Context

Recently, the Chinese government said it has “overlapping claims” with Vietnam over maritime rights in parts of the East Sea, Indonesia showed the concerns and rejected China’s offer for any negotiations and said that Jakarta’s economic interests are threatened by China’s Nine-Dash Line.

About

• China currently claims ‘indisputable sovereignty’ over the South China Sea.
• These nine dash lines are not geographical boundaries but are interpreted by China to advance its claims. 
• The line runs as far as 2,000km from the Chinese mainland to within a few hundred kilometres of the Philippines, Malaysia and Vietnam.

Countries maritime Borders in South China Sea:

• Several countries are bordering the South China Sea:Peninsular Malaysia, Thailand (via the Gulf of Thailand), Philippines, Singapore, East Malaysia, Brunei, Indonesia, Vietnam, China, and Taiwan.
  

Why it is a significant location?

• For China: China claims most of the contested sea, reaching almost to the Philippines shores and has built artificial islands with heavy military developments on them which worries the neighbouring nations and it rejects the UN backed international tribunal ruling as well.
  • The nine dash line asserted by China violates the principle of Exclusive Economic Zones (EEZ).
• For Other Island Countries:The stalled negotiations between China and ASEAN made headway on Code of Conduct as four of the ASEAN nations also made territorial claims on the disputed waters which adds to the problem with already non-negotiable behaviour of China.
  • The 9-dash line makes China’s exclusive rights on marine resources of the region and hence affects the economy of developing island countries like Indonesia.
• For India: The South China Sea holds the major Oil trade route for countries in the Pacific and India affects if the economy of these counties gets impacted.
  

Exclusive Economic Zones (EEZ) It is a formula based on compromise and was recognized by the UN Conference on the Law of the Sea in 1976. It covers an area beyond and adjacent to the territorial sea: it can extend to a maximum of 200 nautical miles from the baselines. The EEZ includes the territorial sea which extends to 12 nautical miles. While the countries have sovereign rights over the territorial sea, the EEZ provides them the right to existing natural resources. Activities allowed in EEZ are - creation and use of artificial islands, Installations and structures. Marine scientific research and protection and preservation of the marine environment