Between one-fifth and one-third of all global maritime trade passes through the South China Sea each year. The U.S. Energy Information Administration estimates that around 10 billion barrels of oil and refined products transited the area in 2023, along with 6.7 trillion cubic feet of liquefied natural gas.
Beneath its surface lie substantial untapped reserves, estimated at 11 billion barrels of oil and 190 trillion cubic feet of natural gas.
These figures help explain why seven parties, namely China, Taiwan, Viet Nam, the Philippines, Malaysia, Brunei, and Indonesia, each bring their own claims, maps, and strategic interests into the same waters.
Seven Overlapping Claims in One Strategic Sea
Two island groups form the core of the dispute: the Paracel Islands in the north and the Spratly Islands in the south. They are contested not merely for their geographic value, but because control over them enables claims to the surrounding waters and their associated resources.
- China
Beijing bases its claim on a U-shaped “dashed line” that covers roughly 62% of the South China Sea. In its 2023 official map, this boundary expanded into a ten-dash line, immediately drawing protests from neighboring states.
In 2016, an international arbitral tribunal in The Hague ruled that China’s historical claims have no legal basis under UNCLOS. China, however, rejected the ruling.
On the ground, between 2013 and 2015, China constructed artificial islands in the Spratly Islands covering roughly five square miles, complete with military installations, harbors, and airstrips. It now maintains around 20 outposts in the Paracels and 7 in the Spratlys.
- The Philippines
The Philippines claims a large portion of the Spratly Islands, which it calls the Kalayaan Island Group, as well as Scarborough Shoal, which has been under de facto Chinese control since 2012. It is the only country that has brought China to arbitration under UNCLOS, filing the case in 2013 and prevailing on most counts.
A key flashpoint is the Second Thomas Shoal, where the aging BRP Sierra Madre has been deliberately grounded since 1999 as a marker of sovereignty. Since 2023, Chinese Coast Guard vessels have routinely obstructed resupply missions to the ship, using water cannons and military-grade lasers.
Cyanide bottles seized from a Chinese fishing vessel in the same area, confirmed positive in April 2026, add to the growing list of incidents.
- Viet Nam
Viet Nam claims both the Spratly and Paracel Islands, although the Paracels have been under Chinese control since 1974. In the Spratlys, Viet Nam occupies more geographic features than any other claimant.
By mid-2025, Viet Nam had created more than 2,300 acres of artificial land and expanded all 21 features it occupies. Many analysts believe Viet Nam could eventually match China’s total land reclamation in the Spratlys, although its facilities are not yet as heavily militarized as China’s main outposts.
- Taiwan
Taiwan’s claims in the South China Sea largely mirror those of mainland China, including features within the U-shaped line. It administers Itu Aba, also known as Taiping Island, the largest natural feature in the Spratly Islands.
As a result, Taiwan finds itself in disputes with the same countries that contest China’s claims, even though they are at odds on nearly every other issue.
- Malaysia
Malaysia claims several features in the southern Spratly Islands based on its continental shelf and currently controls a number of them. Its claims overlap with those of China, Viet Nam, the Philippines, and Taiwan, particularly around James Shoal and Luconia Shoals, which Malaysia considers part of its continental shelf.
- Brunei
Brunei does not claim specific island groups but instead asserts a 200-nautical-mile Exclusive Economic Zone that overlaps with China’s claims.
Unlike other disputes in the region, Brunei’s relationship with Malaysia remains relatively cooperative. The two countries have signed agreements on oil and gas sharing and respect mutually agreed boundaries.
- Indonesia
Indonesia’s dispute with China centers around the waters near the Natuna Islands, where Indonesia’s Exclusive Economic Zone overlaps with China’s dashed line. However, Indonesia successfully concluded an EEZ delimitation agreement with Viet Nam in 2022 and has no disputes over the Spratly or Paracel Islands.
Why the Dispute Persists
The 2016 arbitral ruling is legally binding, but there is no mechanism to enforce compliance. China has ignored the decision, and tensions on the ground continue.
At the same time, interpretations of EEZ rights remain inconsistent. China argues that an EEZ grants the authority to regulate foreign military navigation within it.
The United States and most other countries take the opposite view, that an EEZ confers rights over economic activities, not military operations. This difference continues to trigger friction whenever foreign military vessels or aircraft operate in the area.
What makes the dispute particularly difficult to resolve is the scale of the economic stakes. Shipping lanes, energy reserves, and fish stocks in the region are simply too valuable for any party to step back.
China and ASEAN have been negotiating a code of conduct since 2002 without reaching a binding agreement. Over that same period, all parties have continued to strengthen their positions on the ground.
