For a long time, China has been claiming sovereignty over some very wide area of the sea in South China. This point has strategic commercial sea-lanes and has important depots of gas and oil. The claims have however been disputed by those countries in the southern parts of Asia which include Brunei, Vietnam, Philippines and Malaysia. Some of the counties that are involved in this South-China sea dispute in the real sense are not democracies with China itself included. All of them do not considerably stand by any domestic public opinion concerning the dispute. In the recent past China has been playing down its claims over the region and has been trying enhance closer diplomatic, economic as well as security ties to those countries in the Southeast Asia region. The softer approach however seems to have been abandoned. The real test on whether America can manage the rise of China will be proved by this dispute.