China's establishment of an administrative base and, just last week, a military garrison in a tiny city in the Paracel islands has upped regional tensions. Elias Groll explains why:
[W]hat exactly is at stake in the South China Sea? For starters, as many as 213 billion barrels of oil — more than the reserves of any country except Saudi Arabia and Venezuela — according to a 2008 report from the U.S. Energy Information Administration. As a result, China, Vietnam, the Philippines, Taiwan, Malaysia, and Brunei are engaged in fierce jockeying over the rights to what at first glance are not more than a handful of rocks.
Jim Holmes conveys the context of China's strategic positioning:
China has amassed overpowering naval and military superiority over any individual Southeast Asian competitor. The Philippines possesses no air force to speak of, while retired U.S. Coast Guard cutters are its strongest combatant ships. Vietnam, by contrast, shares a border with China and fields a formidable army. Last year, Hanoi announced plans to buttress its naval might by purchasing six Russian-built Kilo-class diesel submarines armed with wake-homing torpedoes and anti-ship cruise missiles. A Kilo squadron will supply Vietnam's navy a potent "sea-denial" option. But Russia has not yet delivered the subs, meaning that Hanoi can mount only feeble resistance to any Chinese naval offensive. That's still more reason for China to lock in its gains now, before Southeast Asian rivals start pushing back effectively.