U.S. guided-missile destroyer 11 Oct conducted Freedom of Navigation Operation (FONOP) in South China Sea (SCS), fourth of 2017; challenged China’s disputed claim of Paracel Islands by sailing within sixteen nautical miles. In response, Chinese Navy sent guided-missile frigate, two fighter jets and helicopter; Beijing urged U.S. to respect its sovereignty and security interests. Meeting in Philippines 23-24 Oct, ASEAN defence ministers discussed freedom of navigation, non-militarisation, rules-based world; in joint statement emphasised need to “effectively implement the Declaration on the Conduct of Parties” in SCS, reiterated importance of concluding code of conduct. On sidelines of meeting, China and ASEAN agreed to aim for joint maritime exercise in 2018 to build trust. UK defence minister 11 Oct said Royal Navy does not have agenda to conduct deliberate FONOPs or exercises in SCS that would directly challenge China’s territorial claims – apparently contradicting July statement by UK foreign minister. Philippine Defence Secretary Delfin Lorenzana 1 Oct announced plans to upgrade outposts on disputed Spratly Islands, including airstrip on Thitu Island (Pag-Asa); Philippines late Sept made progress on joint oil development with China in north-west Palawan. In closed-door meeting with U.S. state department late Sept, Chinese foreign ministry officials employed novel legal theory to assert China’s sovereignty and maritime claims in SCS, shifting from long-used “Nine-Dash Line” to new “Four Sha” claim (referring to four island groups forming basis of sovereignty claims). Washington Free Beacon 21 Sept reported theory adopts language closer to that used by UN Convention on the Law of the Sea.

Media 2 Sept reported U.S. planning to increase Freedom of Navigation Operations (FONOPs) involving military aircraft and warships in South China Sea (SCS) to two-three times a month, likely intended to reinforce U.S. position while reducing frictions over individual patrols. Australia began largest naval exercise since 1980s, intended to maintain country’s presence in western Pacific, demonstrate capabilities and bolster military cooperation with South East Asian nations; China’s People’s Daily accused Australia of “encircling China”. Indonesia 1 Sept formally named disputed area off its coast in SCS “North Natuna Sea”, despite official Chinese protests. U.S. and Indonesia conducted bilateral naval exercise 7-17 Sept. Malaysian PM Najib Razak 12 Sept met U.S. President Trump, discussed tensions in SCS and released joint statement affirming maritime claims must be resolved according to international law; Malaysia and U.S. began joint maritime exercises 18 Sept. Vietnam and China traded protests over Chinese military exercises in near Gulf of Tonkin and Paracel Islands late Aug/early Sept, Vietnam condemning drill while Beijing reiterated claim of sovereignty and right to conduct exercises. Amid continuing frictions, and ahead of planned visit to Vietnam in November by President Xi, senior party officials meeting in Hanoi 18-19 Sept reaffirmed ties. Philippines security officials 22 Aug reported China had deployed navy and coast guard ships near Sandy Cay sandbars in SCS, within territorial sea around Thitu (Pag-asa) Island, which Manila controls; President Duterte downplayed concerns and said issue had been resolved.

ASEAN states and China adopted framework for code of conduct in South China Sea at regional forum in Manila 5-6 Aug. Framework will set course of negotiations on details; amid continuing disagreements, communiqué did not say if code will be legally binding. Australia, Japan and U.S. 7 Aug issued statement urging ASEAN and China to establish code that is “legally binding, meaningful, effective, and consistent with international law” and refrain from land reclamation and militarisation. Vietnam took firmer line against China at forum, advocating for legally binding code and stronger ASEAN statement; Chinese Foreign Minister Wang subsequently cancelled meeting with Vietnamese counterpart. Wang told ASEAN meeting his country had ceased reclamation activities; Asia Maritime Transparency Initiative 9 Aug said statement not accurate. U.S. and Vietnamese defence ministers 9 Aug agreed U.S. aircraft carrier would visit Vietnam in 2018, first such visit since Vietnam War. Vietnam 23 Aug called for greater unity among South East Asian nations. Philippine defence minister 14 Aug told lawmakers China had agreed to maintain status quo, won’t occupy more features or build on Scarborough Shoal. Philippine lawmaker 15 Aug released images showing Chinese coast guard, naval, and civilian vessels near disputed Thitu (Pag-Asa) Island; allegations independently verified by Asia Maritime Transparency Initiative. President Duterte 21 Aug downplayed allegations, saying China’s presence does not constitute invasion. Manila 1 Aug announced govt in negotiations with Beijing to obtain $2.72bn funding for flagship infrastructure projects. U.S. navy destroyer 10 Aug challenged China’s claims around disputed Mischief Reef with freedom of navigation operation (FONOP), sailing within six nautical miles of Chinese-controlled feature in Spratly archipelago also claimed by Philippines, Taiwan and Vietnam. Chinese frigate reportedly warned U.S. destroyer to turn around ten times. China criticised planned deployment by UK of two new aircraft carriers to conduct FONOPs in South China Sea.

U.S. continued displays of force, with Freedom of Navigation Operation (FONOP) 2 July sailing within 12 nautical miles of Chinese-controlled Triton Island in disputed Paracel (Xisha) archipelago; China accused U.S. of trespassing with “serious political and military provocation”. Two U.S. B-1B bombers 6 July flew training mission with Japanese fighters over East China Sea and South China Sea (SCS). China’s naval expansion and modernisation continued: navy 28 June launched first of eighteen new guided-missile destroyers; Asia Maritime Transparency Initiative 29 June released imagery showing China had progressed in building military outposts on artificial islands in Spratly archipelago. Cambodian defence minister 19 July met with Chinese officials to discuss prospects of military-to-military cooperation, amid perceived Cambodian pivot away from West. Indonesia 14 July renamed northern area of its exclusive economic zone in SCS, where it has expanded naval presence, as North Natuna Sea, in move seen by observers as assertion of sovereignty. Japan expanded military engagement with South East Asian countries. Amid ongoing rapprochement with China, Philippine Navy 1 July conducted joint patrol with U.S. in Sulu Sea focusing on anti-piracy and counter-terrorism, despite previous statements by President Duterte that joint patrols in SCS would cease. Manila 12 July issued statement marking first anniversary landmark ruling by International Tribunal on Law of the Sea in favour of Philippines, playing down its significance. Philippines 12 July said drilling for oil and natural gas on Reed (Recto) Bank may resume before year’s end. Vietnam early July extended Indian oil company’s exploration rights in block 128 of disputed waters, sparking objection by China; 15 July reportedly ordered halt to agreed drilling activities by Spanish company in separate block 136-03 gas field after China reportedly threatened to attack its bases in Spratly Islands. China 25 July expressed support for joint development with Philippines, called for halt to unilateral oil drilling in disputed territory.

G7 27 May issued joint communiqué encouraging demilitarisation and peaceful settlement of disputes in East and South China Seas; U.S., Japan and Australia defence chiefs released similar statement 3 June. Speaking at Shangri-La Dialogue, U.S. Sec Defense Mattis 3 June emphasised binding nature of July 2016 ruling of International Tribunal on Law of the Sea, condemned Chinese construction and militarisation on features in SCS. Chinese delegation head said China abides by, supports and defends international and regional rules, argued U.S. using Freedom of Navigation Operations (FONOPs) to conduct surveillance in “adjacent waters and airspace of China’s islands”. Another Chinese official 3 June said China and ASEAN countries discussing possibility of conducting joint maritime exercises in 2018, China ready to explore setting up China-ASEAN defence communication link. Mattis 14 June told U.S. Congress FONOPs would continue. U.S. Pacific Command 8 June said two Air Force B-1B bombers had conducted joint training exercise over SCS with USS Sterett missile destroyer. U.S. and Japan concluded joint military drills in SCS 15 June. U.S. and China held first senior level Diplomatic and Security Dialogue Washington 21-22 June. Vietnamese PM Phúc met with U.S. President Trump 31 May, later announced over $8bn in commercial deals, reaffirmed commitments on defence and maritime security cooperation. Japan 6 June announced it would provide $350mn to improve Vietnam’s patrol boats and defence equipment. Vietnam 16 June reasserted sovereignty claim over Spratlys and Paracels. Philippines 16 June reported hotline between foreign ministries of China and ten ASEAN countries tested successfully in March. Beijing 20 June unveiled Vision for Maritime Cooperation under Belt and Road Initiative, which proposes joint disaster warning systems and cooperative mechanisms for law enforcement and anti-terrorism in SCS.

China and ASEAN members 18 May finally agreed framework for Code of Conduct (CoC) to govern maritime relations in South China Sea (SCS); framework will form basis for foreign ministers’ discussions in July. In disputed Spratly Islands, American destroyer U.S.S. Dewey 24 May sailed within twelve nautical miles of China-controlled Mischief Reef; media described move as first freedom of navigation operation under President Trump; China condemned U.S. manoeuvers. U.S. said Chinese military jet 25 May made “unsafe” intercept of U.S. P-3 Orion surveillance plane SE of Hong Kong; China blamed U.S.. Philippines military 10 May reported increasing Chinese military and fishing vessels spotted near or within its waters. Chinese state media 16 May reported anti-frogman rocket launchers had been installed on disputed Fiery Cross Reef. Philippines President Duterte and Chinese President Xi met in Beijing 15 May, signed economic and technical cooperation agreements; Duterte 19 May said Xi threatened to “go to war” if Philippines drills for oil in disputed waters. China and Philippines 19 May held first meeting under new Bilateral Consultation Mechanism: agreed to identify confidence-building measures and “mutually acceptable approaches” to resolve SCS disputes. Chinese warships made first port call in Philippines since 2010 in Mindanao, where Duterte visited them 1 May. Philippines began construction on disputed island Thitu/Pag-Asa to repair airstrip and build infrastructure; China lodged protest. Month saw further indications of Philippines tilt away from West: defence minister 15 May said Philippines forced to turn to China and Russia for arms supplies due to U.S. conditions; Philippines 17 May announced it would no longer accept EU development assistance. Annual U.S.-Philippines military exercises ran 8-19 May. Chinese and Vietnamese presidents meeting in Beijing 11 May reached bilateral agreement on discussing competing maritime claims. Indonesian President Widodo 19 May observed military drill around resource-rich Natuna Islands, partly claimed by China’s nine-dash line.

During visit to military base on Palawan Island 6 April, Philippines President Duterte ordered military to occupy islands and reefs that Manila claims in disputed Spratly Islands’ Kalayaan group; also called for repairing runway on disputed Thitu Island. Following expression of concern from Beijing, Philippines defence minister 8 April said Duterte’s comments applied only to nine features in SCS that Philippines already controls, not calling for construction of military structures. Duterte 12 April said that on China’s request he would not visit Thitu as previously stated. Duterte 15 April reportedly said Philippines must “act fast” in occupying uninhabited islands in chain before it loses them to other claimants. Philippine FM 4 April reported ASEAN and China have made progress since Jan on framework for Code of Conduct (COC) in SCS, which would serve as a basis of negotiations on COC; final draft could be approved ahead of Aug meeting of ASEAN FMs. Philippines-hosted ASEAN Summit 26-29 April discussed draft framework. Chairman’s statement released 30 April made no reference to July 2016 Hague arbitration ruling, militarisation or land reclamation in area, referred to need to show “full respect for legal and diplomatic processes” in resolving disputes and noted “improving cooperation between ASEAN and China”. Followed reports of disagreement between member states over whether to include such a reference, reported Chinese lobbying of Philippines officials to leave it out, and scepticism in some quarters over China’s sincerity in suggesting it will commit to code; China has not agreed on making code legally binding. Ahead of summit, Indonesian President Widodo said rival SCS claimants should cooperate on issues such as research and fishing. Vietnam condemned 29-31 March live-fire drills by Taiwan’s military at Taiping Island/Itu Aba, disputed feature in Spratly Islands, calling them serious violation of its sovereignty and threat to maritime security. China reportedly deployed J-11 fighter jets to Paracel Islands late March. China 26 April launched its first domestically-built aircraft carrier, to enter active service circa 2020, meaning it will have two.

Despite relative lull in incidents and statements, competition over disputed features and water in SCS continued, as did Chinese construction on features it controls. In disputed Paracel islands, satellite images from 6 March indicated China clearing land, possibly preparing for harbour on North Island. Washington-based Asia Maritime Transparency Initiative 27 March reported satellite imagery showing China has completed over twenty structures apparently designed to house long-range surface-to-air missiles, plus radar antennae, on three islands in Spratly archipelago. China early March denied reported plans to build monitoring station on disputed Scarborough Shoal; Philippine President Duterte 23 March said Beijing had given “word of honour” it would not build there. Chinese Premier Li 23 March said China’s new facilities and defensive equipment don’t constitute militarisation. China and ASEAN member states reportedly completed draft framework for Code of Conduct for SCS. Philippine President Duterte 6 March reportedly rejected U.S. plans to build facilities at Bautista air base, previously used to launch U.S.-Philippines joint exercises; later said he agreed to allow Chinese surveying vessels into area around Benham Rise, in reversal of statement by defence minister; 23 March accused U.S. of taking provocative stance on SCS. Japan 22 March launched second large helicopter carrier Kaga, further extending its naval force projection capacity; other carrier Izumo reportedly scheduled to patrol through SCS before joining joint exercise with U.S. and Indian ships in July. U.S. observers expressed concern over China’s draft new Maritime Traffic Safety Law that would tighten control over territorial waters.

New U.S. administration moderated previous statements signalling tougher stance on China in SCS and engaged in first contacts with Beijing and regional allies, dialling down tensions. President Trump spoke to Chinese President Xi 9 Feb agreed to honour “One China” policy. U.S. Sec State Tillerson’s controversial remarks at his confirmation hearing early Jan appeared toned down in written responses leaked early Feb. After meeting with Tillerson 17 Feb Chinese FM Wang said countries’ common interested far outweigh their differences. Tillerson reportedly affirmed importance of constructive bilateral relationship in conversation with China’s state councillor Yang Jiechi 22 Feb. During early Feb visit to South Korea and Japan, U.S. Sec Defence Jim Mattis emphasised commitment to allies, criticised Beijing for “shredding the trust of nations in the region”; also said focus should be on diplomacy, not “dramatic military moves”. Three Chinese warships conducted naval exercises in SCS 10-17 Feb; U.S. aircraft carrier strike group began “routine operations” in SCS 18 Feb, despite call by Beijing 15 Feb “not to take actions that challenge China’s sovereignty and security”. Beijing said it respects freedom of navigation and overflight but called for U.S. to respect sovereignty and security of countries in region and their efforts to maintain peace and stability. Philippines FM Perfecto Yasay reported meeting of ASEAN FMs 21 Feb had expressed “grave concerns” over China’s militarisation in SCS; after Chinese commerce minister subsequently cancelled planned trip to Philippines, President Duterte said Beijing had misunderstood Yasay’s remarks. U.S. officials 22 Feb told Reuters China has almost finished building over twenty structures on its artificial islands in SCS, apparently to house long range surface-to-air missiles; China said it has right to deploy defensive facilities on its territory. Reports apparently confirmed by satellite imagery showing facilities on three artificial islands in Spratly archipelago.

Tensions increased between China and the U.S. after new U.S. administration officials signalled tougher approach to Chinese presence in SCS, as well as shifting to protectionist trade policy. Nominee for U.S. Sec State Rex Tillerson said at confirmation hearing 11 Jan U.S. should block China’s access to its artificial islands in contested areas and stop it building new islands; compared China’s policy to “Russia’s taking of Crimea”. Beijing said China had right to conduct “normal activities” in its own territory; state media warned such actions by U.S. would lead to “devastating confrontation” and “large-scale war”. Asked whether President Trump agreed, White House spokesperson 23 Jan said “U.S. is going to make sure we protect our interests” and prevent Chinese attempts to “take over” SCS. Beijing next day reiterated China’s “indisputable sovereignty” over parts of SCS, urged U.S. to “speak and act cautiously” “to avoid harming the peace and stability of the SCS”. Chinese media 26 Jan reported govt testing new very long range air-to-air missile, apparent advantage over U.S. capabilities; next day said China moved long-range missiles to NE by Russian border, from where they can reach U.S. Chinese military official 29 Jan warned war with U.S. “becoming a practical reality”, called for military deployments in SCS and ECS. Chinese aircraft carrier Liaoning early Jan continued operation in SCS, conducting exercises with other warships and fighter jets and testing weapons, before returning to Qingdao port 14 Jan. U.S. navy announced deployment of group of naval vessels to Western Pacific early Jan to focus on maritime security operations, conduct bilateral exercises in Indo-Asia-Pacific region. Philippines FM 17 Jan revealed govt had sent protest note to Chinese embassy in Dec over reports that China has installed anti-aircraft/anti-missile weapons on artificial islands in SCS. Meeting in Manila 19 Jan, Philippines President Duterte and China’s vice FM agreed to set up bilateral consultation mechanism to deal with issues arising in SCS, announced planned visit to Beijing by Duterte in May. Chinese and Vietnamese leaders met in Beijing 14 Jan, pledged to manage their differences and safeguard peace and stability in SCS. Malaysian navy official reported it will establish three permanent submarine exercise areas in SCS to enhance submarine operating safety. Philippines defence minister 26 Jan said U.S. military to start work constructing facilities for troops and equipment inside Philippines army bases, in accordance with 2014 defence agreement.