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STORY: Things are heating up between the Philippines - and China - in the South China Sea.

At the center of tensions - is the Scarborough Shoal -

a ring-shaped island coveted for its bountiful fish stocks and stunning lagoon.

It's located in the middle of the South China Sea - close to shipping lanes carrying an estimated $3.4 trillion of annual commerce.

Here's a look at the conflict - and what's at stake.

[Who does the shoal belong to?]

The shoal is about 125 miles off the Philippines and inside its exclusive economic zone.

Both the Philippines and China lay claim to it, but no sovereignty has ever been established.

It's been effectively under Beijing's control since China seized it in 2012.

A landmark 2016 ruling by the Permanent Court of Arbitration largely went in favour of the Philippines -

but it wasn't tasked with establishing sovereignty.

[What’s happening now?]

Over the weekend, the Philippines discovered a 1,000-foot-long barrier policed by China's coast guard near the shoal.

It led to outrage -

and on Monday, it cut the barrier down in a 'special operation' approved by the president.

China's foreign ministry advised the Philippines against provocations.

Fishermen in the Philippines were left wondering why it was there in the first place.

"It (Scarborough Shoal) is closer to the Philippines, just around 100 to 150 miles, while it is around 500 miles from China. Why are they stopping us from entering?"

[What is the risk of conflict?]

The positioning of the shoal is strategic for Beijing -

and there have been concerns China might build a manmade island there.

During the pro-China former Duterte administration, it allowed Filipino fishing boats to operate near the shoal.

But relations have deteriorated under President Ferdinand Marcos Jr.

There have been minor altercations between the two elsewhere in the South China Sea this year.

While Marcos may score points for standing up to Beijing, his coast guard is no match for China’s.

One deterrent, though, could be the United States.

Earlier in the year the U.S. gave the Philippines guidelines stating mutual defense commitments would be invoked over an attack 'anywhere in the South China Sea.'