China must explain South China Sea plans to small nations, New Zealand says

HONG KONG/SINGAPORE (Bloomberg) - China should explain its island building programme in the South China Sea or it will continue to fuel insecurity among countries whose economies depend on free trade, including smaller nations many miles away, New Zealand Defence Minister Gerry Brownlee said.

"What we are looking to see from the Chinese is some better understanding about what it is about," Brownlee said, referring to islands China has created that now cover more than 3,000 acres of land.

"It is extremely important for the whole world's economies that that remains a peaceable area and that open sea lanes and skies are available," he said in an interview on Friday (June 3) on the sidelines of the Shangri-La Dialogue,a high-level security forum in Singapore.

China's land reclamation, along with its claims to more than 80 percent of the South China Sea, has spooked nations that rely on the US$5.3 trillion of seaborne trade that passes through its waters each year. China bases its assertion on a vague line drawn on a 1940s map and has said its primary reasons for building the islands is for civilian purposes like maritime search and rescue.

Despite its rhetoric, China actions contradicts its assertions that the primary purpose for building the islands was peaceful, Brownlee said. There was concern, he said, that China may turn more reefs into islands that could be capable of supporting communities, and then claim territorial or even exclusive economic zones around them. For a QuickTake explainer on the South China Sea disputes, click here.

"In that part of the world, the proximity of those countries would mean that it is a very difficult circumstance to resolve," he said. About 80 percent of New Zealand's annual trade passes through the South China Sea.

At Shangri-La last year, Brownlee said he was told by a Chinese general that the tensions were not an issue for New Zealand. "So I said, well, from the point of view of being a small trading nation we do have these concerns, and outlined them."

More broadly, the pace of China's land reclamation presents a "whole new circumstance for any particular law of the sea, territorial laws to deal with," Brownlee said. "That is the concern, that there is no particular rules around this."

"There's no doubt there's a degree of asserting what are believed to be long-held rights, but I think you've also got to see that some of those claims are, in history, no greater than the claims that Britain might have had over all of Australia, or all of New Zealand," he said.

"It's hard to imagine, though, that China will want to have any particular conflict over this issue." New Zealand sends surveillance aircraft regularly over the South China Sea, and they have never been directly hailed or asked to leave the area by the Chinese, Brownlee said.

U.S. aircraft and ships have been told on multiple occasions to leave territory China claims. Brownlee said passing the U.S.-led Trans-Pacific Partnership trade pact was essential to maintaining U.S. influence in Asia. All three contenders for the U.S. presidential election have said they are opposed to the 12- nation pact, which needs to be passed by Congress.

"It would be regrettable if TPP fell over on the back of what would be essentially a U.S. nationalistic policy that might in effect lead to a weakening of U.S. influence in the world," he said.

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