This paper analyzes the development process and future direction of China's South China Sea (SCS) policy, focusing on the organizational history of its State Oceanic Administration (SOA) that oversees the maritime administration under the State Council. Most previous studies on China have examined the SCS issue from a diplomatic, if not military, perspective. However, coastal states, in general, take two kinds of approach toward the disputed maritime zones they lay claim to. Recognizing the not-yet-demarked status of the disputed water, the international approach respects other claimants' potential rights and seeks to control frictions in a cooperative manner before permanent delimitation. The Ministry of Foreign Affairs often carries this responsibility in domestic bureaucracy. The second approach, that is, the domestic approach puts higher priority on establishing effective control over the disputed water, by exclusively strengthening their administration against other states. In China, the SOA has devoted itself to this mission for decades, aiming to protect China's maritime rights but only won recognition from central leaders after 2006.

The paper solves two puzzles regarding external Chinese behaviors. First, it answers why Chinese leaders shifted from a cooperative SCS policy to an aggressive one, using paramilitary forces belonging to the SOA in mid-2000. Chinese leaders first allowed SOA to initiate a regular patrolling system over the disputed water of the East China Sea in the summer of 2006, considering the soaring anti-Japanese nationalism in domestic society. Supported by the People's Liberation Army Navy, SOA used the opportunity to expand the patrolling system over all of Chinese "jurisdiction water" the next year. Second, it reveals why China began reclamation of seven disputed maritime features in Spratly Islands in mid-2010. Given the tailwind of the domestic politics, SOA successfully achieved the legislation of "Island Protection Law" in 2009 that enabled it to establish administrative measures to enhance island control. Cooperating with the military authorized to manage offshore islands in the Chinese domestic system, SOA stepped forward to prepare reclamation plans to consolidate Chinese presence in the SCS.

Unlike Hu Jintao administration that was vulnerable to the domestic criticism and therefore accepted SOA's proposals without much consideration, Xi Jinping tightened his control over the SOA. He continues to prioritize the domestic approach, but aims at not raising international tension over maritime issues. The SOA was given the new task of establishing Maritime Silk Road under his initiative. Regarding the SCS, China is trying to find a way to make other claimants respect its rising influence by providing economic carrots to them in the new scheme, in the near future.