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During a June 17 speech at the Center for Strategic and International Studies in Washington, U.S. Pacific Fleet commander Adm. Steve Koehler declared that despite an ongoing campaign of intimidation against its smaller neighbors in the South China Sea, “China’s pressure is not working well. It has failed to intimidate Southeast Asian claimants and make them surrender their sovereign rights.”
Koehler detailed examples of Chinese harassment and violence over the last year against Indonesia, Malaysia, Vietnam, and especially the Philippines, but noted that in each case, the Southeast Asian states have refused to back down. The admiral echoed this assessment the following month in a speech in Manila on the anniversary of the Philippines’ 2016 arbitral victory in The Hague, which ruled most of Beijing’s maritime claims in the South China Sea illegal.
That China is faltering might surprise casual observers of the South China Sea disputes, but it matches the available evidence. China’s efforts to establish control over the sea have plateaued over the last four years. That came after nearly a decade of steady gains. The strategy that won Beijing control over much of the body of water, despite the illegality of its claims, was centered on a campaign of intimidation and non-lethal force, often dubbed “gray zone” coercion. That campaign is no longer working but the Xi Jinping regime is unwilling, and likely unable, to accept that reality and seek compromise with its Southeast Asian neighbors. The result is a dangerous cycle of brinksmanship, but one that is not delivering results for Beijing. To help Southeast Asian partners, especially the Philippines, remain resilient and deter Beijing from military escalation, the United States should follow through with plans to strengthen force posture and support the military modernization of partners in the region.
Successes in the Gray Zone
Shortly after his ascension in 2013, Xi laid out his strategic vision to attain the “China Dream,” or “great rejuvenation of the Chinese nation.” In that speech, he emphasized China’s rise as a maritime power and the importance of recovering what he and other Chinese leaders deemed “lost” territories in the East and South China Seas. A year prior, Chinese law enforcement and militia vessels seized control of Scarborough Shoal, an atoll that had been under Philippine control for decades. As vice president at the time, Xi had a major hand in that effort. In hindsight, these two moments — Xi’s speech and the seizure of Scarborough — signaled important shifts in Beijing’s pursuit of its territorial and maritime ambitions. Under Xi, the Chinese Communist Party would intentionally elevate the political salience of the South China Sea disputes, making compromise an ever more distant prospect, and pursue its claims with a much greater appetite for risk.
The People’s Republic of China has claimed sovereignty over all the islands, rocks, and reefs of the South China Sea, including the Spratly Islands, Paracel Islands, and Scarborough Shoal, since inheriting that claim from Chiang Kai-shek’s Nationalist government at the conclusion of the Chinese Civil War more than seven decades ago. But Beijing’s claim to “historic rights” over all the waters, seabed, and airspace of the South China Sea in clear contravention of international law is newer, having developed in stages since the 1980s. Currently, the Chinese government demands that it be allowed to govern all economic, military, and law enforcement activity across the South China Sea to a distance of roughly 1,000 nautical miles from its southern coast.
Since 2012, China’s law enforcement, naval, and militia forces have worked hand in glove to extend Beijing’s control over much of the waters, seabed, and airspace in the South China Sea. These successes were made possible by China’s island building campaign from late 2013 through 2016. Before then, Chinese vessels were a rare sight in the southern reaches of the sea. But by 2017, the naval, air, and sensor infrastructure on the island bases allowed the China Coast Guard and militia to sustain operations 800 or more nautical miles from the Chinese coast.
The China Coast Guard has been the most visible arm of Beijing’s campaign of coercion against its neighbors, maintaining an almost daily presence at reefs that China deems strategically or symbolically important within the exclusive economic zones of Southeast Asian claimants. The coast guard uses two of these reefs — Luconia Shoals and Vanguard Bank — as staging grounds to harass nearby oil and gas drilling by Indonesia, Malaysia, and Vietnam. Its other preferred patrol locations — Scarborough Shoal, Second Thomas Shoal, and Thitu Island — focus on harassing the Philippines. It has blocked Filipino access to Scarborough since 2012, harassed and sometimes blockaded Filipino troops stationed at Second Thomas since 2014, and has maintained a constant presence around Philippine-occupied Thitu since 2018.
The coast guard is supported in these efforts by what China calls “maritime militia fishing vessels” (haishang minbing yuchuan). These ships, numbering in the hundreds, are purpose built, mostly state-owned, and fully funded by local, provincial, and central governments. They harass foreign government and civilian ships, intentionally creating risks of collision and occasionally shouldering and ramming Southeast Asian law enforcement vessels, while operating alongside the Chinese coast guard and navy. They are a component of China’s national militia, which China’s Military Service Law defines as a reserve component of the armed forces. China’s other maritime service, the People’s Liberation Army Navy, typically lingers behind the coast guard and militia as an implicit threat.
Beijing has so far restricted its Coast Guard and militia vessels to the “gray zone” below the use of lethal force. China assesses that it can achieve control of the South China Sea through pressure and non-lethal coercion alone. This would avoid the unpredictable escalation dynamics and international condemnation likely to follow any intentional use of lethal force against another claimant. And for nearly a decade this strategy worked: Southeast Asian claimants buckled under pressure over and over.
The China Coast Guard expelled Southeast Asians from traditional fishing grounds, especially in the case of Filipino commercial fishers around Scarborough Shoal, while state-backed Chinese fishers freely operated as far south as Indonesia. Threats of force compelled the Philippines to forego offshore oil and gas exploration while most of the foreign operators in Vietnam’s offshore energy industry abandoned their projects or saw them canceled by Hanoi. Chinese government survey ships, meanwhile, mapped the seabed belonging to its neighbors with impunity thanks to coast guard and militia protection.
Despite all this activity, China’s pattern of gray zone success in the South China Sea has stalled, and in some cases reversed, since 2021.
A Faltering Strategy
China is in no greater control of the South China Sea today than it was four years ago. In some areas, it has even lost ground to other claimants. The disputes are now focused on locations of particular symbolic, strategic, or economic value to Southeast Asian governments, and at which they are willing to accept some degree of risk to stand up to China. And they have discovered that they can, in fact, stand up to gray zone pressure. China, at least so far, remains unwilling to escalate to lethal force despite its setbacks in the gray zone. The result has been a cycle of escalations, in which Chinese commanders ordered to avoid military force confront Southeast Asian counterparts with ever-more dangerous and supposedly non-lethal tactics, including ramming, high-pressure water cannons, dazzlers (military-grade lasers), and acoustic devices. Upon failure, they partially de-escalate only to have the cycle begin anew elsewhere.
Oil and gas exploration is an important but overlooked example of Southeast Asia’s recent successes, as Koehler highlighted. In the latter half of 2021, Indonesia conducted exploratory drilling in the Tuna block, an oil and gas concession at the southern edges of the South China Sea. Beijing responded by deploying coast guard vessels to stymie the operation, the first time Chinese forces had physically harassed Indonesian oil and gas activities. Jakarta deployed its own law enforcement and naval ships to protect the drilling. The standoff lasted three months but Indonesia completed the operation as scheduled.
Also in 2021, Vietnam began to push back more forcefully on the oil and gas front. It greenlit new drilling in the Nam Con Son field near Vanguard Bank, which provides a substantial amount of electricity for Ho Chi Minh City. As with Indonesia, the China Coast Guard deployed to harass the operations. Vietnam sent its own vessels to protect the drilling, which proceeded as scheduled. The continued operations at Nam Con Son and the Tuna block are why the China Coast Guard now maintains an almost daily presence at Vanguard Bank. However, China has nothing to show for that effort. In October 2024, Indonesia began exploratory drilling at another nearby field with the same result: the China Coast Guard deployed, Indonesian ships sailed out to protect the operation, and the drilling went ahead.
Malaysia has by far the largest and most profitable offshore oil and gas industry in the South China Sea. China Coast Guard vessels have been patrolling Luconia Shoals to harass these operations since late 2013. That had some successes, for instance in disrupting drilling operations on the Malaysian extended continental shelf in 2020. But Malaysia’s state-owned Petronas has since embarked on an ambitious expansion of its offshore operations, most importantly at a gas field called Kasawari. Along with daily coast guard patrols, a diplomatic letter leaked in September 2024 revealed that China has been putting considerable political pressure on Kuala Lumpur to halt this work. Malaysia nevertheless drilled a record 25 offshore wells in 2023 and another 15 in 2024.
Recent Chinese-Philippine tensions show Beijing’s strategy failing in a more spectacular, and dangerous, fashion. After years of accommodating Chinese demands, the Philippine navy and coast guard are patrolling disputed waters more and the government is speaking up publicly when faced with Chinese harassment. The administration of President Ferdinand “Bongbong” Marcos, Jr., which took power in July 2022, has reestablished coast guard patrols near Scarborough Shoal for the first time since 2012. The Philippines has also bolstered its military posture in the Spratlys, especially around Thitu, by upgrading infrastructure both in the islands and at bases in Palawan and Luzon that facilitate surveillance, patrol, and resupply missions. This military modernization and political willingness to step up patrols has prompted pushback from the China Coast Guard and militia, including more frequent ramming, unsafe air intercepts, and non-lethal force measures such as water sprayings and dazzlers. Despite this, the Philippines has been undeterred.
From February 2023 to August 2024, the China Coast Guard and militia tried to blockade Second Thomas Shoal where the Philippines maintains a tenuous military presence aboard the grounded BRP Sierra Madre. The Philippines had determined that the ship was in desperate need of repair and began bringing in construction supplies, giving an excuse for the blockade. The number of Chinese ships around the shoal grew to around 50 by December 2023 and their tactics grew progressively more violent. Coast guard and militia vessels have a track record of navigating recklessly around foreign fishing, law enforcement, naval, and oil and gas vessels in the South China Sea, intentionally creating risks of collision. At Second Thomas, that escalated to intentional shouldering and ramming on a monthly basis in 2023 and early 2024, at times by several Chinese vessels at once, and it targeted both Philippine government and civilian ships. The coast guard also employed deck-mounted high pressure water cannons. Positioning two coast guard ships to hit a Philippine vessel from both sides simultaneously became a favorite tactic, often shattering windows, injuring crew (including, in one case, an admiral) and drowning the targeted vessel’s engines. The coast guard and militia also made occasional use of dazzlers and acoustic devices to blind and disorient Filipino sailors. But despite the intimidation, every monthly Philippine resupply mission to the Sierra Madre made it through the blockade.
In June 2024, this experimentation with gray zone tactics came to a head. The Philippine navy deployed rigid hulled inflatable boats to maneuver around China’s vessels and deliver supplies to the Sierra Madre. The China Coast Guard dispatched its own rigid hulled inflatable boats to intentionally ram the Philippine vessels and then threatened the Filipinos with knives and other weapons. During the incident, a Filipino sailor became pinned between two boats and lost his thumb. Discussions with senior U.S. and Philippine officials indicate that China realized how close its supposedly “non-lethal” gray zone tactics had come to triggering potential U.S. intervention under its Mutual Defense Treaty with the Philippines. Soon after, China and the Philippines agreed to a provisional arrangement to deescalate tensions around the shoal. Manila agreed, having accomplished its primary goal of repairing the Sierra Madre. Beijing accomplished nothing.
Its behavior at Second Thomas also worsened the strategic environment for China. It accelerated the once-in-a-generation modernization of the U.S.-Philippine alliance, which has been underway since late 2021. The standoff facilitated greater Philippine integration into an emerging regional security architecture. Manila and Tokyo concluded a Reciprocal Access Agreement in July 2023 to allow joint training and exercises. Similar agreements were completed in early 2025 with New Zealand and Canada. And another with France will soon follow. A new trilateral framework among the United States, Japan, and the Philippines has emerged alongside a quadrilateral arrangement, sometimes dubbed the “Squad,” including Australia. And at the diplomatic level, Manila has leveraged the aggression it endured to persuade 28 countries and counting to publicly demand Beijing comply with the 2016 arbitral award that threw out most of China’s maritime claims.
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Rough Seas Ahead?
China is unlikely to adjust its strategy so long as Xi is in power. He has embedded a maximalist interpretation of maritime claims — that all the South China Sea belongs to China by historical right — and made (re)claiming that supposedly “lost” territory a key component of his China Dream. That makes compromise unlikely, which is particularly dangerous because as he has consolidated power, Chinese government decision making has grown increasingly inflexible. No one in the Chinese government has any incentive to give honest feedback to the center if things go south. And unless Xi himself realizes that and orders a shift in strategy, the most likely path for China in the South China Sea is one of inertia. That will mean an ongoing cycle of gray zone escalations that will, eventually, lead to mounting risks of the loss of life, as avoided only narrowly at Second Thomas last June. Should that happen to a Filipino, Manila might call on Washington to act to “meet the common danger” as required by their alliance. While this need not entail immediate armed conflict between China and the United States, it would require some American response. This could involve naval patrols near the Spratlys or increased deployments to the Philippines, potentially provoking a counter-response by China.
Even worse would be for China to determine that gray zone coercion had failed and that escalating to military force would be an acceptable risk. That is only likely if Beijing deems U.S. involvement unlikely or infeasible. So in the short and medium term, it will be incumbent upon the United States and Philippines to strengthen the credibility of their alliance. The U.S. government should continue to reiterate that the treaty applies to any attack on Filipino forces, including the coast guard, in the South China Sea. It should follow through on plans to upgrade Philippine military facilities and rotate U.S. forces, including intermediate range fires, through the archipelago. And it should enhance bilateral patrols with the Philippines and multilateral patrols alongside Australian, Japanese, and other allied forces in the South China Sea, while providing ongoing support for the modernization of the Philippine armed forces. That is the best hope of maintaining the fragile status quo until Xi or, more likely his successor, sees the writing on the wall and seeks compromise.
Gregory Poling directs the Southeast Asia Program and Asia Maritime Transparency Initiative at the Center for Strategic and International Studies and is the author of On Dangerous Ground: America’s Century in the South China Sea.
Image: Philippine Coast Guard via Wikimedia Commons
