Background: The Paracel Islands are surrounded by productive fishing grounds and by potential oil and gas reserves. In 1932 French Indochina annexed the islands and set up a weather station on Pattle Island; maintenance was continued by its successor Vietnam. China has occupied the Paracel Islands since 1974 when its troops seized a South Vietnamese garrison occupying the western islands. China built a military installation on Woody Island with an airfield and artificial harbor. The islands also are claimed by Taiwan and Vietnam.
Location: Southeastern Asia group of small islands and reefs in the South China Sea about one-third of the way from central Vietnam to the northern Philippines
Economy overview: The islands have the potential for oil and gas development. Waters around the islands support commercial fishing but the islands themselves are not populated on a permanent basis.