This paper aims to discuss the nature of the disputes in the South China Sea in the context of political economy of the two main states - the United States and People's Republic of China (PRC).
The sea line of communication, economic trade and freedom of navigation are sensitive issues in the region so that international laws including the United Nations Convention on the Law of the Sea can contribute to offering states opportunities to officially resort to a legal boundary to resolve the disputes among states. Ironically, international laws made as an attempt to alleviate conflicts created even more problems in terms of the fact that the articles of international laws are so ambiguous that states can understand them with different interpretations. Further, rather than negotiation or resolution through the tool of international laws or organizations, power politics have played a crucial role in coping with disputes between countries. ASEAN as a main actor in the disputes has been required to seek a measure or counter-measure dealing with China's approach of claims to the South China Sea, but its inability to achieve a common voice among member states and subsequent absence of power at the level of international organization compared to China requires the role of the United States to balance the disputes in the region.
It is important to note that the states involved in the South China Sea disputes are not willing to engage in extreme means of conflict such as war. It is highly likely that the extent of the rise of China in the future will depend on the range of frequency to raise its assertive voice in the disputed islands against neighboring states. On the one hand, this is caused by nationalism, whose influence has grown since China's opening the gate to the world with economic development has offered its citizens to participate in the issues of their nation. On the other hand, China's growing influence in economy has linked each other and the economic interactions between China and other states have created the environment of interdependence that decreases possibility of conflict and deepens efforts of cooperation.
In this regard, the essential part of the South China Sea disputes is at the national level with the purpose of maximizing national advantages and minimizing national disadvantages. China promotes and abates nationalist movements, raises and reduces its assertive voice to other countries in dispute, and allows and controls the tone of argument in media. Also, the United States announced 'pivot to Asia' with 're-balancing', whose approach is seemingly to retain its supremacy in (South and North) East Asia and prevent China's gradual dominion of its presence in the region. However, it turns out that those slogans are not the comprehensive, long-term strategy, but down-sliding US economy and division of 'military labor' were seriously considered.
Finally, the two representative hegemons are profoundly attentive to their domestic issues. Factors affecting the environment of dispute include Public opinions, domestic support to leadership groups, power struggle among political groups and economic conditions. Therefore, when we see inside the countries, the future of South China Sea will be visioned.