What is the basis of the dispute between China and the Philippines over the Scarborough Shoal?

The dispute centers on conflicting sovereignty claims. China asserts that a Philippine plane intruded into its airspace over Scarborough Shoal, violating Chinese sovereignty. China claims jurisdiction over nearly the entire South China Sea, including this contested shoal area. This territorial dispute has significant implications as the South China Sea is a vital waterway that facilitates more than $3 trillion of annual shipborne commerce. The tensions highlight the ongoing struggle for control in this strategically important region, with both nations asserting their territorial rights through military and coast guard activities.