III. China and the Philippines Have Reached Consensus
on Settling Their Relevant Disputes in the South China Sea
73. China firmly upholds its sovereignty over Nanhai Zhudao, resolutely opposes the Philippines' invasion and illegal occupation of China's islands and reefs, and resolutely opposes the unilateral acts taken by the Philippines on the pretext of enforcing its own claims to infringe China's rights and interests in waters under China's jurisdiction. Still, in the interest of sustaining peace and stability in the South China Sea, China has exercised great restraint, stayed committed to peacefully settling the disputes with the Philippines in the South China Sea, and made tireless efforts to this end. China has conducted consultations with the Philippines on managing maritime differences and promoting practical maritime cooperation, and the two sides have reached important consensus on settling through negotiation relevant disputes in the South China Sea and properly managing relevant disputes.
i. It is the consensus and commitment of China and the Philippines to settle through negotiation their relevant disputes in the South China Sea
74. China has dedicated itself to fostering friendly relations with all countries on the basis of the Five Principles of Peaceful Coexistence, namely, mutual respect for sovereignty and territorial integrity, mutual non-aggression, non-interference in each other's internal affairs, equality and mutual benefit, and peaceful coexistence.
75. In June 1975, China and the Philippines normalized their relations, and in the joint communiqué for that purpose, the two governments agreed to settle all disputes by peaceful means without resorting to the threat or use of force.
76. In fact, China's initiative of "pursuing joint development while shelving disputes" regarding the South China Sea issue was first addressed to the Philippines. In a June 1986 meeting with Philippine Vice President Salvador Laurel, Chinese leader Deng Xiaoping pointed out that Nansha Qundao belongs to China, and when referring to the matter of differences, stated that, "This issue can be shelved for now. Several years later, we can sit down and work out a solution that is acceptable to all in a calm manner. We shall not let this issue stand in the way of our friendly relations with the Philippines and with other countries." In April 1988, when meeting with Philippine President Corazón Aquino, Deng Xiaoping reiterated that "with regard to the issue concerning Nansha Qundao, China has the biggest say. Nansha Qundao has been part of China's territory throughout history, and no one has ever expressed objection to this for quite some time"; and "For the sake of the friendship between our two countries, we can shelve the issue for now and pursue joint development". Since then, when handling the relevant South China Sea issue and developing bilateral ties with other littoral countries around the South China Sea, China has all along acted in keeping with Deng Xiaoping's idea: "sovereignty belongs to China, disputes can be shelved, and we can pursue joint development".
77. Since the 1980s, China has put forward a series of proposals and initiatives for managing and settling through negotiation disputes with the Philippines in the South China Sea and reiterated repeatedly its sovereignty over Nansha Qundao, its position on peacefully settling the relevant disputes and its initiative of "pursuing joint development while shelving disputes". China has expressed its clear opposition to intervention by outside forces and attempts to multilateralize the South China Sea issue and emphasized that the relevant disputes should not affect bilateral relations.
78. In July 1992, the 25th ASEAN Foreign Ministers Meeting held in Manila adopted the ASEAN Declaration on the South China Sea. China expressed appreciation for relevant principles outlined in that Declaration. China stated that it has all along stood for peacefully settling through negotiation the territorial issues relating to part of Nansha Qundao and opposed the use of force, and is ready to enter into negotiation with countries concerned on implementing the principle of "pursuing joint development while shelving disputes" when conditions are ripe.
79. In August 1995, China and the Philippines issued the Joint Statement between the People's Republic of China and the Republic of the Philippines concerning Consultations on the South China Sea and on Other Areas of Cooperation in which they agreed that "[d]isputes shall be settled by the countries directly concerned" and that "a gradual and progressive process of cooperation shall be adopted with a view to eventually negotiating a settlement of the bilateral disputes." Subsequently, China and the Philippines reaffirmed their consensus on settling the South China Sea issue through bilateral negotiation and consultation in a number of bilateral documents, such as the March 1999 Joint Statement of the China-Philippines Experts Group Meeting on Confidence-Building Measures and the May 2000 Joint Statement between the Government of the People's Republic of China and the Government of the Republic of the Philippines on the Framework of Bilateral Cooperation in the Twenty-First Century.
80. In November 2002, China and the ten ASEAN Member States signed the DOC in which the parties solemnly "undertake to resolve their territorial and jurisdictional disputes by peaceful means, without resorting to the threat or use of force, through friendly consultations and negotiations by sovereign states directly concerned, in accordance with universally recognized principles of international law, including the 1982 UN Convention on the Law of the Sea".
81. Afterwards, China and the Philippines reaffirmed this solemn commitment they had made in the DOC in a number of bilateral documents, such as the September 2004 Joint Press Statement between the Government of the People's Republic of China and the Government of the Republic of the Philippines and the September 2011 Joint Statement between the People's Republic of China and the Republic of the Philippines.
82. The relevant provisions in all the aforementioned bilateral instruments and the DOC embody the following consensus and commitment between China and the Philippines on settling the relevant disputes in the South China Sea: first, the relevant disputes shall be settled between sovereign states directly concerned; second, the relevant disputes shall be peacefully settled through negotiation and consultation on the basis of equality and mutual respect; and third, sovereign states directly concerned shall "eventually negotiat[e] a settlement of the bilateral disputes" in accordance with universally recognized principles of international law, including the 1982 UNCLOS.
83. By repeatedly reaffirming negotiations as the means for settling relevant disputes, and by repeatedly emphasizing that negotiations be conducted by sovereign states directly concerned, the above-mentioned provisions obviously have produced the effect of excluding any means of third party settlement. In particular, the 1995 Joint Statement provides for "eventually negotiating a settlement of the bilateral disputes". The term "eventually" in this context clearly serves to emphasize that "negotiations" is the only means the parties have chosen for dispute settlement, to the exclusion of any other means including third party settlement procedures. The above consensus and commitment constitutes an agreement between the two states excluding third-party dispute settlement as a way to settle relevant disputes in the South China Sea between China and the Philippines. This agreement must be observed.
ii. It is the consensus of China and the Philippines to properly manage relevant disputes in the South China Sea
84. It is China's consistent position that, the relevant parties should establish and improve rules and mechanisms, and pursue practical cooperation and joint development, so as to manage disputes in the South China Sea, and to foster a good atmosphere for their final resolution.
85. Since the 1990s, China and the Philippines have reached the following consensus on managing their disputes: first, they will exercise restraint in handling relevant disputes and refrain from taking actions that may lead to an escalation; second, they will stay committed to managing disputes through bilateral consultation mechanisms; third, they commit themselves to pursuing practical maritime cooperation and joint development; and fourth, the relevant disputes should not affect the healthy growth of bilateral relations and peace and stability in the South China Sea region.
86. In the DOC, China and the Philippines also reached the following consensus: to exercise self-restraint in the conduct of activities that would complicate or escalate disputes and affect peace and stability; to intensify efforts, pending the peaceful settlement of territorial and jurisdictional disputes, to seek ways, in the spirit of cooperation and understanding, to build trust and confidence; and to explore or undertake cooperative activities including marine environmental protection, marine scientific research, safety of navigation and communication at sea, search and rescue operation and combating transnational crime.
87. China and the Philippines have made some progress in managing their differences and conducting practical maritime cooperation.
88. During the first China-Philippines Experts Group Meeting on Confidence-Building Measures held in March 1999, the two sides issued a joint statement, pointing out that, "the two sides agreed that the dispute should be peacefully settled through consultation in accordance with the generally-accepted principles of international law including the United Nations Convention on the Law of the Sea, [... and to] exercise self-restraint and not to take actions that might escalate the situation."
89. In the Joint Press Statement of the Third China-Philippines Experts Group Meeting on Confidence-Building Measures released in April 2001, it is stated that, "the two sides noted that the bilateral consultation mechanism to explore ways of cooperation in the South China Sea has been effective. The series of understanding and consensus reached by the two sides have played a constructive role in the maintenance of the sound development of China-Philippines relations and peace and stability of the South China Sea area."
90. In September 2004, in the presence of the leaders of China and the Philippines, China National Offshore Oil Corporation (CNOOC) and Philippine National Oil Company (PNOC) signed the Agreement for Joint Marine Seismic Undertaking in Certain Areas in the South China Sea. In March 2005, national oil companies from China, the Philippines and Vietnam signed, with the consent of both China and the Philippines, the Tripartite Agreement for Joint Marine Seismic Undertaking in the Agreement Area in the South China Sea. It was agreed that during an agreement term of three year-period, these oil companies should collect and process certain amount of 2D and/or 3D seismic lines in the agreement area covering about 143,000 square kilometers, re-process certain amount of existing 2D seismic lines, and study and assess the oil resources in the area. The 2007 Joint Statement of the People's Republic of China and the Republic of the Philippines states that, "both sides agree that the tripartite joint marine seismic undertaking in the South China Sea serves as a model for cooperation in the region. They agreed that possible next steps for cooperation among the three parties should be explored to bring collaboration to a higher level and increase the momentum of trust and confidence in the region."
91. Regrettably, due to the lack of willingness for cooperation from the Philippine side, the China-Philippines Experts Group Meeting on Confidence-Building Measures has stalled, and the China-Philippines-Vietnam tripartite marine seismic undertaking has failed to move forward.