（This is the speech Dr. Wu Shicun, president of the National Institute for South China Sea Studies, delivered at the international conference entitled “Maritime Governance in 21st Century Asia: Perspectives from Taiwan on Maritime Law and Regional Security” in Taipei on June 25, 2015.)

Good morning, Dr. Lee and Dr. Lin, for your kind invitation. It is my second time this year to attend conferences on the South China Sea in Taipei, which I believe is a common concern for scholars across the strait, and for this region. Given the overwhelming media coverage lately on how the United States challenges China’s claims in the South China Sea, I would like to share with you my observations on the new development in this region, with a focus on US’s increasing engagement. My presentation is composed of four parts: the challenges that China faces in the South China Sea; the gains and losses of US’s interests in the South China Sea; the land reclamation; and the “should and should not list” for China the United States.

First of all, about the challenges China now is facing in SCS. Basically, China faces four challenges in the South China Sea. 
First, China needs to protect its legitimate rights in these waters. The Chinese navy must act unyieldingly to make sure we don't lose any territories, and we must extend our presence, by means of economic activities or law enforcement.

Second, China is confronted with challenges related to international law, which is now being used by the Philippines to force a compromise. If Manila's appeal is accepted, China may be asked to give up over 790,000 square kilometers of its waters. China made the right choice in not responding to the lawsuit, but it remains uncertain whether other stakeholders such as Vietnam will resort to the same tactic.

Third, the difficulty of enacting and implementing a code of conduct in this region depends on the US. By nature, conflicts in the South China Sea lead to a contention over leadership in this region between China and the US.

Fourth, China lacks a sufficient and powerful say over South China Sea issues. The West has controlled mainstream public discourse and molded an image of China being aggressive. Followed by claimants such as Vietnam and the Philippines, the US has formed a camp to challenge China.

By the way, I would introduce China’s SCS policy here just for your reference.  China’s SCS policy contains four major points, they are: number one, peace and stability are at priority, number two, to solve the disputes by peaceful means and through bilateral consultations, number three, to safeguard freedom of navigation and overflight enjoyed by all countries in accordance with international law, number four, pending the final resolution, the parties concerned should go for joint development or maritime cooperation in the south China Sea.
 
Second, about the US policy in the SCS and it’s implication. Since 2009, when the US announced its’ rebalance to Asia-Pacific strategy, the US policy in the SCS has been shifting away from its previous commitment to be neutral and not take side with any party. On the one hand, the US policy change offers strategic support to the Philippines and Vietnam’s provocative behaviors, thus resulting in growing maritime tensions and conflicts in the South China Sea. On the other hand, this change serves as strategic guidance for Japan and other US allies to intervene in the South China Sea affairs, which will complicate the disputes and regional situation. Let me be more specific on this.

1）    Since 1995, when the mischief incident happened, the US policy towards the SCS was adjusted from neutral stance to limited intervention, which had been remained until 2010, when secretary of state Hillary Clinton made a high profile remarks with regard to South China Sea issue, the US policy of the SCS was readjusted to active intervention, that is in our eyes, tantamount to taking side with those of claimant states except China.

2）    The assessment of US South China Sea policy, which I will summarize as “three gains and three losses”. First, the gains the US has achieved include: backing up the Philippines to submit international arbitration to ITLOS, that makes China confront challenges with international laws; and successfully supported the Philippines refusing to withdraw from Renai Jiao, regardless China’s strong request that the Philippines should withdraw from second Thomas Shoal, the Philippines occupied in 1999. And also, by taking advantage of incident of 981 oil rig deployment in Paracel last year, the US lifted its’ arms sell embargo to Vietnam, this move not only shows US taking side with Vietnam but also strengthening strategic partnership with Vietnam, in terms of military cooperation in the South China Sea.  Second, the losses now the US is suffering, or in other words, the worries the US has now the SCS, they are: a) China may hold the initiative to formulate the maritime rules or norms in the South China Sea, that is unacceptable to the US, given US sea power dominance in the west pacific area. b) China might have the capability to control the SCS SLCs, this would, in their eyes, be tantamount to a threat to freedom of navigation, the core interest of US. C) There might be great possibility that China would declare and enforce the ADIZ in the South China Sea, despite relevant Chinese authority says that there is no such need for China to announce ADIZ in SCS currently.

Now let me offer some observation on China’s land reclamation activities in South China Sea.1) China is a late-comer when it comes to land reclamation activities in the South China Sea. China’s actions, in principle, are commensurate with what the others have done. 2) China has no intention to change the legal status of the reclaimed features. 3) an important purpose of China’s construction work in the SCS is to boost its capacity to deliver maritime public services, which manifests China’s international and regional responsibility and obligation. 4) After the completion of the land reclamation, there would be followed by facilities construction to meet various civilian demands and functional requirements such as maritime search and rescue, disaster prevention etc.
 
Now let me provide some humble thoughts on the “should and should not” list for China and the United States for their future interactions in the South China Sea.

First, a mutual respect is a fundamental policy for both countries. In a power shift affecting the region, the US needs to acknowledge China’s rise and its core interests as a major party of its territorial and maritime claims. Similarly, China must respect the legitimate interests of US in the South China Sea, especially the Freedom of Navigation, which in any event is also China’s common interest. 

For the United States, it is important for it to view China’s SCS policy from a more objective perspective,with both a historical and a contemporaryangle. A balanced US’ policy in the South China Sea will reduce China’s concern on its being contained in this region. The United States should also reduce its military intelligence gathering in China’s near coast that may be deemed as a threat to China’s national security. Military activities in EEZ should abide relevant international laws.

For China, first, the artificial islands should be used mainly for civilian purposes and keep prudent about military facilities that go beyond defensive needs. Second, China shall make earnest efforts to promote the consultation on the code of conduct in the South China Sea. Third, China should take a lead in charting a security mechanism and crisis management mechanism.

Thank you for your attention and I look forward to your comments and questions.