i think this "issue" can "break" Asean Unity, as we know that China is the most powerful economic country in Asia, China has a good diplomacy to other country and have a great military, so if Asean can't handle this issue (especially between two country, PHP and CNA) i think china can do "anything" to get what they want.
and here some latest news about this problem, taken from singapore news
South China Sea disagreements will test ASEAN: ESM Goh
By Qiuyi Tan | Posted: 02 August 2012 1247 hrs
SINGAPORE: Emeritus Senior Minister Goh Chok Tong said the disagreements over the South China Sea will continue to test ASEAN's ability to forge consensus on difficult political issues.
Mr Goh said this on Thursday morning at an ASEAN and Asia forum organised by the Singapore Institute of International Affairs. Some 300 business leaders attended the forum.
His comments comes as ASEAN foreign ministers failed to issue a joint communique at the recent annual ASEAN Ministerial Meeting (AMM) in July because of disagreements over the South China Sea.
Mr Goh said: "Whether we like it or not, after the 45th AMM, the South China Sea will remain a test case of ASEAN's ability to forge consensus on difficult problems and act in the region's broader interests."
A goal that encompasses such interests is the setting up of the ASEAN Economic Community by 2015.
Mr Goh said ASEAN's economic integration cannot be insulated from its ability to maintain unity on important issues and stability in the region.
He said ASEAN's dialogue partners and investors are watching and re-calculating their interests and positions.
"We cannot blame them for this. It is therefore imperative that we address their concerns and demonstrate that we're capable of reaching consensus on even the most sensitive of issues," Mr Goh said.
Analysts agreed with Mr Goh's view.
Pushpanathan Sundram, managing director of EAS Strategic Advice said: "Investments come into the region because the region is stable, the region is peaceful, the region is growing, and the region is an engine for growth.
"So if this doesn't come through the way we handle the South China Sea issue, then the long term I think this will impact on investors."
But in the short term, Mr Pushpanathan does not expect investors to be put off.
Several ASEAN members and China have competing claims over the South China Sea.
Jusuf Wanandi, senior fellow with the Centre for Strategic and International Studies, said: "Definitely ASEAN should not get involved in the claims and counter-claims of the individual members. These are for them to solve with China.
"Because it's a historical problem with them so it's an overlapping claim so we cannot get involved with that because it's sovereignty problems.
"What we can do however, is to create the atmosphere and the environment where then they are willing to cooperate in solving that problem in the future."
The answer may lie in a regional Code of Conduct that ASEAN is hoping to draw up with China to regulate negotiations on the South China Sea.
Even so, there are questions on how this will be carried out as ASEAN gears up for its next summit in November 2012.