The future maritime security environment in Asia: a risk assessment approach.

• Author: Bateman, Sam

This article is an attempt to predict how the maritime security environment in Asia might evolve over the next decade. It discusses the probability and consequences of possible maritime threats and challenges before identifying three possible scenarios for the future, as well as the risks of a "strategic shock" that could mean that "all bets are off" with predictions of the future.

The scenarios offer alternative views of what the regional maritime security environment might look like in the future: whether it will be much the same as it is at present (the status quo scenario); better than at present, more stable and with enhanced maritime cooperation to manage regional seas and activities within them (the optimistic scenario); or worse than at present with greater instability, more competition, frequent stand-offs at sea, and low levels of maritime cooperation leading to further degradation of the marine environment and falls in fish stocks (the pessimistic scenario). Finally, the paper identifies possible measures to mitigate the risks of the threats and challenges and to improve the prospects of achieving the optimistic scenario.

The geographical scope of the paper is East Asia, the Western Pacific, South Asia and northern Indian Ocean (hereafter "the region") --or what is now often referred to as the Indo-Pacific, but omitting the Eastern Pacific and Gulf subregions. The three main subregions within the region--Northeast, Southeast and South Asia--are increasingly interconnected, both economically and strategically, with the pervasive presence of China in all three subregions.

Setting the Scene

The current broad trajectory of the region will likely continue: economic and maritime power will continue to shift towards this region, particularly to East Asia; the population of the region will continue to grow, predominantly in South Asia, while China and Japan might experience a population decline so much so that India's population will soon surpass that of China's; energy and food security will become even greater concerns as resource scarcities become more critical; demand for offshore oil and gas will continue to drive maritime sovereignty disputes; trade within the region and between it and the rest of the world will continue to expand; and most will be carried by sea. Traditional security concerns will remain the principal cause of instability in the region.

The Strategic Environment

The continued rise of China's economic and maritime power is the leading influence on the future maritime security environment of Asia. The United States is declining in strategic and political influence, while China looms as a major power with global interests. All the long-term trends are going China's way. Its Gross Domestic Product (GDP) is expected to surpass that of the United States within the next few years. Trends in China's intra-regional trade are important. In 2013, total Sino-Southeast Asian trade increased to an all-time high of US$443.6 billion representing an increase of 10.9 per cent from 2012. (1) Nevertheless, China is losing the "war of words" evident in regional strategic discourse that paints China as aggressive, assertive and untrustworthy. As one analyst has described this situation, "some Asian governments and their nationalistic analysts and media seem to be on a 'blame and shame' campaign that demonizes China as an arrogant and dangerous bully". (2) A key factor in considering the future is how China will react to this sentiment: whether it will soften its line, or dig into a position as the regional "strong man", pushing on in its pursuit of great power status at the expense of Japan and the United States in particular. (3)

Southeast Asian nations are discomforted by the tensions between the major powers with concerns in particular that Washington has placed too much emphasis on the military dimension of this strategy. (4) India is also concerned about the real danger of being drawn into the conflict between the United States as the world's foremost power and China as the rising challenger. (5) Regional countries generally share concern that the military dimensions of America's "re-balancing" towards East Asia are measures to encircle or contain China. (6) As the head of Indonesia's armed forces has written, "it is important that the U.S. pivot to the Indo-Pacific does not translate into a sphere of influence that seeks to exclude China from regional affairs". (7)

Tensions between China and Japan are also growing. A report from the International Crisis Group claimed that "Enmity between China and Japan is hardening into a confrontation that is increasingly difficult to untangle by diplomacy." (8) Both countries see each other as acting assertively. In view of the support of the United States for Japan, including in the dispute over the Senkaku/Diaoyu Islands in the East China Sea, the tensions between China and Japan must also be seen in the broader context of tensions between the United States and China. (9) Japan has inserted itself into the maritime disputes in the South China Sea only adding to the tensions already apparent between Tokyo and Beijing. (10)

Sovereignty disputes over offshore islands in East Asia will continue as a major feature, if not a determinant of the regional maritime security environment with few prospects of resolution. These are currently seen as zero-sum issues with a mindset, inspired by nationalism, that they can only be settled by having a "winner" and a "loser". They are thus "prone to the pernicious effects of the security dilemma and can quickly spiral out of control". (11) This situation is not conducive either for confidence building or the development of effective cooperation for managing regional seas and activities within them. (12)

In the Indian Ocean Region (IOR), strategic competition is evident between India, supported by Japan and the United States, on the one hand, and China on the other. India is central in determining what might happen in the future. Most strategic competition will play out in the maritime domain. Strategic uncertainty in the IOR flows from questions about how relations between China, India and the United States will evolve. Each has its own national interests and these do not coincide. Many Indian strategists are concerned about China's alleged "string of pearls" strategy in the IOR. (13)

Russia is gaining strategic confidence and may play a greater role in the future maritime security environment. (14) The successful conclusion of the territorial boundary negotiations between China and Russia, growing trade, energy and investment links between the two countries and a shared perception that they are being targeted by the West have led to an increasing alignment between these two powers. (15) Concurrently, Russia may be placing greater importance on its links with Japan as a means of maintaining balance in its relationship with China. (16)

Meanwhile there are legitimate questions over the ability of the United States to sustain its rebalancing to the region. Its defence budget has fallen in real terms over the past three years and it continues to have major commitments elsewhere. Recent developments in Europe and the Middle East have not helped, and doubts about its ability to maintain the rebalancing can only grow. Budgetary politics in Washington are creating conditions of defence austerity that will make it more difficult for the United States to achieve its security objectives. (17) While the United States is once again overstretched, China is militarily catching up faster than predicted and assessments from the mid-2000s about China being unable to match the United States for decades are beginning to look incorrect.

Defence Spending

China's defence budget of $116 billion in 2013 was by far the largest in the region well ahead of Japan (about $49 billion) and India ($40 billion), and was growing much faster. (18) Military expenditure in Asia and Oceania rose by 3.6 per cent in 2013, reaching $407 billion. (19) Asia and Oceania are the only regions where spending has increased every year over the past twenty-five years. Spending in Southeast Asia increased by 5 per cent to $35.9 billion in 2013 and in East Asia by 4.7 per cent to $282 billion. The increase in East Asia is mostly accounted for by a 7.4 per cent increase by China, whose spending in 2013 reached an estimated $116 billion although some commentators place China's total defence spending at a much higher figure. (20) Russia's defence budget showed the highest rate of growth with 18.5 per cent real growth between 2012 and 2013. (21) Territorial disputes with China are driving military spending increases in the Philippines and Vietnam whose defence budgets showed real growth of 10.5 per cent and 9.6 per cent respectively in 2013 over 2012. (22) Malaysia's defence budget also grew by 10.4 per cent in real terms. (23)

Defence spending in Asia is expected to continue to grow strongly. Whether this trend will accelerate as a consequence of the US rebalancing is a key question for the region. The increased military spending also makes the region an attractive market for defence-related companies. It may be driven at least in part by the supply side with American, European and Russian defence firms aggressively seeking new customers following the drying up of their domestic markets. (24)

Naval Developments

The overall naval balance between the United States and China will continue to shift in favour of China. A US congressional advisory panel has assessed that China will possess the largest fleet of modern submarine and combatant ships in the Western Pacific by 2020, (25) and a senior US Navy admiral has recently claimed that China is building "fairly amazing submarines" with more diesel- and nuclear-powered vessels than the United States. (26) The United States is unlikely to be able to maintain the defence spending necessary to maintain the current naval...