Norms of behaviour may play a very important role in resolving the South China Sea dispute, and in reducing the potential for conflict. ASEAN and China signed a declaration on conduct for the South China Sea in November 2002, which was the first time that China had accepted a multilateral agreement over the issue. ASEAN had attempted to obtain China's endorsement of international norms of behaviour over the issue since 1992. While China regarded the South China Sea as "lost territories" that were to be restored to the mainland, there was little response. China's attitude towards the area changed after the Taiwan crisis of 1995-96 removed from power the main proponents of the recovery of lost territories theme. Moreover, when the Philippines involved the U.S. through the Visiting Forces Agreement of 1998, China realized the value of norms of behaviour in terms of constraining external powers. The article argues that, in a situation where a dominant power has a clear advantage over weaker states, a balance of power is required as a prerequisite for the negotiation of norms of behaviour. Without that balance there would be no incentive for the dominant power to accept constraining norms of behaviour. Norms are a product of a balance of power which in this case was provided by the American role.