South China Sea Code Stalled as Philippines-China Ties Hit New Low

A staggering $6 trillion worth of trade flows through the South China Sea annually, yet the waters have never been more contentious. As Philippines-China relations deteriorate to their lowest point in years, hopes for a legally binding code of conduct in the disputed waters are fading fast.

The Marcos Factor

Ferdinand Marcos Jr.'s presidency has defied expectations. Unlike his father, who maintained warm ties with Beijing, the current Philippine leader has pivoted decisively toward Washington while taking an increasingly confrontational stance against China's maritime claims.

Since 2023, incidents between Chinese coast guard vessels and Philippine ships have escalated dramatically. The most notable occurred last August when Chinese vessels used water cannons against Philippine supply boats near Scarborough Shoal, drawing international condemnation and further straining bilateral ties.

The Code's Impossible Timeline

ASEAN and China have been negotiating a South China Sea code of conduct for over two decades. What began as a non-binding declaration in 2002 was supposed to evolve into a legally enforceable framework by now. Instead, the process has become a diplomatic Sisyphean task.

The Philippines, ironically, remains one of the most vocal advocates for the code's completion. But as Manila's relationship with Beijing sours, other ASEAN members find themselves in an increasingly uncomfortable position. Vietnam and Malaysia, despite having their own territorial disputes with China, are reluctant to rock the boat given their substantial economic ties with Beijing.

America's Shadow

The Biden administration's decision to expand military cooperation with the Philippines has added another layer of complexity. The 2023 agreement granting US forces access to four additional Philippine military bases sent a clear signal to Beijing about Washington's commitment to the region.

China views this as evidence of "Cold War mentality" and argues that external powers should stay out of regional disputes. For the Philippines, however, US backing provides essential leverage against what it sees as China's increasingly aggressive behavior.

The Economic Paradox

Despite political tensions, economic interdependence continues. China remains the Philippines' largest trading partner, and Chinese investments in Philippine infrastructure projects initiated during the Duterte era haven't completely dried up.

This economic reality creates a peculiar dynamic: neither side wants to completely sever ties, yet neither is willing to compromise on core territorial claims. The result is a relationship characterized by public confrontation and private pragmatism.

Regional Ripple Effects

The Philippines-China standoff has broader implications for regional stability. Other ASEAN members worry that escalating tensions could force them to choose sides between their largest trading partner and a fellow ASEAN member with legitimate grievances.

Singapore and Thailand, which have generally maintained neutral positions, now face pressure to take more definitive stances. The unity that ASEAN has long prized appears increasingly fragile in the face of great power competition.

The Enforcement Question

Even if a binding code were somehow agreed upon, enforcement would remain problematic. China's track record of ignoring international arbitration—as demonstrated by its rejection of the 2016 Hague tribunal ruling favoring the Philippines—raises questions about whether any agreement would be worth the paper it's written on.

Moreover, the code's effectiveness would depend on mechanisms that none of the parties seem willing to accept: neutral arbitration, economic sanctions for violations, or third-party enforcement.