By Drake Tien, Fall 2025 Marcellus Policy Fellow

Since becoming a standalone province in 1988, Hainan Island has played an outsized role in China’s strategic goals and operations in the South China Sea (SCS). This includes administrative oversight of the controversial Sansha City, hosting the People’s Liberation Army Navy’s (PLAN) nuclear submarine fleet at Yuli Naval Base, and hosting the National Institute for South China Sea Studies (NISCSS) in Haikou City. Beijing’s decision to make Hainan a province was a deliberate strategy to use the island as a proxy for its long-term SCS objectives.

Hainan Province balances its own strategic interests within the SCS with its directives from Beijing. This behavior is not unique to Hainan but reflects the role of provincial governments in directing and implementing Chinese foreign policy objectives vis-à-vis neighboring countries. What is unique, however, is the economic and strategic importance of the SCS. The SCS is one of the world’s most heavily trafficked waterways, with an estimated $3.4 trillion in ship-borne commerce transiting the sea each year. It is also a potential flashpoint for conflict between the United States and China, due to overlapping maritime claims from Beijing and its neighbors (Philippines, Vietnam, and Taiwan).

In recent decades, China has taken actions its neighbors perceive as aggressive and expansionist behavior in disputed territorial waters, increasing the risk of a flashpoint event that triggers direct conflict between the U.S. and China. While U.S. policymakers have particularized the risks associated with Chinese behavior in the SCS, less attention has been paid to the source and drivers of this risk. There is a misconception among many in Washington that China is a unitary actor led exclusively by the Central Committee of the Chinese Communist Party (CCP). Subnational actors like Hainanese provincial officials are able to interpret Beijing’s directives to simultaneously address their own economic and political issues. These factors incentivize comparatively aggressive behavior by Chinese actors in the SCS that while within the parameters of acceptable behavior in Beijing, cause preventable tensions between other claimants and actors.

It is unclear to what extent Beijing sees Hainan’s behavior as a problem to address or the cost of its long-term strategic goals. What is clear is that economic and political opportunities brought about by Beijing’s objectives in the South China Sea are increasing the risk of incidents that in tandem with Washington’s belief in a “New Cold War” could trigger a full blown U.S.-China conflict.
To address these issues, this paper will examine the role subnational actors such as Hainan Province play in shaping Chinese behavior in the SCS and how the U.S. can take into account this behavior in advancing its strategic aims in the SCS. Specifically, this paper will argue that Beijing’s more aggressive and expansionist tactics in the SCS are in part due to sub-national actors like Hainan Province taking advantage of an incentive structure CCP and other central government appendages to maintain central control over provincial actors.

To craft policies that effectively deter Chinese escalatory behavior while reducing flashpoints for conflict, U.S. decision-makers must account for the economic concerns and strategic influence of Hainan Province. By drawing a more comprehensive picture of what drives China’s behavior in the SCS, U.S. policymakers can effectively explore potential policies that both address Hainan’s economic and political drivers while reducing the risk of escalatory behavior.