This claim has even been bolstered by the international community and the countries concerned. Vietnam’s government has recognized that Xisha and Nansha are part of Chinese territory on several occasions. For instance in a meeting on June 15, 1956 with Li Zhimin, China’s charge d’affaires in Vietnam, Vice Foreign Minister of Vietnam Ung Van Khiem acknowledged that according to Vietnamese sources the Xisha and Nansha islands are Chinese territory. On September 14, 1958 Vietnamese Prime Minister Pham Van Dong sent a diplomatic note to his Chinese counterpart, saying, “We would like to inform you that the Government of the Democratic Republic of Vietnam has noted and supports the September 4, 1958 declaration by the People’s Republic of China regarding the territorial waters of China.” The position of Nansha and Xisha islands within Chinese borders have been confirmed by a number of foreign maps, including the Welt-Atlas published by the Federal Republic of Germany in 1954, World Atlas published by Romania in 1957, The Daily Telegraph World Atlas published by Britain in 1968, Atlas International Larousse published by France in 1968 and 1969 as well as China Atlas published by Neibonsya of Japan in 1973.

Based on the aforementioned facts and in light of international law doctrines of discovery, uti possideti (whereby territory remains in the possession of the nation that possesses it at the end of a conflict unless otherwise decided on in a treaty) and equitable estoppel, China’s territorial claim over the Nansha Islands and surrounding waters is unchallengeable.

Abundant Resources and a Strategic Position

The rise of the South China Sea disputes has had much to do with the abundant resources underneath the sea, the development of modern international maritime law and the region’s strategic importance. In recent years, the U.S. has also played a more and more prominent role in this issue.

The South China Sea is rich in oil, gas, fishery resources and minerals, such as manganese, iron, copper, and cobalt, and rare formations such as manganese nodules. Its gas and oil reserves have earned the sea the name “the Second Persian Gulf.” It also has abundant ocean life, with over 2,850 species of marine creatures. These natural treasures have become the motivation for countries who are now claiming the area as their own.

With the surrounding nations’ economic growth, the rise of international oil prices and the soaring demand for energy, some countries have been showing more and more interest in the South China Sea. They have tried both hard and soft measures to strengthen their claims of sovereignty and have made agreements with several foreign countries about the exploitation of its resources.

The emergence of the South China Sea issue is partly a result of the development of modern maritime international laws. When the UN Convention on the Law of the Sea (UNCLOS) was concluded in 1982, several countries in the South China Sea region extended their right to an Exclusive Economic Zone (EEZ) to a distance of 200 nautical miles or laid claims to continental shelves. Some even raised sovereignty claims over the islets in the area. Vietnam, the Philippines and Malaysia raised sovereignty claims over all or some islets of the Nansha Islands, and speeded up the exploration of the sea’s gas and oil resources. These have all resulted in incursions into China’s territory, separation of Chinese sea territory, and the occupation of Chinese islets whose resources have been exploited. It was at this time that disputes emerged.

Strategic considerations also come into play. The South China Sea is the main sea channel and transportation hub connecting East Asia to the Middle East and Europe. The sea routes that pass through the South China Sea are highly important to Japan and connect China with the world. One third of global marine trade, over half of the energy supply in Northeast Asia and 80 percent of the oil transit of Japan, the Republic of Korea and China’s Taiwan region is transported along these routes. From a military perspective, occupying the islets in the South China Sea is equivalent to taking direct or indirect control over the majority of sea routes east of the Strait of Malacca, one of the world’s 16 major chokepoint sea routes, or even from as far as West Asia, Africa, and Europe to East Asia.

With the end of the Cold War the geopolitical situation of the South China Sea grew in importance, accompanied by the steady discovery of more and more resources under the sea. Around the time that UNCLOS came into force in 1994, several neighboring countries pushed their claims for sovereignty over the islets, the EEZs and continental shelves, leading to the escalation of disputes between China and those countries. ASEAN member countries, Japan, the U.S. and several Western countries have stepped in and made the situation more complicated. It has become a hot issue among the East Asian countries and the international community.

Peaceful Settlement

The global financial crisis brings the South China Sea into the global spotlight for both political and economic reasons. On a political level, the posturing around territory is a strategy by contesting countries to maintain power. The financial crisis has had a huge impact on economic growth in Southeast Asia. Living costs have soared and living standards fallen. With potential social crises looming on the horizon, the governments of these countries are using the issue to distract public attention from their economic woes.

On an economic level, most of these Southeast Asian countries follow an export-oriented economic strategy because of their limited domestic markets, and they are at the mercy of the international economic climate. The financial crisis in 2008 hit their economies hard, shattering their export-oriented strategy along with their economies. And with the pressure of rising oil prices, some countries shifted their focus to the South China Sea with the hopes of using its wealth of natural gas and oil to secure their domestic energy supply.

Furthermore, the policies of these countries toward China in the light of the nation’s fast rise are influenced by two conflicting issues. On one hand, they can benefit their own economy by trading with China; on the other, they are worried about becoming overly reliant on China and that China’s power and influence will damage their own interests and security. In 2010, China’s GDP surpassed Japan’s to become the world’s second largest economy. Some countries are wary of the rise and push the hypothesis that the big power would seek hegemony over the world. Subsequently cooperation with China has been colored by alliances, wariness and hostility.

The U.S.’s Asia-Pacific strategy is also influencing the South China Sea issue. U.S. Secretary of State Hillary Clinton declared the U.S. “back in Asia” in 2009, marking a major increase in activities and investment in the Asia-Pacific and in particular the Western Pacific. For the U.S., countering the rise of China is an integral part of its foreign policy. At solicitation from Vietnam and the Philippines, interfering with the South China Sea issue had become a good opportunity for the U.S. to pursue its own strategic considerations and tackle the asserted threat to its international strength.

The U.S.’s oceanic activities have gradually been diverted to this area in order to undermine China’s territorial claims and role in Southeast Asia. Since asserting its national interest in the South China Sea issue in 2010, the U.S. has made sea territory a key issue in its Asia-Pacific strategy. It has taken actions to strengthen its military forces at sea, and expanded its military base on Guam to increase surveillance over disputed sea area in East Asia. The new U.S. Secretary of Defense Leon Panetta has repeated the intention to increase the U.S. military presence in the region. He visited Indonesia during the 2011 ASEAN Defense Ministerial Meeting, underlining the influence and significance of Southeast Asia in the U.S.’s regional security strategy. The U.S.’s intentions are clear.

Over the years, China’s core strategy in the settlement of the South China Sea dispute has been “shelving disputes and seeking common development.” This has brought about some positive results, making stable and peaceful relations with surrounding countries possible. Confronted with obstacles and interference from outside the region, China has acted responsibly and with restraint. It commits itself to talks and negotiations and expects to undertake bilateral negotiations with those involved in order to settle the disputes peacefully in accordance with recognized international laws and modern maritime laws, including the principles and laws of the UNCLOS.

China strives to gain the trust and understanding of its neighboring countries and the world through its actions rather than win empty victories through the use of intimidation. It hopes that its approach and eventual solution to the South China Sea issue will add to its positive image, showing that outsiders need not view the nation’s rise as a threat.