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South China Sea: Economic importance of the most contested territory in Asia

Image source: tufts.edu

The South China Sea has been one of the most contested territories in Asia. Several countries such as Malaysia, the Philippines, Vietnam, Taiwan, and most importantly, China, each claim their parts of the region, especially the Spratly Islands.

However, in 2016, the international tribunal committee rejected China’s extensive claim of the territory and ruled against the economic power. While the decision deemed China’s claims unfounded, it still refuses to accept the ruling and continues to occupy and build on the surrounding islands.

But what it is in the South China Sea that makes it highly contentious? The answer lies in the territory’s resources and role in trading. The South China Sea is rich in both oil and gas reserves. In fact, experts estimate that there are over 900 trillion cubic feet of total gas reserves under its waters.

Hydrocarbons have also been found in the South China Sea, specifically natural gas. According to the U.S. Geographical Survey, it’s highly likely that the territory has huge oil reserves that may cover 266 trillion cubic feet.

The South China Sea is also the home to a variety of marine life and most abundant reef systems on the planet. That is why export revenues gained from the fishing industry is a massive business in this side of the world, earning billions in dollars and contributing to over 12% of the world’s fish catch.

However, the economic importance of the South China Sea goes beyond what these resources can offer. Wealth and money pass through these territories since they are a part of a highly active trade route that serves Japan, China, and the rest of Southeast Asia.