Context: Recently, China has notified new maritime rules, warranting vessels to report their information when passing through what China sees as its “Territorial Waters”, that will take effect from 1st September 2021.
Background

• China claims almost all of the 1.3 million square-mile South China Sea as its sovereign territory. It has been building military bases on artificial islands in the region.
• It is seen as a sign of stepped-up efforts to safeguard China's national security at sea by implementing strict rules to boost maritime identification capability.
• China sees the US’ incursion into the region is of assertive nature that can be the biggest destroyer of peace and stability in the region.

Key Features of China’s new maritime rules 

• Foreign vessels, both military and commercial, will be henceforth required to submit to Chinese supervision in “Chinese territorial waters,” as per the new law. 
• “Operators of submersibles, nuclear vessels, ships carrying radioactive materials and ships carrying bulk oil, chemicals, liquefied gas and other toxic and harmful substances are required to report their detailed information upon their visits to Chinese territorial waters”.
• It designed to control the entry of foreign vessels in what Beijing calls “Chinese territorial waters” take effect. 
• The move is expected to have far-reaching consequences for passage of vessels, in the disputed South China Sea, East China Sea and Taiwan Strait, and is likely to escalate the existing tension with the US and its neighbours in the region.

Impact of the move

• The move is expected to have far-reaching consequences for passage of vessels, both commercial and military, in the disputed South China Sea, East China Sea and Taiwan Strait.
• It is likely to escalate the existing tension with the US and its neighbors in the region.

Why is this important?

• South China Sea: The South China Sea, which lies between China, Taiwan, the Philippines, Brunei, Malaysia, Indonesia and Vietnam, is of great economic importance globally.
• Shipping: Nearly one-third of the world’s shipping passes through its lanes, and the waters house numerous important fisheries.

Significance for India

• South China Sea is a critical route for India, both militarily and commercially.
• It plays a vital role in facilitating India’s trade with Japan, South Korea and ASEAN countries, and assists in the efficient procurement of energy supplies.
• More than 55% of India’s trade passes through the South China Sea and Malacca Straits.
• India is also involved in oil and gas exploration in offshore blocks in the margins of the Sea, which has led to standoffs with Chinese authorities.

The actual row

• The waters around China are hotly contested.
• Under a “nine-dash line” map, China claims most of the South China Sea as its sovereign territory.
• This claim is contested by its neighbors in the region and by the United States, which, though it has no claim in the Sea, backs the smaller nations in the fight against Chinese overreach.

International position

• Currently, international maritime activities are governed by an international agreement called the United Nations Convention on the Law of the Sea (UNCLOS).
• China, India and over a hundred other countries are signatories of UNCLOS (the US, significantly, is not).
• Accordingly, states have the right to implement territorial rights up to 12 nautical miles into the sea.
• The UNCLOS also states that all vessels have the right of “innocent passage” through this region – China’s new law violates this.