China continued military deployments in SCS, 8 Dec flying long-range nuclear-capable H-6 bomber along disputed territory for first time since March 2015; 15 Dec said this was regular exercise, will be routine. U.S. Center for Strategic and International Studies report 13 Dec said satellite images showed China might have built large anti-aircraft guns and close-in weapons systems on its seven artificial islands in disputed Spratly Archipelago. Beijing said it was legitimate to deploy “necessary military facilities” for defence purposes, deployments did not mean militarisation. Chinese Liaoning aircraft carrier and five other vessels entered SCS 26 Dec; China said deployment part of annual plan. China and Philippines continued rapprochement. President Duterte 11 Dec said his govt would finalise firearms deal with China. Both coast guards 15-16 Dec held first meeting to discuss forming Joint Coast Guard Committee (JCGC) on Maritime Cooperation. Reuters 9 Dec reported Vietnam has started dredging work on Ladd Reef on SW fringe of Spratlys, based on satellite imagery; Beijing called activity illegal. Chinese and Vietnamese vice FMs 12 Dec discussed border negotiation mechanism, agreed to expand cooperation on border control and law enforcement. Confrontational rhetoric between China and U.S. intensified (see also Taiwan Strait). Head of U.S. Pacific Command 14 Dec said U.S. would begin flying its most advanced fighter plane out of Australia 2017 should Beijing’s “aggressive” actions continue; Beijing urged U.S. to “stick to its pledge of not taking sides” in SCS. Chinese navy 15 Dec captured U.S. Unmanned Underwater Vehicle (UUV) some 50 nautical miles NW of Philippines’ Subic Bay. U.S. registered objection to China’s “unlawful seizure”; China said it retrieved “unknown device” to prevent safety hazards, regretted Washington’s move to “dramatise” issue, returned UUV 20 Dec.

During six-day visit to Beijing, Malaysian PM Najib 1 Nov signed Malaysia’s first defence cooperation agreement with China; following signing, Najib said ties with China set to “reach new highs”, longstanding disputes in South China Sea (SCS) would be “managed calmly and rationally”. One month after their landmark meeting in Oct, Philippines President Duterte and China President Xi met again 20 Nov during Asia Pacific Economic Cooperation (APEC) summit in Peru, discussed “maritime arrangements” including joint Coast Guard patrols in Scarborough Shoal. Following China’s late Oct decision to allow Philippines fishing access to Scarborough Shoal, Duterte 20 Nov called on China to join him in declaring maritime sanctuary near portion of shoal; 22 Nov issued unilateral executive order banning fishing in region. Beijing has not responded directly. Senior govt advisor Wu Shicun 25 Nov said Beijing was considering package agreement on fishery cooperation with Manila, potentially covering Scarborough Shoal area. Australian FM 1 Nov said Australia and Indonesia were considering joint patrols in SCS. Washington-based Center for Strategic and International Studies 15 Nov reported new satellite images showing construction of hangars and significant lengthening of Vietnam’s only runway in disputed Spratly Islands; suggested runway had been extended to over 1.2km, enabling deployment of Vietnamese maritime surveillance aircrafts to Spratlys for first time. China foreign ministry 18 Nov called on Hanoi to “immediately stop its illegal occupation and construction” in Spratlys; Vietnam called report “inaccurate”.

During four-day visit to Beijing, Philippine President Duterte and Chinese President Xi 20 Oct announced plans to resume talks on South China Sea (SCS) disputes for first time since negotiations were suspended in 2012. Philippine FM Perfecto Yasay 24 Oct said Duterte stressed to Chinese leaders his commitment to abide by July arbitral ruling by Permanent Court of Arbitration in The Hague. Ahead of visit, Duterte 19 Oct said July’s contentious ruling could “take a back seat” in future negotiations. Chinese FM Wang Yi said China is willing to resolving disputes through negotiation and constructive dialogue; called Duterte visit new starting point for bilateral relations. Philippine officials 29 Oct said Chinese coast guard vessels had left disputed Scarborough Shoal area and Philippine fishermen had unimpeded access to surrounding waters for first time in four years. Joint statement following Duterte’s meeting with Japanese PM Abe in Tokyo late Oct announced both nations’ continued commitment to “self restraint” and “acknowledged the importance of a rules-based approach to the peaceful settlement of maritime disputes”. In move to challenge China’s “excessive maritime claims” in SCS, U.S. navy destroyer 21 Oct sailed near disputed Paracel islands; freedom of navigation operation did not involve Japan-based Seventh Fleet, but was under orders from Third Fleet headquartered in San Diego. China defence ministry reportedly ordered ship to leave, calling it “illegal” and “provocative”. China carried out military drills in SCS 27 Oct; defence ministry said exercise was planned joint search and rescue training.

Chinese and ASEAN leaders 7 Sept formally signed guidelines for senior diplomats’ hotline for emergencies at sea and joint statement on Code for Unplanned Encounters at Sea (CUES) in South China Sea (SCS) during ASEAN summit in Laos. In 8 Sept joint statement China and ASEAN agreed to uphold freedom of navigation in and over SCS; committed to resolving territorial disputes through peaceful means including “friendly consultations and negotiations” in accordance with international law. Also during summit, Japanese PM Abe promised to offer patrol boats to Philippines, Vietnam and Malaysia. Japanese Defence Minister Tomomi Inada 15 Sept said Japan would step up activity in SCS through joint trainings and exercises with U.S. and other regional navies; echoed U.S. concerns that consequences of Beijing’s “rule bending” in SCS “could become global”. Chinese state-run Global Times 17 Sept published editorial warning any U.S.-Japan joint patrol in SCS would prompt Beijing to increase military deployment “to balance the situation”. Chinese defence ministry 29 Sept said any joint patrol between Japan and U.S. in SCS amounts to “playing with fire”, and “China’s military will not sit idly by”. Contradicting April 2016 joint patrol arrangement between U.S. and Philippine defence chiefs, Philippine President Duterte 13 Sept said he would no longer allow joint patrol of disputed waters in SCS with foreign forces including U.S. and China. Chinese and U.S. presidents met 3 Sept ahead of G20 meetings in Hangzhou; agreed to finalise MoUs on maritime law enforcement cooperation and rules of behaviour between coast guards. Vietnamese PM Phuc 11 Sept visited Beijing, first official trip to China by Vietnamese premier in six years, met with President Xi; Chinese state media reported they affirmed commitment to prioritising friendly bilateral relations.

Following contentious July arbitration ruling by Permanent Court of Arbitration in The Hague, Philippine Special Envoy to China Fidel Ramos 10-11 Aug met informally with Fu Ying, chairperson of Foreign Affairs Committee of China’s National People’s Congress, to “renew” Sino-Philippine relations; joint statement said discussion focused on trust building and opportunities for cooperation. Philippine President Duterte 23 Aug said talks on territorial dispute with China expected to start this year. At 13th Senior Officials Meeting (SOM) on implementation of 2002 Declaration on the Conduct (DOC) of Parties in the South China Sea, 15-16 Aug in Inner Mongolia, Chinese and ASEAN officials agreed on guidelines for senior diplomat’s hotline for emergencies at sea and joint statement on Code for Unplanned Encounters at Sea (CUES), to be discussed at China-ASEAN Summit in Sept; also set first formal timeline for binding Code of Conduct (COC) in SCS, with framework to be complete by mid-2017. U.S. think-tank Center for Strategic and International Studies (CSIS) 9 Aug released satellite photos allegedly showing China’s construction of reinforced hangars on Fiery Cross, Subi Reef and Mischief Reef in disputed Spratly islands; said size and structural features of hangars suggest military purpose. Reuters 18 Aug released report accusing Vietnam of secretly sending mobile rocket launchers to five bases in Spratly islands; Vietnam said report “inaccurate”.

Permanent Court of Arbitration in The Hague 12 July issued landmark ruling in SCS territorial dispute case brought by Philippines, ruling “no legal basis for China to claim historic rights to resources … within ‘nine-dash line’”, and that none of disputed Spratly chain are legally “islands” and therefore do not generate exclusive economic zones (EEZs); also ruled that China violated Philippines’ sovereign rights in its EEZ; and that Chinese activities have severely harmed marine ecology and environment. Beijing repeated its refusal to accept or comply with ruling, restated claims in SCS; said completion of lighthouse on Mischief Reef expected “soon”. China 13 July tested two airfields in Spratlys with civilian flights; military spokesman 18 July announced combat air patrol encompassing disputed Scarborough Shoal conducted “recently”, would become “regular” in future. China Navy commander met with U.S. chief of naval operations in Beijing same day, said China would not give up efforts to peacefully resolve SCS disputes. Philippines FM 19 July said he had refused Chinese offer of bilateral negotiations “outside of and [in] disregard of” court ruling; prior to ruling Philippine President Duterte 5 July proposed bilateral talks on basis of ruling. Two Chinese coast guard vessels reportedly rammed and sank Vietnamese fishing boat 9 July within area cordoned off by China for 5-11 July military drills; Vietnam demanded compensation for fishermen. Indonesian defence minister 13 July confirmed country refurbishing and upgrading military assets on Natuna islands. China 28 July announced it will hold joint military exercises with Russia in SCS in Sept. Former Philippine President Fidel Ramos appointed special envoy to China 23 July.

Indonesian navy 17 June fired on Chinese fishing vessels in Indonesian exclusive economic zone (EEZ) around Natuna Islands, detained one boat and seven crew. Two Chinese Coast Guard vessels arrived to protect and rescue fishermen and vessels. China said incident took place in traditional Chinese fishing grounds, accused Indonesian navy of damaging one vessel and wounding fisherman, and of violating international law; lodged protest with Jakarta. Chinese media 1 June reported Beijing preparing to declare air defence identification zone (ADIZ) over SCS; U.S. Sec State Kerry 6 June warned such a step would be “provocative and destabilizing”; followed 27 May report of Chinese surveillance drone on disputed Woody Island. Addressing regional security forum U.S. Sec Defence 4 June outlined vision of “principled security network” in SCS. Following meeting between Chinese and ASEAN officials 14 June ASEAN FMs issued joint communiqué expressing “serious concerns” on development in SCS, but retracted hours later to make “urgent amendments”, possibly after China lobbied Cambodia and Laos to withdraw support for statement.

U.S. guided missile destroyer 10 May sailed within twelve nautical miles of Fiery Cross Reef in disputed Spratly islands; China deployed fighter jets and warships to warn and track destroyer. U.S. said exercising “right of innocent passage”; China said it was illegal and provocative, proved necessity of increased Chinese defensive facilities in archipelago. Senior Chinese and U.S. defence officials in 12 May talks affirmed desire to avoid confrontation. U.S. 18 May reported that Chinese jets previous day intercepted U.S. aircraft conducting routine patrol in international airspace over SCS, flew only 15m from U.S. plane; China 19 May said its aircraft were at safe distance, urged U.S. to cease close-up reconnaissance. U.S. Pentagon report 13 May characterised China’s SCS strategy as “low-intensity coercion”; also noted no Chinese land reclamation in Spratlys since late 2015. Beijing late April denied U.S. aircraft carrier entry to Hong Kong harbour. Ahead of ruling (expected in June) by Permanent Court of Arbitration on SCS territorial dispute in case brought by Philippines, China sought international support, including meetings with Laos, Brunei and Cambodia, and Arab League. Philippine president-elect Duterte 15 May met with Chinese and Japanese diplomats, confirmed willingness to improve relations with Beijing and discuss maritime dispute. China 4 May began annual combat drill in SCS. Vietnamese PM 14 May called on Japan to play more active role in SCS dispute. China and Vietnam conducted annual fishery patrol on shared fishing grounds in Tonkin Gulf late April. Indonesian navy reportedly arrested crew of Chinese fishing vessel 27 May, despite attempt by Chinese coast guard vessel to intervene, in disputed waters. G-7 leaders 27 May expressed concern over SCS tensions, emphasised importance of peaceful dispute settlement; China expressed dissatisfaction.

U.S. Dept Defense 13 April confirmed two Chinese J-11 fighters spotted on disputed Woody Island 7 April; satellite imagery showed new fire control radar, providing information for directing weapons at targets, on island, making surface-to-air missiles fully operational. Chinese military aircraft 17 April publicly landed on contested Fiery Cross Reef for first time, evacuated three injured construction workers. U.S. urged China to reaffirm it has no plans to deploy military aircraft in disputed Spratly islands. China 5 April began operation of Subi Reef lighthouse; Vietnam claimed lighthouse violates its sovereignty. Media 4 April reported Vietnamese Coast Guard 31 March seized Chinese fuel ship allegedly sailing in Vietnamese waters, arrested three Chinese nationals. China 3 April deployed oil rig outside Gulf of Tonkin where China and Vietnam are negotiating delimitation; Vietnam 7 April urged China to remove rig. Philippine, Vietnamese FMs 12 April agreed to cooperation initiatives including drafting six-year common action plan from 2017. Media 12 April reported Philippines transporting construction materials to disputed Pagasa/Zhongye Island in Spratlys, upgrading airfield. Approximately 8,500 U.S. and Philippine troops conducted two-week annual joint military exercise. U.S. Sec Defense 14 April revealed U.S. conducted joint patrols with Philippines in March/April, said U.S. would station warplanes in Philippines. U.S. 19 and 21 April flew three air patrols near Scarborough Shoal in response to observed Chinese survey work; China 26 April condemned patrols, said shoal is its “inherent territory”. G7 countries 11 April issued joint communiqué expressing concern over SCS tensions, opposition to unilateral actions; China 12 April summoned G7 diplomats to communicate dissatisfaction over remarks.

U.S. intelligence chief 8 March said China has capability to provide basic self-defence in Spratlys, though no Chinese navy/coast guard ships permanently based there, and China has paused land reclamation since Oct. Mayor of Sansha City (administrative unit for all SCS islands claimed by China) 11 March said civilian flights to disputed Woody Island to begin within twelve months; followed late Feb announcement of plans for Chinese power grid management station on island, and U.S. report that China had deployed fighter jets to island. U.S. Navy 1-6 March conducted “routine operations” in eastern SCS; officials emphasised operations neither show of force nor formal confrontation. Philippines and U.S. 18 March announced deal opening four Philippine air bases and one army camp to U.S.. Chinese FM Wang Yi 8 March said China exploring possibility of establishing SCS littoral states cooperation mechanism. EU 11 March released statement calling on SCS claimants to resolve disputes through peaceful means in accordance with international law, expressing concern about deployment of missiles on islands. U.S. Army 15 March reported plans to stockpile materials in Vietnam, Cambodia, other Pacific countries to enable quicker deployments. Malaysian defence minister said 14 March he would coordinate pushback with Australian, Vietnamese and Philippine counterparts to ensure China would not militarise Spratly Islands. Chinese coast guard vessel forcefully intervened 19 March when Indonesian fisheries ministry ship arrested Chinese fishermen off Natuna Islands; Indonesia refused Chinese demands that it release the eight fishermen, said they would be prosecuted. Indonesian maritime security official 23 March said China’s actions had created “new ball game” in SCS.