INTERNATIONAL CRISIS GROUP - NEW REPORT Stirring up the South China Sea Beijing/Brussels, 23 April 2012: China is one of its own worst enemies in the South China Sea, as its local governments and agencies struggle for power and money, inflaming tensions with its neighbours, illustrated by Beijing's latest standoff with the Philippines. Stirring up the South China Sea, the latest report by the International Crisis Group, exposes the domestic political and economic contradictions undermining China's efforts to restore relations with its neighbours, as the U.S. expands its influence in the energy-rich and strategically important South China Sea. Beijing must ensure that the eleven ministerial-level agencies involved, and in particular the law enforcement agencies, respect one coherent maritime policy and end confusion over what constitutes Chinese territorial waters. “Some agencies are acting assertively to compete for a slice of the budget pie, while others such as local governments are focused on economic growth, leading them to expand their activities into disputed waters”, says Stephanie Kleine-Ahlbrandt, Crisis Group's North East Asia Project Director. “Their motivations are domestic in nature, but the impact of their actions is increasingly international”. Clashes on the South China Sea - 3.5 million sq km of waters contested by Brunei, China Malaysia, the Philippines and Vietnam - are plentiful. Last year, tensions peaked when a Chinese fishing boat rammed and severed the exploration cables of a Vietnamese ship and both sides launched live fire exercises. Just last week, Chinese law enforcement vessels prevented the Philippine navy from detaining Chinese fishermen allegedly caught poaching, resulting in the extended standoff in Scarborough Reef. The Chinese navy has steered clear of the disputes over the last several years, but is using the tensions to justify its modernisation, which is contributing to a regional military build-up. Logic would dictate that the Chinese foreign ministry should coordinate policy in the sea, where increasingly assertive law enforcement and paramilitary ships are independently plying the disputed waters. But the ministry lacks the power and authority to control the agencies, including five law enforcement bodies, local governments and private sector actors. Another central problem is the lack of legal clarity over the maritime borders. Beijing has insisted that its historic "nine-dashed line" map is a valid territorial claim. But its contours are vague, and the chart, which encompasses almost all of the South China Sea, is not recognised under international law. To ease its neighbours' concerns, China has said it plans to present a maritime border claim based on the UN Convention on the Law of the Sea. But with nationalist sentiment high and growing public demand for more assertive action, it will not be easy for Beijing to back away from its historical claims. This confusion is playing into the hands of law enforcement forces and local government agencies. “The South China Sea has become a crucial issue for Beijing's regional diplomacy. Escalating tensions since 2009 have dealt a severe blow to China's relations with its South East Asian neighbours and significantly tarnished its image”, says Robert Templer, Crisis Group's Asia Program Director. “The Sea will remain volatile unless China's internal coordination problems and the legal confusion surrounding its maritime territorial claims are addressed”.