A Secret War Is Brewing In The South China Sea

By Haley Zaremba - May 04, 2023

• The South China Sea, due to its natural resources and strategic importance, has long been a source of regional tensions.
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• After a period of relative calm in the region, tensions are rising at two potential flashpoints, the first between China and Malaysia and the second between China and the Philippines.
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• The real reason behind these recent disputes isn’t fishing rights, access to oil, or even shipping routes, it's actually part of a secret war over the subsea cables that carry 99% of global internet traffic.

After a period of relative calm and quiet, there is once again a geopolitical storm brewing out in the South China Sea. This time, there are dual face-offs: one minor spat between China and Malaysia, and another seriously major spat between China and the Philippines. 

The South China Sea is one of the most heavily trafficked maritime routes in the entire world. However, the conditions that make it so valuable – namely, its location on the coasts of a considerable number of Asian countries – have also led to major regional tensions over ownership, rights, and tenure. Vast, overlapping swaths of this prized patch of the Pacific are currently being claimed by Brunei, China, Malaysia, Indonesia, the Philippines, Taiwan, and Vietnam. 

China, which has staked the largest claims to the South China Sea and has historically (and continuously) been the most aggressive in its position with an ever-expanding military presence on the waters, has stirred up no shortage of political discontent in the region. Beijing claims sovereignty over more than 90 percent of the South China Sea – using a delineation branded as the “nine-dash line” – which cuts into the exclusive economic zones of Vietnam, the Philippines, Malaysia, Brunei, and Indonesia. As a result, geopolitical squabbles over rights to the Sea are the rule rather than the exception. 

Earlier this year, when Malaysian Prime Minister Anwar Ibrahim made his first official visit to China, officials pointedly questioned Malaysia about its exploration activities in what it has designated as China’s exclusive economic zone in the South China Sea. In an unsurprising twist, Ibrahim claimed that those waters actually belong to Malaysia and “therefore Petronas will continue its exploration activities there”. According to reporting by Al Jazeera, “The exchange highlights Beijing’s increasing efforts to pressure Kuala Lumpur not to exploit energy resources under its control, even as Anwar looks to deepen Sino-Malaysian ties, analysts say.”

Now, just a couple of months later, China has once again made headlines for its bullying and intimidation in the South China Sea, but this time Beijing’s adversary is the Philippines. On the surface, the argument between’s Xi Jinping’s China and Ferdinand Marcos’ Philippines is over fishing rights. It all started in late April when the Philippines publicly accused China's coastguard of employing "dangerous manoeuvres" and "aggressive tactics" to intimidate the Filipino coast guard Philippines-held waters. The reported incident, took place in fishing waters in the Second Thomas Shoal, “a flashpoint for previous altercations located 105 nautical miles (195 km) off its coast,” according to Reuters.

However, according to new reporting this week, the fights between the Philippines, Malaysia, and China aren’t really about fishing or even oil exploration at all – instead, it’s just one battle in a “secret war to control the internet.” Indeed, many of the activities carried out recently in the South China Sea seem far too militarized and grand in scale for a simple fishing disagreement. In April of this year, the U.S. and the Philippines held the largest-ever military drills in the South China Sea, which were followed up by plans for more major military drills from China and Singapore.

According to reporting from The Hill, “ the biggest economic asset up for grabs in the region is Big Data — and the future of the entire internet depends on who wins the battle to dominate this strategic waterway.” The crux of the war is underwater cables. More than 99% of all international internet traffic is carried through such subsea cables, which are overwhelmingly controlled by a handful of Big Tech companies in the U.S., “namely Google-owner Alphabet, Facebook-owner Meta, Amazon and Microsoft.” As the internet economy ramps up in Asia – it’s expected to reach $1 trillion in value by just 2030 – other economic powers now want their slice of that pie. Whoever controls the cables that cross through the South China Sea will stake a major claim to that $1 Trillion. 

In other words, don’t expect anything approximating a truce in the South China Sea any time soon. 

By Haley Zaremba for Oilprice.com