The regulation, which was enacted by China's island province of Hainan on Jan. 1, is the latest effort by Beijing to bolster territorial claims and is adding to tensions over contested islets, freedom of navigation and rights to fisheries and other resources in a sea vital to world trade. The Philippines and Vietnam this week criticized the measure, as has the U.S. State Department, which called it "provocative and potentially dangerous."

In recent months, China has stepped up muscle-flexing over its territorial claims, declaring an air-control zone over the East China Sea that aggravated a dispute with Japan and challenged a fledgling thaw with South Korea. The latest moves in the South China Sea increases prospects for further standoffs with its southern neighbors.

Wu Shicun, a delegate to Hainan's legislature and former head of the province's foreign-affairs office, said Friday that the measure in principle applied to China's entire territorial claim in the South China Sea, which extends to near the coasts of the Philippines and Malaysia.

In practice, however, Mr. Wu said that Chinese enforcement would focus on policing the waters near the Paracel Islands, just south of Hainan, and not farther away. Mr. Wu said punishments—likely including fines and the seizure of catches—would be strengthened against fishermen who entered the area without permission. He said Vietnam has been encouraging its fishermen to enter the area.

"The goal is to make them not dare to come back," said Mr. Wu, who is also president of the National Institute for South China Sea Studies. "If you violate the rules, you will pay a high price." He said the U.S. had grown too worked up about the new measure, which he said was aimed at better regulating the fishing industry.

China has exercised de facto control of the Paracels after ousting Vietnam in a naval battle in 1974 and has since built up a sizable government and military presence.

Hanoi hasn't relinquished its claim. Luong Thanh Nghi, spokesman for Vietnam's Foreign Ministry, reiterated Friday that Vietnam had "indisputable sovereignty" over the Paracels and Spratlys, another island group farther to the south, claimed in part or full also by China, the Philippines and others. "Any foreign activities not approved by Vietnam in this area are illegal and invalid," he said, in response to a media query.

Other South China Sea claimants include Malaysia, Brunei and Taiwan. Verbal sparring and outright confrontations have been on the rise in recent years as a more powerful China asserts claims it has long made on paper and as other countries resist. In March, Vietnam accused China of firing on a Vietnamese fishing boat operating near the Paracels. China's Defense Ministry later said Chinese sailors fired two flares as a warning and hadn't attacked the Vietnamese.

On Friday, the Philippines Department of Foreign Affairs said it was "gravely concerned" by the new regulation. "This development escalates tensions, unnecessarily complicates the situation in the South China Sea, and threatens the peace and stability of the region," the statement read.

Existing Chinese law requires foreign fishing vessels to obtain permission from China's central government before operating in its territorial waters; the new Hainan regulation deals more directly with disputed South China Sea waters.

Farther south from the Paracels, the waters around the disputed Spratly Islands, off the Philippine island of Palawan, offer rich fishing grounds. Disputed sections of the South China Sea may also be rich in energy reserves, including oil and gas. Mr. Wu said Filipino fishermen operating near the Spratlys wouldn't be affected by the new measure.

Mr. Wu said the priority for enforcement is China's territorial waters—the area that under the U.N. Convention on the Law of the Sea extends up to 12 nautical miles from what is known as a country's "baseline," the low-water line along a coast from which countries measure territorial waters.

"The regulation only applies to territorial waters for which we have announced baselines, and those waters which we are practically able to control," he said.

The U.S. has long said it doesn't take sides in the territorial dispute, but that it supports any measures conducive to maintaining freedom of navigation. Mr. Wu said the new regulation posed no threat to freedom of navigation in the area.

Asked about the State Department's criticism of the new regulation, a spokeswoman for China's Foreign Ministry said Friday that China had the right to manage resources in its sovereign territory.

By Yang Jie & Vu Trong Khanh - The Wall Street Journal - January 10, 2014

Vietnam dismisses China's fishing curbs

Vietnam has denouced a Chinese law that requires foreign vessels to seek approval from Chinese regional authorities to operate in large areas of the disputed East Sea, internationally known as the South China Sea.

Vietnamese Foreign Ministry spokesman Luong Thanh Nghi said in a statement late Friday that the law and other moves by China in recent months are “illegal and invalid” and seriously violate Vietnam’s sovereignty over the Hoang Sa (Paracels) and Truong Sa (Spratlys) islands.

“Vietnam demands that China abolish the above said wrongful acts, and practically contribute to the maintenance of peace and stability in the region,” he said.

The rules, approved by China's southern Hainan province, took effect on January 1 and compel foreign fishing vessels to obtain approval to enter the waters, which the local government says are under its jurisdiction.

China and four members of the Association of Southeast Asian Nations (ASEAN) - Vietnam, the Philippines, Malaysia and Brunei - are embroiled in sovereignty disputes over the East Sea.

China’s claim is the largest, covering most of the sea’s 1.7 million square kilometers, a move emphatically rejected by the other claimants and independent experts.

The Philippine Department of Foreign Affairs said in a statement Friday that the new Chinese regulation “escalates tensions, unnecessarily complicates the situation in the South China Sea, and threatens the peace and stability of the region.”

Washington also called the fishing rules "provocative and potentially dangerous", prompting a rebuttal from China's foreign ministry on Friday, Reuters said.

Foreign Ministry spokeswoman Hua Chunying said the government "has the right and responsibility to regulate the relevant islands and reefs as well as non-biological resources" according to international and domestic law.

'Unilateral action'

Analysts say at this stage it remains to be seen whether these rules have been approved by the central government.

"We still have to wait and see whether the new rules are affirmed by Beijing and whether they are enforced by Beijing," Sam Bateman, a maritime security researcher at Singapore’s Nanyang Technological University, told Thanh Nien News.

But analysts say it is an obligation under the United Nations Convention on the Law of the Sea, to which both Vietnam and China are signatories, for the littoral countries of the East Sea to cooperate in the management of the living resources of the sea.

"The new rules suggest unilateral action by China contrary to the obligation to cooperate," Bateman said.

"If it turns out that these rules have been approved by Beijing, I would expect legal action to challenge the rules."

By An Dien - Thanh Nien News - January 11, 2014

The East Sea is thought to hold vast untapped reserves of oil and natural gas that could potentially place China, the Philippines, Vietnam, and other claimant nations alongside the likes of Saudi Arabia, Russia, and Qatar.

In 1974, taking advantage of the withdrawal of the American troops from the Vietnam War, China invaded the Paracel Islands. A brief but bloody naval battle with the forces of the then US-backed Republic of Vietnam ensued.

Vietnam’s behemoth northern neighbor has illegally occupied the islands ever since. But a post-1975 united Vietnam has never relinquished its ownership of the Paracel Islands and continues to keep military bases and other facilities on the Spratly Islands.