A combination photo shows Chinese fishing boats spotted in the Scarborough Shoal, a small group of rocky formations whose sovereignty is contested by the Philippines and China, in the South China Sea, about 124 nautical miles off the main island of Luzon April 10, 2012. The Philippines and China traded diplomatic protests on Wednesday over a standoff in the shoal, a jointly claimed area in the South China Sea, but Manila ruled out the use of force in its enforcement of local maritime laws. Picture taken April 10, 2012. REUTERS/Philippine Army Handout (PHILIPPINES)__FOR EDITORIAL USE ONLY. NOT FOR SALE FOR MARKETING OR ADVERTISING CAMPAIGNS. THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. IT IS DISTRIBUTED, EXACTLY AS RECEIVED BY REUTERS, AS A SERVICE TO CLIENTSReuters/Reuters
The Philippines calls it Panatag. China calls it Huangyan Island. It is known more generally as Scarborough Shoal. Whatever the name, both countries insist it belongs to them.
The string of uninhabited islands, reefs and coral in the South China Sea is home to fertile fishing grounds and a possible store of energy riches. It is now at the centre of a tense naval standoff that is threatening to destabilize a region that has long been a potential flashpoint for military conflict in Asia.
A Philippines navy frigate and two Chinese surveillance boats remained locked in a showdown over Scarborough Shoal late Wednesday with few signs of a potential resolution. The confrontation marks a crisis point in a long-simmering multicountry dispute over who controls the South China Sea and its seaways, which carry more than half the world's trade. Asia's economic ascendance has only added to the perceived value of the maritime assets.
Citing historical jurisdiction, China has long claimed sovereignty over much of the South China Sea. A potential trove of oil and gas that some now believe lies beneath the sea floor has added fuel to China's aggressive jurisdictional claims.
For Filipino President Benigno Aquino III, who came to power in 2010 amid great expectations of an end to the political corruption that has long economically hobbled his country, Scarborough Shoal and the South China Sea represent an opportunity to distance himself from his predecessors and assert the Philippines' newfound confidence.
Mr. Aquino has taken a harder line with China than former presidents Gloria Macapagal-Arroyo and Joseph Estrada whose "cozying up to China" broke ranks with many Southeast Asian countries while gaining little in return, said Ian Townsend-Gault, a law professor at the University of British Columbia and an expert in maritime law and the South China Sea.
Six countries – China, the Philippines, Brunei, Malaysia, Vietnam and Taiwan – have all made overlapping sovereignty claims to various parts of the South China Sea.
Prof. Townsend-Gault said the region's fish stocks and busy sea lanes are more critical to the region's value than any potential oil and gas discoveries.
"There are 700 million people living on the coasts of the South China Sea who derive something close to 80 per cent of their proteins from it. If the fishery collapses, what are these people going to eat? That is the human-security issue that people should really be looking at," he said.
Chinese and Filipino officials both called for a diplomatic resolution to the dispute, but the two sides remained at an impasse with each asserting sovereignty over the territory.
Philippine Foreign Secretary Albert del Rosario met with Chinese Ambassador Ma Keqing in hopes of diffusing the showdown involving the Philippines' largest and newest warship, the BRP Gregorio del Pilar, and two Chinese surveillance vessels. The Chinese ships are blocking attempts by the Gregorio del Pilar to board and arrest the crews of several Chinese fishing boats the Philippines alleges were fishing illegally on the Scarborough Shoal.
"The ambassador of China took the view that they have full sovereignty over the Scarborough Shoal," Mr. del Rosario told reporters after the meeting with Ms. Ma in Manila on Wednesday. "So, in a sense we had reached an impasse in terms of our positions. And so there's a real challenge for us in terms of our agreement to keep on talking."
President Aquino called for a calm resolution to the crisis. "Nobody will benefit if violence breaks out there," he said.
The Scarborough Shoal dispute threatens to derail increasing economic ties between China and the Philippines, a close U.S. ally and former territory. The Philippines established diplomatic relations with China in 1975 but its links to the United States have hampered the rapport between the two Asian countries Two-way trade reached $32-billion (U.S.) in 2011 and Mr. Aquino travelled to Beijing last year, signing agreements with Chinese President Hu Jintao that aim to increase trade to $60-billion by 2016.
Relations were strained in February when the Philippines said it would invite foreign companies to explore for oil and gas near the Spratly Islands south of Scarborough Shoal.
In Beijing, Foreign Ministry spokesman Liu Weimin said China lodged a protest, saying the Philippines violated an agreement to maintain peace and stability in the region and prevent any escalation of disputes.
"We hope the Philippines can focus on China-Philippines friendship, peace and stability, and won't make new disturbances," Mr. Liu said.
The Philippines acquired the Gregorio del Pilar, a former Coast Guard cutter, from the United States last year, vowing to step up the defence of its sovereign waters. The dispute comes as the two countries are preparing for joint naval exercises in the South China Sea from April 16 to 27.
The United States has said it won't take sides in the long-running conflict over the South China Sea but has called for a peaceful resolution. China has accused the U.S. of meddling in the dispute.
With a report from Associated Press