This article focuses on China’s strategy in dealing with the US factor in the South China Sea conflicts. While the USA is not directly involved in the South China Sea quagmire, its concern with the security of the sea-lanes and its insistence that peaceful means must be used to solve the region’s problems have cautioned China to tread carefully in its plans to recover its ‘lost territories’. China would like to see ASEAN and the individual ASEAN claimant states weaned off their reliance on Washington. However, US surveillance and military power, particularly in the post-11 September period, play an important role in ensuring that disputes in the South China Sea do not escalate to unacceptable levels. It seems likely that the impasse in the discussions on the South China Sea will continue for some time.