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This is an interesting move for China, and more than simply because it could put an airstrip on the new island eventually. International law treats islands differently from mere rocks and shoals.

By creating a new island, China could plausibly create a new bubble of Chinese sovereignty where none previously existed to help with the rest of its claims in the South China Sea.

It's all a very aggressive kind of diplomacy, something which the Chinese themselves liken back to American "Monroe Doctrine" activities in the Caribbean during the mid to late 19th century. I hope it doesn't take the Chinese as long America did to figure out that regional hegemony can be more effectively achieved by not trying to redraw lines of sovereignty and thereby inflaming nationalism.

When citing the Monroe doctrine, people tend to forget the Spanish-American war, which was its most significant outcome.

It's also interesting to wonder how the Chinese would respond if Taiwan started manufacturing land further south. I can't imagine it'd go over well.

Doesn't China claim Taiwan already? (Honest question)
Of course, since 1949, in case you missed the news. However, TW is political for the "unity of the motherland". China claimed South China Sea probably around the same time too, but IMO, it aimed for natural resource instead.
TW is Republic of China, so it is some China anyways...
Actually, Taiwan was the first country to claim the disputed territory (around 1949 IIRC), so we can't even blame China for starting this one. However China certainly did latch hard onto the Taiwanese claim.