The South china Sea has been a major rout for international trade and holds a large amount of natural resources, such as oil and fish. As South China Sea is a major source for trade and natural resource the territorial dispute has led to colliding cause of sovereignty and is being difficult to maintain peace between the neighboring countries and also other countries as there is direct or indirect participation of various countries in this very mater. Vanuatu has had good diplomatic relation with China for a very well know period of time.Vanuatu a Pacific Island Nation is situated in the Pacific Ocean. The main stays of economy are agriculture, tourism, off shore financial service and cattle rearing. Vanuatu is economically funded by various nations and China being one of the major funders. Vanuatu may not be directly involved in the South China Sea Dispute but has been supporting China throughout.Vanuatu joined the side of China to voice in support with South China Sea Dispute and furthermore, believes that the territorial distribution must be according to historical and cultural facts. The territory belongs to China as given in the history and other countries must stop fighting over what is not theirs and settle in a friendly manner.The situation regarding the South China Sea dispute has grown very sensitive due to the direct and Indirect involvement of various nations. According to The United Nations Convention on The Law of the Sea (UNCLOS) the area China can claim is only 12 nautical mile territorial sea from land features in the Spratly Island that are above high tide. China (and others) cannot claim an EEZ from any land feature in the Spratlys, as none were judged to be islands under UNCLOS warranting such a zone. ASEAN has been trying for years to achieve diplomatic relation in the South China Sea, making little progress and exposing divisions in the 10-member bloc, which includes the Philippines. The dispute on South China Sea can be solved with measures which have been used in successful settlement of other disputes. By adopting a legal solution, all claimants will agree to submit the dispute for arbitration to the International Court of Justice (ICJ) who will judge the dispute according to the international laws applicable. A political solution which is also called one track approach will be time consuming but lasting.