Academic journal article Contemporary Southeast Asia

The Role of Chinese Corporate Players in China's South China Sea Policy

Academic journal article Contemporary Southeast Asia

The Role of Chinese Corporate Players in China's South China Sea Policy

Article excerpt

At the 18th Party Congress in 2012, the Chinese leadership set a strategic goal to transform China into a strong maritime power. (1) In July 2013, Chinese President Xi Jinping reiterated this ambition at the 8th collective study session of the Politburo of the Chinese Communist Party (CCP) Central Committee. (2) Thereafter, China began a sustained effort to reinforce its control over the land features it had occupied in the 1970s and 1980s and expand its presence in the South China Sea. Beijing reformed its maritime administrative system and strengthened the capabilities of the navy and maritime law enforcement agencies in order to protect and promote its perceived interests in the South China Sea. (3) In 2013, China began to transform the seven atolls it controls in the Spratlys archipelago into large artificial islands equipped with extensive military infrastructure such as airfields, barracks, radars and communication systems. In mid-2014, the national oil company China National Offshore Oil Corporation (CNOOC) deployed the Haiyang Shiyou-981 (HYSY-981) drilling rig into disputed waters near the Paracel Islands, resulting in a severe confrontation with Vietnam. In July 2016, China rejected the ruling of an arbitral tribunal in a case brought by the Philippines against China in 2013 which had challenged the legal basis of Beijing's expansive claims in the South China Sea. In October 2017, at the 19th Party Congress, President Xi highlighted the "steady progress" that the artificialisland programme in the Spratlys had achieved and how this had helped the country safeguard its maritime rights. (4) These events demonstrate that China has become more assertive in the South China Sea since Xi became General Secretary of the CCP in 2012. (5)

Scholars have attempted to explain Beijing's increasing maritime assertiveness from different perspectives. In general, however, their analysis has failed to fully address the role of domestic actors in China's South China Sea policy. As has been acknowledged by many China experts, the growing pluralization of Chinese society has made China's foreign policy more complicated. (6) Traditional state-centric approaches to analysing China's foreign policy are no longer adequate to achieve a nuanced understanding of the country's external relations. It is necessary to pay more attention to the role of new actors in Chinese foreign policy, and in the case of the South China Sea in particular, the role of Central State-Owned Enterprises (CSOEs).

This article argues that Chinese CSOEs have become increasingly important actors in the formulation and execution of Beijing's policy in the South China Sea. However, while all CSOEs are required to follow central government commands, their roles vary. Some actors mobilize resources to influence state policy and even pursue their own initiatives in the name of building a strong maritime nation in order to secure economic and political benefits. As such, they proactively align their business interests with the country's maritime interests and present themselves as defenders of the national interest. Other actors only respond when the central government provides policy incentives. When the policy environment appears favourable to their corporate objectives, they become very active in policy facilitation. Other state-owned enterprises are simply policy takers that serve as a political tool to undertake strategic tasks for the state. However, it is important to note that their activities are not just aimed at fulfilling political tasks given by the state; these companies also take advantage of their policy-taker role to maximize commercial opportunities.

Exploring the role of CSOEs in China's South China Sea policy is important for four reasons. First, it provides a new perspective for understanding China's policy towards the South China Sea. In particular, it helps us better understand Beijing's economic interests in the South China Sea, the pursuit of which often complicates relations between China and the Southeast Asian claimant countries, i. …

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