The 14th UNESCO Intergovernmental Oceanographic Commission (IOC) agreed that China would establish five observation posts for worldwide ocean survey, including one in the Spratly Islands, and they commissioned China to build an observation post there in March 1987. The Delegate of the People's Republic of China (PRC) spoke highly of GLOSS (Global Sea Level Observing System) during the meeting of the UNESCO IOC in Paris, but he noted what the PRC considered to be a few mistakes in the text of Document IOC/INF-663; for example, "Taiwan" is listed as a "country" in relevant tables contained in the document. The scientists from the GLOSS did not know that the PRC claims that Taiwan is not a separate country; nor did they know about the territorial disputes in the South China Sea. They agreed that China would install tide gauges on its coasts in the East China Sea, and on what the PRC calls its Nansha Islands in the South China Sea. The scientists did not know that Taiwan occupied one of the Spratly Islands, but (despite its territorial claims), at that time China occupied none. After numerous surveys and patrols, in April 1987 China chose Fiery Cross Reef as the ideal (from their point of view) location for the observation post, because the unoccupied reef was remote from other settlements, and it was large enough for the observation post. On the other hand, Johnson South Reef in the Union Banks sunken atoll, (150 km east of Fiery Cross Reef), is close to the Vietnamese inhabited Sin Cowe Island (also in the Union Banks), and it is also within the Philippine claimed 200 nautical mile Economic Exclusion Zone; in other words, Johnson South Reef is in a high profile and highly disputed area. In January and February 1988, Vietnamese forces began establishing a presence at surrounding reefs, including Collins Reef and Lansdowne Reef in the Union Banks, in order to monitor Chinese activity. This led to a series of confrontations.

On 31 January 1988, two Vietnamese armed cargo ships approached the Fiery Cross Reef to get construction material to build structures signifying Vietnam's claim over the reef. However, the PLAN intercepted the ships and forced them away from the reef. On 17 February, a group of Chinese ships (a PLAN destroyer, escort, and transport ships) and several Vietnamese ships (a minesweeper and armed freighter) all attempted to land troops at Cuarteron Reef. Eventually the outgunned Vietnamese ships were forced to withdraw. On 13 and 14 March, a PLAN artillery frigate was surveying the Johnson Reef when it spotted three Vietnamese ships approaching its location. Both sides dispatched troops to occupy Johnson Reef. After shots were fired by ground forces on the reef, the Chinese and Vietnamese ships opened fire on each other.

China moved quickly to consolidate its presence. By the end of 1988, it had occupied six reefs and atolls in the Spratly Islands.

On 2 September 1991, China released the nine Vietnamese prisoners taken during the Johnson South Reef Skirmish.

In 1994, China had a similar confrontation by asserting its ownership of Mischief Reef, which was inside the claimed EEZ of the Philippines. However, the Philippines only made a political protest, since according to the Henry L. Stimson Center, the Philippine Navy decided to avoid direct confrontation. This was partly based on the Johnson South Reef Skirmish, in which the Chinese had killed Vietnamese troops even though the conflict took place near the Vietnamese-controlled area.