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The South China Sea 'V-I-P' solution

By Stewart Taggart - posted Monday, 9 March 2015

The 'VIP' Group of Vietnam, Indonesia and the Philippines all share both advantageous relations with and deep disagreements with China in the South China Sea. Working together, they could present a united front.
This would include establishing Joint Development Areas allotted by auction and linked by a common-carrier open-access energy infrastructure.

Each has a serious offshore territorial dispute with China. Meanwhile, each cooperates with China in important ways.


The disputes revolve around over China's nine-dotted-line maritime territorial claim. How the V-I-P countries respond will determine how peacefully Asia is in coming decades.

None of the three can take on China alone. But together, however, they can create a compelling negotiating counter party.

Start with Vietnam. In 1974, China seized the Paracel Islands from Vietnam. In 1979, China and Vietnam fought a land border war. In 2014 China placed a rig in waters claimed by Vietnam.

Despite this, China and Vietnam now cooperate in the Tonkin Gulf. There, Vietnam and China jointly manage fisheries and are working together to explore for energy resources in the offshore area straddling their offshore equidistance line.

Over at Scarborough Shoal off the Philippine Island of Luzon, the Philippines and China have engaged in water cannon fights.

The Philippines continually warns about China's construction of facilities on disputed reefs, presumably to build up forward military bases for more aggressive action.


Less reported, however, is that Philippine energy company Philex has been negotiating with with China National Offshore Oil Company (CNOOC) regarding joint development of the disputed Reed Bank.

Meanwhile, State Grid Corp of China is several years into a showcase 25-year contract to operate and upgrade the Philippine electricity grid.

State Grid's Philippine grid upgrade contract is a major international infrastructure showcase. It illustrates China's 'going out' strategy of overseas investment by China's now internationally-competitive infrastructure state champions.

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This article was first published on the Grenatec website.

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About the Author

Stewart Taggart is principal of Grenatec, a non-profit research organizing studying the viability of a Pan-Asian Energy Infrastructure. A former journalist, he is co-founder of the DESERTEC Foundation, which advocates a similar network to bring North African solar energy to Europe.

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All articles by Stewart Taggart

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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