It is bound in the north by southern China, in the west by Vietnam, in the east by Taiwan and the Philippine islands of Luzon, Mindoro and Palawan and in the south by Borneo, eastern Sumatra and the Bangka Belitung Islands.

Within the body of water, there are hundreds of small islands, rocks and reefs, most of which are located within the Paracel and Spratly Islands chains.

The United Nations Conference on Trade and Development has estimated that more than 21% of global trade, worth US$3.37 trillion, transited through these waters in 2016.

Given its strategic position, the area has long been a tinderbox, and in recent years, China’s sweeping claims over the body of water – which are contested by Malaysia, Vietnam, Brunei, the Philippines and Taiwan – have only heightened tensions.

FMT takes a closer look at the South China Sea dispute, and Malaysia’s position in the state of affairs.

What are China’s claims?

China, by virtue of its nine-dash-line, has made sovereignty and maritime claims on territories within the 200 nautical-mile (370km) exclusive economic zones of Vietnam, the Philippines, Malaysia and Indonesia in contravention of the United Nations Convention on the Law of the Sea 1982.

Over the past decade, China has pressed these claims with an ever-expanding military presence.

In 2022, Admiral John C Aquilino, commander of the US Indo-Pacific fleet, claimed China had militarised at least three islands in the disputed waters by deploying anti-ship and anti-aircraft missile systems there.

Where does Malaysia stand?

Last year, China courted controversy when it published its 2023 standard map that identified portions of Malaysian waters near Sabah and Sarawak as Chinese territories.

The foreign ministry was quick to announce Malaysia’s rejection of the new map, repeating objections to China’s long-held claims to the maritime areas.

But beyond that, Malaysia has taken a relatively soft approach to the issue compared with the Philippines, whose navy has engaged in numerous stand-offs with Chinese vessels in its waters.

Just last month, China’s coast guard boats “bumped” and “blocked” two Philippine vessels that had stopped in the Second Thomas Shoal to transfer a sick Filipino soldier, according to AFP.

This was reportedly one of many forms of intimidation employed by Chinese vessels. They have also used water cannons and intentionally collided with other vessels, resulting in injuries.

On June 9, Prime Minister Anwar Ibrahim called for “aggressive diplomatic” engagement to ease tensions between China and the Philippines.

He reiterated that territorial disputes must be resolved through talks between Asean members and China, without the interference of external parties.

A tougher stance?

Early this month, Toshi Yoshihara, a senior fellow at the Center for Strategic and Budgetary Assessments, said Malaysia should take a more proactive approach to defending its territory since accepting Chinese policy would not satiate the superpower’s ambitions.

However, Shahriman Lockman, senior researcher at the Institute of Strategic and International Studies, said Putrajaya is unlikely to get “tougher” with China, given that Malaysia stood to benefit economically by maintaining positive ties with Beijing.

“Anwar’s ‘aggressive diplomacy’ is an insistence on what is, in reality, the tedium of talks between Southeast Asian countries and China.

“That is probably the most realistic and sensible option for Malaysia right now,” he told FMT, adding that he expects national leaders and diplomats to continue to play down Malaysia’s differences with China.

Even so, Shahriman said, the dispute is not just about China’s relationships with Asean but also an extension of its rivalry with the US.

Washington has made it clear that Beijing’s claims to resources across most of the South China Sea are “completely unlawful”, as is its “campaign of bullying” to control them.

While Shahriman dismissed the notion of Asean countries collectively acting against China, he praised Indonesia, which held the chair of the bloc last year, for successfully rallying Southeast Asia’s foreign ministers to express concern over ongoing tensions in the region.

“There will be high expectations for Malaysia to offer that kind of leadership when it takes over as Asean chair next year,” he added.