, which are claimed -- in whole or in part -- by a number of countries.

China currently lays claim to the largest portion of territory, all of which falls within an area outlined by the "nine-dash line."

The area within these dashes comprises approximately two million square kilometres and encompasses the Spratlys and Paracels.

The Nine-Dash Line (in green). Image: US Central Intelligence Agency

In 2016, an United Nations tribunal ruled against China's expansive claim, but Beijing dismissed the ruling.

While arguments over who legally owns what may have ignited the conflict, it's what China has gone on to build within its claimed territory which has put further strain on geopolitical tensions.

After announcing in June 2016 the process of building seven new artificial islands by moving sediment to reefs was nearly complete, China began the construction of ports, airstrips, radar facilities and other military buildings on the newly created land masses.

Fiery Cross Reef, located in the western part of the Straptly Island group. Top image taken in May 2014, bottom image taken in November, 2016. Images: Getty
Subi Island in the Spratlys. Top photo taken September 2013, bottom photo taken September 2016. Images: Getty
Why DOES Australia Care?

While we may not be among its bordering countries, the South China Sea is of both economic and geopolitical interest to Australia.

With suspected reserves of undiscovered oil and gas beneath its sands, the sea is a also rich fishing ground, providing an estimated 12 percent of the total world's catch in 2012 and employing at least 3.7 million people.

It also serves as one of the world's most prominent commercial shipping passageways, with an estimated AUD $7.5 trillion worth of trade cruising through the South China Sea every year. That's roughly one third of all global maritime trade.

Fishing boats set sail to net fish in the South China Sea in Sanya, Hainan Province China. Image: Getty

“Around the South China Sea a lot of trade obviously passes through the area," Roland Rajah, director of the International Economy Program at the Lowy Institute, told ten daily.

"All of our exports primarily to China, of course but also to other countries in Asia, so it’s an important trade route. From the Australian perspective we have an interest in making sure that trade route stays open.”

Outside of the South China Sea, China is Australia's largest trading partner in both exports and imports. Such a relationship puts Australia in a precarious diplomatic situation, with the US -- one of our key security allies -- and China on opposite sides.

What Might This Mean For The Future?

A group of former senior officials at the Department of Defence recently issued the call for a "radical" change of defence policy in response to the potential threats posed by China and growing concerns about a changing world order.

With the development of the Spratly Islands, there are now locations capable of hosting fighter aircrafts and bombers much closer to Australia, emeritus professor at the ANU and former deputy secretary at Defence Paul Dibb told ten daily.

Chinese aircraft carrier fleet operating during training in the South China Sea. Image: Getty

“The crux is that now we have a situation that we haven’t faced since the second world war, where there’s a major power with whom we do not share values, developing military capabilities that could threaten us with high intensity conflict," he said.

"Those Chinese military facilities in the South China Sea have now brought China 1300 kilometres closer to Australia’s vulnerable northern approaches."

This development of the Chinese military capabilities has decreased the time Australia will have to respond to threats in the event they should arise, said Richard Brabin-Smith, another former deputy secretary at Defence.

Dibb recommended Australia should "review the extent of our dependence on China" in industries such as trade, investment and tourism by diversifying with other countries including India, Japan, South Korea and Vietnam.