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Speech by H.E. Ambassador Liu Xiaoming at the International Institute for Strategic Studies: China is a Staunch Force for Peace and Stability in the South China Sea

Mr. Nigel Inkster,

Ladies and Gentlemen:

It is truly a delight to be back again at the International Institute for Strategic Studies (IISS) after three years. Back then, I was invited by Dr. John Chipman to deliver a speech about China's Diplomacy in the New Era. Today my speech is also about China's diplomacy, but I will focus on one issue - the South China Sea.

Recently the South China Sea issue has attracted much attention and media coverage. However, the articles and reporting show that the truth and facts behind the issue remain unclear to most people. Misunderstandings still exist.

So I have chosen to speak about this issue at IISS, a prestigious institution that focuses on international security. I will expound on China's position and policy, and then take questions from you. In this way, I hope our interaction today will help you gain a more comprehensive and accurate understanding of the issue.

In order to be objective, impartial and rational on the issue of the South China Sea, one must get to the root of the issue and put it in perspective. So I would like to begin with the history of China and the South China Sea.

The islands and reefs in the South China Sea have been Chinese territory since ancient times. I emphasise 'ancient times' to highlight the historical facts that put the South China Sea firmly on the map of China. To elaborate on this, let me share with you four "Firsts".

China was the first to discover the islands in the South China Sea.

Some of the countries attempt to claim some of the islands on grounds of "prior possession". They try to get away with their illegal occupation by referring to Nansha Islands as "Terra Nullius". In fact, as early as 200 BC, during China's Han Dynasty, the Chinese had large-scale and frequent sea-faring and fishing activities in the South China Sea. There is clear evidence that the South China Sea was already used by China as an important shipping route since ancient times. It follows that, because of frequent shipping, the Chinese became the first to discover the islands in the South China Sea.

Marwyn Samuels is known for his studies on the South China Sea. He wrote a book in the 1980s called 'Contest for the South China Sea'. In this book he wrote:

"Along the way, both literarily and figuratively, the South China Sea and its islands helped shape the geographical cognita of the Chinese world order."

Second, China was the first to name the islands in the South China Sea.

Today, Nansha of the South China Sea is called the Spratly Islands in the west. This name comes from a British sea captain called Richard Spratly who thought it was he who had "discovered" and "named" the islands in 1843. But actually the Chinese had started to name the Nansha Islands about 2,000 years before he did.

In various kinds of Chinese historical records dating back to over 2000 years, the South China Sea is known as "Zhang Hai", or "rising sea", and the islands, reefs, shoals and sands as "Qi Tou", or "rugged peaks". In historical documents of later dynasties after the Han Dynasty, ancient names referring to today's Xisha Islands, Nansha Islands and individual islands in the archipelagoes are clearly recorded.

A popular sailing guide called "Geng Lu Bu" was compiled by Chinese fishermen. This was during the Ming and Qing Dynasties between the 14th and 20th century. In this book, names of dozens of islands of the South China Sea, including those in Nansha, are recorded. Many of these names have been widely adopted and used by international sailors until this day.

Third, China was the first to exercise administrative jurisdiction in the South China Sea.

Ever since China's Tang Dynasty, about 1,200 years ago, successive Chinese governments have exercised jurisdiction over the South China Sea. This included islands and the waters around them. China's sovereignty was established through administrative establishment, naval patrol, resources development and management.

In the 10th century, during China's Song Dynasty, local chronicles explicitly recorded that the islands in the South China Sea were under the administrative jurisdiction of Qiongzhou, which is today's Hainan province.

In 1279, China's famous astronomer Guo Shoujing was recorded traveling to the South China Sea and building observatorial facilities. The Governments of the Ming and Qing dynasties both placed the South China Sea under the supervision of naval patrols.

Fourth, China is also the first country to develop the islands in the South China Sea.

For centuries, the Chinese have been engaged in fishing, planting and other activities on the islands and in the nearby waters. The remains of this continuous habitation can be seen through archaeological evidence found on many islands. The fact that only Chinese lived on the Nansha islands is recorded clearly in the book called The China Sea Pilot published by the British Navy in 1868.

The aforementioned four "Firsts" are based on substantial and concrete historical evidence. They testify to the fact that the islands of the South China Sea have long been Chinese territory under successive, peaceful and effective administration.

Until the 1970s, it was widely recognised by the international community that islands in the South China Sea belonged to China. Let me give you two examples:

• In 1883, Germany sent military vessels to Xisha and Nansha for surveys. The Government of Guangdong Province protested to the Germans, citing Chinese sovereignty. Germany had to stop the survey and withdrew their team.

• In 1958, the Chinese government issued a declaration on territorial waters applicable to all Chinese territory including Xisha, Nansha and other islands in the South China Sea. Vietnam's then prime minister, Phạm Văn Đồng, sent to Chinese Premier Zhou Enlai a diplomatic note which explicitly recognizes that Xisha and Nansha belonged to China.

I could give you more examples like these if we had more time.

History speaks for itself as to who owns those islands in the South China Sea. Then how did the disputes arise?

Since the 1970s, some countries have tried to lay claim on the natural resources in the South China Sea. It was then that some nations began to make territorial claims. Vietnam and Philippines sent troops and illegally occupied some of the islands. That is how the disputes started. Up till today, Vietnam has occupied 29 islands, Philippines eight and Malaysia five.

In 1982, the United Nations Convention on the Law of the Sea (UNCLOS) was concluded after 9 years of negotiations. With this development of the maritime legal system in the 1980s, countries around the South China Sea gradually made further claims. These were based on UNCLOS agreements that include the Exclusive Economic Zone (EEZ), continental shelf and other maritime rights and interests. Such overlapping claims in some cases gave rise to disputes of maritime delimitation. This has caused further complications to the issue of the South China Sea.

It is clear that there are two disputes at the centre of the South China Sea issue:

• One is the territorial dispute caused by illegal occupation of Chinese territory.

• The other is the dispute over maritime delimitation caused by overlapping claims of maritime jurisdiction.

These two disputes are intertwined and have made the issue highly complex. However, one thing is clear: whichever angle one chooses to look at the issue, China has never been the troublemaker. Quite the opposite, China has been a victim.

Then what is China's position and policy?

For a long time China has exercised a high-level of self-restraint and forbearance on this issue. We have always approached the disputes in a constructive and responsible manner. If China had not maintained self-restraint, the South China Sea would not have been what it is today.

I would like to summarize China's position as five "commitments".

First, China maintains a strong commitment to peace and stability in the South China Sea.

For years, China has been a staunch force safeguarding and maintaining regional peace and stability. Building friendship and partnership with neighbours has always been a top priority in China's policy towards neighbouring countries.

The Chinese people are a peace loving nation. Moreover, China's development needs a peaceful environment. In the past three decades peace and stability has enabled China to industrialise at a speed and scale that is unprecedented in human history. This advance by China can be largely attributed to the peaceful and stable environment in its neighborhood and beyond. So, China would be the last to wish to see instability in the South China Sea. It means that China would be the first to oppose conflicts in the South China Sea.

Second, China maintains a strong commitment to solving disputes peacefully through friendly consultations and negotiations.

The ultimate resolution of territorial disputes, regardless of its mechanisms or process, has to be agreed between parties directly involved. The dialogue must be based on negotiations on an equal footing if such a resolution is to be fundamental and lasting. Negotiations and consultations are the most effective way of disputes resolution. This is because they can, to the greatest extent, reflect the principle of sovereign equality and the will and wishes of the parties involved.

Since the People's Republic of China was founded in 1949, we have signed boundary treaties with 12 of our 14 neighbours on land. These treaties involved over 20,000 kilometers of boundary. Most of the neighbors are medium-sized or small nations, but none of them has ever complained about the approach of China in the negotiations. These are examples of how China has resolved disputes through face-to-face negations with other countries directly involved in the disputes.

The South China Sea disputes do not need to be an exception. Experience shows that only negotiation and consultation could help the parties concerned to constantly build mutual trust, manage problems, narrow differences and advance cooperation. Negotiation and consultation are the most realistic and effective approach to the South China Sea issue.

Third, China maintains a strong commitment to rule-based dispute management.

China and ASEAN countries signed the Declaration on the Conduct of Parties in the South China Sea in 2002 and are now working closely on the making of the "Code of Conduct in the South China Sea", or COC for short. Since the start of the COC consultation, there has already been much progress.

China and ASEAN countries have worked actively to set up the "Senior Officials' Hotline Platform" in response to maritime emergencies, and the "Point-to-Point Hotline Communication" on search and rescue. All sides have also agreed to establish "Preventive Measures to Manage Risks at Sea", which will serve as the interim measure prior to the final conclusion of the COC. What happened over the years has testified to the effectiveness of rule-based dispute management.

Fourth, China maintains a strong commitment to the freedom of navigation and over-flight.

China is the biggest littoral state in the South China Sea. The vast majority of China's energy supply and trade pass through the South China Sea. This means China cares more than any other nation about freedom of navigation and over-flight in the South China Sea.

Recently 'freedom of navigation' has become a hot subject. Some people talk about "protecting the freedom of navigation".

This creates a dangerous misunderstanding as it implies that the safety and security of ships passing through the region were under immediate threat. The reality is that more than 100,000 vessels pass through the South China Sea every year. None of them has ever run into any problem with freedom of navigation.

If there was real threat to maritime traffic in the South China Sea then this would immediately result in a jump in shipping insurance rates. This has not happened. The Reuters news agency reported in January that there are no signs of commercial shipping being affected in the South China Sea. The report went on to say that the South China Sea area was not listed as a high risk area by the industry's influential Lloyd's Joint War Committee. This means insurers do not charge additional premiums for vessels operating in the region.

Business people, particularly insurers, are the most responsive to risks. Yet they haven't sensed any threat to freedom of navigation in the South China Sea. This makes me wonder what kind of "freedom of navigation" some people are feeling so eager to protect.

The fact is, "freedom of navigation" has recently been used as an excuse by the United States to flex its military muscles in the South China Sea. The United States sends military jets and warships on close-in reconnaissance in the nearby waters and air space of China's islands and reefs. Such dangerous actions has increased tension and posed a threat to China's sovereignty and security.

For example, just ten days ago, the USS William P. Lawrence, a guided missile destroyer, illegally sailed into the waters near China's Nansha islands. The ship manoevered without Chinese government's permission in sovereign waters of China.

Actions such as this, I am afraid, can not be regarded as protection of "freedom of navigation". They are a manifestation of superior military power and the assertion of maritime dominance. These actions have posed the biggest threat to the real freedom of navigation and the peace and stability in the South China Sea.

To those who claim that they care about freedom of navigation and over-flight, I hope they will act in strict accordance with the international law and respect the sovereignty and security of coastal state.

The actions of the United States should be judged at all times by its approach to international law. If the United States had a serious commitment to maritime law then it would have signed the UNCLOS. China has signed UNCLOS along with most other member nations.

Respect for international law and peaceful dialogue on disputes is crucial for the stability and peace in the South China Sea.

Military provocation and intimidation in the name of "freedom of navigation" is highly dangerous. Such actions directly undermine regional peace and stability.

Turning to my next commitment point.

Fifth, China maintains strong commitment to win-win cooperation.

China values friendly and cooperative relationship with its neighbours. We have taken the initiative to call on all parties involved to "shelf differences and engage in joint development" in the South China Sea. This provides a useful approach to the resolution of the issue. And it is an approach that takes into consideration the interest of all parties concerned. To put this into practice, China has engaged in a series of cooperation initiatives with relevant countries.

In 2005, oil companies from China, Vietnam and the Philippines signed the "Agreement for Joint Marine Seismic Undertaking in Certain Areas in the South China Sea". This was an effort for joint development of oil and gas resources in the South China Sea.

In 2011, China announced the establishment of China-ASEAN Maritime Cooperation Fund with a total of three billion RMB yuan, or more than 300 million pounds. This was set up to fund maritime cooperation projects.

Two years ago, China put forward the initiative of the 21st century Maritime Silk Road. This demonstrated the mutual benefits which the ASEAN countries can enjoy by becoming regional hubs of development. These measures and initiatives are evidence of China's efforts and good faith in seeking further and deeper maritime cooperation with its neighbours.

The aforesaid five "Commitments" constitute China's position on the South China Sea. They demonstrate China's sincerity:

• For resolving the issues.

• For securing the regional peace and stability.

• And for promoting the common development in China's neighborhood.

Recently a number of hot issues have cropped up with regard to the South China Sea. In turn I will share with you my views.

The first one is about the "arbitration"

The reference to the Arbitral Tribunal was unilaterally initiated by the Philippines. Many media reports are creating misunderstanding by not explaining clearly this circumstance of the 'arbitration'.

A crucial point is that the Tribunal is not a permanent arbitration body nor is it a court of law.

For any arbitration to work it requires the proactive participation and agreement of both sides. Another critical point is that China rejected to participate in the arbitration. From the very start of the reference from the Philippines for the arbitration China made it clear this was not an acceptable way to resolve the dispute.

Some media and politicians are now ramping up this topic of arbitration. They are erroneously making these claims:

• If China does not accept the ruling of the arbitration panel it will be breaking international law.

• It would be seen as "violating the international law" and "undermining the rule-based international system".

This is completely wrong.

China's rejection of the arbitration and non-participation in the arbitral process is an act of exercising its legitimate rights empowered by the international law.

In contrast, it is the Philippines who is challenging the legal and moral bottom line of the international community because the arbitration is totally unreasonable, unfair and illegal.

My second point about the arbitration is that it is unreasonable.

It is not reasonable because the Philippines went against its commitment to China and other ASEAN countries. Let me briefly summarise the logic of this point. China and the Philippines reached a number of bilateral agreements long ago on resolving disputes through bilateral negotiations. In the Declaration of Conduct reached between China and Philippines and other ASEAN countries, it is clearly stipulated that "the parties concerned undertake to resolve their territorial and jurisdictional disputes by peaceful means."

In 2011, the Philippines issued a joint statement with China to reaffirm its commitment to negotiations and consultations. However, a year later, it suddenly went back on its clear written commitment. Without notifying China, or even asking for consent from China, the Philipinnes initiated the arbitration against China unilaterally. "Pacta sunt servanda" is a basic rule in international relations. This is the bottom line of morality that every country must strictly observe. To put it simply, the Philippines has reneged on its words and deeds.

Another point is that the arbitration is unfair.

It is unfair because the islands in the arbitration case are the sovereignty property of China since ancient times. What the Philippines is doing is robbing its neighbour and asking the court to rule in its favour over the ownership of the booty. No one in the world should find this reasonable.

Here in Britain, there is always an emphasis on a "rule-based international system". But if rules can be abused, as they are in the Philippine arbitration, what should we expect from such rules and order?

The arbitration is illegal for three apparent reasons:

First, UNCLOS stipulates that States Parties have the right to settle a dispute by any peaceful means of their own choice. The aforementioned arbitration was unilaterally forced ahead by the Philippines, who did not seek consent from China. This violates China's legitimate right under the international law.

Second, UNCLOS also states:

"If the States Parties have agreed to seek settlement of the dispute by a peaceful means of their own choice, the (arbitration) procedures apply only where no settlement has been reached by recourse to such means and the agreement between the parties does not exclude any further procedure."

China has always been open to bilateral means and clearly bilateral means between China and the Philippines has not been exhausted.

Third, UNCLOS states:

"When a dispute arises between State Parties concerning the interpretation or application of this Convention, the parties to the dispute shall proceed expeditiously to an exchange of views regarding its settlement by negotiation or other peaceful means."

However, the Philippines have never had any consultations with China. Its unilateral initiation of the arbitration is an overt violation of law.

It should also be noted, for the record, that both China and the Phillipinnes signed and ratified UNCLOS. Compared with what the Philippines did, China has truly implemented and championed the international law.

With the Tribunal the 15 submissions made by the Philippines concern territorial sovereignty and maritime delimitation. The UNCLOS has no jurisdiction over issues related to sovereignty.

As for maritime delimitation, China made a declaration in 2006 in accordance with Article 298 of the UNCLOS. This made it very clear China would exclude disputes on maritime delimitation from compulsory arbitration. So China has exercised its legitimate rights conferred by the UNCLOS. China's action complies with the international law.

It should be noted that over 30 other countries, including the UK, have made similar declarations on the same principle of exclusion. These declarations have constituted an inseparable part of the UNCLOS. The reasonable and legitimate appeals and concerns of these countries should be considered. If the Philippines' arbitration case became a convention to be followed, then any of these 30 countries could be dragged into arbitration without prior notice. This would be a serious damage to state sovereign, international order and the dignity and authority of the international law.

There has been speculation in the media that the Tribunal may soon make public its report on the so called 'arbitration' triggered by the Philipinnes.

China is not hiding away from any outcome. China has been totally consistent in its respect for international law. What China refuses to do is participate, accept, recognize or implement any arbitration that has no legitimacy in upholding international law.

The Tribunal is running a risk of undermining its authority and legitimacy. The Tribunal has created a situation where the arbitration is clearly unreasonable, unfair and illegal. Despite this the Tribunal has still chosen to proceed with the arbitration with only the Philipinnes participating. This raises grave concern about the Tribunal's impartiality and legitimacy. It has also call into question the political attention behind the arbitration. The arbitration in essence is a political initiative under the cloak of law. China will never accept the result whatever comes from the Tribunal.

Although China rejects the arbitration, the door to bilateral negotiation remains open. China and the Philippines are close neighbors. The Chinese and the Philippine peoples have had a long tradition of friendly ties. The Philippines has just elected a new President. We hope that the new Philippine government will work with China on a proper settlement of differences and bring the situation in the South China Sea back on track following the principles established by UNCLOS and international law.

Another issue I want to talk about is the developments on China's islands in the South China Sea.

Development on some of the Nansha islands began a few years ago. The building efforts will improve the living conditions on the islands and will serve mainly civilian purposes. This includes providing necessary and emergency public services to China and to other countries in and from outside the region. The facilities built include lighthouses, maritime communication facilities, search and rescue facilities and medical centers. They will enable China to better fulfill its international responsibility and obligations, such as maritime search and rescue, disaster prevention and relief, maritime scientific research, meteorological observation, eco-environmental protection, navigation safety and fishing services.

There are necessary defence facilities deployed according to Chinese security assessments. Such deployment on China's own islands falls within the right of self-protection that every sovereign state is entitled to under international law.

In January 2016, according to Reuters news agency, it stated that: "Some shippers believe a greater Chinese presence could actually improve safety."

The Reuters report quoted ship owners saying: "If China is to base search-and-rescue assets on the (disputed) islands then there would potentially be faster response times, improving the chances of rescue and survival."

Earlier I described the crucial importance to international trade of the safe and free of navigation for ships through the South China Sea. Reasonable observers would then applaud China's investment and actions to make this critical international artery safer.

However, some people complain about the scale and speed of the building efforts. I want to remind these people that scale and speed are not the benchmark for right and wrong. The scale and speed of China's building efforts match China's international responsibility in the South China Sea. Why would China sit on its hands and refrain from doing the right things simply because of its size?

Some others accuse China of "changing the status quo". I would like to ask this question: What is the "status quo"?

China's construction takes place on its own islands. China is not changing any "status quo".

And I would also like to ask those who are so keen on not "changing the status quo": Why are they silent when some countries illegally occupied China's islands and went in for large-scale construction activities there?

The third issue is the so called "militarisation" of the South China Sea.

Recently the "militarisation" has been hyped up and the United States shouts the loudest. However, it is not difficult to see who is "militarising" the South China Sea.

More than half of the US military force is deployed in Asia-Pacific. Yet, this is a region that has been largely peaceful and stable for many years.

In addition to this huge military force, the USA, together with its allies in the region, frequently flexes its military muscles. This is shown with the conduct of highly-targeted military drills. Then there are the military jets and warships on close-in reconnaissance in the nearby waters and air space of China's islands and reefs. It is these provocative and hostile actions that have raised the tension in the South China Sea. These acts have sent wrong signals to Philippines and others who have recklessly deployed military facilities on their illegally occupied islands.

The answer to the question of who is "militarising" the South China Sea is nothing but self-evident. Going forward it is the hope of China that the United States:

• Will act as a big country with responsibility.

• Be prudent in what it says or does on this complicated issue.

• Commit to and respect widely agreed international law, such as UNCLOS.

• And work with China to safeguard stability and peace.

Therefore, to solve the "militarisation" issue, the United States needs to:

• First of all, stop its dangerous provocations that challenge China's sovereignty and security.

• Secondly, stop being provocative with its "militarisation".

• And thirdly, take concrete steps to facilitate peace and stability in the region.

Ladies and Gentlemen,

Complicated and sensitive as the South China Sea issue is, the region has maintained overall stability thanks to the joint efforts of China and its neighbours. China will, as it grows in strength, make greater contribution to the stability and prosperity of the South China Sea region. As President Xi Jinping once said, China pursues maritime power through peace, development and win-win cooperation.

What China has achieved today can be largely attributed to its path of peaceful development. And China will keep to this path.

Looking into the future:

• China is confident and capable of resolving disputes through negotiations and consultations.

• China has shown a consistent commitment to upholding international law.

• China has been continuous in safeguarding peace and stability of the South China Sea through cooperation.

• China is ready to join hands with other countries to create peaceful resolution.

• And China can always be counted on to build the South China Sea into a sea of peace, a sea of friendship and a sea of cooperation.

Thank you.

Now I am pleased to take your questions.

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