China Controls the South China Sea

Summary: Several million b/d of oil and many other goods flow through the South China Sea, which is now essentially controlled by China. Tighter military ties between the U.S. and Japan, the Philippines, and even Vietnam are not stemming China’s efforts to dominate this critical international waterway. Significant escalation of limited and episodic conflict is probably not imminent, but control of this strategic territory will likely have implications down the road.