Clear benchmark to be attained for South China Sea issue, which has to be managed: PM Lee

PM Lee Hsien Loong said whether there was any clear progress on the South China Sea issue will be seen only by the middle of 2017, when China has committed to a legally binding Code of Conduct with Asean.
PM Lee Hsien Loong said whether there was any clear progress on the South China Sea issue will be seen only by the middle of 2017, when China has committed to a legally binding Code of Conduct with Asean.PHOTO: AFP

VIENTIANE - Whether there is clear progress on managing the South China Sea issue will be seen by the middle of next year, which is when China has committed to complete a framework for a legally-binding Code of Conduct (COC) together with Asean, Prime Minister Lee Hsien Loong said on Thursday (Sept 8).

A COC has proven elusive 14 years after Asean and China adopted a less binding Declaration of Conduct in the resource-rich waterway, through which U$5.3 trillion (S$7.2 trillion) worth of trade passes every year.

However, consultations on it began in 2013 and after The Hague-based arbitral tribunal ruling in July that invalidated China's claims to much of the vital waterway - and which Beijing has rejected - Chinese Foreign Minister Wang Yi proposed in July that Asean and China "fast-track" negotiations for the COC following a meeting with Asean foreign ministers. The two sides last month agreed to come up with a draft framework by the middle of next year.

Speaking to reporters on the final day of the Asean Summit in Vientiane, Laos, Mr Lee said that Asean members have a range of perspectives on the South China Sea, because the waterway is fundamental to many countries' security calculations and even the way they view the world.

He referred to points he had made during this year's National Day Rally speech on why the South China Sea has proven so difficult a topic for everyone to be on the same page: it is not just a dispute about territory, but also about rights of the international community such as freedom of navigation, as well as about how an international disagreement can be peacefully resolved.


"I don't think that differences in perspectives on the South China Sea can easily be overcome, because they are fundamental to the strategic situations that the countries are in, and therefore the way they see the world: what are the threats, what are the opportunities, who are the allies, who are the neutrals, who are the potential adversaries," he said.


"These are realities of international relations, and we have to navigate and find our position, find our way through such an unpredictable world."

But this does not mean the situation cannot be managed or should be ignored, as tensions in the sea have a tangible, if hard to measure, effect on the economy.

The region has prospered till date because there has been peace, allowing countries to cooperate and deepen their interdependence on trade and investments, said Mr Lee. Conversely, tensions in the South China Sea lowers investor confidence.

"When you have tensions in the South China Sea, the confidence - there is an impact when people make decisions on investments," he said. "They won't say that this is a decisive factor, but it's one of the things which affects their decision."

If the situation is allowed to deteriorate to the point where there is an encounter or mishap there, " confidence will really be shaken and you will have a big problem," said Mr Lee.

"So it's one of those situations where you don't feel that it is good, but neither can you say 'I can count how many dollars it has cost me'," he said. "It's a minus for me, I know it, and we really should mitigate that risk as much as we can."

Noting that the summit in Laos is the first since Asean declared that it has formed an Asean Community in Kuala Lumpur last year, Mr Lee said the 10 countries in the grouping must now find the resolve to forge forward and integrate more closely with one another.

At this year's summit, members adopted a five-year work plan that aims to narrow the development gap, enhance the region's competitiveness and support the implementation of three Community Blueprints which Asean leaders adopted last November.

"As always, after you've made an achievement, that's the basis from which you have to keep on moving forward," said Mr Lee. "And we're trying to keep on developing and deepening the cooperation we have together."