War at sea, or just talk?
In foundational game theory, war occurs when the cost of war for a state actor outweighs the cost of peace and negotiation. We can use this basic model to examine whether we are on the brink of armed conflict in the South China Sea -- described as a "likely zone of conflict" by US Adm James Stavridis in his book Sea Power: The History and Geopolitics of the World's Oceans.
Not only is the sea worth anywhere from US$3 trillion to $5 trillion in traded commodities, the disputed area hosts a bounty of natural resources -- chiefly oil and natural gas, much of it untapped. It is also home to some of Asia's most profitable fisheries, a main food source for millions.
Apart from all the natural wealth, the strategic importance of the sea has pitted nations against each other for claims over the waterway. Brunei, China, Indonesia, Malaysia, the Philippines, Singapore, Taiwan and Vietnam all have claims and exclusive economic zones (EEZ) in the territory.
At present, China seems to be the main determinant of potential warfare given its powerhouse status in the global economy but also its professed claims to practically the entire sea.
However, the prospect of armed conflict remains distant since there is no incentive for China to go to war just yet. Beijing is currently locked in a trade war against the United States and also faces pushback over its Belt and Road Initiative.
And while the Philippines is perceived as an aggrieved party, it has no incentive to go to war, as President Rodrigo Duterte wants to continue his economic detente with China.
Other nations with claims also do not want to risk straining relations with China, the biggest market in Asia and a key to their economic wellbeing. Asian nations aligning with China for economic cooperation has been a developing trend.
Given Taiwan's political situation, Taipei would prefer to avoid an armed confrontation with China as well. Japan, the newest actor in the area, is currently bound to Article 9 of its Constitution and cannot provoke war.
Therefore, for many states in the South China Sea, the value of peace eclipses the cost of war, for now.
To add slight complexity to the model of war, state actors can launch a preemptive or preventive strike. In the case of the South China Sea, if the international community were to launch a preemptive strike on China or if China were to launch a preventive strike on the Philippines, the narrative would change significantly. Although both scenarios seem unlikely now, both are worthy of discussion.
If war were to actually occur, a preemptive strike by the international community against China seems more viable than a Chinese preventive strike against the Philippines. Over the past month, China has significantly bolstered their defences in the sea.
The international community has condemned China's actions as an act of armament that threatens international security. However, the real motive behind China's fortification is still up for interpretation. If the international community views China's buildup as an increasing threat to other nations' claims and interests, it may launch a preemptive strike against China.
Last Tuesday, President Duterte declared that "if America wants China to leave [the South China Sea], and I can't make them … I want the whole 7th Fleet of the armed forces of the United States of America there.
"When they enter the South China Sea, I will enter. I will ride with the American who goes there first. Then I will tell the Americans, 'Okay, let's bomb everything.'"
His apparent warning to China as well as his backtracking on EEZ policy could be perceived by Beijing as an act of war and thus justification for a preventive strike against the Southeast Asian nation.
However, a Chinese preventive strike on the Philippines seems highly unlikely given the chain of alliances, resembling that of World War I, that would be triggered.
An armed attack on the Philippines would draw the US into the conflict under the Mutual Defence Treaty. With the US in the conflict, its military allies, like Japan, would also enter the fray of conflict. In addition, any sort of preventive war is deemed unlawful in accordance with international law.
With the eyes of the international community and the whole world watching, China's next moves in the South China Sea could be the difference between peace and stability or violence and bloodshed.