Maintaining regional peace and security is a major concern for the Association of South East AsianNations(ASEAN) while preserving strong and strategic ties with China is also imperative for theprotection of regional economic and security interests. In a territorial dispute that involves mostASEAN nations to a different extent, delicately crafting a diplomatic solution to protect good workingrelations among ASEAN nations and China will become increasingly difficulty. China has beenaccused of intimidating and using other coercive tactics against the Philippines and Vietnam in its bidto claim large areas of the South China Sea against the interests of ASEAN member states. Despitethese tensions, ASEAN, nor its member nations have “condemned‟ these actions, or sort to sanctionthe Chinese at the risk of damaging lucrative economic relations to the detriment of security andstability in the region. A lack of solidarity within the ASEAN community has the capacity to undermineits function and response which has thus far been limited in addressing this issue. This paper willdiscuss aspects of Philippine, Vietnamese and Indonesian government policy towards China andcharacterize ASEAN‟s role in resolving and managing the conflict. The Philippines and Vietnam haveincreasingly troubled and deteriorating relations with the Chinese, in contrast with the Indonesians,who are working expeditiously to strengthen ties with the Chinese across a plethora of foreign policyand defense cooperation issues. The prospect of a unified ASEAN response to the South ChinaSea territorial dispute remains unlikely. Indonesia‟s proposed code of conduct may be the first stepin addressing peace and security, however is not a long term solution and governments throughoutthe region must continue ongoing robust diplomatic efforts through ASEAN, bilaterally andmultilaterally, with International assistance and cooperation, to resolve these territorial disputes.