Roberto Rabel recently attended the 11th South China Sea International Conference ‘Cooperation for Regional Security and Development’ in Hanoi, with the support of the Asia New Zealand Foundation.

What happens in the ongoing territorial disputes in the South China Sea matters to New Zealand because this strategically located maritime zone involves some of our most vital trade routes and commercial activities.

In recent years, the South China Sea has emerged as one of Asia-Pacific’s prominent hot spots, with competing claims by China, Taiwan and five Southeast Asian states. Controversially, since 2013, China has built and militarised artificial islands on claimed rocky features – with the aim of asserting sovereignty within its so-called ‘nine-dash line’ that encompasses almost the entire South China Sea. The ‘nine-dash line’ – at different times also referred to as the ‘10-dash line’ and the ‘11-dash line’ – refers to the undefined, vaguely located, demarcation line used by China for their claims of the major part of the  South China Sea.

Although a Permanent Court of Arbitration Tribunal ruled in 2016 that China’s historical claims were invalid under the United Nations Convention on the Law of the Sea (UNCLOS), Beijing not only rejected the Court’s jurisdiction but has bolstered its military presence in the South China Sea, to the chagrin of other claimant states and much of the international community.

As one of the states most affected by these developments, Vietnam holds an annual conference that draws international scholars, jurists, journalists and officials to reflect on the current state of the issue and possible ways of addressing it.  Hosted by the Diplomatic Academy of Vietnam since 2008, this year’s event suggested a ‘new normal’ was congealing, with China’s de facto achievement of most of its objectives but without de jure acceptance by regional or global communities. While making for relative peace and stability in the medium term, this informal status quo is punctuated by intermittent naval incidents and has left the underlying disagreements unresolved.

New Zealand finds itself having to navigate between the opposing stances of our important trading and political partners, with the United States especially eager to lead others in challenging China’s perceived violations of UNCLOS through Freedom of Navigation Operations that involve warships sailing through waters claimed by China around its fortified islands. The divisions on the South China Sea which have plagued ASEAN as a regional organisation further complicate matters for countries like New Zealand.

Accordingly, successive New Zealand governments have adopted a cautious stance. While taking no position on the competing claims, New Zealand favours resolution of the issue peacefully in accordance with international law. Even this relatively anodyne stance has drawn occasional raps across the knuckles from Beijing, as well as countervailing hints that others would welcome a more robust defence of international law out of Wellington.

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Although New Zealand’s stance is eminently justifiable in not commenting on specific claims, questions linger about how long countries that champion a rules-based international order can stand by if international law is flouted, while environment degradation and the ravaging of fish stocks steadily worsen because of the stand-off between claimants.

The South China Sea disputes involve a complex intersection of geopolitics, international law, economic considerations and environmental challenges. It raises key questions for how disputes over maritime boundaries are settled: through regional or global regimes; through realpolitik or rules-based approaches; through multilateralism or bilateralism.

China’s actions pose a clear challenge to UNCLOS as the maritime embodiment of a rules-based international order and stand as a prime exhibit for those who argue its rise as a great power is unlikely to remain benign. As one British expert on the issue, Bill Hayton, pithily put it at the conference, it comes down to ‘might versus right’.

The South China Sea is one of the most pressing regional examples of the difficulty of resolving complex inter-state disputes that are set in wider supra-national contexts. The recent Hanoi conference identified few viable ways to move beyond the unsatisfactory ‘new normal’. While leaders in Beijing must be painfully aware that their actions are damaging China’s image in the region and globally, its stance has left it little room for manoeuvre, for both domestic and international reasons.

New Zealand has limited leverage but can contribute modestly to international efforts to prevent the uneasy impasse degenerating into crisis and conflict. The underlying issues are unlikely to be resolved soon, but New Zealand must continue to encourage all parties to move more purposefully on concluding a long-mooted, legally binding Code of Conduct to regulate practical cooperation between China and ASEAN states in the South China Sea. While likely to be imperfect, it could facilitate better working relations between relevant parties, more transparent handling of naval incidents and, above all, cooperative management of environmental issues and maritime resources. New Zealand should do all it can to support progress on this pathway. After all, what happens in the South China Sea stands as an exemplar for the management of regional order in the Asia-Pacific—whether for good or ill.