For the past several years, an emboldened China has intensified its aggression in the South China Sea, zeroing in on the Philippines as its main target. Manila now arguably contends with what amounts to a maritime occupation of its internationally recognized exclusive economic zone by a hostile power.
China has repeatedly swarmed, blocked, and rammed the Philippine vessels, deploying non-lethal but hazardous tools like dazzlers, water cannons, and long-range acoustic devices in an attempt to quash Manila’s resistance.
While China’s belligerence has surged recently, its ambitions trace back over a century. With enhanced maritime capabilities, China’s goal of pushing the U.S. out of the “first island chain” – the strategic arc of islands from Japan through Taiwan, the Philippines, and Borneo – is increasingly plausible, no longer just a boast of hardliners.
China’s sweeping territorial claims, embodied in the nine-dash line covering nearly the entire South China Sea, are baseless under the 1983 United Nations Convention on the Law of the Sea (UNCLOS), as its southernmost point, James Shoal, lies 22 meters underwater, granting no territorial rights.
China has exploited the “gray zone” – a space short of war – to advance its expansionist agenda, using opacity and deniability to paralyze adherents of the U.S.-led “rules-based order.”
In 1994, China placed “fishing shelters” on Mischief Reef, within the Philippines’ exclusive economic zone, 150 nautical miles from its shores, marking the first such incursion.
Caught off guard, the Philippines grounded a World War II-era ship, the BRP Sierra Madre, at Second Thomas Shoal in 1999 as a makeshift outpost, which later became a flashpoint. China’s restrained approach under Deng Xiaoping gave way under Xi Jinping, who, after taking power, articulated the “China Dream” of national rejuvenation, emphasizing maritime dominance and recovery of “lost” territories.
China now claims control over economic, military, and law enforcement activities across the South China Sea, extending 1,000 nautical miles from its coast. Its 2012 seizure of Scarborough Shoal, just 150 miles from Manila, was a critical blow to the Philippine fishing communities.
The Philippines responded by filing a case against China at The Hague in 2013, challenging Beijing’s claims. China dismissed the proceedings, asserting “historic rights” and “indisputable sovereignty.” After Manila’s legal victory in 2016, China altered the facts on the ground, transforming reefs in the Spratlys into militarized artificial islands with 4,600 acres of dredged material.
These bases, vulnerable in wartime, bolster China’s gray-zone operations, supported by a massive paramilitary force of coast guard and maritime militia vessels. The China Coast Guard maintains a near-daily presence at key reefs, while the maritime militia–state-funded and part of China’s national militia–harasses foreign ships, rams vessels, and operates alongside the navy, which looms as an implicit threat.
Over the past four years, China’s campaign to dominate the South China Sea has stalled, despite earlier successes driven by illegal claims and “gray zone” coercion, but the Xi Jinping regime seems unable or unwilling to pivot toward compromise with Southeast Asian neighbors.
China’s control over the South China Sea has not advanced since 2021, and in some areas, it has even weakened. Disputes now center on symbolically, strategically, or economically vital locations where Southeast Asian states are willing to take risks to resist China. These nations have found they can counter gray zone tactics, and China has so far avoided escalating to lethal force. This has led to cycles of escalation, with Chinese forces, restricted from military action, using increasingly dangerous non-lethal methods like ramming, high-pressure water cannons, military-grade lasers, and acoustic devices. When these fail, China temporarily de-escalates, only for tensions to flare elsewhere.
A key case is the Philippines at Second Thomas Shoal, where China’s Coast Guard and maritime militia blockaded the BRP Sierra Madre, a grounded Philippine military outpost (February 2023 to August 2024). Manila’s efforts to repair the ship prompted China to deploy around 50 vessels by December 2023, escalating to monthly ramming, water cannon attacks, and the use of lasers and acoustic devices. These tactics, often targeting both government and civilian Philippine ships, injured crew, damaged vessels, and aimed to intimidate. Yet, every Philippine resupply mission succeeded.
These aggressive “non-lethal” tactics risked triggering U.S. intervention under its defense treaty with the Philippines, leading to a provisional de-escalation agreement. Manila secured its goal of repairing the Sierra Madre, while China gained nothing but strained regional ties.
Meanwhile, Vietnam has countered China by expanding its Spratly Islands outposts, adding over 2,200 acres of land across ten features, including eight new harbors and an airstrip. This rivals China’s earlier creation of 3,500 acres in the Spratlys. Vietnam’s upgraded bases enhance logistics, enabling longer deployments and better protection against Chinese harassment of maritime activities.
These outposts, once mere concrete platforms, now support anti-ship artillery, rocket systems, coastal defenses, and advanced radar. While Vietnam likely couldn’t repel a full Chinese assault, the strengthened bases raise the cost of any attack, making escalation riskier and potentially sparking a broader conflict.
As long as Xi Jinping remains in power, China is unlikely to shift its approach. He has entrenched a sweeping view of maritime claims, asserting that the entire South China Sea is China’s by historical right, tying the reclamation of this “lost” territory to his vision of the China Dream. This stance makes compromise improbable, especially as Xi’s consolidation of power has rendered Chinese decision-making increasingly rigid and inflexible.
Meanwhile, the most pressing issue in the region arguably remains the strained relations with the current U.S. administration, as they face increasing pressure from China for a Sino-centric Asia. Pressure on trade and defence spending from the U.S. alongside increasing Chinese bids for regional domination is cracking Southeast Asia’s long term hedging game (which is a particular problem for countries such as Vietnam or Singapore that are being pushed by both sides, and would be facing tough decisions in case of a confrontation between the world’s two superpowers).
Regional leaders seek a stable U.S. presence to balance China without escalating tensions. Yet, the U.S. administration’s policies suggest this balance is unattainable. The administration’s focus appears divided, with Trump prioritizing discussions with Russia and Middle East engagements tied to his personal business interests. The Pentagon’s decision in March to extend one aircraft carrier’s deployment in the Red Sea and deploy a second to counter Yemen’s Houthis underscores this distraction, signalling a U.S. stretched thin and unable to fully commit to the Indo-Pacific, despite years of rhetoric and election promises.
China, in turn, may exploit this uncertainty by escalating its activities in the cyber domain against regional states. Beijing could intensify cyberattacks on critical infrastructure, such as energy grids or financial systems, to undermine confidence in U.S. protection and sow discord among Southeast Asian nations. CYFIRMA analysts have continually warned that by targeting smaller states like Singapore, Malaysia, or Vietnam with sophisticated cyber operations – such as data theft, disinformation campaigns, or disruptions to maritime navigation systems – China could demonstrate its technological superiority and pressure these nations to accommodate Beijing’s regional ambitions.
Such escalation would further complicate the strategic calculus for U.S. allies who may feel compelled to hedge their bets rather than align fully with a seemingly distracted Washington. Some analysts even argue that the July UNC3886 hack targeting Singapore is precisely an example of such a pressure campaign.
This was by far not the first such case, however, as in recent years, China has increasingly employed cyberattacks as a component of its gray-zone warfare strategy against ASEAN countries, particularly those involved in South China Sea disputes, such as the Philippines and Vietnam. These operations, designed to coerce without triggering outright conflict, include tactics like DDoS attacks, data breaches, and disinformation campaigns. For instance, in early 2024, the Philippines experienced a 325% surge in cyberattacks, with 55% involving data breaches targeting law enforcement, ministries, and universities, coinciding with heightened tensions at Second Thomas Shoal. Similarly, Vietnam faced a dozen state-sponsored campaigns in 2024, attributed to Chinese threat actors like APT41 and Salt Typhoon, targeting military and government secrets to undermine Hanoi’s South China Sea stance. These attacks aim to psychologically pressure adversaries, disrupt critical infrastructure, and shape public opinion – as seen in a Chinese-linked deepfake audio of Philippine President Ferdinand Marcos Jr., falsely suggesting military action against China.
China’s cyber operations in the region also leverage APT groups to maintain deniability while advancing strategic goals. For example, in 2022, Chinese state-affiliated hackers breached the ASEAN Secretariat’s email system, and in 2023, the Salt Typhoon group targeted telecommunications sectors in the Philippines, Vietnam, Malaysia, and Indonesia, gaining remote access to critical networks for nine months. These intrusions, often masked as cloud service activities, focus on espionage and prepositioning for potential sabotage, aligning with China’s “cabbage strategy” of layered coercion. By targeting sensitive sectors and spreading disinformation (such as through WeChat campaigns against foreign leaders), China seeks to erode trust in U.S. alliances and assert regional dominance without crossing the threshold of armed conflict, exemplifying gray-zone tactics.
For China – who no doubt feels surrounded by U.S. allies, and distant from vital Indian Ocean trade routes – Southeast Asia is a critical gateway for securing economic resilience, geopolitical influence, and regional security, meaning that it will use coercive tools to achieve its broader strategic goals, even to the extent of openly disregarding its long-professed respect of sovereignty and non-interference.
ASEAN nations struggle to coordinate a unified response, and without an effective U.S. leadership, they lack the capacity to counter Beijing’s dominance. China is intent on reasserting regional hegemony, employing any necessary tools. The cyber domain will likely be the first arena where this renewed Chinese push for regional supremacy will be evident.
China’s aggressive pursuit of South China Sea dominance – underpinned by Xi Jinping’s inflexible vision – has reached an impasse, with Southeast Asian nations like the Philippines and Vietnam effectively countering its gray-zone tactics. Xi’s refusal to compromise, coupled with a distracted U.S. foreign policy, creates a volatile regional dynamic, and the U.S.’s inconsistent Indo-Pacific engagement, exemplified by its focus on the Middle East and tariff policies straining Southeast Asian economies, weakens its ability to counterbalance China. This vacuum enables Beijing to intensify coercive measures – including potential cyberattacks – to pressure smaller states and solidify its regional dominance. Without unified ASEAN resistance or robust U.S. leadership, China’s strategic ambitions, particularly in the cyber domain, are likely to escalate, challenging Southeast Asia’s autonomy and stability. A reinvigorated U.S. commitment and stronger regional coordination are critical to restoring balance and preventing further Chinese hegemony in the South China Sea.
