Earlier this month, China sent an oil rig to waters off the Paracel Islands in the South China Sea (upper left box on the map). Vietnam sent ships to intercept the oil rig, but they were repelled by Chinese naval vessels. In Vietnam, outraged citizens rioted, destroyed Chinese property, and killed some Chinese nationals. China has threatened unspecified sanctions against Vietnam, apparently moving troops to the border, while Vietnam has moved to bring the riots under control.
The Paracel Islands are within Vietnam’s 200 nautical mile Exclusive Economic Zone and on its continental shelf, so minerals in the area belong to Vietnam under the UN Convention on the Law of the Sea, which both Vietnam and China have ratified. What is the basis of China’s claims? In fact, China has never provided an official legal justification for its claims. Two scholars, Florian Dupuy and Pierre-Marie Dupuy (gated), who scoured Chinese sources have suggested the Chinese claims are based on “history”: that China has always controlled the South China Sea, or the islands that dot it. But, as they explained, this type of argument is not recognized under UNCLOS or traditional principles of public international law.
China has not backed down but instead seems to be considering economic sanctions against Vietnam, which is highly dependent on Chinese trade, much more than China is on Vietnam. See this graph.