The South China Sea dispute involves competing territorial claims from China, Vietnam, the Philippines, Taiwan, Malaysia, and Brunei, with rising tensions due to China's aggressive actions, including island-building and naval patrols. Key issues include the sovereignty over island chains like the Paracels and Spratlys, potential natural resource reserves, and strategic shipping routes. International responses have included calls for arbitration, with the U.S. recently declaring many of China's claims unlawful, supporting the Philippines' position following a tribunal ruling against China in 2016.