Conflicting claims in the South China Sea have made shared governance or compromise impossible, allowing stronger countries like China to bully their way to control of the South China Sea region.
The South China Sea has long been perceived as a potential source of conflict. Headlines warn it will be a “battleground of the future” and that a “superpower showdown” is imminent. Despite these warnings, the South China Sea has so far remained peaceful. Why?
At first glance, there are plenty of reasons for conflict. The South China Sea has abundant natural resources, including oil and fish, and serves as the main shipping lane between East Asia and the rest of the world. Five nations—China, the Philippines, Vietnam, Brunei, and Malaysia—currently claim parts of this resource-rich and trade-heavy area. These claims have often led to violent clashes.
China has been especially aggressive, pursuing a comprehensive claim to the South China Sea, known as the “Nine-Dash Line.” Most recently, this has led to increasingly intense confrontations with the Philippines, where Chinese vessels have rammed ships, unsafely maneuvered aircraft, and harassed Filipino fishermen.
A potential conflict between China and the Philippines risks involving the United States. It’s bound by a 1951 mutual defense treaty to defend the Philippines and sees the South China Sea as a strategically important region. As a result, the U.S., along with its European allies, often conducts freedom of navigation patrols through the South China Sea, adding to the number of armed actors who transit the South China Sea every day. With so many countries involved, it seems like only a matter of time before one, either intentionally or unintentionally, upends the status quo and starts a conflict.
This assessment, however, overlooks an incredibly important factor that has kept peace in the South China Sea—energy.
Neither China nor the U.S. and its allies can afford to lose the vast amounts of fossil fuels that flow through the South China Sea, and as a result, both superpowers have substantial incentives to prevent conflict in the South China Sea.
Consider China first. It needs energy imported from the South China Sea to support its economy. China is the world’s largest energy importer, and nearly 70% of its energy imports from the Middle East go through the South China Sea. This energy is crucial to China’s economy, specifically the manufacturing sector. Imported energy powers China’s vast network of factories, producing cars, solar panels, consumer electronics, and other goods valued around the world. In total, China’s manufacturing sector accounts for 37% of the country’s economy, consumes almost half of its energy, and is the country’s main driver of economic growth.
Additionally, China needs reliable energy in the South China Sea to stay competitive in the AI race with data center power demand projected to increase 170% and consume 6% of the nation’s total power by 2030. Chinese leaders believe AI will be one of the defining technologies of the 21st century, and as a result have moved heavily to try to open a technological lead over the US. Without energy flowing through the South China Sea, China would struggle to support its ambitious AI+ initiative, which aims to implement AI across all areas of Chinese life, and to keep up with the U.S. in the rush to develop frontier AI models. In both these cases, power will be one of the central limiting factors on China’s success.
Consider the U.S. next. Unlike China, it’s not as dependent on South China Sea energy, but key allies like Japan, South Korea, and Taiwan rely on energy supplies in the South China Sea more than China. In 2023, Japan imported 87.3% of its energy, of which 90% went through the Persian Gulf and the South China Sea. Similarly, South Korea and Taiwan imported 84.6% and 94.4% of their energy in 2023, which flowed through the South China Sea at around the same rate as Japan. A sudden loss of these fossil fuels would throw each country’s economy into chaos and significantly weaken the U.S.’s key regional allies. These key allies help the U.S. project power in East Asia and are one of the main ways the US can counter China’s influence in the region.
Additionally, an energy disruption in the South China Sea would also threaten U.S. military bases. The U.S. has nearly 200 bases and 78,000 active-duty service members in Japan and South Korea, which are critical for the U.S.’s power projection abilities. These bases also consume a substantial amount of power: in 2016, the U.S.’s Okinawa facilities used 7,649 million kWh, equivalent to the annual energy usage for 728,000 American homes. These energy usage numbers have likely increased since 2016. Despite these power requirements, U.S. bases in both Japan and Korea are all supplied by the commercial electric grid, meaning a major disruption to South China Sea energy shipments would disrupt every U.S. base in the region, significantly diminishing the U.S. military’s ability to quickly project power at the most crucial time.
Thus, both the U.S. and China cannot afford to lose the energy that flows through the South China Sea, and energy has been a critical, if unseen, factor that has kept the South China Sea peaceful for the last two decades. China’s recent change to alternative energy, however, threatens to upend this status quo.
China has rapidly installed clean energy capacity, decreasing its reliance on energy shipped through the South China Sea. In 2024, China built more solar capacity than all existing capacity in the U.S., installed wind capacity six times faster than the U.S., and built half of the world’s new nuclear power capacity. China plans to continue this trend with a 2035 target to increase non-fossil fuel energy consumption from 20% to 30%.
With less reliance on imported fossil fuels, China’s energy economy will become increasingly insulated from the South China Sea conflict. Meanwhile, Japan, Taiwan, and South Korea are far behind China in shifting away from fossil fuels and have no concrete plans to close the gap. This situation creates a dangerous asymmetry in the South China Sea where China will soon be able to challenge U.S. regional dominance without fear of major energy repercussions on its economy, while the U.S. and its allies still rely on the same vulnerable energy sources. There are several key steps the U.S. must take to protect its position in the Indo-Pacific.
- First, the U.S. should continue the Trump administration’s efforts to sell more liquid natural gas (LNG) to Japan, South Korea, and Taiwan. Increasing these LNG purchases would reduce energy shipped through the South China Sea and act as an important bridge while U.S. allies transition to alternative energy.
- Second, the U.S. should strengthen its alternative energy manufacturing base. This would allow Japan, South Korea, Taiwan, and even U.S. companies to pivot away from Chinese manufacturers towards the U.S.. Currently, the U.S. only manufactures 1.9% of the world’s solar panels, 9% of its wind turbines, and 5% of its batteries. The U.S. must do better.
- Third, U.S. military bases in South Korea and Japan must switch to microgrids to increase their resilience. Microgrids allow U.S. bases to operate critical systems even when a crisis disrupts the commercial grid and would eliminate one of the U.S.’s biggest vulnerabilities in a South China Sea conflict.
In sum, two distinct paths present themselves to the U.S.: Assuming China continues its drive towards alternative energy, the US can either maintain the status quo of imported energy reliance or choose to invest in the energy security of its military and its allies.
Considering the status quo, China’s alternative energy expansion will decrease its reliance on the South China Sea. If Japan, South Korea, Taiwan, and U.S. military bases remain overwhelmingly dependent on energy imports in the South China Sea, China can leverage this asymmetry to extract meaningful concessions and eventually become the dominant power in the Indo- Pacific.
The U.S. must take the second path and invest in the energy security of its military and its allies. A more energy resilient Japan, South Korea, and Taiwan will balance against China’s energy transition and strengthen the U.S.’s Indo-Pacific position. Importantly, the second path of energy security will maintain the peaceful, if sometimes tense, status quo in the South China Sea. The benefits of this peace cannot be overstated
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Ryan is a senior, studying International Relations and Political Science. He is also a varsity athlete on both Carnegie Mellon’s Cross Country and Track and Field teams.
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