South China Sea COC talks face ‘negotiation fatigue’—and Beijing–Manila gaps could derail a year-end deal

ASEAN is publicly projecting optimism that a long-awaited South China Sea Code of Conduct (COC) could be concluded by the end of 2026, but observers warn that the process is far from consensus. The SCMP analysis highlights that significant gaps persist between ASEAN member states and China, with the sharpest divergence reportedly between Beijing and the Philippines. The article frames the current phase as one where “negotiation fatigue” could stall progress even if diplomatic momentum remains visible. In parallel, the broader ASEAN policy debate is shifting toward resilience and coordination rather than expecting rapid breakthroughs. Geopolitically, the COC is not just a legal instrument but a confidence-building mechanism that can shape how incidents at sea are managed, how deterrence is signaled, and how China’s regional influence is normalized. If Beijing and Manila remain misaligned on core text elements, ASEAN’s ability to present a unified front weakens, increasing the risk that bilateral friction spills into multilateral forums. The Atlantic Council piece argues that ASEAN should not pursue “decoupling” from major powers, but instead build coordinated resilience—an approach that implicitly accepts that strategic competition will persist. Taken together, the cluster suggests ASEAN diplomacy is moving from deal-making optimism toward risk management, with China–Philippines differences acting as the key bottleneck. Market and economic implications are indirect but potentially material through shipping risk, insurance premia, and the signaling of future maritime governance. A stalled or watered-down COC can raise the probability of operational disruptions in contested sea lanes, which would typically pressure regional logistics, port throughput expectations, and maritime risk pricing. While the articles do not provide specific commodity figures, the direction of impact is toward higher risk premia for regional shipping and related supply chains, especially for firms exposed to South China Sea transits. Separately, the Taiwan-related cultural and identity debate underscores that geopolitical pressure from China remains a persistent variable, which can influence investor sentiment around cross-strait risk. What to watch next is whether ASEAN can narrow the Beijing–Manila gap on the COC’s most contentious provisions and whether “negotiation fatigue” translates into concrete delays. Key indicators include the cadence of negotiating rounds, the emergence of draft language that both sides can accept, and any public signaling by Philippine officials about red lines. On the ASEAN resilience front, monitor whether member states align on contingency planning, maritime incident protocols, and joint capacity-building that reduce reliance on a single political breakthrough. For escalation or de-escalation, the trigger point is a visible narrowing of textual differences in the COC track; absent that, the likely near-term trajectory is a slower, more fragmented process extending beyond the year-end target.

Geopolitical Implications

• 01

  ASEAN unity is under strain if the COC cannot bridge Beijing–Manila gaps.

• 02

  A weaker COC increases the likelihood of incident management failures at sea.

• 03

  ASEAN is shifting toward resilience planning, signaling longer competition horizons.

• 04

  Cross-theater pressure from China (including Taiwan) reinforces regional risk sensitivity.

Key Signals

• —Draft-language convergence on the COC’s most contentious clauses.
• —Philippine red-line messaging and whether it softens or hardens.
• —ASEAN coordination milestones on maritime incident protocols and contingency planning.
• —Any uptick in maritime incidents that tests whether diplomacy is translating into restraint.