Dispatch: Sea Lanes, Natural Resources at Stake in the South China Sea. (Click for Video)

Vice President of Strategic Intelligence Rodger Baker examines recent territorial disputes between China and the Philippines and why the United States is reshaping its defense policy in the region.

Editor’s Note: Transcripts are generated using speech-recognition technology. Therefore, STRATFOR cannot guarantee their complete accuracy.


The Philippine government continues to assess its security situation following a series of alleged incursions by the Chinese into disputed territories.

On May 20, just before the Chinese defense minister paid a visit to the Philippines, a report came out suggesting that two Chinese fighter jets had flown over Philippine territory in the disputed Spratly Islands. The story was initially played up as Chinese fighter jets shadowing Philippine patrol aircraft in the area but what later came out is that the Philippine OV-10s, which were patrolling the area, saw what they thought were contrails of fighter jets flying much higher and straight over the territory. But by bringing up a story right before the defense minister visited, it became a hot issue going into the talks.

The Spratly Islands are disputed by many claimants including the Philippines and China. Traditionally, control over the Spratly Islands in the South China Sea was primarily an issue of sea-lane control and the ability to interdict sea lanes. But more recently, there’s been active investigation, active exploration and exploitation of deep-sea mineral resources of oil and gas off the ocean floor and as additional exploration takes place, the issue of the South China Sea and control over these islands becomes much more significant.

One of the reasons the issue is being played up so much in the Philippines is the Defense Ministry is trying to find ways to obtain more and more modern military resources, and this plays into the relationship of the United States. The United States is the primary supplier of military equipment to the Philippines, but the United States also still has an alliance structure with the Philippines. But it’s unclear what level of confrontation it would take before the United States would actually really take action against China, and as we’ve seen in Chinese interventions in Japanese territorial waters or in disputed territories and Chinese actions in the Philippines, we haven’t seen a concerted effort from the United States to counter this at this point and that leaves a certain amount of confusion and uncertainty amongst these nations.

The Philippines really does have to walk a careful balance. China is the regional power in their area, China’s major economic partner for the Philippines. At the same time, the United States again is a significant economic partner and an alliance partner.

For the United States, whether it’s the Philippines drawing them in or the U.S. trying to get involved with Vietnam in this issue or even Malaysia, the expansion of Chinese activity in the South China Sea has become a significant issue for U.S. security in the long-term. And the United States is looking very clearly at what the Chinese are doing the South China Sea and beginning to reshape U.S. defense policy in the region to maintain U.S. control over access in the area.