An aerial view of Mischief Reef, part of the South China sea area disputed by China and the Philippines. Photo by Ritchie B Tongo/EPA

Start playing ball regarding the South China Sea or face consequences — that was the warning handed to China by the United States and European Union on Thursday.

The Permanent Court of Arbitration in the Hague is due to make a decision later this year on China's dispute with the Philippines over the territory — but Beijing rejects its authority, even though it has ratified the UN Convention on the Law of the Sea on which the case is based.

Amy Searight, US deputy assistant secretary of defense for South and Southeast Asia, said the US, the EU, and allies like Australia, Japan, and South Korea must be ready to make clear that the court's ruling must be binding and that there would be costs to China for not respecting it if it lost the case.

China claims virtually all the South China Sea, through which more than $5 trillion in global trade passes every year, but the Philippines, Taiwan, Malaysia, Vietnam, and Brunei all also claim sovereignty over various parts of the territory. Searight's comments came a day after China deployed an advanced surface-to-air missile system to the Woody Islands, which is part of the Paracels chain that Beijing has controlled for more than 40 years but which is also claimed by Taiwan and Vietnam.

"We need to be ready to be very loud and vocal, in harmony together, standing behind the Philippines and the rest of the Association of Southeast Asian Nations (ASEAN) claimants to say that this is international law, this is incredibly important, it is binding on all parties," she told a seminar at Washington's Center for Strategic and International Studies.

Searight said the message to China, if it did not respect a negative ruling, should be, "we will hold you accountable."

"Certainly, reputational cost is at stake, but we can think of other creative ways to perhaps impose costs as well," she said without elaborating.

The Hague tribunal has no powers of enforcement and its rulings have been ignored before. Manila has said the court may hand down a ruling before May.

Klaus Botzet, head of the political section of the EU Delegation in Washington, said it was difficult to oppose world opinion. "A joint Western, a joint world opinion, matters also for Beijing," he said.

"If we unanimously support that international law as formulated by the international tribunal in the Hague... needs to be upheld, that's a very strong message and will be very difficult to ignore," he said.

Chinese Foreign Ministry spokesman Hong Lei said he had "noted" the comments, and repeated China's opposition to the arbitration case and refusal to participate. The Philippines' "scheme would never succeed," he told a daily news briefing in Beijing.

Yet, in unusually forthright language, Botzet said China's policy of military buildup was not in its interest: "It's investing much more in its military relative to its economic growth; it's forcing its neighbors into alliances against itself; positions its neighbors otherwise wouldn't take and the return on investment on this policy is negative."