The Paracel Islands are surrounded by productive fishing grounds and by potential oil and gas reserves. In 1932, French Indochina annexed the islands and set up a weather station on Pattle Island; maintenance was continued by its successor, Vietnam. China has occupied the Paracel Islands since 1974, when its troops seized a South Vietnamese garrison occupying the western islands. China built a military installation on Mischief Reef in 1999. The islands are claimed by Taiwan and Vietnam.
The islands have the potential for oil and gas development. Waters around the islands support commercial fishing, but the islands themselves are not populated on a permanent basis. China announced plans in 1997 to open the islands for tourism.