The Wire

The Phillipines thought it had a win yesterday when the Permanent Court of Arbitration in The Hague decided in its favour, ruling that China did not have historic rights to occupy its waters. However China which has long rejected arbitration has dismisssed the decision and announced that it wishes to continue discussion on such regional matters in its own ways. The reaction has escalated tensions in the area and created a diplomatically difficult situation for Australia, which has  ties to the US but  also a huge financial stake in keeping peace in the South China Sea.