The South China Sea conflict has spawned two contrasting views related to China’s foreign policy. Some argue China is obsessed with hegemony in the South China Sea, while some others argue China is pushing a peaceful settlement through dialogue. In fact, China implements a dual strategy – coercion and cooperation – in pursuing its strategic interest in the disputed area. How to explain this paradoxical behavior? This paper assumes that the best way to understand China’s policy in the South China Sea is to understand the character of dualism in China’s strategic culture. Following constructivist proposition that stresses on culture as a crucial factor, this paper argues that Chinese duality approach in the South China Sea is rooted in the philosophy of Daoism. The symbol of ‘Yin-Yang’ depicts reality as a dialectical interaction between two opposing elements. This is why China demonstrates assertive behavior but at the same time open diplomatic channels with other states. Although Daoism ethical principle opposes violence, it does not replace the duality character of two opposing elements that mutually dependent. This paper focuses on this duality character of Daoism and neglects its ethical considerations.