Related: East China Sea

The South China Sea encompasses a portion of the Pacific Ocean stretching roughly from Singapore and the Strait of Malacca in the southwest, to the Strait of Taiwan (between Taiwan and China) in the northeast. The area includes more than 200 small islands, rocks, and reefs, with the majority located in the Paracel and Spratly Island chains. Many of these islands are partially submerged islets, rocks, and reefs unsuitable for habitation and are little more than shipping hazards, with the total land area of the Spratly Islands encompassing less than 3 square miles. The islands are important for strategic and political reasons, however, as claims of ownership are used to bolster claims to the surrounding sea and its resources. The Gulf of Thailand borders the South China Sea, and though technically not part of it, disputes surround ownership of the Gulf and its resources as well.

The South China Sea is rich in natural resources such as oil and natural gas, but ownership of the resources is in dispute. Asia's robust economic growth has boosted demand for energy in the region. According to EIA estimates, oil consumption in developing Asian countries is expected to rise by 2.7 percent annually from about 14.8 million barrels per day (MMbbl/d) in 2004 to nearly 29.8 MMbbl/d by 2030. China is expected to account for almost half the growth.

The United Nations Convention on the Law of the Sea (UNCLOS) has not yet resolved ownership disputes in the South China Sea. The 1982 convention created a number of guidelines concerning the status of islands, continental shelves, exclusive economic zones (EEZ), enclosed seas, and territorial limits. UNCLOS states that countries with overlapping claims must resolve them by good faith negotiation.