Chinese foreign policy is represented as a function of internal, domestic political considerations. Through the analysis of Chinese policy, we illustrate a method for predicting the outcome of policy decision making inside China. The substantive issue is China's expected approach toward territorial disputes in the South China Sea, especially surrounding the Spratly Islands. We address the extent to which China can be expected to reallocate resources from economic reform to foreign policy undertakings in that area and how likely China is to utilize force to impose its will on weaker neighbors. The approach represents a marked departure from the predominant neorealist paradigm in international politics. We assume that decision makers seek an optimal compromise between enhancing their security and pursuing their specific policy or ideological goals. Using this perspective, we conclude that, despite a dramatic increase in military expenditures and a significant strengthening of China's naval force in the South China Sea, China is unlikely to engage in any significant uses of force to pursue its agenda in the South China Sea.