April 18, 2014:
China announced in late 2012 that beginning in 2013 it would start enforcing new rules that will allow Chinese naval patrols to escort or expel foreign ships from most of the South China Sea unless those ships have Chinese permission to be there. China did not start doing this right away. But over the last few months the Chinese have become more aggressive enforcing this decree, without resorting to deadly forces. China is not using grey painted navy ships for this but rather white painted coast guard vessels. White paint and diagonal stripes on the hull is an internationally recognized way to identify coast guard ships. This is much less threatening than warships. China also calls in civilian vessels (owners of these privately owned Chinese ships understand that refusing to help is not an option) to get in the way of foreign ships the coast guard wants gone. Thus if foreign warships open fire to try and scare away these harassing vessels they become the bad guys.
China has been rapidly increasing the size of its coast guard since 2010 and now has dozens of larger (over 1,000 tons) coast guard vessels, which are ideal for intimidating the smaller fishing ships found in the South China Sea. At the same time China has been transferring more small (corvette type) navy warships to the coast guard. All these additional ships are needed because China now includes the coasts of many uninhabited islets, rocks, and reefs in the South China Sea as “Chinese coastal waters”. This converts (in Chinese eyes) a lot of areas that the rest of the world considers international waters into Chinese coastal waters. China needs a lot more ships to patrol all this and China now has a lot more patrol boats and larger ships available to not only patrol but to expel intruders.
The Chinese claim on the South China Sea is mostly about the EEZ and patrolling it more frequently and aggressively. International law (the 1994 Law of the Sea treaty) recognizes the waters 22 kilometers from land as under the jurisdiction of the nation controlling the nearest land. That means ships cannot enter these "territorial waters" without permission. However, the waters 360 kilometers from land are considered the Exclusive Economic Zone (EEZ) of the nation controlling the nearest land. The EEZ owner can control who fishes there and extracts natural resources (mostly oil and gas) from the ocean floor. But the EEZ owner cannot prohibit free passage or the laying of pipelines and communications cables. China also claims that foreign ships have been conducting illegal espionage in their EEZ. But the 1994 treaty says nothing about such matters. China is simply doing what China has been doing for centuries, trying to impose its will on neighbors or anyone venturing into what China considers areas under its control.
For the last two centuries China has been prevented from exercising its "traditional rights" in nearby waters because of the superior power of foreign navies (first the cannon armed European sailing ships, then, in the 19th century, newly built steel warships from Japan and the West). However, since the communists took over China 60 years ago, there have been increasingly violent attempts to reassert Chinese control over areas that have long (for centuries) been considered part of the "Middle Kingdom" (or China, as in the "center of the world").
China is particularly concerned about the nearby Spratlys, a group of some 100 islets, atolls, and reefs that total only about 5 square kilometers of land but sprawl across some 410,000 square kilometers of the South China Sea. Set amid some of the world's most productive fishing grounds, the islands are believed to have enormous underwater oil and gas reserves. Several nations have overlapping claims on the group. About 45 of the islands are currently occupied by small numbers of military personnel. China claims them all but occupies only 8, Vietnam has occupied or marked 25, the Philippines 8, Malaysia 6, and Taiwan one.
The new Chinese rules mean offshore areas of the Philippines, Malaysia, Taiwan, Brunei, and Vietnam that international law does not recognize as Chinese are now formally claimed by China. India and the United States have both announced that they will not obey and that Indian and American warships continue to move unmolested through the South China Sea. For the moment China is content to bully smaller civilian ships, but apparently plans to take on foreign warships eventually.