Fortune

What Beijing Could Do Next After the South China Sea Ruling

Minxin Pei
Few should be surprised by the unanimous ruling this week against China by a tribunal of the Permanent Court of Arbitration (PCA), a Hague-based international judicial entity constituted under the United Nations Convention on the 

Few should be surprised by the unanimous ruling this week against China by a tribunal of the Permanent Court of Arbitration (PCA), a Hague-based international judicial entity constituted under the United Nations Convention on the Law of the Sea (UNCLOS). Even Beijing was expecting this outcome. When the Philippines brought the case against China in early 2013, Beijing refused to take part in the proceedings on the ground that the court has no jurisdiction over the dispute in the South China Sea. Immediately, after the release of the tribunal’s ruling, the Chinese Foreign Ministry issued a detailed rebuttal of the ruling, an indication that Chinese leaders had anticipated an unfavorable verdict.

Although the PCA’s ruling cannot be enforced, the magnitude of defeat suffered by China cannot be overstated. For the first time, an international legal entity has effectively rejected Chinese claims of sovereignty over the South China Sea and soundly criticized its activities such as land reclamations.
 
While the legal and practical implications of the ruling are still being digested, the most urgent question now is what options Beijing has in the wake of this legal setback.

 

Given the belligerent response from China, including a recent military exercise in the South China Sea, it is clear that Beijing will not abide by the ruling and cease and desist. In determining how to blunt the impact of the ruling and avoid further loss of its credibility, China will weigh a combination of factors in crafting a response. The most critical ones are the domestic political considerations of its top leadership and the possible response by the United States.