South China Sea: Tensions to spark ‘major economic disruption’ over claims to waters

Bill Hayton: Tensions in South China Sea will have 'major' economic impact

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China has been building up its defences in the South China Sea to ward off any attack on the disputed waters which they claim to own. But associate Fellow with the Asia-Pacific Programme at Chatham House, Bill Hayton, has explained tensions in the disputed water can have “major economic implications”. Speaking to, Mr Hayton said: “Tensions there would echo right around the world because China is the world’s second-biggest economy and Japan is the third.

“Then you’ve got Korea and Taiwan plus the southeast Asian countries.

“You’ve got a huge amount of trade crossing the South China Sea, some estimates say around $3.5trillion a year goes through it.

“If you think about how much disruption the blockage of the Suez Canal caused a couple of months ago, imagine that going on not for a week or so but months and how much we depend on international trade.

“It would have major economic implications.”

US Secretary of State Antony Blinken called out bullying in the South China Sea on Monday and warned the UN Security Council that a conflict “would have serious global consequences for security and for commerce,” sparking a strong rebuke from China.

The South China Sea has become one of many flashpoints in the testy relationship between China and the United States, with Washington rejecting what it calls unlawful territorial claims by Beijing in the resource-rich waters.

“Conflict in the South China Sea, or in any ocean, would have serious global consequences for security, and for commerce,” Blinken told a Security Council meeting on maritime security.

“When a state faces no consequences for ignoring these rules, it fuels greater impunity and instability everywhere.”

China 'building infrastructure on South China Sea' says Hayton

China claims vast swaths of the South China Sea which overlap with the exclusive economic zones of Vietnam, Malaysia, Brunei, Indonesia, and the Philippines.

Trillions of dollars in trade flow every year through the waterway, which also contains rich fishing grounds and gas fields.

“We have seen dangerous encounters between vessels at sea and provocative actions to advance unlawful maritime claims,” said Blinken.

He added that Washington was concerned by actions that “intimidate and bully other states from lawfully accessing their maritime resources.”


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China’s deputy UN Ambassador Dai Bing accused the United States of “stirring up trouble out nothing, arbitrarily sending advanced military vessels and aircraft into the South China Sea as provocations and publicly trying to drive a wedge into regional countries.”

“This country itself has become the biggest threat to peace and stability in the South China Sea,” Dai said.

Secretary Blinken said it was the responsibility of all countries, not just claimants to the islands and waters of the South China Sea, to defend the rules they had all agreed to follow to peacefully resolve maritime disputes.

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