ASEAN and China Fail to Finalise South China Sea Code Despite 80% Progress

Negotiations between China and the Association of Southeast Asian Nations (ASEAN) on a long-awaited Code of Conduct for the South China Sea remain unfinished, despite provisional agreement on approximately 80% of the draft text, Philippine Foreign Secretary Ma. Theresa Lazaro said on Sunday.

The announcement represents a setback for efforts to conclude the agreement under the Philippines' ASEAN chairmanship in 2026. The proposed code is intended to establish guidelines for managing maritime disputes, reducing the risk of confrontation and promoting cooperation among countries with competing claims in the strategically important waterway.

Speaking at a press conference during the 49th ASEAN Leaders' Summit in Manila, Lazaro said negotiations had made substantial progress but several important issues remained unresolved. These include whether the agreement should be legally binding and how its provisions should be interpreted by the participating countries.

According to Reuters, Lazaro said there was no final conclusion yet, although negotiators had provisionally agreed on about 80% of the draft. She added that ASEAN members and China continued to hold different views on several issues.

The negotiations have lasted for more than two decades. ASEAN and China have repeatedly expressed support for completing a formal code, but disagreements over its legal status, geographical scope and implementation have prevented a final agreement.

The South China Sea is one of the world's most important maritime trade routes, connecting major manufacturing centres in East Asia with markets in Europe, the Middle East and other regions. It is also believed to contain significant oil and gas resources and supports important fishing industries.

China claims sovereignty over extensive areas of the sea, while Brunei, Indonesia, Malaysia, the Philippines and Vietnam have overlapping maritime claims or interests. The disputes have periodically led to confrontations involving coast guard vessels, fishing boats and other maritime forces.

The Philippines and China have experienced particularly frequent tensions in recent years. Manila has accused Chinese vessels of dangerous manoeuvres, water-cannon incidents and interference with resupply missions in areas it considers part of its exclusive economic zone. Beijing has rejected the accusations and maintained that its maritime activities are lawful.

The legal dispute is also complicated by a 2016 ruling by an international arbitration tribunal. The tribunal found that China's expansive historic-rights claims had no legal basis under the United Nations Convention on the Law of the Sea. Beijing rejected the ruling and continues to maintain its position on sovereignty and maritime rights.

According to Channel NewsAsia, Lazaro said the parties had agreed to continue working constructively towards an effective and substantive code as soon as possible. However, she did not announce a new deadline for completing the negotiations.

The Philippines had previously made the conclusion of the code a major priority during its ASEAN chairmanship. The failure to finalise the document means the task will pass to Singapore when it assumes the rotating ASEAN chairmanship in 2027.

Analysts have noted that the disagreements are not limited to China and the Philippines. ASEAN members themselves have different interests and positions regarding the geographical coverage and practical application of the proposed agreement.

A code that is too limited may fail to address the concerns of claimant states, while a more comprehensive arrangement could prove difficult to negotiate. Whether the agreement will be legally binding is another central question, as a voluntary framework may have less influence over behaviour at sea.

The absence of a final agreement does not mean negotiations have collapsed. The provisional completion of around 80% of the draft suggests that substantial technical work has been completed. However, the remaining provisions may be the most politically sensitive and difficult to resolve.

For regional governments and international businesses, a credible code could help reduce uncertainty surrounding maritime activities and improve the management of incidents. Shipping companies, energy investors and fishing industries all have an interest in a stable maritime environment.

The next phase of negotiations will therefore test whether China and Southeast Asian governments can translate years of diplomatic discussions into a practical framework for managing disputes without resolving every sovereignty claim.