The South China Sea area was strategically important to Beijing because of the discovery of offshore oil in China's 200-nauticalmile exclusive economic zone, increased foreign trade in the South China Sea, and China's territorial claims there. The Xisha and Nansha islands also were claimed, and some occupied, by Vietnam, Taiwan, the Philippines, and Malaysia. Beijing's claims to these island groups predated all others except those by the Guomindang authorities. In 1974 the PLA Navy ousted South Vietnamese forces from the Xisha and occupied some of the islands, which were valuable as Chinese fishing bases and guano sites. Although Chinese occupation of the Xisha effectively expanded its exclusive economic zone, the discovery of offshore oil deposits near Hainan Island intensified China's interest in both island groups. With the expansion of Chinese foreign trade, Beijing's interest grew in maintaining a naval presence in the Xisha Islands, which sit astride the strategic Hong Kong-Singapore shipping route. Chinese fishermen also used the Nansha Islands, but most of these were occupied by Vietnam, Taiwan, and the Philippines. In the 1980s the PLA Navy built up the South Sea Fleet, strengthened its naval facilities and deployments in the Xisha Islands, and conducted naval exercises in the South China Sea. To strengthen its military position in the Xisha Islands and protect itself against the Soviet base at Cam Ranh Bay, Beijing also reinforced its claim to the Nansha Islands.

Data as of July 1987