The Cost to Doing Nothing in the South China Sea

Political tensions are preventing action to save the region's fishing stocks.

Political tensions are allowing fish stocks to be eviscerated.

Photographer: Hoang Dinh Nam/AFP/Getty Images

President Obama's visit to the Philippines this week will train a spotlight on the fiercely contested South China Sea. Both he and his hosts will likely call on China and other claimants to maintain the status quo in the region until their various differences can be resolved. Yet while that may be the best one can hope for geopolitically, it could be a disaster environmentally.

QuickTake Territorial Disputes

In 2012, the South China Sea accounted for around 12 percent of the global seafood catch. If nothing changes, according to a new report from scientists at the University of British Columbia, those waters could lose nearly 60 percent of their stocks by 2045. Preventing that disaster isn’t impossible, but it’ll require multilateral talks and regional agreements on resource sharing that seem impossible given current tensions.

Overfishing isn’t a problem confined to Asia, of course. But due to the leading role that seafood plays in regional diets and economies, the problem is more acute here and has only become more so as the region has grown more affluent. Data collected by UBC researchers show that catches have steadily increased along with the number of fishermen since the 1950s. By the mid-1990s, quantities of fish in some parts of the South China Sea had already shrunk by 90 percent compared to mid-1960s levels.

Every country in the region has played a role in that decline. Still, over the last four decades, China’s naturally had the biggest impact. Between 1978 and 2013, China’s fishery production increased from 5 million tons to 60 million tons per year. In 2013, it accounted for 17 percent of the global catch -- and nearly half of the South China Sea catch (worth around $21 billion).

Demand has skyrocketed as Chinese have grown wealthier. Meanwhile, since more than 80 percent of China's coastline is heavily polluted, according to the Chinese government, Chinese fishermen have been forced to venture further out to sea. The government encourages that expansion via generous fuel and boat-building subsidies. For example, fishermen can tap a "special fuel subsidy" to fish waters around the disputed islands known by the Chinese as the Nansha, and by other claimants as the Spratlys. The official assistance not only produces larger catches, but takes advantage of China's massive fishing fleet to extend its territorial claims.

According to the UBC researchers, seven of the 11 key species groups in the South China Sea will generate smaller catches by 2045, with large species such as grouper likely to experience a 50 percent decline. The researchers also projected out future prices under a “do-nothing” scenario, based on the price of seafood earned by fishermen in Hong Kong in 2010. According to these estimates, shrimp would be more than three times more expensive in 2045, and grouper nearly nine times more expensive. While such estimates are necessarily uncertain, the issue of food inflation is particularly sensitive in China, where it's traditionally played a role in spurring popular discontent.

Recently China's signaled an interest in the sorry state of South China Sea fisheries. But its preferred method of addressing the problem -- unilateral fishing bans in disputed waters -- is no solution unless the other claimants who fish in those areas also agree to them, the methodology by which they were devised and the Chinese sovereignty claims which those moratoriums are partly designed to reinforce. Bilateral agreements such as one between China and Vietnam haven't had much more luck stemming the decline in stocks or easing tensions between fishermen.

Any solutions will have to be multilateral, something impeded by the current political stalemate. Countries including China need to start discussing a truly regional fisheries framework, one that lays out specific conservation areas and agreed-upon fishing corridors. Next, China and other countries must end fuel subsidies for fishing in disputed areas. Such subsidies not only encourage more fishermen into the water at a time when there should be fewer, but also provide “patriotic” cover for fishermen who venture into disputed waters, thereby undermining any actual or tacit agreements to curb fishing.

Finally, China should work with other South China Sea claimants to create regional aquaculture centers that would ease pressure on local seas. With the world’s largest aquaculture industry, China is in a unique position to lead such a venture and it could profit both financially and politically if it succeeded. The real beneficiary, however, would be the South China Sea and its rapidly disappearing resources. 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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