ASEAN Must Unify To Unlock The Economic Potential Of South China Sea

By Julia Roknifard The conflict in the Middle East shows every sign of becoming a prolonged crisis that will permanently alter the region’s security and dependability as an energy and critical commodity supplier. Those depending on the resources exported though the Strait of Hormuz and potentially the Bab-el-Mandeb which forms another critical chokepoint in the Red Sea, must wake up to the reality that moving forward, energy and commodities must be sourced from closer to home. For the nations of Southeast Asia, this instability is a stark wake up call. Security of energy supply can no longer be outsourced to unstable, distant shipping lanes. The irony is the members of the Association of Southeast Asian Nations (ASEAN) are sitting on reserves in the South China Sea that could make them not just independent but drive new growth even in emerging high tech sectors, if only they can overcome the institutional paralysis and competing territorial claims that has locked them into a state of inaction. Rather than allowing these divergent territorial claims to indefinitely stall regional progress, ASEAN must pivot to a pragmatic paradigm of joint development. Sitting on a virtual bonanza of untapped resources, the continuing failure to build a unified framework is an act of collective economic self-harm. By pooling their sovereignty, managing their shared maritime spaces, and offering material stakes to non-claimant regional neighbors, ASEAN can protect its regional centrality, preserve its environmental heritage, and negotiate with external powers from a position of collective strength. The bonanza beneath the waves The South China Sea is one of the world’s most lucrative and underexplored resource frontiers. The US Energy Information Administration estimates that the area holds approximately 11 billion barrels of oil and 190 trillion cubic feet of natural gas in proved and probable reserves, with vast additional reserves currently categorized as undiscovered. Beyond hydrocarbons, the seabed contains significant deposits of polymetallic nodules. These deep-sea mineral reserves are rich in manganese, nickel, cobalt, copper, and critical rare earth elements (REEs) essential for the global green energy transition and advanced high-tech manufacturing. For decades, the extraction of these resources has been paralyzed. National oil companies, including Malaysia’s Petronas, Vietnam’s PetroVietnam, and the Philippines’ Philippine National Oil Company (PNOC), have repeatedly seen ambitious offshore projects delayed, suspended, or starved of international investment due to geopolitical risk. International energy conglomerates are increasingly hesitant to finance exploration in areas characterized by overlapping Exclusive Economic Zones (EEZs) and persistent maritime standoffs. The core issue is a basic failure of business logic. The insistence on absolute, unilateral sovereignty has resulted in zero-sum outcomes where no party can safely extract wealth. To break this deadlock, ASEAN’s littoral states must adopt a simple, business-first principle: it is infinitely better to share a percentage of a highly profitable joint venture than to own one hundred percent of an inaccessible, unexploitable field. By shelving ultimate sovereignty claims in favor of functional joint development areas (JDAs), claimant states can turn a flashpoint of conflict into an engine of shared prosperity. Regional inclusivity and the protection of ASEAN centrality For a comprehensive maritime initiative to succeed, it cannot merely be an exclusive club for the claimant states of Malaysia, the Philippines, Vietnam and Brunei. It must be built on a foundation of broader ASEAN solidarity. To secure the political and diplomatic backing of non-claimant states such as Singapore, Thailand, Indonesia, Cambodia, Laos, Timor-Leste and Myanmar, the core maritime bloc must integrate these neighbors directly into the value chain. This can be achieved through a structured system of resource-sharing agreements, preferential pricing for natural gas and refined fuels, and priority access to deep-sea mineral yields. By distributing the dividends of the South China Sea across the entire grouping, the initiative will transform the maritime dispute from an internal ASEAN wedge issue into a collective regional asset. This inclusive economic integration is vital to protecting the concept of “ASEAN Centrality.” When the 11 member states speak with a single, unified voice on resource allocation and maritime management, they effectively prevent outside powers from using “divide and rule” tactics. A unified economic front ensures that ASEAN remains the primary architect of its own regional security and economic destiny, rather than a collection of vulnerable states forced to choose sides in a larger superpower competition. Upholding environmental stewardship and the marine commons Any coordinated push for industrial extraction must be balanced by a rigorous, legally binding framework for environmental protection. The South China Sea is a highly fragile, interconnected marine ecosystem. Overfishing, destructive reef reclamation, and uncoordinated offshore drilling have already caused severe damage to the region’s coral reefs and critical fish spawning grounds. An ASEAN-led joint resource authority would provide the institutional architecture needed to establish transboundary Marine Protected Areas (MPAs), coordinate joint oil spill responses, and enforce standardized environmental impact assessments for deep-sea mining and drilling. By setting collective ecological standards, the claimant states can ensure that the exploitation of the sea’s blue economy does not destroy the vital marine habitats that feed hundreds of millions of people across the region. Stewardship of the marine commons provides a non-threatening, highly collaborative starting point for joint governance, building the institutional trust required for more complex energy joint ventures. Constructive engagement: leveraging China’s strengths on ASEAN’s terms A unified ASEAN bloc is also uniquely positioned to manage its relationship with its largest neighbor. China’s extensive experience and advanced technological capabilities in deep-sea drilling, marine engineering, and the refining and processing of rare earth elements are undeniable assets. Rather than allowing Beijing to pursue unilateral exploration or coerce individual states into unequal bilateral deals, a unified ASEAN coalition can invite Chinese state enterprises to participate as commercial partners within a strictly defined, multilateral framework. Under this model, China can play a highly constructive role, providing the capital, heavy maritime infrastructure, and technical expertise required for ultra-deepwater extraction. By engaging China as a contracted partner or joint-venture shareholder under ASEAN-designed rules, the region can de-escalate tensions and build a shared stake in the stability of the waterway. Crucially, this collective approach creates a powerful regional bulwark against destabilizing intervention by distant, non-regional powers. When regional stakeholders are actively cooperating and sharing profits, the pretext for external military posturing evaporates. Brunei, Malaysia, the Philippines, and Vietnam are facing a choice. They can remain prisoners of geography, watching their domestic energy reserves deplete while sitting on top of an untouched bonanza of resources. Or, they can choose the path of pragmatic, joint development, securing their energy futures, protecting their shared environment, and cementing ASEAN as a sovereign, self-determining force on the global stage. Dr Julia Roknifard is a Senior Lecturer at the Bachelor’s Program on Philosophy, Politics, and Economics at the School of Law and Governance, Taylor’s University (Malaysia)