South China Sea: openness encouraged to shore up marine economy after disputes threaten to capsize relations

To build up China’s marine economy and improve its relations with Asean nations, an academic has advised openness as a strategic objective
Marine sector best capitalised on with regional cooperation, but charged encounters in the South China Sea present significant ballast

South China Sea

He Huifengin Guangdong

Published: 8:00am, 28 Nov 2023

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In light of maritime disputes with neighbouring countries and the lack of trust and confidence these conflicts have engendered, the head of a top Chinese think tank has called for a strategy of unilateral opening-up in the marine sector to address the issue head-on.

Chi Fulin, president of the Hainan-based China Institute for Reform and Development, proffered the strategy as a means of rapprochement with Southeast Asian countries, many of which dispute China’s claims over the South China Sea.

Global ocean governance is facing serious challenges due to changes in relations between major powers, and opening up at a high level is crucial for promoting marine economic cooperation between China and the world, he said at the China Ocean Economy Expo on Saturday in Shenzhen.

If China wants to be a leader in this marine economy … they need to take responsibility

Klaus Zenkel, European Union Chamber of Commerce in China

“We recently proposed a strategic recommendation for unilateral opening-up to Asean,” he said, calling the 10-country Association of Southeast Asian Nations a “strategic leverage point” in the region.

“In the South China Sea, where other issues are challenging to resolve in the short term, the ‘blue economy’ has become one of the most important [factors] in China-Asean cooperation,” Chi added, referring to the use of ocean resources for development and growth while continuing to prioritise conservation.

He specifically mentioned tourism – encouraging domestic and Asean enterprises to develop tourism in the South China Sea – and fishery when discussing what form that cooperation would take.

05:22

Why the South China Sea dispute remains one of the region’s most pressing issues

The remarks come at a time when China is delving into deep-sea exploration to make use of marine resources, such as offshore wind power, to enhance its energy supply as well as the economies of its coast.

According to the 2023 China Ocean Economic Development Index, released on Saturday by the National Marine Data and Information Service, China’s 2022 gross marine product – a calculation of the economic value provided by the ocean – increased by 1.9 per cent year on year to 9.5 trillion yuan (US$1.3 trillion), with the value added per hectare by marine industries growing 3.1 per cent in nominal terms from the year before.

Emerging marine industries, including advanced manufacturing, services and coastal tourism, grew more than 7.9 per cent year on year, while offshore wind power generation more than doubled.

Local governments in Shenzhen, as well as Liaoning and Shandong provinces, are racing to incentivise marine industry growth as part of China’s efforts to expand its blue economy.

Zhang Chunyu, a researcher at the Chinese Academy of Social Sciences, said he believes that Shenzhen, a southern port city already well-known as China’s tech hub, would be an optimal choice.

The city is now building Shenzhen Maritime University as part of its plan to become a maritime industry centre, and last year the local government announced a policy fund of up to 10 billion yuan to support the shipping industry.

Shenzhen looks to tap blue economy with support for marine industries

According to official data, Shenzhen’s citywide marine gross domestic product (GDP) reached 300 billion yuan in 2022, up 3.9 per cent year on year and accounting for 9.7 per cent of total GDP.

Klaus Zenkel, vice-president of the European Union Chamber of Commerce in China and chair of its south China chapter, said at the forum the development of the maritime economy, like many other sectors, is marred by a lack of confidence.

“Unpredictability is not good,” he said. “So make sure people come here, they can plan ahead for a decade, for example, and don’t have to be interrupted by a new law like the cybersecurity law and anti-spy law.”

02:03

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He emphasised the need for China to proactively take action to gain traction in the sector.

“If China wants to be a leader in this marine economy, I think they need to take responsibility,” he said. “They need to start a dialogue with all the countries on a working level, not on a political level.”