Territorial disputes in the South China Sea
The South China Sea disputes involve both island and maritime claims within the region by several sovereign states, namely Brunei, the People's Republic of China (PRC), Taiwan (Republic of China/ROC), Indonesia, Malaysia, the Philippines, and Vietnam. An estimated US$3.37 trillion worth of global trade passes through the South China Sea annually, which accounts for a third of the global maritime trade. 80 percent of China's energy imports and 39.5 percent of China's total trade passes through the South China Sea.
The disputes involve the islands, reefs, banks, and other features of the South China Sea, including the Spratly Islands, Paracel Islands, Scarborough Shoal, and various boundaries in the Gulf of Tonkin. There are further disputes, such as the waters near the Indonesian Natuna Islands, which many do not regard as part of the South China Sea. Claimant states are interested in retaining or acquiring the rights to fishing stocks, the exploration and potential exploitation of crude oil and natural gas in the seabed of various parts of the South China Sea, and the strategic control of important shipping lanes. Maritime security is also an issue, as the ongoing disputes present challenges for shipping.
In 2013, the PRC began island building in the Spratly Islands and the Paracel Islands region. According to Reuters, island building in the South China Sea primarily by Vietnam and the Philippines has been going on for decades; while China has come late to the island building game, its efforts have been on an unprecedented scale as it had from 2014 to 2016 constructed more new island surface than all other nations have constructed throughout history and as of 2016 placed military equipment on one of its artificial islands unlike the other claimants. A 2019 article in Voice of America that compared China and Vietnam's island building campaign in the South China Sea similarly noted that the reason why Vietnam in contradistinction to China has been subject to little international criticism and even support was because of the slower speed and widely perceived defensive nature of its island-building project.
China's actions in the South China Sea have been described as part of its "salami slicing"/"cabbage wrapping" strategies, and since 2015 the United States and other states such as France and the United Kingdom have conducted freedom of navigation operations (FONOP) in the region. In July 2016, an arbitration tribunal constituted under Annex VII of the United Nations Convention on the Law of the Sea (UNCLOS) ruled against the PRC's maritime claims in Philippines v. China. The tribunal did not rule on the ownership of the islands or delimit maritime boundaries. Both the People's Republic of China and Taiwan stated that they did not recognize the tribunal and insisted that the matter should be resolved through bilateral negotiations with other claimants. On 17 September 2020, France, Germany, and the United Kingdom issued a joint note verbale recognizing the PCA ruling and challenging China's claims.