This week’s binding decision from the Permanent Court of Arbitration at The Hague, Netherlands, dealt a serious blow to China’s claim to most of the South China Sea, a 1.4 million-square-mile body of water that contains the world’s busiest shipping lanes. The ruling was rejected immediately by the Chinese Foreign Ministry — as expected — but it has left Beijing in an exceedingly difficult position where it has to balance an angry, nationalistic population against an international community that expects it to back down.

“What’s at stake here is the question of China’s image and China’s future — what kind of nation, what kind of country will China be? And how will it be regarded by its neighbors as well as by its people?” Assistant Secretary of State for East Asian and Pacific Affairs Daniel Russel told CNBC.

http://www.cnbc.com/2016/07/13/south-china-sea-beijing-considers-next-moves-after-hague-ruling.html