China took lion's share of trade through South China Sea in 2016, study says

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More than 20 percent of all goods transported globally in 2016 passed through the South China Sea, a recent study has found. The findings highlight the economic significance of one of the wold's busiest yet most troubled waterways and show what could be at stake for global trade if territorial disputes in the area get out of hands.

The total volume of trade traversing the South China Sea in 2016 amounted to 3.4 trillion US dollars, accounting for 21 percent of the year's total, said a report published on Friday by China Power, a project affiliated with the Center For Strategic & International Studies (CSIS).

Infographic by the CSIS

The number, which is lower than the widely held figure of 5.3 trillion US dollars, was reached thanks to a new data set for South China Sea trade which uses “common shipping routes, automatic identification system data, and bilateral trade flows,” according to the report.

China was the biggest stakeholder with 64 percent of its seaborne goods shipped through the region in 2016, the report said.

Following China was Japan, which accounted for about 42 percent of all goods that passed through the sea area last year.

“As the second-largest economy in the world with over 60 percent of its trade in value traveling by sea, China’s economic security is closely tied to the South China Sea,” the report said.

Some 14 percent of seaborne trade through the South China Sea belonged to the United States, the world's largest economy.

Logo of the 50th ASEAN Foreign Ministers’ Meeting. /CGTN Photo

The world’s busiest sea route has been mired in territorial disputes involving multiple claimers. The tensions over the region’s sea features peaked in July 2016, when a controversially formed international court ruled in favor of Manila's claims in a unilateral case brought against Beijing. China ignored the ruling, describing it "a political farce" in the name of law.

Given the sizeable share of global trade passing through the South China Sea, failing to contain the maritime row could impact all parties involved in it, the report warned.

“Long-term interference with shipping traffic would increase insurance premiums on commercial vessels and force shippers to consider more expensive trade route alternatives.”

As the world’s second largest economy and a key trader in the region, China has been trying to reach a peaceful resolution to the dispute through individual dialogue and negotiations with the ASEAN member countries involved, including such other major claimers as the Philippines and Vietnam.

Chinese Foreign Minister Wang Yi is in Manila to attend meetings such as the ASEAN Plus Three Foreign Minister’ Meeting and the ASEAN Regional Forum, together with foreign ministers from South Korea, US and Russia.

"China is willing to work with the ASEAN to maintain stability in the South China Sea, promote maritime cooperation and guide the East Asia regional cooperation, to inject positive energy into regional integration and economic globalization," a spokesperson for China's Ministry of Foreign Affairs said on Thursday.