Reading China’s strategy in the South China Sea

Although China was expected to advance more aggressively into the waters, it is taking a moderate stance. How should we read its position?
One of the factors resides in the White House. US President Donald Trump has indicated that America’s commitment to the “One China” policy could change. (He subsequently agreed to respect the policy.) There are a number of uncertainties. China seems to want to establish a solid relationship with the US before formulating other policies. Before establishing that solid relationship, China is expected to avoid making any major decisions that could increase the variables, although it may execute policies to some extent. 
Another factor is the domestic situation in China. As is well known, the year 2017 is the key year for Chinese President Xi Jinping. His top political priority is carrying out a reshuffle of personnel in the autumn without any problems and consolidating power in his second term. On the diplomatic front, he would like to stage major events every month until the autumn to emphasise the results achieved in the first half of his administration. To that end, he will not cause any trouble for some time to come. He will not take any bold steps until at least July, when China and the US are expected to agree on economic issues.
We need to consider whether this situation will continue for an extended period. The Spratly Islands are important to China, and the importance of Scarborough Shoal (known in the Philippines as Panatag Shoal or Bajo de Masinloc), in particular, must be emphasised. China is aiming to build a military base on the shoal to establish naval supremacy and air supremacy in the northeastern part of the South China Sea. It aspires to secure a route to safely bring the submarines stationed along the coast of Hainan Island to the Pacific Ocean.
Although China is showing a harmonious attitude, it will definitely seek to build a base on Scarborough Shoal in the medium to long term.
Following the award made to the Philippines by the Permanent Court of Arbitration in July 2016 and the subsequent agreement between China and the Philippines, tensions eased. However, the agreement does not represent a solution to China. Last February, Philippine Defence Secretary Delfin Lorenzana said he believed that China would eventually reclaim Scarborough Shoal and build a base on it. The then Philippine foreign secretary, Perfecto Yasay, was reported as saying that when Philippine President Rodrigo Duterte met with Chinese President Xi Jinping in Beijing in October 2016, Xi promised Duterte that Beijing would not reclaim and build structures on Scarborough Shoal. China has refuted this, and appears to be denying having gone as far as to reach such an agreement. Duterte made conciliatory remarks in relation to the remarks of the defence and foreign secretaries.
If China acts aggressively, it would claim that the Philippines is responsible for violating the status quo. China is seeking to secure the right to interpret the “agreement” unilaterally.

Shin Kawashima is professor of international relations at the University of Tokyo.