China has continued exercising its sovereignty over the Xisha Islands since the founding of the People's Republic of China in 1949. Following the signing of a so-called peace treaty between Western countries led by the United States and Britain with Japan at the San Francisco Conference, then Foreign Minister Zhou Enlai issued a statement in the capacity of the Chinese government in 1951, explicitly pointing out that the Xisha Islands and Nanwei Island, which is affiliated to the Nansha Islands, are both Chinese territories like the entire Nansha, Zhongsha and Dongsha Islands and that the Chinese government had formally taken over their full sovereignty from Japan after its surrender, although these islands had once fallen into the hands of Japanese imperialists during their aggressive war against China. In the statement, Zhou made China's stance clear that China's sovereignty over Xisha and Nansha islands is free from any restraints of the US and Britain-led "peace treaty" with Japan. In 1958, the Chinese government issued a statement, once again claimed that the Dongsha, Xisha, Zhongsha and Nansha islands as a part of Chinese territory. Following the statement, then Vietnamese prime minister Pham Van Dong sent a verbal note to then premier Zhou Enlai, solemnly expressing that the Vietnamese government "recognizes and endorses" the Chinese government's statement. In 1959, the Chinese government set up an office on the Yongxing Island in charge of the affairs of the Xisha, Nansha and Zhongsha Islands, and the office was administratively put under Guangdong province. In 1988, the office was assigned under the newly established Hainan province. The Law of the PRC on the Territorial Sea and the Contiguous Zone, a law that was passed in 1992, once again reiterated China's stance that the sovereignty of South China Sea islands, including the Xisha Islands, belongs to China. What is notable is that countries surrounding the South China Sea always definitely recognized China's sovereignty over these islands in the years before the 1970s.

Second, sovereignty over the Xisha Islands includes sovereignty over their territorial waters, contiguous zone, exclusive economic zone and continental shelf. According to Article 121 of the UN Convention on the Law of the Sea, the territorial sea, the contiguous zone, the exclusive economic zone and the continental shelf of an island are determined in accordance with the provisions of this Convention applicable to other land territory. In May 1996, the Chinese government issued a statement on the baseline of its territorial sea, declaring the baseline of its Xisha Islands as a straight baseline. This, together with the UN Convention and relevant laws of China's own, shows the Chinese government has the right to lay claim to the waters extending 12 nautical miles away from the straight baseline of the Xisha Islands, their contiguous zone, exclusive economic zone and continental shelf.

Third, the drilling of a CNOOC oil rig in the waters off the Xisha Islands should be China's sovereign right that accords with the UN Convention on the Law of the Sea. According to the Convention, territorial sea is an extension of a coastal nation's territorial sovereignty and it thus enjoys sovereignty over its territorial sea, corresponding overhead space, seabed and subsoil. The nation is privileged to exercise jurisdiction over customs, finance, immigration and healthcare in its contiguous water areas. The UN Convention also extends to the nation a sovereign right for the exploration, development, maintenance and management of seabed or underground natural resources in its exclusive economic zone as well as the right for some economic activities, such as the utilization of seawater, ocean currents, and wind power. The nation also enjoys jurisdiction over the construction and use of artificial islands and related facilities, oceanic researches, and protection of oceanic environment. At the same time, the country can also exercise its right over its continental shelf and enjoy exclusive rights for the exploration and development of natural resources at the continental shelf and any other country is not empowered to engage in similar activities at the continental shelf if no explicit nod is gained from the nation. According to the UN Convention, coastal countries also enjoy an exclusive right for the drilling at their continental shelf whether or not they have acquired an effective or symbolic occupation of the shelf or whether or not they have issued an explicit announcement for this purpose.

All these stipulations contained in the UN Convention on the Law of the Sea indicate that China owns the right for exploration and management of the waters off its Xisha Islands and that the drilling of the CNOOC oil rig is completely a sovereign right accorded by the convention.

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