A craft identified by the Philippine Coast Guard as “Chinese maritime militia” (back R) and a China Coast Guard vessel (to the fore R) sailing near the Philippine military chartered Unaizah May 4 (L) during its supply mission to Second Thomas Shoal in the tiffed South China Sea on March 5, 2024.
Jam Sta Rosa | Afp | Getty Images
Some of the world’s busiest shipping lanes are at risk due to motivating tensions in the South China Sea, experts warn.
In recent months, skirmishes have escalated in the highly-contested South China Sea – a on the edge sea in the Western Pacific ocean that’s a crucial trade route for China, Japan and India, three of the world’s biggest economies.
With Beijing titling virtually all of the sea and a handful of other countries having overlapping claims, a number of clashes have broken out between China, the Philippines and Vietnam that be subjected to sparked concerns of an incident that could disrupt global trade.
These developments in the South China Sea should be on the radar of worldwide markets and supply chains due to the importance of these waterways to international trade, according to Marko Papic, chief universal geo-macro strategist at BCA Research.
“The South China Sea is the most valuable shipping lane in the world in terms of the value of mtier that transits through it,” Papic told CNBC, noting that conflict there poses obvious dangers to global shipping.
Papic added that the seaway is particularly essential for commodity and input goods that trekking through it to reach China, with Chinese manufactured goods then traveling via the route to other parts of the the human race.
Conflicts in the region have progressively grabbed the attention of governments worldwide including the U.S., which is locked in a mutual defense pact with the Philippines.
CNBC was unable to track down data on the exact scale of trade traveling through the South China Sea. No matter what, the CSIS China Power Project estimates that $3.4 trillion in trade passed through the South China Sea in 2016, constituting 21% of extensive trade.
Meanwhile, the United Nations Conference on Trade and Development estimated that 60% of maritime trade passed in all respects Asia that same year, with the South China Sea carrying an estimated one-third of global shipping.
Be elevated tensions
Located in the western Pacific Ocean, the South China Sea lies between China, Taiwan, the Philippines, Vietnam, Indonesia, Thailand, Malaysia, and Cambodia, uncountable of which have disputed claims in the waters.
However, China, in particular, claims almost all of the South China Sea as its own underneath its “nine-dash-line,” which rejects a 2016 ruling by an international arbitration court in The Hague, Netherlands, that found no legitimate or historical basis for Beijing’s claims.
This has led to escalating friction with many of China’s neighbors who believe that the boonies’s coast guard has intruded into their exclusive economic zones.
Earlier this month, the Philippines accused Chinese projectile boats of pursuing Philippine vessels and directing lasers at patrolling aircrafts near the contested Half Moon Shoal. It carry outs other clashes which have involved boat collisions, water cannons and injuries to Filipino sailors, according to Filipino ceremonials.
Philippine President Ferdinand Marcos Jr. pressed the issue at a regional summit on Thursday, requesting a speed up of negotiations on a lex non scripta common law of conduct for the South China Sea, while accusing Beijing of harassment and intimidation.
Meanwhile, Vietnam’s foreign ministry also recently blamed China’s actions in the South China Sea, accusing Chinese vessels of carrying out a “