The PLA at Home and Abroad - Strategic Studies Institute - U.S. Army

tions. More than half of the world’s merchant ships
cross the South China Sea transiting the Malacca, Sunda,
and Lombok Straights. The cargo carried by this
shipping is dominated by oil and liquid natural gas.
China’s strategic interest in the South China Sea is
reflected in the construction of a new naval base near
Sanya on Hainan Island complementing the South
China Sea air base on Woody Island. In addition to
supporting surface combatants, the Sanya naval base
has underground facilities for submarines, making the
South China Sea a transit route for both nuclear-powered
attack (SSN) and ballistic missile (SSBN) submarines.
53 Thus, although the South China Sea SLOC is
critically important to all of maritime East Asia, and
the resources it contains serve Southeast Asia as much
they do China, Beijing has taken a course of action designed
to affirm its military superiority in this regional
sea.
China has entered into various bilateral agreements
on joint development of South China Sea resources
and to peaceful resolution of disputes, including an
ASEAN-wide “Code of Conduct” where all 10 signatories
agreed to pursue diplomatic solutions to territorial
disputes. Nonetheless, in all these agreements
Beijing’s position has remained constant: China’s
sovereignty over the Paracel and Spratly Islands and
their adjacent waters is indisputable. 54 Beijing thus
agrees to negotiate while insisting that on sovereignty
questions there is nothing to negotiate. What can be
negotiated is joint development of South China Sea
resources and scientific explorations. It seems that as
the most powerful military force in the South China
Sea, Beijing believes it can dictate terms because no
regional state can or is willing to confront China militarily.
Even so, Chinese press reports have bitterly
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