Post a Comment On: China Matters

As I predicted a while back, the United States has quietly ditched its old, underperforming pretext for confrontation in the South China Sea and is sidestepping into a new justification.
I do not care deeply about America’s stake in the South China Sea.
So I have little interest in slogging through recent US & PRC contributions to the controversy du jour: the viability or lack thereof of the notorious nine dash line or 9DL under international law.
The only people who should give a sh*t about the South China Sea are the Chinese.  Much of the PRC’s trade and Middle East energy pass through the SCS; and the determined US rapprochement with Myanmar (and anti-Chinese activism by the PRC's domestic Myanmar opponents) has threatened one of the PRC’s important energy security countermoves: the Rakhine to Kunming oil and gas pipeline originating beyond the western end of the Malacca Straits.
But the PRC’s conflicts with its SCS neighbors—and the ridiculous burden of the nine-dash line—are China’s key areas of strategic & diplomatic vulnerability.  The United States has been working assiduously to exploit the PRC’s difficulties and foreclose the logical trajectory for conflict resolution since 2010, when Hillary Clinton declared the United States had a strategic interest in freedom of navigation in the South China Sea, a sea I might point out, which is of overwhelming strategic importance to only one major power, the PRC.
Instead of allowing the conflicts to resolve themselves through bilateral discussions, with the PRC basically sticking it to Vietnam and the Philippines and confirming its dominant strategic posture in the South China Sea, the United States worked overtly to internationalize them through ASEAN and has discretely encouraged the Philippines and Vietnam to defy the PRC and thereby keep the conflicts alive.
Case in point, the apparent sabotage of PRC-Philippine bilateral negotiations over the Scarborough Shoal in 2012 by Kurt Campbell and Alberto Del Rosario.
The commentariat apparently swallowed Kurt Campbell’s ridiculous line about the Scarborough Shoal encounter which, stripped of the persiflage, boils down to this:
First, the PRC abandoned its desperately defended insistence on bilateral negotiations with the Philippines (and its other SCS interlocutors, for that matter), to settle the affair in a completely Filipino-free environment with one of its most detested adversaries, the Pappy of the Pivot, Kurt Campbell, in a Virginia motel room;
Second, the PRC decided virtually instantaneously to renege on the revolutionary initiative they had just negotiated with Campbell.
As a couple carefree hours of googling the English-language Philippine press reveals, this story is BS.   
President Aquino was deep in backchannel talks directly with Beijing. 
Del Rosario blew up the bilateral initiative and bewildered everybody with jibberjabber accusing the Chinese of reneging on a US-brokered deal that probably existed only in the fertile imagination of Kurt Campbell. 
Perhaps it gives the commentariat brainhurt to consider the possibility that Kurt Campbell is yanking its chain and the US might conceivably be guilty of counterproductive and destabilizing behavior in Asia in order to create a strategic opportunity.
I could understand that, I guess.  Life and work are easier when you treat Kurt Campbell as a font of insider expertise, instead of calculating dispenser of dodgy and self-serving narratives.  The path to fame and fortune in Asia pundit-land is not, I guess, paved with skepticism concerning Kurt Campbell and US talking points. 
The SCS is now officially, a thing, something for the military-industrial-think tank complex to batten on.
The Center for Strategic and International Studies has institutionalized its handwringing over the SCS in a new initiative, the “AsiaMaritime Transparency Initiative”: 
Competing territorial claims, incidents between neighboring countries, and increasing militarization, however, raise the possibility that an isolated event at sea could become a geopolitical catastrophe. This is all occurring against a backdrop of relative opaqueness. Geography makes it difficult to monitor events as they occur, and there is no public, reliable authority for information on maritime developments.

The Asia Maritime Transparency Initiative seeks to change this. AMTI was conceived of and designed by CSIS. It is an interactive, regularly-updated source for information, analysis, and policy exchange on maritime security issues in Asia. AMTI aims to promote transparency in the Indo-Pacific to dissuade assertive behavior and conflict and generate opportunities for cooperation and confidence building.
… There may be circumstances when AMTI cannot confidently de-conflict contradictory but credible accounts of the same event. In such cases, we will be guided by our advisory board as to whether to post the event showing multiple, plausible accounts, or await further information. … AMTI is made possible by Asia Program internal funding as well as a start-up grant from the Brzezinski Institute on Geostrategy. CSIS is in the process of soliciting funding for the initiative from governments in Asia, as well as corporate and foundation support.
I see a platform to document, broadcast and legitimize anti-PRC talking points in anticipation of SCS clashes in line with the close-surveillance “naming and shaming” tactics previously proposed to put a crimp in PRC’s seaborne mischief.  Prove me wrong, I beg you.
In my piece from earlier this year, reproduced below, I argue that Campbell’s motive in 2014 was to retroactively frame the PRC as the great betrayer of peace and security in the SCS, in order to deal with the fact that the PRC had neutralized the “threat to freedom of navigation” gambit—and in fact in mid 2014 turned it on its head and made an apparent spectacle of US doctrinal impotence by freely navigating the HYSY 981 oil rig through the South China Sea—and provide a narrative basis for justifying an overt US slide toward a new, hopefully more effective but also overtly anti-PRC position.
I think we’ve seen that with the release of the US paper.  By declaring its opinion that the nine-dash line doesn’t conform to the international law of the sea (I will not excessively belabor the fact that the US itself has not ratified UNCLOS), the US government is not only “taking sides”; it is taking the position that the PRC is improperly denying US interests their fair access to the oily goodness of the South China Sea.  Or as Jeffrey Bader put it, US interests include:
To ensure that all countries, including the U.S., have the right to exploit the mineral and fish resources outside of legitimate Exclusive Economic Zones.
This is a touch disingenuous, perhaps.  Since Vietnam is not abandoning its claim to the PRC-occupied Spratlys—and claims a corresponding EEZ all the way up to the Philippine EEZ—there might not be any UNCLOS-certified mutually-agreed free-and-clear seabed for the US to sashay into.
But by abandoning the non-flying “threat to freedom of navigation” canard in favor of the “Hey, we got a right to drill in the SCS, dammit!” repudiation of the 9DL, the United States can finally claim some real skin in the game, if not in international waters, then maybe in a consortium exploiting stuff within an EEZ.
Perhaps the next shoe to drop or splash (assuming the arbitral committee comes up with a suitable repudiation of the nine-dash line) might be for an international flotilla including US ships to shield an internationally-financed (with US investment, natch) Phillipines-sanctioned survey ship or drilling rig off the Recto Bank from Chinese harassment in a mirror-image to the crowd of PRC ships that surrounded the HYSY 981 in its foray in contested waters off the Spratlys.  If that works, maybe Vietnam might get into the energy incident act as well.  Maybe India and Japan will be emboldened to make good on their promises and pitch in, too.  Maybe.
If there’s a collision, I expect the AMTI website to get very busy, in this case replicating the parade of Japanese videos released on the occasion of PRC-Japan Senkaku encounters.
Trouble is, I think the PRC is not going to back down.  Its lengthy riposte to the Philippine arbitration case is an indicator that it has the determination to defy/ignore an unfavorable ruling.
I think the PRC will act on the assumption its existential interest in the SCS will trump the US determination to embarrass and inconvenience the PRC in its own backyard.  And we will get caught in an escalatory spiral which, despite the financial and psychic benefits it dispenses to the armed services, defense contractors, and pundits, will be expensive, destabilizing, and ultimately counterproductive to US interests and prestige.
In other words, ten years from now we might not be celebrating the time we stopped Chinese aggression, ah, excuse me, assertiveness at Fiery Cross Reef and assured the security of our Philippine coconut milk supplies 4evah, and instead might ask ruefully, “Since when did we think it was a good idea to twist the PRC’s nuts repeatedly on the SCS?”
We’ve made our watery geostrategic bed in the South China Sea.  Let’s just hope it doesn’t turn out to be our grave.
Sunday, July 13, 2014 Debunking America's Scarborough Shoal Dolchstoss Meme
... or “Goodbye Honest Broker” 
Whoever is rolling out the new US maritime strategy for East Asia apparently regards the Financial Times as his or her chosen instrument.  The FT, for its part, appears to believe that it completes its journalistic mission by reporting the US position, and sees no need to examine the US claims in detail, a shortcoming I intend to remedy in this piece.
In recent days two backgrounded FT articles have expressed US frustration with Chinese salami-slicing and cabbage wrapping in the South China Sea.  From the first piece, Pentagon plans new tactics to deter China in South China Sea:
In recent months, the US has come to two broad conclusions about its approach to the South China Sea. The first is that its efforts at deterrence are having only limited impact. Despite considerable US attention and rhetoric since 2010, China has slowly continued to shift the status quo in ways that are rattling both many of its neighbours and the US.
The second is that US military strategy in the region has to some extent been asking the wrong question. For several years, some of the Pentagon’s best minds have been focused on how the US would win a protracted war with China and have come up with a new concept – known as AirSea Battle – to ensure continued access of US aircraft and ships to contested areas during a conflict.
However, the reality is that Washington is facing a very different military challenge, a creeping assertion of control by the Chinese that often involves civilian rather than naval vessels – the sort of grey area that would not normally warrant any response from the US.
The solution doesn’t appear particularly impressive on the surface: basically naming and shaming through increased and closer US surveillance.  
More important, perhaps, is the thrust of the second article: an effort to paint the PRC as the guys who cheated at the game, rather than outplayed the United States.  That is important because the United States has taken another step in shedding its threadbare “honest broker” costume, and is adopting a more overtly confrontational posture in backing the PRC’s overmatched local adversaries and imposing the US strategic and tactical agenda on the region.
And that, it appears, requires getting rewrite on the phone for some creative history.

The event in question is the scuffle over the Scarborough Shoal in 2012.  In an attempt to assert Philippine sovereignty, Manila apprehended some Chinese fishermen poaching protected shellfish in the shoal and made a point of broadcasting pictures of them with their ill-gotten conch.  Two Chinese maritime patrol vessels appeared, and the Philippines withdrew without detaining the fisherman.
The Chinese ships stuck around and were joined by fishing vessels.
Now, according to second the FT backgrounder, US strategists face dilemma over Beijing claim in South China Sea:
In June 2012, senior US and Chinese officials met in a hotel in southern Virginia to discuss a dangerous two-month stand-off taking place in the South China Sea.
At the time, dozens of government vessels and fishing ships from China and the Philippines were massed in the lagoon of Scarborough Shoal, a reef 120 nautical miles from the Philippines’ coast claimed by both countries. A naval conflict seemed a real possibility.
With typhoon season fast approaching, the US tried to broker a resolution. By the end of the meeting between Kurt Campbell, then the top US diplomat for Asia, and Fu Ying, China’s vice foreign minister for Asia, the US side believed they had an agreement for both sides to withdraw. The following week, the Philippines ships left the Scarborough Shoal and returned home. The Chinese, however, stayed in the area.
The Scarborough Shoal case played a big role in another part of the new approach by the US and its allies: the appeal to the courts. Albert del Rosario told the FT that it was the “catalyst” for Manila’s decision to bring China to an international court over its expansive claims in the South China Sea. 
Even though there is still considerable resentment over the way events in Scarborough Shoal unfolded, the Obama administration has shown no willingness to reopen the issue and push for a Chinese withdrawal. 
Speaking last month at a conference in Singapore, Ms Fu denied there had been any deal between her and US diplomats in 2012. “I do not know what agreement you are referring to,” she said. The Chinese vessels did not leave the area because they feared the Philippines might double-cross them.
“All China is doing is to keep an eye on the island for fear that the Philippines would do it again,” said Ms Fu.
US officials tell a different story, insisting there was a clear understanding at the 2012 meeting that the Chinese would take the idea of a mutual withdrawal from Scarborough Shoal back to senior leaders in Beijing. 
They say it is unclear whether Ms Fu really tried to sell the agreement in Beijing or whether the foreign ministry was overruled by more hawkish elements in the Chinese system, including the military.
This is pretty weak beer.  
And I will add my considered opinion that any scenario based on the PRC agreeing to US mediation in its dealings with the Philippines is, for lack of a nicer word, horsepucky.
The PRC’s detestation of internationalization of its one-sided scrum with the Philippines is a byword in Chinese diplomacy.  Maybe as a courtesy, Mdme. Fu agreed to transmit the U.S. proposal back to Beijing; most likely, the leadership’s decision would have been to reject any U.S. involvement in the matter.  Indeed, as shown below, the record in the Philippine media supports this interpretation.
What was really going on in June 2012 seems not to have been the rape of Kurt Campbell’s injured innocence by the dastardly Chinese; more likely it was a carnival of collusion, incompetence, and bad faith, with Philippine Foreign Minister Alberto Del Rosario at its center.
Negotiations with the Chinese were not in the hands of Campbell or, for that matter, Del Rosario.
President Aquino had despaired of achieving diplomatic engagement with the PRC over the Scarborough Shoal issue through Del Rosario—a China-bashing fire eater—and had instead opened a back channel to the PRC through a senator, Antonio Trillanes IV.  (Del Rosario apparently retaliated by dispatching an ex-business associate of his to Beijing to represent himself as Del Rosario’s own informal envoy and further muddy the waters.)
Trillanes was not just engaged in occasional chit-chat.  He apparently was the recognized conduit for behind the scenes engagement between the Philippines and the PRC, claiming to have met with the PRC Ministry of Foreign Affairs sixteen times concerning the Scarborough matter between May and July 2012.  Presumably, he met more than once with Fu Ying who, in addition to acting as Vice Minister of Foreign Affairs for Asia, had previously served as ambassador to the Philippines and was entrusted with presenting the smiling PRC face to the Phillipines.
Trillanes clearly detests Rosario—he characterized Del Rosario as a “traitor”--and Del Rosario certainly returned the favor.
In an attempt to discredit Trillanes and his channel, the Speaker of the Philippine Senate, Juan Ponce Enrile flayed Trillanes’ efforts when they came to light in September 2012.
Excercising the government’s prerogative of leaking classified information when political necessity demands, Enrile introduced some confidential notes from the Philippine ambassador to the PRC, whom Trillanes briefed on his talks, and added his own vituperative remarks in order to provide the most unfavorable gloss on Trillanes’ actions.  
The notes are not particularly damning to Trillanes, and they do characterize the nature of Campbell's contacts with Fu rather persuasively:
“There was never any negotiation between the Chinese and the Americans, just a meeting with Kurt Campbell. Mr Campbell was not a negotiator. Besides, Secretary del Rosario was not there.”
Rather unambiguously albeit awkwardly, President Aquino credited Trillanes with negotiating the mutual climbdown…and in September 2012, far from repudiating Trillanes, confirmed that the senator was still his informal envoy.
Aquino was asked about the Palace statement that Trillanes achieved “minor successes” in his role as backdoor negotiator.
The President said Trillanes’ work helped reduce the number of Chinese vessels in Scarborough Shoal, deescalating the tension. Aquino was however unsure about the exact number.
“’Yon naman siguro pwede nating i-credit doon sa efforts rin at efforts ni Senator Trillanes at iba pang efforts ano.” (This we can credit to the efforts of Senator Trillanes and other efforts.) Aquino admitted that he felt uneasy discussing Trillanes’ work in detail because the talks were informal in nature.
“’Pag informal nito, hindi pwedeng sabihin publicly sa China. Meron silang considerations sa pag-a-address nung kanilang constituencies. So hindi ko pwedeng ibigay sa inyo lahat ng detalye pero mukhang napakaliwanag na humupa naman nang maski papaano ‘yung tension diyan at nakatulong si Senator Trillanes.” (When it’s informal, it means we can’t discuss it publicly with China. They have considerations in addressing their constituencies. So we can’t give you all the details but it looks like it’s very clear that the tension was reduced and Senator Trillanes helped.)
As to how the withdrawal actually played out, Philippine journalist Ellen Tordesillas provided this timeline in 2012:
Days before President Aquino left for London and the United States, Fu Ying was in Washington D.C and met with Kurt Campbell, U.S. Assistant Secretary of State for East Asian and Pacific Affairs.

DFA and Chinese sources said Campbell suggested a simultaneous withdrawal of vessels from Panatag Shoal to de-escalate the tension.

A DFA official said United States Ambassador to Manila Harry Thomas relayed to Del Rosario that Beijing has agreed to a simultaneous withdrawal.

This is the “agreement” Del Rosario said Beijing reneged on. He referred to this agreement in several statements.

…
Chinese sources said what happened in Washington was that Fu Ying told Campbell she would relay the suggestion to Beijing.

Bejing said they would “gradually pull out” of the disputed shoal. “There was never a commitment for a total pullout,” a Chinese source said, explaining that “they have a domestic audience to consider.”

China has always been against the intervention of the U.S. in conflict in Asia and sources said the Chinese officials did not appreciate it that the Americans were negotiating for the Philippines.


Based on Thomas’ confirmation, Del Rosario ordered the pullout of Philippine vessels in the middle of the night. By morning, the President was displeased that Del Rosario had made that order. So he called Trillanes to ask the Chinese why their ships remained in the area when the Philippines had already pulled out.

Trillanes was unaware of such an agreement coursed through the U.S. Following the President’s orders, he called his counterpart in China to follow the Philippine move, since both countries had already agreed on a “simultaneous pullout.”

The Chinese sent word to Aquino, through Trillanes, that they would issue a statement to explain the back-to-port order of their ships, and asked that they be given 48 hours to relay the orders to appropriate agencies in Beijing.

Aquino departed for London and the U.S., relieved that the tension had de-escalated.

The Philippines said it pulled out its ships to safety because of the bad weather in Scarborough Shoal. China for its part said they will go back to port to re-supply.

But before China could complete the pullout, the DFA issued a statement accusing China of reneging on an agreement. This angered China, which insisted there was no such agreement.
It seems quite likely that this account, and not the FT’s, hews closer to the facts.  For reasons of practicality (Fu was already in negotiations with Aquino’s designated envoy, Trillanes) and principal (US involvement in bilateral PRC-Philippine disputes were to be discouraged), it seems unlikely that Fu was luring Kurt down the garden path.  
Neither, for that matter, is it particularly credible that Campbell would believe America’s blinding “honest broker” charisma would persuade a vice foreign minister to sign off on a fundamental change in the PRC strategy of bilateral dispute resolution, and settle a Philippine issue without the Philippine foreign minister even in the room.
Tit-for-tat, as opposed to simultaneous, withdrawal was being discussed between Trillanes and the PRC, per the Philippine ambassador’s notes:
“The arrangement being looked at by the senator, meaning Senator Trillanes, was one side would leave first then the other side then the next, etc. They were talking about the manner of evacuating the Scarborough. He then received a call from PNoy [Philippine President Benigno Aquino III], saying why are the Chinese still there when there was an agreement for simultaneous withdrawal. He thought to himself, ‘This is not the arrangement.’ He was protecting the Chinese.” [I’ll go out on a short limb & infer that the ambassador meant Trillanes was “defending” not “protecting” the Chinese--PL.]
The confusion created by Del Rosario’s assertion that the PRC had committed to a simultaneous withdrawal, and his denunciations of the Chinese for reneging, are palpable.  
At the time, the PRC made the point that it felt Del Rosario, in denouncing the PRC for its failure to withdraw its ships simultaneously, was talking through his hat, both through official and unofficial channels.  
As in an official statement from the China.gov web portal:
Philippine Foreign Affairs Secretary Albert del Rosario said Friday that Manila is waiting for Beijing to meet its commitment to remove its vessels that remain in the lagoon of Huangyan Island after the only Philippine ship there left this week.
In response to Del Rosario's remarks, Hong questioned where and when the Philippine side received such a commitment from China.
He urged the Philippines to constrain its words and deeds and do more things that are conducive to the development of bilateral ties.

And via Global Times:
Zhuang Guotu, director of the Center for Southeast Asian Studies at Xiamen University, told the Global Times, a tabloid of the Communist Party-owned People's Daily that "China has never made commitments that it would pull out from the waters around the island. The Philippine side is saying this to get out of an awkward situation."

Nevertheless, the PRC did take action in support of the de-escalation process.
On June 18, the PRC announced it would be removing the 20 fishing vessels inside the lagoon:
"Due to the inclement weather and strong tide in the Huangyan Island (Panatag Shoal) waters, in order to help Chinese fishermen and fishing boats pull out safely for shelter, Nanhaijiu-115 vessel has set out to the area to provide necessary assistance," the Embassy said in a statement posted on its website on Sunday. …
In fact, according to Del Rosario himself, on June 25 the shoal was completely clear of all ships, Chinese and Philippino, an awkward state of affairs that the FT account of Chinese duplicity fails to address.  
Two days later, however, the PRC ships were back.  Supposedly, the PRC took umbrage at President Aquino’s statement that the Philippines would fly surveillance aircraft over the shoal (and, I would expect, also took exception to statements by the Philippine defense ministry that it was imperative that Philippines take control of the shoal to pre-empt any Chinese return).  
Perhaps the underlying reason was that the PRC realized that the Trillanes channel had completely imploded, the initiative lay with Del Rosario, and there best option was to return to the status quo ante (after symbolically vacating the shoal for a couple days to indicate it could and would honor the undertakings it made through Trillanes).
The PRC re-established its presence at the shoal, which it maintains to this day.  Currently PRC vessels control entrance to the shoal via a cable strung across the mouth, and occasionally even accommodate the entry of some Philippine fishing vessels.
As to the second order consequences, observers are welcome to speculate that Foreign Minister Rosario was either a clueless ass who abruptly ordered the Philippine vessels to vacate the shoal on the unilateral say-so of the US ambassador despite the PRC’s long-standing insistence on bilateral negotiations (which indeed were ongoing), without any confirmation from the main Beijing negotiating channel, and without informing his president…
…or he presumed upon whatever statement the US ambassador passed to him to assert the existence of a fictitious agreement for simultaneous evacuation in order a precipitous unilateral evacuation so he could accuse the Chinese of bad faith, torpedo the deal, and foreclose a bilateral PRC-Philippine process that kept Del Rosario (and the US) on the outside looking in.
President Aquino provided Del Rosario with considerably less than full-throated backup over the fiasco:
Malacañang is leaving it up to the Department of Foreign Affairs (DFA) to answer China’s claim that it never committed to pull out its vessels from the disputed Panatag (Scarborough) Shoal.

“First off, the commitment has always been to deescalate tensions; to always be sensitive about what is being said. Second, we will defer to the DFA to respond to that particular issue,” deputy presidential spokesperson Abigail Valte said.
Given this context, it is not surprising that Del Rosario felt compelled to offer his resignation to Aquino over the Scarborough brouhaha, which Aquino declined.  A sense of discomfort within the Philippine establishment concerning Del Rosario’s confrontational agenda can be seen in the publication of a heated defense of his incendiary anti-Chinese diplomacy at ASEAN in July 2012.
Del Rosario further muddied the waters in September 2012 by claiming rather unconvincingly he had negotiated the fatal deal with the PRC’s ambassador to the Philippines, Ma Keqing, which needless to say conflicts with both the Trillanes and the Campbell versions, both of which are predicated on the premise that Del Rosario was not effective as an interlocutor with the Chinese.
As to the declaration that the United States and Philippines were pushed beyond their endurance by PRC perfidy and finally decided more in sorrow than in anger to pursue the Philippine case through a lawsuit before the International Tribunal of the Law of the Sea, it appears that the US had already hung its hat on shifting the Scarborough dispute to an international forum before the simultaneous vs. alternating evacuation unpleasantness played out.
While the negotiations were still bubbling along on June 21 (the deal fell apart on June 26, when the PRC reoccupied the shoal):
A US official on Thursday said Washington supports the Philippine initiative to resolve the dispute between Manila and Beijing over Panatag Shoal through legal means…

Joy Yamamoto, political section counselor and acting deputy chief of mission of the US embassy in Manila, echoed [Ambassador] Thomas’ statement.

“We have been very consistent throughout this dispute in supporting international law in settlement of dispute, so we continue to support China and the Philippines to settle the issue through international means,” said Yamamoto.
With this context, my personal construction would be that the tenor of Kurt Campbell’s representations to Mdme. Fu Ying in Virginia in early June might have been along the lines of: “Withdraw from the shoal.  Otherwise the US will encourage a Philippine legal challenge to the 9-dash line.”
With the eager assistance of Del Rosario, failure was pretty much pre-ordained and the Philippines took their case to arbitration.
Now the question is begged as to why, two years after the fact--and despite a public record that calls its version of events into serious question--the United States deems it necessary to publicly promote a Scarborough Dolchstoss (“stabbed in the back” for you non-German speakers) meme at this particular time.
First of all, US South China Sea policy needs a reboot.  To quote the FT:  “Our efforts to deter China [in the South China Sea] have clearly not worked,” said a senior US official.
In 2010, the US justified its attention to the remote reaches of the SCS on the grounds of “a national interest in freedom of navigation”.
The substantive US interest in freedom of navigation—the freedom of US military vessels to conduct surveillance within the PRC EEZ—was de facto conceded by the PRC pretty promptly.  On the other hand, since the PRC was relies on freedom of navigation for commercial traffic to an existential degree (most of the traffic through the SCS is, after all, going to and from Chinese ports), there was an embarrassing dearth of Chinese offenses against freedom of navigation that compelled US action.
While sedulously protecting freedom of navigation (and studiously declining to take positions on sovereignty issues), the United States had no direct riposte to the most conspicuous PRC exercise of outrance in the South China Sea: the dispatch of the HYSY 981 drilling rig into disputed waters off the Paracel Islands.
In simpler times, the US might have been willing to concede that the PRC had the stronger case than Vietnam thanks to its conspicuously exercised sovereignty over the Paracels, and Vietnam’s Vietnam was only muddying the waters by deploying the politics of outrage to sustain its claim.  
But these are complicated times, and the United States, Philippines, and Japan have clubbed together to ensure that Vietnam is spared the embarrassment of acknowledging PRC sovereignty over the Paracels, divvying up the overlapping EEZs accordingly, and, perhaps, putting one festering South China Sea problem in the rear view mirror.
Failure to deter the HYSY 981 exploit would seem to require that the definition of the US national interest in the South China Sea be redefined to enable more effective pushback, preferably pushback that carries the threat of the PRC’s least-desired outcome: confrontation with US military forces, a threat justified by the US assertion that, as demonstrated by the Scarborough Shoal affair, the PRC is a dangerously duplicitous adversary.
The Financial Times makes an interesting elision by stating “The Obama administration declared South China Sea a US “national interest” in 2010,” leaving out the rather important qualifier “in freedom of navigation”.  Connoisseurs of irony are welcome to wonder if the next step will be for the US to declare this remote basin of rocks, reefs, and shoals 10,000 miles from the homeland a “core interest”, a formulation for which it excoriated the PRC when it tried to apply that formulation to its near beyond in 2010.
Today, if the US is simply declaring a national interest “in the South China Sea” full stop, that would imply, well pretty much whatever the US wants it to imply.  In practical terms, this means that the United States will have the luxury of acting unilaterally in its self-defined national interest, unconstrained by rigid considerations of international law (which the PRC, for the most part, carefully attempts to parse and the United States, by its failure to ratify the Law of the Sea convention, is on the back foot) or the position of ASEAN (which the PRC has, for the most part, been successful in splitting).
The US recently took another bite out of the SCS apple by calling for a construction ban in the South China Sea (the PRC has been dredging, expanding, and improving some of its island holdings in order to strengthen its sovereignty claims):
Speaking at a Washington think tank, senior State Department official Michael Fuchs voiced great concern over the "increasingly tenuous situation" as an assertive China and five of its smaller neighbors vie for control of tiny islands and reefs in waters with plentiful fisheries and potential hydrocarbon reserves.
Fuchs said no claimant was solely responsible for the tensions, but criticized a pattern of "provocative" behavior by China.
He detailed a proposal for a voluntary freeze on activities which escalate tensions, to flesh out a 2002 declaration by China and the Southeast Asian bloc that calls for self-restraint in the South China Sea. The U.S. is expected to push the proposal at a gathering of Asian foreign ministers in Myanmar next month.
Fuchs said the claimants themselves would need to agree on the terms, but suggested stopping establishment of new outposts and any construction and land reclamation that would fundamentally change existing outposts. He also proposed that one claimant should not stop another from continuing long-standing economic activities in disputed areas.

Apparently the United States has decided that ASEAN needs an extra push to come up with the proper anti-PRC policies and, even though the US is not a member of ASEAN, it will be more pro-active in trying to shape its policies and counter the PRC’s attempts to divide and influence the forum.
Actually the new US posture—call it Requiem for the “Honest Broker” or We’re Taking Sides: Got A Problem With that? was already rolled out for the occasion of the resupply of the Philippine Marines aboard the hulk of the Sierra Madre on the Thomas Second Shoal in April 2014.  
Billed at the time as “plucky Philippine craft evades hulking PRC maritime patrol vessel”, as I noted in a piece for Asia Times Online, it was actually a choreographed exercise in alliance anti-PRC pushback, featuring ship loaded to gunwales with Western journos, US surveillance aircraft overhead, and a suspiciously fortuitous port call by two Japanese destroyers.
Now, the FT article indeed explicitly characterizes the Sierra Madre resupply as a piece of US pushback, while failing to note it was something of a Rubicon: de facto support of the Philippines against the PRC i.e. taking sides in a territorial dispute, something that it would be difficult to justify in even in terms of enforcing the ASEAN standstill agreement (since the US is not a party to ASEAN, nor has ASEAN asked the US to enforce the voluntary agreement on its behalf).
I expect there will be more Rubicons in the South China Seas’ future.
Perhaps we are now approaching a situation in which the United States explicitly declares that it will act in the South China Seas on behalf of the Philippines or Vietnam against the PRC for the sake of a unilaterally defined US interest.
The need to justify a pretty significant shift to unilateralism in the US doctrine for the South China Sea is, perhaps, behind the decision to repackage the US/Del Rosario Scarborough gambit as a Chinese outrage.  That way the US move can be presented as retaliatory to PRC misbehavior, not as an escalation provoked by PRC success in gaming the current SCS order.
A further whiff of this possibility was offered by Carl Thayer:
University of New South Wales in Australia Professor Carlyle A. Thayer suggested that Vietnam submit a proposal to the UN Security Council seeking for a debate on China’s illegal oil rig placement in the South China Sea and its impact on regional security.  Thayer, who is a Southeast Asia regional specialist with special expertise on Vietnam, said that China, as a world power, may use its veto power to reject any UNSC resolution. However, at least the international community will better understand Vietnam’s goodwill and China’s actions, asking China to withdraw its platform from Vietnam’s waters.
Bear in mind that the United States usually feels compelled to check off the “tried the UNSC; unreasonably blocked by PRC and/or Russian veto” box before embarking on some unilateral security adventure.
As to where this all goes, I envisage a specific scenario.  It relates to SC-72, a hydrocarbon exploration block off the coast of the Philippine island of Palawan in a region called Reed or Recto Bank, in a zone that the Philippines claims lies within its 200-nautical mile EEZ, but the PRC also claims.
Amid the resource-related bonanza bullshit that underlies SCS rhetoric, SC-72 might be the real thing, a significant oil and gas find that will provide a major economic boost to the Philippine economy and the government’s bottom line.  Greed and anxiety concerning SC-72 have been the consistent, unifying thread of Philippine-PRC maritime disputes including the Scarborough Shoal circus.
The Philippine government designated a Philippine controlled company, Forum Energy, owned by Philippine’s leading rich guy Manuel V. Pangilinan (and very close friend of Del Rosario; indeed, Pangilinan was the informal envoy Del Rosario sent to the PRC when his formal diplomacy hit a wall and Aquino turned to Trillanes) to  “help assert the Southeast Asian country's sovereign rights over parts of the South China Sea, claimed by the Philippines as the West Philippine Sea.” 
SC-72 was originally a centerpiece of prospective PRC-Phillipine cooperation and co-development.  The main point of contention was Phillipine insistence that the PRC acknowledge SC-72 as lying within the Phillipine EEZ, something that beyond bragging rights would give the Philippine government 100% share of the royalties.  In an interesting parallel to the PRC/Vietnam/Paracels situation, Pangilinan declared ”his only condition… was for CNOOC to respect the Philippines' rights over Recto Bank.
When the Philippine concession-holder sent a survey ship into SC-72 in 2011, a PRC vessel played chicken-of-the-sea and nearly rammed it.  Nevertheless, the Philippine side has consistently presented SC-72 as a venue for cooperation with the PRC.
I wonder if this is about to change.
Specifically, I can imagine a scenario in which the Philippines wins its arbitration suit invalidating the 9-dash line; the Philippines, emboldened by its victory, US support, and the blandishments of Japan (which is in the process of reinterpreting its constitution to permit assistance to vital, friendly nations under the banner of "collective self defense") decides to develop SC-72 without the PRC; the US military closely surveils PRC vessels attempting to disrupt unilateral Philippine exploration and production efforts…
…and, if necessary, US military vessels interpose themselves to protect Philippine ships.
Indeed, the Philippine government recently renewed the concession of Philex Energy to August 2016, which would give time for the lengthy Arbitral Tribunal process to play out and allow Philippine ships to sail into Recto Bank waters that are, at least with a minimal level of ambiguity, Philippine and not Chinese.
Engineering the PRC’s exclusion from SC-72 might be seen as fitting revenge for Beijing’s presumption in sending HYSY 981 to drill off the Paracels.
Whether or not the United States goes beyond Scarborough and Recto and establishes itself as the all-purpose defender of the UNCLOS rights or claims of the PRC’s neighbors in a brave new world in which the nine-dash-line has been refuted would presumably depend upon whether the US can bring itself to ratify UNCLOS itself—a long-standing goal of the US military and diplomatic establishment, but opposed by US conservatives as a piece of sovereignty-surrendering trickery.
But in the South China Sea, it looks like anything is possible.