The South China Sea dispute is a contentious issue in the Asia-Pacific region characterised by periodic escalations of tensions, sabre rattling, and often armed conflict. The most recent escalation of tensions occurred as a result of the China National Petroleum Company’s (CNPC) unilateral decision to drill two exploratory oil wells in waters contested by Vietnam starting early May and projected to finish mid-August. However, CNPC’s decision to withdraw the HY SY-981 drilling platform from contested waters on July 15, a month earlier than expected, has completely overshadowed its earlier reckless assertive actions, with a number of international observers praising Beijing’s more moderate approach.

Some even speculated that China might be finally willing to agree on a long-awaited code of conduct on the sea, and maybe even concede to international arbitration to resolve the dispute. However, I argue that China’s actions were merely dictated by the need to normalise relations with Vietnam and the United States and ameliorate international pressure congruent with China’s overall strategy in the South China Sea region.

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