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Sarah Osorio is bubbly and beautiful, and she is enjoying her reign as both Miss Palawan and Miss Kalayaan - the name of a contested chain of tiny islands in the South China Sea.

"That's me!" said the 18-year-old, showing a video of the beauty contest, where she struts down the runway beaming and wearing a red bikini.

Ms Osorio said she joined the pageant to make a serious point - about the Kalayaan Islands, where her father is an elected member of the municipal council. Her chance came when she was asked on stage what she would do if she won.

"I will focus on the biggest problem of our municipality, which is that other countries are claiming my municipality," she replied. "Because my municipality is for the Philippines only." The crowd went wild and the crown was hers.

The Kalayaan Islands are some of the thousands of islands, atolls and reefs in the South China Sea, where China, the Philippines, Vietnam, Malaysia, Brunei and Taiwan have overlapping territorial claims. Beneath and around them are believed to be rich reserves of oil and natural gas.

China's claim includes almost the entire South China Sea, well into what the UN Convention on the Law of the Sea recognises as the 200-mile-from-shore Exclusive Economic Zones of other claimants. That has led to occasional flare-ups and to competition to occupy islands, reefs and sandbars.

The Philippine army has a few men living on a rusting boat docked on one atoll. There is not room for anything else.

Kalayaan's main island, Pag-asa - about 650 metres in diameter - is spacious by comparison. Many of its 60 residents are in local government.

"We're a small island - no activities, no entertainment," Ms Osorio said. "You can fish during the day and at 6pm, no electricity, sleep." Still, she says, people choose to live there "to show it's ours, that we have that island for the Philippines".

Coastal clashes
 
China's energy needs are expected to double over the next 25 years. Already it imports more than half its oil. It is looking to the South China Sea to provide more and is becoming increasingly aggressive in asserting its claims.

When ExxonMobil announced in October that it had found what looked like a sizable natural gas field near the Vietnamese city of Danang, China warned that foreign companies should not proceed in waters it claims.

A Vietnamese survey ship in May filmed as a Chinese Marine Surveillance boat severed the Vietnamese ship's seismic sensor cable.

The Philippines has had its own challenges. Lt-Gen Juancho Sabban, who heads the Western Command of the Philippine Armed Forces on the island, shows off what he calls a "Chinese donation" to his marine patrol boats - a confiscated Chinese fishing speedboat.

"They had GPS, they had radios. They had air compressors for deep sea diving - making use of an air hose - about 50 metres," he said.

Gen Sabban thinks the boat was involved in surveillance. When it went into internal waters, smaller Philippine patrol boats blocked it. The Chinese speedboat tried to ram one of them so the patrols fired to disable the engine.

The arrested crew said they were fishermen from the southern Chinese island of Hainan. But Gen Sabban doubts a fishing boat would have travelled 600 miles on its own. He notes that the group were promptly bailed out by the Chinese embassy and disappeared.

He says similar boats have left markers and construction materials near islands or reefs the Philippines claims.

The Chinese erected a structure on Mischief Reef in 1995 almost overnight and now have a permanent presence there, some 130 nautical miles from the Philippines and 600 from China.

Still, China says it has ancient claims to these distant islands, because Chinese explorers, centuries ago, found them and named them.

"In layman's terms, it's absurd," said Gen Sabban. "Unbelievable." By the same logic, he says, Filipinos travelled to China centuries ago, so the Philippines should be able to claim some of China.

Gen Sabban sees China's new assertiveness as linked to the fact that the Philippines and Vietnam are both opening up waters they claim to foreign companies. Shell and Chevron are already active in the Philippines, and the country is soliciting bids for 15 more offshore exploration blocks.

"Now our oil industry is picking up and investors have increased five-fold or so," Gen Sabban said. "This year, there will be more drilling in the West Philippine Sea (the Philippines' name for areas of the South China Sea it claims) and we expect that by the end of this year, more rigs will be in place."

'Vital area'
 
Protecting an oil rig will be one of the exercises the Philippines performs with the US military this spring. A Philippines delegation visited Washington in January to talk about enhanced US military support in the South China Sea.

"This area is vital to the United States," Chief of US Naval Operations Admiral Jonathan Greenert said recently. "It's been an area vital to our navy and our focus for decades, because of… the trade routes, the large economies."

Adm Greenert said the challenge was to keep trade routes open - and peaceful - while keeping belligerence to a minimum.

China's view is that the US should mind its own business.

"Any interference from outside forces or a multilateral discussion will only complicate matters, rather than resolving them," Chinese Foreign Ministry Spokesman Liu Weimin said in November.

China points out that the $30bn in trade the Philippines has with China could double in a couple of years. Or China could punish the country, as the Communist Party-owned newspaper The Global Times suggested, for turning to the US for more military muscle.

Another Global Times editorial warned that "small countries" like the Philippines and Vietnam should stop challenging China's interests or "they will need to prepare for the sound of cannons".

Not surprisingly, this kind of talk irritates Gen Sabban. He says he has doubled patrols of nearby waters over the past 18 months, but has not increased armed presence. He would prefer a peaceful solution. Still, he says, China should think before getting any more aggressive in these waters.

"Remember the Vietnam war, where a smaller country defeated a superpower," he says. "It's about the determination of a people to defend themselves."

And it does not hurt that another superpower stands ready to come to their aid.