A decade has passed since an international tribunal rejected China's sweeping maritime claims across much of the South China Sea. Yet ten years later, the region remains one of the world's most strategically sensitive waterways, with competing claims, military deployments and regular confrontations continuing almost unchanged.

The anniversary is more than a historical milestone. It provides an opportunity to assess what has changed, what has not, and what it means for Australia.

A Landmark Legal Decision

In July 2016, an international arbitral tribunal established under the United Nations Convention on the Law of the Sea (UNCLOS) concluded that China's expansive "nine-dash line" claim had no legal basis under international law. The case had been brought by the Philippines following years of disputes over reefs, shoals and fishing grounds.

Beijing rejected the ruling, maintaining that the tribunal lacked jurisdiction and continuing to assert its historical claims across much of the South China Sea.

As a result, the legal position and the practical reality have followed different paths. International law remains unchanged, while events at sea continue much as before.

The Situation Today

China has continued to develop artificial islands, many of which now feature long runways, deep-water ports and substantial military infrastructure.

Meanwhile, the Philippines continues to report frequent confrontations involving its coast guard and fishing vessels. Maritime patrols, surveillance flights and naval operations by regional nations remain a regular feature of one of the world's busiest shipping corridors.

The South China Sea carries a significant proportion of global trade. Stability in the region therefore matters well beyond the countries that border it.

Australia's Position

Australia has consistently stated that it does not take sides on competing sovereignty claims over individual islands and reefs.

However, successive Australian governments have also maintained that disputes should be resolved peacefully and in accordance with international law.

The Australian Defence Force continues to operate lawfully in international waters and airspace, exercising rights recognised under international law. At times, Australian aircraft and naval vessels have reported close or unsafe interactions during operations in the region.

At the same time, Australia has strengthened defence cooperation with partners including the United States, Japan and the Philippines, reflecting broader concerns about security in the Indo-Pacific.

Australia's Strategic Paradox

Australia's relationship with China illustrates one of the defining challenges of modern foreign policy.

China remains Australia's largest trading partner, purchasing Australian resources, agricultural products and services that support thousands of jobs across the country.

Yet Australia is also investing heavily in defence, expanding regional security partnerships and advocating for freedom of navigation and respect for international law in precisely the waters where China continues to press its claims.

The relationship is therefore neither one of simple partnership nor outright rivalry. It is both.

Economic cooperation exists alongside strategic competition.

Pragmatic or Compliant?

That raises an important question for Australians.

Is maintaining strong commercial ties while disagreeing on security issues an example of mature diplomacy and national pragmatism? Or does economic dependence risk limiting Australia's willingness to challenge behaviour that it believes undermines the international rules-based order?

Reasonable people may answer that question differently.

What is beyond dispute is that Australia cannot afford to ignore either reality. Prosperity depends upon trade. Security depends upon stability, reliable alliances and adherence to international law.

Looking Ahead

Ten years after the tribunal's decision, the South China Sea remains a test of whether international law can influence the behaviour of major powers.

For Australia, the challenge is unlikely to disappear anytime soon.

The nation will continue trading with China while working alongside regional partners to preserve an open Indo-Pacific. Managing that balance—protecting both economic prosperity and national security—may prove to be one of Australia's most important strategic tasks over the next decade.