In April 2003, Malaysia sent four flotillas totaling 11 surveying vessels to the waters around Nantong Reef (Louisa Reef) to conduct prospecting operations; in May, it organized an international maritime challenge in waters around Danwan Reef and approved for the first time commercial tours to Yuya Shoal organized by travel agencies. In November 2004, it published stamps showing a Malaysian map with newly included Nansha islands. In August 2008, Malaysia's Defense Minister landed on Danwan Reef with some 80 journalists to declare "sovereignty".

In April 2003, the Philippines celebrated the 25th anniversary of the establishment of Kalayaan Municipality on Zhongye Island. In June 2006, it started to renovate and upgrade the air strip and other facilities on the island. In March 2008, it set up satellite communications facilities on some of the occupied islands and shoals.

But it must be admitted that despite a continuing tug-of-war in the South China Sea, the general situation was under control before 2009. Soon thereafter, things became more complicated, mostly due to an official deadline set by the UN Commission on the Limits of the Continental Shelf (CLCS), according to which relevant states should submit claims over a continental shelf extending the 200 nautical miles from its territorial sea by May 15, 2009. An even greater factor is the introduction of the American Asia-Pacific rebalancing strategy.

Shortly after taking office in January 2009, the Obama administration signaled that it would correct the Bush administration's misplaced foreign policy by shifting the US's strategic priority to the Asia-Pacific region, which obviously contributed to the confidence of the other claimants in the South China Sea to challenge China.

Between January and February 2009, the Philippines' House of Representatives and Senate adopted the Territorial Sea Baselines Bill, which claims China's Huangyan Island and some islands and reefs in the Nansha Islands as Philippine territory. On May 6, choosing to ignore the outstanding territorial and maritime delimitation disputes in these waters, Vietnam and Malaysia jointly submitted to the CLCS information on the outer limits of the continental shelf beyond 200 nautical miles in the South China Sea. On May 7, Vietnam separately submitted to the CLCS information on the outer limits of the continental shelf beyond 200 nautical miles, claiming sovereignty over China's Xisha and Nansha Islands. Under such circumstances, China had no choice but to submit to the CLCS the preliminary survey findings on the outer limits of its continental shelf beyond 200 nautical miles, in order to prevent further undermining of its own interests.

Meanwhile, US started to have frictions with China in the South China Sea. 2009 alone saw at least five confrontational incidents between US and Chinese ships, with the USNS Impeccable incident being the most conspicuous.

The year of 2010 witnessed a faster shifting in the US policy on the South China Sea issue, which showed an inclination to “take sides”. At the ministerial meeting of the ASEAN Regional Forum held in Hanoi, Vietnam on July 23, 2010, US Secretary of State Hillary Clinton spoke on the South China Sea issue, stating that the United States “has a national interest in freedom of navigation, open access to Asia’s maritime commons, and respect for international law in the South China Sea”, and emphasized that claimants should pursue their territorial claims and accompanying rights to maritime space in accordance with the Convention. Later Clinton wrote in her memoir: "That was a carefully chosen phrase, answering the earlier Chinese assertion that its expansive territorial claims in the area constituted a 'core interest'." [xiii] Clinton continued to make a series of remarks on the Obama administration’s Asia-Pacific policy and the South China Sea issue on other occasions. Meanwhile, the US has beefed up its presence and enhanced military exercise efforts in the region.

On the other hand, the Chinese side continued its diplomatic efforts, in order to maintain stability in the South China Sea and diffuse tensions with ASEAN countries. China achieved some progress for its painstaking efforts to seek to resolve disputes via peaceful talks. At the ASEAN-China Ministerial Meeting (10+1) held in Bali, Indonesia in July 2011, the Guidelines to Implement the DOC was adopted by China and ASEAN countries. China reached some understanding with the Philippine and Vietnam through bilateral negotiations. Yet these efforts were not enough to offset US’s Asia-Pacific rebalance strategy, and claimants like the Philippines and Vietnam, in turn, didn’t display much restraint.

They began to step up their reclamation efforts on the encroached islands and reefs and frequently conduct military exercise with the US near the South China Sea. Some countries even intended to group-up against China, taking a series of provocative actions in disregard of China's concern. In March 2011, the Philippines military disclosed plans to invest 230 million USD in the renovation of the barracks and the airports on the South China Sea islands. In June and July, the Philippines and Vietnam conducted a series of joint exercises with other foreign powers in the disputed waters. Looking to strengthen the Philippines' territorial and maritime claims in this region, Aquino III ordered the official use of the "West Philippines Sea" to replace the internationally standardized geographical name of "South China Sea", and such move even temporarily gained some US official acknowledgement. , and to some extent, it gained official recognition from the US. In March 2012, the Philippines and Vietnam reached an agreement on joint military exercise and maritime border patrol in the South China Sea. In April, Vietnam dispatched several monks to some temples on South China Sea islands.

These provocative activities by some ASEAN member countries and the US’s intervention have been closely watched and widely reported in China, evoking strong repercussions among the public. Under the doubling-down pressure of policy sustainability and public opinion, China’s restraint policy is approaching to its brink.

 

Tensions as Result of Wrestling among Multiple Players

In April 2012, the Philippine Navy made a provocative arrest of Chinese fishermen working in the Huangyan Island waters in what was later known as the Huangyan Island Incident. Arguably this became the "last straw on the camel's back" in the fragile stability in the South China Sea, and it tested the bottom line of China's policy and patience.

On April 10, 2012, Philippine warships launched a surprise raid on twelve Chinese fishing vessels working in the lagoon, disturbing and harassing their operations, and even forcibly boarding one vessel and arresting the fishermen. Almost instantly, images of the arrested Chinese fishermen being stripped to the waist and exposed to the scorching sun on the deck made headlines on print and digital media in China, triggering off an outcry among the Chinese general public. China was thus forced to take countermeasures, making urgent diplomatic representations to the Philippines, and sending marine surveillance ships and fishing administrative ships to the waters around Huangyan Island. Both sides engaged in a tense standoff till June 3, when all the Philippine ships had left the lagoon at the island. To prevent further moves by the Philippines, China sent marine surveillance ship for long-term deployment in the waters surrounding Huangyan Island, putting the Island under its control.

As if the Huangyan Island Incident was not bad enough for tensions, Vietnam adopted its domestic Maritime Law on June 21, in an attempt to legalize its territorial claims in the South China Sea. [xiv] On the day of its adoption, China's then Vice Minister of Foreign Affairs Zhang Zhijun summoned the Vietnamese Ambassador in China Nguyen Van Tho to protest against this move. On the same day, China announced its long-planned establishment of Sansha, a prefecture-level city, on Yongxing Island (Woody Island) in the Xisha Islands. Its jurisdiction covers the Xisha, Zhongsha and Nansha Islands and surrounding waters. Relevant administrative, jurisdictional and military arrangements were made in the following months.

On January 22, 2013, the Philippines initiated an arbitral proceedings against China at the International Tribunal for the Law of the Sea. Shortly after this announcement, China's Foreign Ministry made multiple official responses: "The Philippines and the Arbitral Tribunal have abused relevant procedures and forced ahead with the arbitration, disregarding the fact that the subject matter of the arbitration involves territorial sovereignty and maritime delimitation and related matters, deliberately evading the declaration on optional exceptions made by China in 2006 under Article 298 of the UN Convention on the Law of the Sea", stating "China does not accept the arbitration initiated by the Philippines" and therefore "will not participate in the proceedings".

Obviously, China disagrees with the Philippines which applied for arbitration on account that its consultations and negotiations with China reached an impasse. The fact is that ever since the Huangyan Incident, the Philippines refused to have any serious dialogue with China, let alone negotiations, nor did they consult the other DOC parties. As far as arbitration is concerned, China already made a declaration on optional exceptions in 2006 under Article 298 of the UN Convention on the Law of the Sea. Since the Arbitration Court jurisdiction concerns sovereignty, historic rights and entitlement, China is exempt from the arbitration. There is no provision in the convention to enforce an adverse award on China.