(Footage of protests outside the United Nations building plays)
THOM COOKES, REPORTER: Outside the United Nations building in New York, this small but very noisy group of Filipinos is staging a protest. They're infuriated by China's increasing claims to the South China Sea and the gas reserves that might lie under it.
PROTESTER (subtitled): we are saying that we should benefit from the resources of the country. And the Spratly Islands are within the 200 economic zone of the Philippines. And China is over 600 miles away.
THOM COOKES: In January, the Philippines lodged a complaint with the United Nations, saying that China's claims violate the Convention on the Laws of the Sea, a convention that both countries have sign and ratified.
LOIDA NICOLAS-LEWIS, CHAIR, US PINOYS FOR GOOD GOVERNANCE: We are now before the United Nations Arbitral Tribunal. So the judges, three of them also decide who has the right to exploit the 200 billion barrels of oil, the trillion square cubic feet of natural gas that is within our shore.
(Footage of vessels in the South China Sea plays)
THOM COOKES: China has argued that the tribunal doesn't have jurisdiction over the issue and has refused to take part in any arbitration which has further infuriated the Philippines. The tribunal has yet to decide if it will hear the issue, but the arguments are over more than whatever oil and gas might be under the sea.
DR PRADEEP TANEJA, UNIVERSITY OF MELBOURNE: The bulk of the trade, China's trade and America's trade goes through the South China Sea, through this region. And it's in everybody's interest to maintain the sea lanes of communication open.
China claims that this is not an issue. But other countries, particularly the US, is not so sure.
THOM COOKES: The South China Sea is possibly the most contested piece of water on the planet, subject to multimillion overlapping claims and counter-claims from half a dozen different countries.
By far the most sweeping claim is China's so called Nine-dashed Line, which covers the entire area and which has provoked a great deal of tension.
When asked exactly how much tension there is, the US admiral in charge of the Pacific Fleet chose his words carefully.
ADMIRAL SAM LOCKLEAR, UNITED STATES PACIFIC COMMAND: inthe South China Sea I think we have - we are at a... I would say kind of a low boil is probably the best way to put it. Is that we're watching carefully what happens as each of these peripheral countries look at how they're going to secure their interests.
THOM COOKES: The Philippines Navy has had standoffs with both the Chinese and the Taiwanese in the last 12 months, as well as numerous clashes over fishing boats. And the Filipinos have looked to their allies for assistance.
While the Philippines may have one of the smaller defence forces in the region, it does have one very large and very powerful friend.
(Footage of United States navy on manoeuvres in the Phillipines)
The United States is proposing to store equipment and supplies at Filipino military bases, as well as gaining increased access to those bases for its own ships and planes
JOSE CUISIA, PHILIPPINE AMBASSADOR TO THE US: Can it be used for military purposes if needed?
Maybe if needed, if the US has to assist the Philippines for some reason, then a facility will be there you know, for that purpose.
THOM COOKES: But when asked if this was in direct response to China, the ambassador was more diplomatic.
JOSE CUISIA: This is not meant to address a threat of a specific country. It is to enhance our capability for our self-defence, for our external security, and this is where the US is coming in to assist us.
THOM COOKES: When dealing with the various competing claims, China's preferred strategy is to pick each country off one by one to strike a separate deal.
The US and some of its allies have taken the opposite tack, using regional forums like ASEAN (Association of South East Asian Nations) to push for a code of conduct for the South China Sea, and the result has been that some traditional rivals have found some common ground.
At the demonstration outside the UN, a small number of Vietnamese protesters join the Filipinos.
PETER NYUGEN, VIETNAMESE-AMERICAN COMMUNITY IN NEW YORK: They're starting to take over part of the Spratly Islands which also are co-owned by Vietnam, Taiwan, Thailand and the Philippines. Therefore we have the same common interest.
THOM COOKES: And China's claims have created some more unlikely allies.
BARACK OBAMA, US PRESIDENT: Obviously we all recognise the extraordinarily complex history between the United States and Vietnam.
THOM COOKES: The two countries fought a war for almost 20 years, but now they're negotiating on how to balance China's growing power
BARACK OBAMA: We very much appreciate Vietnam's commitment to working with ASEAN and the East Asia Summit in order for us to arrive at codes of conduct that will help to resolve these issues peacefully and fairly.
THOM COOKES: For its part, China says its position is clear.
HUA CHUNYING, CHINESE MINISTRY OF FOREIGN AFFAIRS (translation): China reiterates its determination to safeguard its territorial sovereignty and maritime rights as well as its commitment to resolve disputes with concerned nations through negotiation. China hopes the United States will respect the facts and not side with any particular party.
DR PRADEEP TANEJA: I think China is unwilling to make any real concessions on this. China is the rising power, and if this dispute is to be resolved eventually, concessions will have to be made, because China's claim is sweeping.
THOM COOKES: However the competing claims are resolved in the South China Sea will be a key test of the evolving relationship between two of the most powerful nations on earth. Something that both countries recognise.