Explainer: What's the significance of Scarborough Shoal, and what is China planning there?

The Philippines has reacted strongly to China's announcement that it would establish a nature reserve in the South China Sea at the disputed Scarborough Shoal, site of years of stand-offs between the countries.

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WHAT IS THE SIGNIFICANCE OF THE SHOAL?

Named after a British ship that was grounded on the atoll nearly three centuries ago, Scarborough Shoal is one of Asia's most contested maritime features and a flashpoint for diplomatic flare-ups over sovereignty and fishing rights.

Located 200km off the Philippines and inside its exclusive economic zone, the shoal is coveted for its bountiful fish stocks and a turquoise lagoon that provides a safe haven for vessels during storms. It is named Huangyan Dao by Beijing, while Manila calls it Panatag Shoal, or Bajo de Masinloc.

Its position is strategic for Beijing, sitting in the middle of the South China Sea and near shipping lanes carrying more than US$3 trillion (S$3.85 trillion) of annual commerce. Activities there are closely watched by the United States and other major powers.

WHAT IS CHINA PLANNING?

China has approved the creation of a national nature reserve at Scarborough Shoal that it says is to preserve a 3,524ha coral reef ecosystem. It would cover the north-eastern side of the triangle-shaped atoll, with close proximity to the sole entrance for larger vessels.