As a heavily laden, Danish-owned container ship leaves Singapore’s port and enters international waters, it pings China’s Zheng He vessel identification system, providing an update on its cargo and intended route through the South China Sea to Shanghai. Despite long-standing fears about China’s threat to freedom of navigation, Beijing still allows all commercial ships unrestricted access to these critical global trade routes, so long as they adopt Chinese monitoring technology. Foreign navies, by contrast, are severely curtailed in these waters, with control maintained through China’s unrivalled navy and coast guard, plugged into a sprawling network of unmanned ships, drones, sensors, and satellites.
The year is 2035. And this vignette reflects a hypothetical scenario of Chinese dominance of the South China Sea that we recently presented to policymakers and maritime experts in Southeast Asia and the United Kingdom in a “back-casting” exercise.
A technique that is used by governments, intelligence agencies, and militaries to reduce human biases and encourage critical thinking, back-casting is the mirror image of forecasting. It requires researchers to sketch out a possible future scenario and then work back from there to the present, asking “how did we get here?” The aim is not to predict the future, but rather to identify long-term drivers and short-term trigger points.
The trajectory and outcome of the South China Sea disputes will shape the nature and extent of China’s global rise as well as the future of freedom of navigation and open trade. But we fear that groupthink and short-termism are clouding judgements about these waters.
We designed our scenario as a worst-case realistic outcome (excluding black swan events). Shockingly, many officials and researchers we spoke to in Southeast Asia viewed this outcome as simply a continuation of business-as-usual. That was one of many surprises that arose in our discussions, underlining the importance of techniques such as back-casting in challenging conventional wisdom.
As Beijing has consolidated its leading position in the South China Sea, international analysts have tended to focus on factors such as the dramatic expansion of the Chinese naval and coast guard fleets, China’s use of gray-zone tactics, and its abuses of international law. But in our back-casting discussions, Southeast Asian participants thought that the combination of Beijing’s economic might and its growing lead in digital and renewable energy technologies would be more decisive considerations if China were to gain full control of the South China Sea.
So how might this scenario unfold? China would continue its so-called salami-slicing activities in the South China Sea, probing for weaknesses in the defenses and societies of the other claimant states (Brunei, Indonesia, Malaysia, the Philippines, Taiwan, and Vietnam) and undermining the U.S. alliance system. But the key driver would be its immense economic power, leveraged through attractive and coercive means.
China is so much more than the region’s biggest trading partner and a major builder of physical infrastructure. It is binding Southeast Asian economies into its world-leading manufacturing network, investing in and acquiring the region’s most exciting start-ups (including GoTo Group, Lazada and Tokopedia), and providing cutting-edge and affordable digital and renewable energy technologies. The more that this continues, the less likely that Southeast Asian governments will be willing to risk compromising their economic interests by pushing back against Beijing’s maritime coercion.
Some of the policymakers and analysts whom we spoke to in the United Kingdom questioned China’s long-term economic prospects, citing its aging population, burdensome local government and housing debts, and stifling environment for private enterprise. But our discussants in Southeast Asia thought that even a China with a slowing pace of growth would become a more and more important development partner for their nations over the next decade by virtue of their proximity and deep interconnections. They believed that Southeast Asian political elites would fail to stand up to Beijing over the next decade because of the desire to keep the money and technology flowing, combined with the justified fear that Beijing would economically sanction those that oppose it in the South China Sea.
This likely reflects divergent priorities—in Southeast Asia, China’s economic dominance is already a fact of life and, unlike China’s competitiveness in relation to the West, unlikely to be offset by any slowdown in China’s growth.
Southeast Asian maritime states’ dangerous exposure to rising temperatures and sea levels as well as growing energy demands over the next 10 years could accelerate China’s route to dominance. Although previous U.S. administrations and their allies in Europe and Asia have launched a plethora of green finance initiatives in the region, these have been slow-moving, even before President Donald Trump came back to the White House and threw Washington’s climate policy into disarray.
Meanwhile, China has established a commanding position in the production of cheap solar cells, wind turbines, battery technologies, and electric vehicles, making it an indispensable partner for Southeast Asia as it is buffeted by the impacts of climate change. The fusion of renewable technologies with Chinese digital networks, software, artificial intelligence, and conventional economic power is likely to further pull Southeast Asia into China’s orbit.
Does the United States have to have withdrawn from Asia militarily for China to secure the South China Sea for itself? There was vigorous debate on this question in the United Kingdom and Southeast Asia, with our European discussants more convinced than the Southeast Asians that the U.S. position is likely to matter. China has already done much to assert control over these contested waters, including building and fortifying large island bases and intimidating its neighbors. That is despite constant U.S. condemnation since then-Secretary of State Hillary Clinton declared in 2010 that the United States had a national interest in freedom of navigation and respect for international law in the South China Sea. If Washington maintains a similar posture, China is likely to continue down the current path. It would surely take a much more muscular, and potentially escalatory, response from Washington to deter China. And that comes with its own risks.
So how can China be stopped without raising the risks of war between two nuclear-armed superpowers? Ironically, given that Southeast Asian officials often complain that the United States and its allies overlook their agency, few of our Southeast Asia participants believed that their governments were likely to proactively shape outcomes in the South China Sea. And none of our back-casting participants suggested that the Association of Southeast Asian Nations (ASEAN), the regional organization, would be impactful.
Rather, the consensus was that an ever more powerful and assertive China would triumph over Southeast Asian complacency and short-termism in the face of the United States talking a good game but remaining wary of action.
Nonetheless, without wanting to sound naïve in a world where raw power and risk-takers seem to prevail, we believe there are ways in which China can be prevented from fully dominating the South China Sea. The success of any such effort depends on pragmatism; a total reversal of Beijing’s power in the region is unrealistic, but Southeast Asian countries and their extraregional partners have a range of practical options to stop China going further.
First among these should be preventing further encroachment by China on Southeast Asian maritime interests. The most important and most challenging requirement for this is the political will on the part of Southeast Asian nations to put aside intraregional differences and present a united position against China’s gray-zone operations, countering Chinese attempts to undermine ASEAN unity.
Such a joint stance needs to be backed up by credible deterrence. A relatively cheap and effective way to do this would be through the development of autonomous maritime patrol capabilities and enhanced maritime surveillance. This could be done in conjunction with a range of extraregional partners, including Australia, Japan, South Korea, and the United States as well as the United Kingdom, France, and other European nations.
It is undoubtedly in the interests of such countries to assist in this task; as China’s naval power projection capabilities grow, it may well seek to expand its maritime gray-zone operations elsewhere in the absence of credible deterrence.
However, the major longer-term challenge for Southeast Asian countries is reducing their economic and technological dependence on China while avoiding taking sides in intensifying China-U.S. competition, particularly in the face of a more protectionist administration in Washington.
The best strategy would be one of diversification, including through the promotion of intraregional trade, with a particular focus on sourcing energy and emerging technologies from beyond China or the United States. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership—a trade agreement that includes Brunei, Malaysia, Singapore, and Vietnam as well as Australia, Japan, and the U.K.— is a useful platform, especially as other regional economies, including Indonesia and South Korea, have expressed interest in joining.
China’s economic footprint in Southeast Asia—and its capacity and willingness to provide cheap and efficient digital systems and renewable energy technology at scale—cannot be fully offset, even with extensive engagement from partners such as Europe, Japan, South Korea, and Australia. But through cooperation within and beyond the region, Southeast Asian nations can diversify their supply chains and carve out niches where China does not yet dominate. In particular, they should try to attract external investment in sectors that would give regional economies reciprocal leverage over China.
As they pursue a green transition and greater digitization, Southeast Asian nations should avoid overdependence on Chinese technology by seeking alternative providers for renewables, nuclear energy, and artificial intelligence (AI) systems. Countries beyond the region would do well to listen carefully to regional needs when it comes to decarbonization and climate change mitigation strategies, and tailor their engagement accordingly. When it comes to AI systems, external partners could reap the benefits of carving out an alternative sphere to one dominated by either Chinese or U.S. tech.
One of the most instructive elements of the back-casting process was seeing the discombobulation of experts in international law when they heard others argue that legal processes would do next to nothing to shape the shifting balance of power in the South China Sea over the next decade. Officials, researchers, and academics who spend most of their time looking through one particular lens at one particular issue tend to lose sight of the bigger picture as well as the way in which interconnections and interdependencies drive change.
As China continues to strengthen its position, there is an urgent need for Southeast Asian claimant states and their partners who care about the future of the South China Sea to look at the disputes in a much broader way. By understanding how Beijing is fusing technology, industrial power, economic might, military heft, and diplomatic ambition, Southeast Asians and their partners in Europe, the United States, and Asia can respond more effectively, using the unique advantage of their alliances and trusted networks.