The South China Sea (SCS) is a region subject to overlapping and conflicting sovereignty claims by multiple countries. China’s policy has been subject to international scrutiny, and met with opposition from countries outside the region such as Australia and the United States. This is largely in response to China’s growing military power, the extent of its claims in the SCS, and its actions in asserting these claims.

The SCS disputes are complex and ongoing. While China is far from the only country involved, understanding the Chinese perspective and its background is important for understanding these disputes and developing policy responses. The evidence suggests that China’s interests and policies in this region are not directed at the acquisition of territory. Rather, China’s primary interest is the creation of a buffer zone to its east and south, consistent with its historical approach to territorial defence.

The Nine-dash Line

Much of the alarm surrounding China’s South China Sea policy comes from the “Nine-dash Line”, by which China demarcates its sovereignty claims. It appears to extend Chinese territory across the SCS to the doorsteps of Malaysia and Indonesia.

Commentary on the SCS often ignores the fact that the People’s Republic of China has inherited the Nine-dash Line claims from the previous USA-aligned Kuomintang government. Additionally, China does not use the Nine-dash Line to demarcate its claimed territorial sea; it claims only the various scattered, small land features within this area as its territory—and, consequently, it claims limited territorial waters and maritime rights generated by those features under the framework of the United Nations Convention on the Law of the Sea (UNCLOS). It does not claim the right to control all shipping within the Nine-dash Line.

China engaged in small-scale armed conflicts with its neighbours on the SCS from 1974 to 1996, without expelling them from the Nine-dash Line area. The disputes between China and other claimants escalated again in 2009, but the tensions cannot be solely attributed to China’s activities; rather, they arose from a chain of interactions between various claimants and an increasingly engaged United States.

The 2016 arbitration case

In 2016, the Permanent Court of Arbitration made its ruling in a case brought by the Philippines against China over their SCS disputes. The court considered many of China’s claims and activities in the area as in contravention of UNCLOS.

China maintains its right under UNCLOS to refuse arbitration in this case. Additionally, since the Permanent Court of Arbitration did not rule on the sovereignty over many of the land features in the SCS, the ruling was not a complete repudiation of China’s entire claims across the SCS.

Strategic and economic considerations

China’s military developments—both in the South China Sea and on shore—give it a substantial defensive advantage over the area, but this advantage in the SCS does not enable China to project power outside of the SCS. As one of China’s maritime transport chokepoints, the SCS is more important for China than for other major powers or even other claimants.

The economic potential of the South China Sea’s fisheries, mineral and energy resources are all limited. While the natural gas reserves there are substantial, China already has various safer options to increase its supply.

Recent developments and policy outlook

China has, especially since 2024, actively pursued diplomacy with most other claimants in the SCS to manage the disputes as of mid-2025, reaching understandings without resolution with Brunei, Malaysia, Vietnam, and Indonesia. On the other hand, the involvement of the United States and its allies such as Australia has not facilitated a settlement between China and the Philippines. Their challenge to China’s claims, particularly in the form of Freedom-of-Navigation Operations, does little to advance their security interests but instead enhances the risk of military escalation.

All in the region have a stake in continuing the current trajectory of peacefully managing the SCS disputes. China has an interest in minimising other risks and distractions while it focuses on the strategic competition between itself and the United States. China could further improve its diplomatic standing and reduce tensions with its SCS neighbours by leading, more proactively, the process of multilateral negotiations over the disputes.