History, money and military: why the South China Sea is so important to Beijing

Article by F. Palafox

Published on July 16, 2026 02:00PM

The policy mood in Southeast Asia, as reflected in the ISEAS-Yusof Ishak Institute’s State of Southeast Asia 2026 Survey, shows how sharply regional anxieties have shifted. A majority of respondents now view the United States under President Donald Trump as a key source of concern, even ahead of maritime tensions, underscoring a broader unease about great-power behavior in the region. The survey also suggests that if forced to choose between the two superpowers, many respondents would lean toward China rather than the United States, with especially strong preferences in countries such as Indonesia, Malaysia, and Singapore. Still, ASEAN’s official position remains anchored in peaceful dialogue, respect for international law, freedom of navigation, and the pursuit of a binding code of conduct with China.

For the Philippines, the central lesson is clear. Lasting stability in the South China Sea and West Philippine Sea cannot depend on outside powers shaping the region’s future from afar. More than a decade of tensions has shown that external involvement often deepens rather than eases friction, turning already sensitive maritime issues into wider strategic flashpoints. As ASEAN and China continue their engagement, the strongest path forward lies in diplomacy led by the region itself, with Southeast Asian states managing their differences through dialogue, restraint, and mutual respect. Attempts to dismiss international legal outcomes should not distract from the need to protect stability, uphold maritime rights, and preserve the peace of waters close to the Philippine islands.

The 14‑nation statement marking the 10th anniversary of the 2016 arbitral award is best read not as an exercise in grandstanding but as an affirmation of Manila’s legal victory and a defense of rules-based maritime order, an affirmation grounded in the tribunal’s legal reasoning and widely reported Philippine and international reactions. ¹

The Hague ruling and Manila’s position

The 2016 arbitral tribunal found in favor of the Philippines on the core legal questions it submitted, concluding there was “no legal basis” for China’s claims to historic rights within the nine‑dash line and clarifying the maritime entitlements of features in the Kalayaan Island Group and nearby waters.

Philippine officials and local media mark the anniversary as a reaffirmation that the award is “final, legally binding, and definitive” between the parties, a view reflected in the joint 14‑state statement that renewed support for the award and for peaceful resolution under international law. ¹ ⁵

UNCLOS limits and Article 298

It is correct that UNCLOS does not resolve questions of territorial sovereignty over land features directly; the tribunal itself said it would not rule on sovereignty or delimit maritime boundaries between States. ²

But the tribunal addressed a narrower legal question, whether China’s asserted “historic rights” to maritime resources inside the nine‑dash line were compatible with rights allocated under UNCLOS, and it held they were not. Scholarly and legal analyses (including those cited by institutions such as ASIL and academic commentators) explain why the Tribunal parsed China’s position and concluded that China claimed historic rights, not historic title, and so Article 298 did not bar the tribunal from deciding the issues before it. ³

Why Manila’s unilateral arbitration mattered

The Philippines invoked UNCLOS dispute‑settlement procedures available to parties under Articles 287/298 and Annex VII; the tribunal accepted jurisdiction over the submissions it considered after examining China’s 2006 declaration and the nature of the claims. ²

Mainstream Philippine reporting and commentary present the arbitration as Manila’s lawful, peaceful use of international dispute‑settlement mechanisms to assert its maritime entitlements, an outcome many Filipino policymakers continue to cite in diplomacy and defense planning. ¹ ⁴

ASEAN dynamics and regional sentiment

Survey data and regional analysis have shown growing concern among Southeast Asian elites about great‑power competition and shifting alignments; recent ISEAS surveys and reporting note anxieties about U.S. policy under recent administrations and a pragmatic regional preference for managing ties with Beijing. ¹ ³

At the same time, mainstream coverage and Philippine reporting show Manila using the award as legal leverage while pursuing bilateral and multilateral diplomacy, naval modernization, and code‑of‑conduct talks, illustrating that legal, diplomatic, and security tools are being used in parallel rather than one supplanting the others.

Assessment on law, history and politics in Manila’s lane

The legal limits of UNCLOS and China’s invocation of Article 298 are real technical points; the tribunal’s attentive parsing of China’s position and its legal reasoning explain why it proceeded and why many legal scholars and governments accept its conclusions. ³

For the Philippines, the award is less an abstract doctrinal claim, but a tangible diplomatic and political asset. It underpins Manila’s claims around features near Palawan, the Kalayaan Island Group, the Benham Rise, and areas adjacent to Luzon and the Batanes approaches, matters reported and debated repeatedly in local press.

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Notes:

¹ Manila Bulletin. 14 nations reaffirm 2016 arbitral ruling, reject China’s expansive South China Sea claims. https://mb.com.ph/2026/07/12/14-nations-reaffirm-2016-arbitral-ruling-reject-chinas-expansive-south-china-sea-claims

² ASIL. The South China Sea Arbitration. https://www.asil.org/insights/volume/20/issue/17/south-china-sea-arbitration

³ Academic.oup. Regional reporting and surveys on Southeast Asian sentiment (ISEAS coverage noted in mainstream analyses). https://academic.oup.com/chinesejil/article-pdf/16/3/387/21638622/jmx023.pdf

⁴ Asia Media Centre. Manila marks a decade of the South China Sea ruling, as Beijing digs in,” Asia Media Centre / regional reporting. https://www.asiamediacentre.org.nz/manila-marks-a-decade-of-the-south-china-sea-ruling-as-beijing-digs-in

⁵ South China Morning Post. 14 Nation South China Sea Statement Expansionist Overreach. https://www.scmp.com/opinion/china-opinion/article/3360419/14-nation-south-china-sea-statement-expansionist-overreach