China’s recent behavior in the South China Sea and its efforts to cultivate influence in artificial intelligence together suggest a strategy of combining hard power with diplomatic engagement to shape the choices of smaller states.
Paul Reichler and the Hague ruling US lawyer Paul Reichler, who has built a career defending underdogs, spent years reviewing historical navigation charts and hydrological surveys of the South China Sea while preparing the Philippines’ case under the United Nations Convention on the Law of the Sea (UNCLOS). That work contributed to a major victory: a panel in The Hague unanimously rejected China’s expansive maritime claims and reaffirmed the core principles of the UN framework.
Limited impact of the ruling and China’s response For the Philippines the ruling proved to be a qualified victory. China rejected the decision — the foreign ministry called it “nothing but a scrap of paper” — and intensified pressure on its smaller neighbors. Last month, a Chinese coast guard vessel fired high-pressure water cannon at Philippine boats delivering fuel to local fishermen in the Philippines’ own waters; nearby, sailors from the two countries clashed around a disputed reef, using batons and oars in a dangerous encounter. The China Daily posted an AI-generated video portraying the Philippines as a US- and Japan-controlled monkey, an image Manila condemned as “dehumanizing and racist.”
AI diplomacy and strategic goals It is striking that as China employed coercion in maritime disputes, Chinese leader Xi Jinping used the World AI Conference in Shanghai to court developing nations as part of Beijing’s bid to establish global AI leadership. Having sought to reshape the maritime order — the backbone of global goods trade, energy flows, food supplies, and internet communications — China now aims to win the trust of smaller states to influence the emerging digital order.
Systemic pressure from great powers Reichler warned that the great powers — China and the United States, along with regional hegemons such as Israel and Russia — are increasingly acting with impunity and that “the system is under as much stress as it’s been since World War II.” In his view, the Hague decision a decade ago signaled a shift toward a global order where raw power is used by the strong against the weak, undermining rules-based cooperation.
Parallels between the sea and the digital realm China has shown little inclination to share the South China Sea’s resources: it has blocked undersea oil and gas prospecting by neighboring states, enforced seasonal fishing bans, and dredged to create massive artificial islands that endanger the marine ecosystem. The same logic appears in AI governance: states view AI as critical to national security and prosperity, and the sector is becoming a new frontier in a US–China rivalry reminiscent of a Cold War.
Two competing technological blocs Beijing seeks to lead a coalition of emerging economies by supplying open-source AI models and integrating them into Chinese technological and industrial ecosystems, thereby creating dependencies. The United States, for its part, is assembling a “Pax Silica” alignment dominated by advanced economies to secure semiconductor, critical mineral, and AI supply chains.
Limits to bilateral AI agreements This geopolitical divide will constrain upcoming US–China AI talks ahead of a presidential summit in Washington, DC. There is little prospect that the two sides will agree to an arms-control–style arrangement on the development of powerful AI models: China would likely view such an agreement as a form of containment, similar to how it interprets US pushback against its maritime ambitions via “freedom of navigation” operations and military support for the Philippines and other Asian states.
Cautious optimism from Reichler Despite these challenges, Reichler sees reasons for guarded optimism. A veteran of the multilateral legal system, including cases before the International Court of Justice, he notes a rising number of small and medium-sized states bringing cases to defend themselves on issues ranging from genocide to environmental harm and human rights. Even when Beijing violates international law, Reichler observes, it often still invokes legal arguments to justify its actions, a tendency that can force awkward legal contortions — because international law matters to China’s soft power.
Conclusion Judicial victories and legal norms matter to smaller states, but in practice coercive great-power behavior — on the sea and in the digital sphere — continues to challenge a rules-based order. The US–China competition over AI and critical supply chains risks reshaping international alignments and creating new dependencies that will influence how states navigate both technological and territorial disputes.
