Taiwan has maintained a garrison on the biggest of the islands since 1956. Its claims to the island are based on its assertion that Taiwan and its Kuomintang government are the true China. Both Taiwan and the People's Republic of China say that the islands were discovered by Chinese navigators, used by Chinese fishermen for centuries, and under the administration of China since the 15th century. Further, the Kuomintang sent a naval expedition to the islands and took formal possession in 1946. It left a garrison on the largest island of Itu Aba. However, since Taiwan claims to be the true China, it believes the islands belong to it and not to the PRC. Its main concern is that China alone or China and Vietnam will gain control and thus, have a monopoly on the South China Sea.
Spratly Islands Dispute (SPRATLY Case)
Japan has protested vehemently against exploration plans by China National Offshore Oil Corp (CNOOC) in waters near the island group of Diaoyu - known by the Japanese as Senkaku - which are also claimed by Taiwan. CNOOC has installed a drilling plant close to Japan's exclusive economic zone to look for natural gas, and said this year that it had been authorized by Beijing to construct an underwater pipeline to China.
Tokyo, concerned that gas fields on its side of the boundary might be exhausted, sent a survey team to the area in July. Japan's gas reserves are projected at 200 billion cubic meters, a commercially viable level. Beijing proposed in June that the gas field be jointly developed, but Tokyo has not responded, reportedly because the extent of the Chinese reserves is unknown and out of concern that the issue might inflame tensions between China and Taiwan.
Oil worries lubricate South China Sea pact
Beijing, Manila and Hanoi strike deal over Spratleys' oil 15 Mar 2005 13:29 GMT
BEIJING - China has claimed that it had indisputable sovereignty over the Spratley Islands in the South China Sea and asked Vietnam to rescind its "unilateral" move to invite global firms to explore oil and natural gas in the area.China has indisputable sovereignty over the Nansha Islands (Spratley) and the surrounding sea, Chinese Foreign Ministry spokeswoman Zhang Qiyue said yesterday while reacting to reports that Petrovietnam has invited tenders for oil and gas exploration in some disputed areas in the South China Sea.
Zhang said Vietnam's move infringed upon China's sovereignty and oceanic rights and interests. "China hopes Vietnam will correct the mistake as soon as possible and not take any unilateral actions that would complicate or enlarge disputes," she said.Zhang also cautioned international oil companies against taking part in the process initiated by Hanoi. China hopes international oil companies will respect China's firm stance on this issue, and not do anything to harm China's sovereignty over its marine territory, she said.
Indisputable sovereignty over Spratley Islands
Military skirmishes have occurred numerous times in the past two decades. The most serious occurred in 1976, when China invaded and captured the Paracel Islands from Vietnam, and in 1988, when Chinese and Vietnamese navies clashed at Johnson Reef in the Spratly Islands, sinking several Vietnamese boats and killing over 70 sailors.
The disputed areas often involve oil and gas resources:
 Indonesia's ownership of the gas-rich Natuna Island group was undisputed until China released an official map indicating that the Natunas were in Chinese-claimed waters.
 The Philippines' Malampaya and Camago natural gas and condensate fields are in Chinese-claimed waters.
 Many of Malaysia's natural gas fields located offshore Sarawak also fall under the Chinese claim.
 Vietnam and China have overlapping claims to undeveloped blocks off the Vietnamese coast. A block referred to by the Chinese as Wan' Bei-21 (WAB-21) west of the Spratly Islands is claimed by the Vietnamese in their blocks 133, 134, and 135. In addition, Vietnam's Dai Hung (Big Bear) oil field is at the boundary of waters claimed by the Chinese.
 Maritime boundaries in the gas-rich Gulf of Thailand portion of the South China Sea have not been clearly defined. Several companies have been signed exploration agreements but have been unable to drill in a disputed zone between Cambodia and Thailand.
Rich fishing grounds and the potential for gas and oil deposits have caused this archipelago to be claimed in its entirety by China, Taiwan, and Vietnam, while portions are claimed by Malaysia and the Philippines. All five parties have occupied certain islands or reefs, and occasional clashes have occurred between Chinese and Vietnamese naval forces
Several multinational US-based companies have contracts with claimant nations for off-shore
oil and natural gas exploration in the South China Sea. Crestone Energy Corp. (China),
Exxon Mobil Corp. (Vietnam) and Conoco (Vietnam) activities for rival claimants in a contested
area of the Spratly Islands has potentially placed American ventures in harms way. In July
1994, China sent two Navy ships to stop supplies from reaching the then recently begun
Vietnamese oil-drilling operation just off southern Vietnam. The Chinese Government said the
drilling was "illegal"and the warships turned away at least one vessel trying to reach the site.
ARCO and Amoco are working a less controversial sites off China's Hainan Island and Hong
U.S. Oil Exploration in the South China Sea
I don't normally bother with international events but if Australia gets into this one I'm in China's line of fire.
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Have a good day.
Why Bono and HIV/AIDS Inc will be stopped