The South China Sea has moved to the center of debates about China‟s increasingly assertive foreign policy. Most policy analyses of the situation have focused on either the implications for international law or China‟s proposed military plans to create a South China Sea version of the “East China Sea Air Defense Identification Zone” (ADIZ). While there has been much excellent work analyzing China‟s influence on global politics, little has been done to understand the role China‟s domestic administrative institutions play in managing these disputed territories.

In 2012, the Chinese State Council upgraded Sansha, a tiny community on an island in the disputed region of the South China Sea, to the status of a prefecture-level city. The city population had not grown, and while Sansha‟s upgrade meant an increase in its administrative power, it meant very little in terms of physical construction or migration. However, following the announcement, Chinese officials argued that Sansha‟s designation as a prefecture-level city “announces to the rest of the world that China has indisputable sovereignty over this region.” The decision to upgrade Sansha represents an attempt to expand Chinese governance over a region of growing importance and should not be considered “hype” or a simple administrative reorganization by Beijing.

While most ASEAN states have welcomed US policy in the region as a check on growing Chinese power, the economies of these states are increasingly dependent upon China and they do not wish for conflict between the US and China. In light of this economic dependency, and the inability of neighboring nations to militarily contest Chinese claims over these territories, many analysts and media pundits have declared the South China Sea an area of “indisputable disputes.”

Rather than treat the South China Sea disputes as a deadlock or dismiss Chinese claims as bluster, more can be gained by considering how Chinese understandings of “territory” go beyond what can be simply drawn on a map. China wishes to extend its territorial control over the South China Sea: the airspace above it, the islands in it, the surface of the ocean, the submarine spaces, and the ocean floor. To legitimate that claim, China uses domestic institutions to build a territory where one did not previously exist. Shortly after upgrading Sansha, for example, 21 companies were approved to set up offices on the island, an official government website was launched, a newspaper was opened, and the island was extended to accommodate a new airport runway. China‟s treatment of the South China Sea does represent a new, more assertive, foreign policy regarding contested territories, but it also represents a new motivation for remaking territory such that it conforms with the conventions of international law and an innovative use of domestic institutions as instruments of foreign policy to legitimate territorial claims.