Disputes in the South China Sea could disrupt trade routes and lead to war, experts say

“If the U.S. were to engage in some kind of war with China, it would most likely be over Taiwan,” Wiegand told FreightWaves in an interview. “But at the same time, there is a possibility that an accident or some kind of crisis could happen in the South China Sea. For example, if an American ship collides with a Chinese naval vessel, or there is a missile fired at an American destroyer or frigate, that would certainly lead to some kind of crisis that could escalate. Nobody wants a war, obviously, including China, but they certainly want the South China Sea, and there is a possibility that war will happen.”

The 1.3 million square mile sea in the Western Pacific Ocean contains some of the busiest trade routes in the world.

The South China Sea stretches from Singapore and the Malacca Strait in the southwest to the Taiwan Strait in the northeast and lies between China, Taiwan, the Philippines, Indonesia, Vietnam, Thailand, Brunei, Cambodia and Malaysia.

Duke University researchers have calculated that the total trade through both the South China Sea and the East China Sea—which lies between China, North and South Korea, and Japan—is worth 7.4 trillion dollars a year.

About 24% of global maritime trade passed through the South China Sea in 2023, data shows UN 2024 Maritime Transport Review.

The South China Sea’s share of global maritime cargo trade volume in 2023 included crude oil (45%), propane (42%), machinery (26%), and dry bulk (23%).

China’s exports to both the US and Mexico have seen strong growth over the past five years. The trade route for goods from China to North America passes through either South China or the East China Sea.

As of Thursday, 20-foot-equivalent units moving from China to the U.S. are about 10% lower year-over-year compared to 2023, but are more than 40% higher than 2022, according to the SONAR Volume Index Inbound Ocean TEU. .

The South China Sea may also hold valuable undiscovered resources such as oil and natural gas, according to the US Energy Information Administration (EIA).

In 2023, US Geological Survey reported that the South China Sea may contain up to 9.2 billion barrels of untapped oil and other liquids and up to 216 trillion cubic feet of natural gas, according to a recent EIA report.

China’s disputes in the South China Sea include territories that fall within a country’s economic exclusion zones (EEZs), such as the Philippines. An EEZ is a maritime area where a coastal state has the right to explore, exploit, conserve and manage natural resources, according to the United Nations.

In 2016, the Permanent Court of Arbitration in The Hague ruled in favor of the Philippines in a case opened in 2013 against China. The arbitral tribunal declared China’s claims in the South China Sea it had no legal basis.

Wiegand said the Permanent Court of Arbitration and other international organizations have made it clear that China has no solid claim to all of the South China Sea.

“There are some historical claims that may have legitimacy, but at the same time, the United Nations Convention on the Law of the Sea, which China has signed and ratified, along with most other countries in the world, except the US and others, is very clear about countries’ maritime borders,” Wiegand said. “China’s claims or maritime features about islands in the waters of countries such as Vietnam and the Philippines that fall under their control… these are completely illegitimate.”

Hasim Turker, an international security expert based in Istanbul, said if the US is drawn into the South China Sea conflict, it will most likely be through its treaty with the Philippines or to help Taiwan or other nations.

“The US has substantial strategic interests in the South China Sea centered on maintaining freedom of navigation and enforcing international maritime rules,” Turker told FreightWaves in an email. “This is not just about the economic stakes, but also about strengthening the rules-based international order. Regular Freedom of Navigation Operations (FONOPs) are a clear expression of Washington’s intent to challenge China’s expansive claims. These operations are meant to assert that the waters in question remain open to all nations under the United Nations Convention on the Law of the Sea (UNCLOS) – even though the US has not formally ratified the treaty.”

In August 2023, ships belonging to China and the Philippines accused each other of causing collisions in a disputed area of ​​the South China Sea.

Philippine authorities said a Chinese Coast Guard ship carried out “dangerous blocking maneuvers” that caused it to collide with a Philippine ship carrying troop supplies, according to a statement published by CNN.

In June, China and the Philippines blamed each other for provoking a collision in the South China Sea near the disputed second Thomas Shoal, with the Philippines saying its military would resist Beijing’s actions in the disputed waters, according to Reuters.

US Ambassador to the Philippines MaryKay Carlson condemned China “aggressive, dangerous” maneuvers near the second Thomas Shoal in a post on X in June.

In September, authorities from China and the Philippines agreed to a temporary deal after the countries clashed repeatedly near the bank. However, the Philippines said the deal may not be permanent.

The US and the Philippines have a long history of cooperation, officially beginning in 1951 with the US-Philippines Mutual Defense Treaty. The treaty requires both nations to support each other if another party attacks either country.

“The likelihood of armed conflict in the South China Sea remains significant due to ongoing tensions, frequent clashes and increased militarization,” Turker said. “Incidents like the one in August 2023 underscore the persistent risk of military escalation. These confrontations reflect a broader pattern of assertive behavior by China, involving the deployment of coast guard vessels, maritime militia and military assets to enforce its claims to disputed waters.”

Turker, a former commander in the Turkish Navy, is the author of “European Security and Defense Policy” (2007) and “Towards the New Cold War: China, the US and NATO on the Rise” (2019). He was also Academic Coordinator and Senior Research Fellow at the Bosphorus Center for Asian Studies, an independent think tank based in Ankara, Turkey.

“Frequent incidents … demonstrate how easily low-intensity confrontations can occur, especially given the dense presence of military, coast guard and civilian vessels in contested waters, which increases the likelihood of accidental or deliberate escalation,” Turker said. “This risk is compounded by China’s militarization of artificial islands, where airstrips, missile systems and surveillance infrastructure have been built. These moves have prompted other claimants to strengthen their defenses, leading to a more volatile environment.”

Turker said US involvement will significantly escalate the situation in the South China Sea, especially if military means are deployed.

“This would not only create tensions in the region, but could also lead to a direct military confrontation with China – a scenario neither side wants, given the stakes involved. A US-China conflict would have global repercussions, impacting trade, regional alliances and the geopolitical balance of power. The specter of a wider war looms if such an incident escalates beyond a contained, localized response, especially if US allies such as Japan or Australia are drawn in to support collective security efforts in the Indo-Pacific,” Turker said.

Although the outbreak of war in the South China Sea is a strong possibility, each country also has reasons to maintain peace, he added.

“Several factors are discouraging the escalation of limited skirmishes into a full-scale war in the South China Sea. The economic costs of a major conflict are substantial, as a war would disrupt critical trade routes, disrupting global supply chains and damaging regional economies, including China’s, which is heavily dependent on maritime trade,” Turker said. “Regional stability remains a priority for Southeast Asian nations, who, despite their assertive territorial claims, generally favor diplomatic solutions to maintain economic stability and avoid the risks associated with protracted conflict. The possibility of a wider confrontation involving great powers such as the US and its allies is another significant deterrent. A full-scale war could draw these external actors into the conflict, raising the stakes regionally or even globally, a scenario all sides are keen to avoid.”

Wiegand said that while he hopes there is a diplomatic solution to territorial disputes in the South China Sea, it will be difficult to quell China’s growing ambitions.

“The problem is that the Philippines tried a diplomatic solution through the arbitration case and China refused to even appear in court; they didn’t even send representatives,” Wiegand said. “Vietnam has tried negotiations several times and China just refuses to back down and they keep repeating the same statement: these are our territories, these are our waters. There is only so much you can do diplomatically. For the other countries, they are kind of stuck until China makes a move. It’s really at a standstill right now, and unfortunately I think the status quo is just going to be a continuation of China maintaining its claims, maintaining control of the islands, controlling the waters. It really depends on the other countries in the dispute whether they want to keep pressuring China to try to overturn that status quo. It’s a very difficult thing to do diplomatically.”