As China continues to ignore The Hague's ruling, strategists are warning of heightened tensions that could endanger Beijing's ties with Southeast Asia and hurt President Xi Jinping's international credibility.
Mainland officials have repeatedly publicized their disregard for The Hague's Tuesday court ruling, begging the question of what China's next move will be.
In an official statement, Beijing said it was ready for more diplomatic negotiations to resolve the matter, a move that Philippine President Rodrigo Duterte is also open to. But should diplomatic talks fail, of which there is a high probability of given China's stubborn position, Beijing may resort to military action.
On Wednesday, Vice Foreign Minister Liu Zhenmin said China has the right to set up an air defense zone in the South China Sea, but added that such a move depends on "the level of threats" the country faced. Meanwhile, Chinese ambassador to the U.S. Cui Tiankai said the case could intensify conflict and confrontation in the region, Reuters reported.
Experts largely expect China's response in the coming weeks to consist of strong diplomatic condemnation of the ruling combined with continued steady increase in its regional military presence.
"No state seeks conflict, but any sense that the decision is being used to roll-back China's territorial position will likely lead to an escalation in confrontations with the U.S. and its allies," explained Malcolm Jorgensen, senior lecturer at the University of Sydney.
He said direct negotiations with the Philippines and some form of the 2002 ASEAN provisional code of conduct, in which states agree to suspend sovereignty claims in favor of joint economic activity, remain the most plausible courses of action.
"The ruling won't change anything in the short-term ... China will continue its occupation of the islands and building them up," said James Nolt, senior fellow at World Policy Institute.
The South China Sea is a strategic zone for Southeast Asian nations given its operate profitable fishing and shipping businesses, so it's in the best interest of all parties to avoid the use of force, Nolt added.