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Several countries are competing territorial claims over the South China Sea. Such disputes are regarded as Asia’s potentially dangerous point of conflict. Both China and Vietnam have been vigorous in prosecuting their claims. This study examines the origin and development of the Sino-Vietnaemse dispute over the South China Sea from the historical perspectives. In the traditional era, China didn’t use any standard name of Paracel Islands or Spratly Islands. Moreover, the South China Sea was not considered as Chinese territory. On the other hand, Vietnam called Paracel Islands Bãi Cát Vàng or Hoàng Sa, and then Spratly Islands was named Vạn Lý Trường Sa in the late 19th century. Vietnamese government had tried to control Paracel Islands since the 17th century. However, the French colonial period was a break with tradition. Vietnamese territorial water grew rife with ambiguities and uncertainties. Japanese intervention in the South China Sea set off a knock-on effect on China and French Indochina. The consequent increase in the political temperature on both sides of Paracel Islands and Spratly Islands, and in the occupied and disputed area itself, was real and palpable. Japan took de facto control of the two Islands in the early 1940s. Japan’s defeat in the Second World War and its farewell to the South China Sea in 1951 became a major hindrance to peaceful coexistence in Asia.