The exclusive economic zone beyond the territorial sea is not part of a coastal country's territory. However, coastal countries have sovereign rights over the natural resources in their exclusive economic zones and exercise jurisdiction over maritime research, environmental protection and the construction of manmade islands there. The zones are therefore believed to be part of the waters under the countries' jurisdiction. While territorial sea is regarded as the sovereign territory of a country, foreign ships are allowed innocent passage through it.

The UN Convention on the Law of the Sea provides that an island, as a country's land territory, can have a 12-nautical mile territorial sea and a contiguous zone. Islands that can sustain human habitation can have a continental shelf and an exclusive economic zone.

In the late 1940s, a Filipino labeled some islands in the South China Sea islands without human habitation and called for the Filipino seizure of the islands. Despite this claim, the South China Sea remained peaceful until a UN resource agency issued a report in 1968 saying that the South China Sea is rich in oil resources. After that, countries in the region vied to claim sovereignty over the South China Sea islands, putting themselves at odds with China.

It should be noted that countries contending with China for the South China Sea islands have begun to exploit oil and gas resources in the areas they have occupied. If they exhaust these non-renewable resources, the areas will not be as valuable even if China recovers them in the future.

With regard to the navigation issue, the South China Sea is located in a strategic area through which ships traveling from Northeast Asia to the Indian Ocean, the Middle East and Europe must pass. It is the lifeline of China's marine trade and a sea of which major marine powers such as the United States and Japan are trying their best to control.

In a statement issued in 1995, the United States asserted its interests in the South China Sea, urging protection of its freedom of navigation in the sea.

According to the UN Convention on the Law of the Sea, foreign ships, including warships, have the freedom to sail in the exclusive economic zones of sovereign states. However, while enjoying this right, they should take the countries' interests, especially security interests, into consideration. The U.S. surveillance ship USS Impeccable posed a threat to China's security with its spying activities. China therefore had the right to interfere with and supervise the ship and take other action.

Islands in the South China Sea and the territorial sea surrounding them are part of China's territory. China has the right to delimit continental shelves and exclusive economic zones around large islands, a right that other countries should respect. Overlaps in jurisdiction should be resolved through consultation and negotiation. China has long stood for resolving the South China Sea issue peacefully through consultation and negotiation on the basis of equality and mutual respect according to international law, including the UN Convention on the Law of the Sea. It has also suggested shelving disputes to conduct joint development.

There are generally three ways to resolve disputes between countries-military, political and legal.

Before the 20th century, war was regarded as a legitimate means to resolve disputes. The Pact of Paris of 1928 prohibited the use of war to settle disputes. The UN Charter of 1945 further provides that countries should not use or threaten to use force in international relations. China pursues an independent foreign policy of peace. War is not an option to resolve the South China Sea issue.

Political means mainly refer to consultation and negotiation. China takes these means as the basic approach to resolving the South China Sea issue. This approach has not worked effectively in practice, as China has yet to start formal negotiations with other countries on the issue.

From a legal perspective, China can seek arbitration at the Permanent Court of Arbitration or resort to the International Court of Justice. At present, the country is not willing to submit disputes over its sovereignty and territory to a third party for judgment. In the future, this method may well be worth consideration.