China has sovereign claims to archipelagos in the South China Sea which are well-founded in historical fact. Recognition of these claims is vital to China's maritime and security interests and to the development of hydrocarbon resources. These will make a major contribution to its primary goal of economic development in the coming decades. At the same time, China wants to dispel foreign perceptions that it sees the South China Sea as a 'domestic lake'. There have been military clashes, but China wants good-neighbourly relations with ASEAN and the countries of the area. Consequently, it has adopted a conciliatory and flexible attitude to bridge the apparent contradictions in these approaches. China's ongoing defence buildup is of a defensive nature. It wants peaceful settlements to regional disputes in accordance with international law and the UN Convention on the Law of the Sea.