The GPM Global Forecast is a bi-weekly, members-only article series for 2016. It provides analysis and short-term forecasting on key military, political, and economic events around the globe. 

China Loses Key Ruling on the South China Sea

The Permanent Court of Arbitration at The Hague ruled against China and in favor of the Philippines with regards to the two countries’ territorial dispute in the South China Sea. In its ruling, the court found that there was no historical evidence of China controlling the waters, and that China’s island-building program was a violation of the Philippines sovereign rights.

Given the flimsy nature of China’s claim, the court’s ruling comes as no surprise. Beijing has been preparing for this result for months, stressing that the court’s opinion will not influence its reclamation activities in the South China Sea. But that doesn’t meant that the ruling isn’t important.

The Chinese government has long presented itself as a defender of sovereign rights in the developing world. That it has now been reprimanded for being a violator of these rights is embarrassing to say the least, and it gives the obvious outward impression that this is not an issue that can be solved bilaterally by stakeholders, as China maintains.

There is a chance that this will all help to bring about an agreement. For one, Rodrigo Duterte is now the president of the Philippines, and it’s an open question as to whether or not the legal proceedings would have been initiated in the first place if Rodrigo had been in charge in 2013. In Duterte, Beijing has a more amenable negotiating partner than Benigno Aquino, and Duterte has publicly supported joint development of the disputed resources. For China’s part, their demarcation has always been extreme in terms of international law and ripe for moderation in some sort of bilateral ‘compromise.’

There’s a debate as to whether the ruling does anything for the Philippines, with some questioning the utility of the moral high ground in the face of an intransigent Chinese government. Yet image considerations are still important, especially to a civilization that values the concept of face, and these considerations could very well manifest in a greater push for a diplomatic settlement from Beijing.

Another X-factor that could be influenced by the ruling is public opinion within the Philippines, something that directly determines just how sympathetic the Duterte regime can be in its negotiations with Beijing. Protests against China are expected to intensify in the days to come, and the #Chexit hashtag (China out of the Philippines territorial waters) is trending in the country’s social media.