The following is the Aug. 21, 2023, Congressional Research Service report, China Primer: South China Sea Disputes.
From the report
Multiple Asian governments assert sovereignty over rocks, reefs, and other geographic features in the heavily trafficked South China Sea (SCS), with the People’s Republic of China (PRC or China) arguably making the most assertive claims. The United States makes no territorial claim in the SCS and takes no position on sovereignty over any of the geographic features in the SCS, but U.S. officials have urged that disputes be settled without coercion and on the basis of international law. Separate from the sovereignty disputes, the governments of the United States, China, and other countries disagree over what rights international law grants foreign militaries to fly, sail, and operate in a country’s territorial sea or Exclusive Economic Zone (EEZ). The last several Congresses have examined China’s efforts to use coercion and intimidation to increase its influence in the SCS and have passed legislation aimed at improving the ability of the United States and its partners to protect their interests, including freedom of navigation and overflight.
The SCS is one of the world’s most heavily trafficked waterways. An estimated $3.4 trillion in ship-borne commerce transits the sea each year, including energy supplies to U.S. treaty allies Japan and South Korea. According to the U.S. Energy Information Administration, the SCS contains about 11 billion barrels of oil rated as “proved” or “probable” reserves—a level similar to the amount of proved oil reserves in Mexico—and 190 trillion cubic feet of natural gas. The SCS also contains significant fish stocks, coral, and other undersea resources.
Ongoing Disputes
Disputes over Sovereignty
PRC officials assert “indisputable sovereignty over these islands [of the SCS] and their adjacent waters” without defining “adjacent waters.” The PRC government depicts its claims with a “nine-dash line” that encompasses approximately 62% of the SCS, according to the U.S. Department of State. (The estimate is based on the International Hydrographic Organization’s definition of the SCS’s geographic limits—a definition cited by the State Department that includes waters well to the south and west of the nine-dash line, extending toward the southern part of the Malay Peninsula.) The PRC has never explained definitively what the dashed line signifies.
In the northern part of the SCS, China, Taiwan, and Vietnam contest sovereignty of the Paracel Islands; China has occupied them since 1974. The PRC and Taiwan also claim Pratas Island, which Taiwan controls. In the southern part of the sea, China, Taiwan, and Vietnam each claim all of the approximately 200 Spratly Islands, while Brunei, Malaysia, and the Philippines, a U.S. treaty ally, claim some of them. Vietnam occupies the most land features in the island chain; Taiwan occupies the largest. In the eastern part of the sea, China, Taiwan, and the Philippines claim Scarborough Shoal; China has controlled it since 2012. China’s “nine-dash line” and Taiwan’s similar “eleven-dash line” overlap with the theoretical 200-nautical-mile (nm) EEZs that five Southeast Asian countries—Brunei, Indonesia, Malaysia, the Philippines, and Vietnam—could claim from their mainland coasts under the 1994 United Nations Convention on the Law of the Sea (UNCLOS).
Dispute over Freedom of the Seas
A dispute over how to interpret UNCLOS underlies U.S.-China tensions over U.S. military operations in and over the SCS and other waters off China’s coast. The United States and most other countries interpret UNCLOS as giving coastal states the right to regulate economic activities within their EEZs, but not the right to regulate navigation and overflight through the EEZ, including by military ships and aircraft. China, Vietnam, and some other countries hold the minority view that UNCLOS allows them to regulate both economic activity and foreign militaries’ navigation and overflight through their EEZs.
The U.S. Navy routinely operates in the SCS and the Taiwan Strait, including transits of the Taiwan Strait and Freedom of Navigation Operations (FONOPs) near the Spratly and Paracel islands to challenge maritime claims that the United States considers to be excessive. U.S. Air Force and Navy aircraft fly surveillance and reconnaissance missions in international airspace above the waters of the SCS, including airspace that is close to (but outside of) China’s airspace. China regularly conducts military activities in the SCS, and objects strenuously to U.S. military activities there. PRC officials often say that U.S. military operations in the SCS undermine regional stability.
China and the other SCS claimants (except Taiwan, which is not a member of the U.N.) are parties to UNCLOS. The United States is not a party, but has long had a policy of abiding by UNCLOS provisions relating to territorial waters, the EEZ, and navigational rights. UNCLOS allows state parties to claim 12-nm territorial seas and 200-nm EEZs around their coastlines and “naturally formed” land features that can “sustain human habitation.” Naturally formed land features that remain above water at high tide, but which are not habitable, are entitled to 12-nm territorial seas, but they are not entitled to 200-nm EEZs.
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