As expected the Permanent Arbitration Court [PCA], set up under the UNCLOS dispute resolution mechanism, has given its ruling. And as widely expected it has gone against China, even though the latter had refused to participate in PCA deliberations. That the reaction has been vitriolic in China, was also a foregone conclusion. That the ruling has been described by Chinese officials as "a piece of paper" was also known; for the former State Councilor, Dai Bingguo had already publicly denounced it as such during a recent visit to the US.
* While the world watches with bated breath as to what is likely to happen next, as the two leading great powers in the region, namely the US and China, assess the situation; it would only be prudent to look at their bilateral relations just to understand the stakes involved.
*The Sino-US interaction is conducted not only at the highest levels, but there are 91 official mechanism for dialogue. There is the high level Strategic and Economic [S&ED] dialogue at the Secretaries level, but also a Governor's Forum and a Mayor's Forum. There are 41 pairs of friendly provinces and 202 sister cities. By 2017, people to people exchanges are expected to exceed 4 million. Sino-US bilateral trade volume is nearly US$561billion, with the Chinese holding US$1.3trillion in US Treasury Securities. China is the largest foreign holder of US securities at 21.2% of the total. Last year there are 194,000 Chinese students in the US and 20,000 US students studying in China.
*If one examines the scale of the Sino-US interaction, there is no doubt that both countries would lose very heavily, if a conflict situation over the SCS dispute were ever to arise. Logic would suggest that both countries would do their utmost to avoid such a situation. It would also suggest that both will work hard towards finding a modus vivendi that both can comfortably live with.
*The question that therefore arises is: What stance should countries such as India adopt over the SCS dispute ruling? It is, of course, easy to crow over China's obvious discomfiture given the way that China opposed India's application to join the NSG; but then is that prudent policy?
* Firstly, India "noted" the award, but did not "welcome" it as some hawkish elements would have wished. Secondly, India supported the freedom of navigation and overflight. Thirdly, India believes that states should resolve disputes through "peaceful means" without the "threat of force" and exercise self restraint and finally India urged all states to show "utmost respect for UNCLOS"; thereby indirectly upholding its findings.
* Indian policy makers have done a remarkable exercise in drafting a very measured and appropriate response that is neither bellicose nor accusatory, but stresses the essential elements of our position. India is the only major country that accepted an international court ruling, without any demur, when the question of the maritime dispute between India and Bangladesh was decided. All the others; the US and Japan have often demurred when ICJ rulings went against them. Australia refuses to take the maritime dispute between them and Timor-Lest to the PCA under UNCLOS for a decision, despite the latter's repeated requests to do so. The inference is obvious. Therefore, India's stated position on the SCS issue has considerable merit and also occupies the moral high ground, while at the same time preserving our essential interests.
* Even China will find it hard to criticize India's position.