China recently caused a diplomatic incident by interfering with an American survey ship, the USNS Impeccable, operating off its coast. This ship, with a civilian crew, uses sonar and other sensors to study the ocean floor, and collect information on anything else going on down there (including submarines in the area.) The U.S. ship was in international waters, 120 kilometers from China. International law (the 1994 Law of the Sea treaty) recognizes the waters 22 kilometers from land as under the jurisdiction of the nation controlling the nearest land. That means ships cannot enter these "territorial waters" without permission. Moreover, the waters 360 kilometers from land are considered the Exclusive Economic Zone (EEZ), of the nation controlling the nearest land. The EEZ owner can control who fishes there, and extracts natural resources (mostly oil and gas) from the ocean floor. But the EEZ owner cannot prohibit free passage, or the laying of pipelines and communications cables. China claims that the USNS Impeccable was conducting illegal espionage (there's a major Chinese submarine base nearby). But the 1994 treaty says nothing about such matters. China is simply doing what China has been doing for centuries, trying to impose its will on neighbors, or anyone venturing into what China considers areas under its control.
For the last two centuries, China has been prevented from exercising its "traditional rights" in nearby waters because of the superior power of foreign navies (first the cannon armed European sailing ships, then, in the 19th century, newly built steel warships from Japan). However, since the communist took over China 60 years ago, there have been increasingly violent attempts to reassert Chinese control over areas that have long (for centuries) been considered part of the "Middle Kingdom" (or China, as in the "center of the world").
China is particularly concerned about the nearby Spratlys, a group of some 100 islets, atolls, and reefs that total only about 5 square kilometers of land, but sprawl across some 410,000 square kilometers of the South China Sea. Set amid some of the world's most productive fishing grounds, the islands are believed to have enormous oil and gas reserves. Several nations have overlapping claims on the group. About 45 of the islands are currently occupied by small numbers of military personnel. China claims them all, but occupies only 8, Vietnam has occupied or marked 25, the Philippines 8, Malaysia 6, and Taiwan one.
Taiwan recently built a 1,150 meter long, and 30 meter wide air strip on Itu Aba, one of the Spratly Islands, 500 kilometers to the south. Called Taiping Island by the Taiwanese, Ita Aba is one of the largest of Spratly Islands, at about 120 acres (489,600 square meters). It has been in Taiwanese hands since the mid-1950s, and has largely been used as a way station for fishermen. The island is also claimed by the Vietnamese, who call it Thai Binh. Taiwan has long maintained a small military presence on the island, and the new air strip is meant to cement that control. Protests were made by Vietnam, which controls the largest group of islands, and the Philippines, which also claims Itu Aba island. The Vietnamese earlier refurbished an old South Vietnamese airstrip on Big Spratly Island.
In 1988, China and Vietnam fought a naval battle, off the Spratly islands. The Chinese victory, in which a Chinese warship sank a Vietnamese transport carrying troops headed for one of the disputed islands, was followed by Chinese troops establishing garrisons on some of the islands. In 1992, Chinese marines landed on Da Lac reef, in the Spratly Islands. In 1995, Chinese marines occupied Mischief Reef, which was claimed by the Philippines.
The next war in this part of the world may break out because of a dispute over an uninhabited island in Southeast Asia. Border disputes have long been a cause for wars. All it takes is a country that feels it is losing out because a border is not where everyone agrees is should be. Same thing with islands. There are dozens of these island disputes worldwide. Most are not active issues, except for the fact that an international treaty (the Law of the Sea) gives whoever owns these uninhabited rocks rights to fishing, and oil drilling, for 360 kilometers from each of these tiny bits of land.
Thus, aside from prestige and possible historical ties, the primary reasons folks are claiming ownership of these uninhabited bits of land has to do with the ability to control sea lanes, defining maritime economic zones, possible tourist dollars in some instance, and oil, rumored to underlie much of the area. The principal islands involved (and the nations claiming ownership) are;
Padra Branca Islands, claimed by Malaysia & Singapore.
Sipadam & Ligatan Islands, claimed by Malaysia & Indonesia -- this is one that seems most likely to cause trouble in the near term.
Louisa Reef, claimed by Malaysia & Brunei.
Paracel Islands, claimed by China, which occupies them, Taiwan, and Vietnam. In 1974, China fought a naval battle with the South Vietnamese near the Paracel islands, and took control after sinking one of the four Vietnamese warships and chasing the others away. China has recently been expanding military facilities on these tiny islands. Among the more notable additions has been an expanded electronic monitoring facility, and a lengthened runway, now long enough to support Su-30 fighters. Several large fuel tanks have also been built, indicating an intention to base Su-30 fighters there. About a thousand military personnel are stationed there.
Sabah, claimed by Philippines & Malaysia. This is a province of Malaysia, which the Filipinos claim was ceded to the Sultan of Sulu (now part of the Philippines) back in the 1870s.
In some of these there have also been periodic clashes over who maintains aids to navigation. All of the nations making claims in this area understand that it is the U.S. Navy that still has the final say over who controls what. It's long been feared that eventually China would contest that, and the May 8th incident with the unarmed U.S. survey ship is apparently the first round of what may be a long naval conflict. In the last few days, China and the United States have each sent a warship to the area. The American destroyer will escort the USNS Impeccable. The Chinese warship will patrol the area.