July 29, 2012: On July 24th China made it official and declared one of the Paracel islands (Woody Island) to be the center of a new Chinese municipality (city). Sansha is actually Woody Island and dozens of smaller bits of land (some of them shoals that are under water all the time) in the Paracels and the Spratly Islands to the south. In fact, the new "city" lays claim to two million square kilometers of open sea (57 percent of the South China Sea). This is part of a strategy based on the ancient principle that, when it comes to real estate, "possession is 9/10ths of the law." It's the law of the jungle, because all the claimants are armed and making it clear that, at some point down the road, force will be used to enforce claims. Since 1975, there have been two naval battles, and dozens of minor clashes by the rival claimants to the Paracels. With the establishment of Sansha City, China is saying the next time it could be war, because a government has to defend its sovereign territory.

Currently Woody Island has a permanent population of about a thousand people who have to be supplied (even with water) at great expense from the Chinese mainland. Most are military and police personnel (who serve on the island for two years) and civilian officials (who serve six month tours). There is a small fishing community and facilities for fishing boats to tie up and the crews to come ashore for some rest. There are also some tourist attractions. Woody Island is about 340 kilometers from Chinese territory (Hainan Island) thus within China's exclusive economic zone (EEZ). The expense of maintaining Sansha is a minor cost when you consider that this move makes many disputed islands, atolls, and reefs officially part of China.

As a "city" Sansha requires a larger military garrison, which is expected to arrive soon in the form of several thousand troops, armored vehicles, anti-aircraft weapons, warships, and aircraft. The Paracel Islands are also claimed by Taiwan and Vietnam. In 1974, China fought a naval battle with the South Vietnamese near the Paracel islands and took control after sinking one of the four Vietnamese warships and chasing the others away. China has been expanding military facilities on these tiny islands for several years. Among the more notable additions has been an expanded electronic monitoring facility and a lengthened runway on Woody Island, now long enough to support Su-30 fighters. Several large fuel tanks have also been built, indicating an intention to base Su-30 fighters there. Eventually, over 3,000 civilian and military personnel will be stationed in Sansha. This strengthens claims on unoccupied islets and reefs, including many within the Filipino EEZ.

China is also concerned about the nearby Spratlys, a group of some 100 islets, atolls, and reefs that total only about 5 square kilometers of land but sprawl across some 410,000 square kilometers of the South China Sea. Set amid some of the world's most productive fishing grounds, the islands are believed to have enormous oil and gas reserves. Several nations have overlapping claims on the group. About 45 of the islands are currently occupied by small numbers of military personnel. China claims them all but occupies only 8. Vietnam has occupied or marked 25, the Philippines 8, Malaysia 6, and Taiwan one.

Taiwan built a 1,150 meter long and 30 meter wide air strip on Itu Aba, called Taiping Island by the Taiwanese. Ita Aba is one of the largest of Spratly Islands, at about 120 acres (489,600 square meters). It has been in Taiwanese hands since the mid-1950s, and has largely been used as a way station for fishermen. The island is also claimed by the Vietnamese, who call it Thai Binh. Taiwan has long maintained a small military presence on the island and the air strip is meant to cement that control. Protests were made by Vietnam, which controls the largest group of islands, and the Philippines, which also claims Itu Aba island. The Vietnamese earlier refurbished an old South Vietnamese airstrip on Big Spratly Island.

In 1988, China and Vietnam fought a naval battle off the Spratly islands. The Chinese victory, in which a Chinese warship sank a Vietnamese transport carrying troops headed for one of the disputed islands, was followed by Chinese troops establishing garrisons on some of the islands. In 1992, Chinese marines landed on Da Lac reef, in the Spratly Islands. In 1995, Chinese marines occupied Mischief Reef, which was claimed by the Philippines.