The South China Sea disputes involve both island and maritime claims among sovereign states and the issue has long been a point of debate in international politics. It involves not only the countries in dispute but also other major world powers, including the United States. Its important strategic location and the abundant resources make the South China Sea a target of contention among the claimant countries. The arbitral ruling in July 2016 gives a new momentum to the dispute. The article examines the strategic relations of China and the Association of Southeast Asian Nations (ASEAN) by analyzing the positions and steps taken by ASEAN and China, as well as ASEAN-China joint initiatives. It also discusses the challenges and viable solutions to the dispute.