In a statement by the Chinese Embassy in the U.S., China claims the U.S. ships were not operating on the high seas , but in China's "special economic zone." It also alleges the U.S. is violating international law of the sea by conducting illegal surveillance.
A nation's Exclusive Economic Zone extends 200 nautical miles from its shore under the United Nations Convention on the Law of the Sea (UNCLOS) and is probably a part of customary international law for all intents and purposes, to be followed even by nations like the U.S, which has not ratified the treaty (although the U.S. has noted its objection to some aspects of the treaty for some time). Generally, though, a nation is better situated to defend claims over "its waters" as opposed to the high seas when a vessel is operating within the "contiguous zone" stretching out to 24 nautical miles from shore.
I have not yet seen a source indicating how far from the Chinese coast the U.S. ship was operating when it was accosted, but it's a highly relevant fact in understanding the full implications of the controversy.
I also wonder if this confrontation may involve China's contested claims to sovereignty over the Spratly Islands (which could enhance and extend its claims of jurisdiction over various waters - and would help its overall goal of making the South China Sea its own backyard "lake" in a way). Perhaps China was acting in this way as a means of demonstrating that it's treating the Spratlys like sovereign territory.
The other possibility, rather more cynical, is that it's possible the move comes at a time when the leadership of the Communist Party needs to stoke nationalist sentiment to distract from domestic economic problems.
I am very interested to see how the White House handles this matter. Forget Gordon Brown's DVDs and Hillary's ridiculous "Overload" button. This will likely be the first defining foreign affairs test for the Obama administration (although the North Korean saber rattling today is also worrisome). I hope the President sees the importance of the relationship with China.
Here's my guess as to the law the Chinese will cite as its basis for harassing the U.S. vessel, since it claims the U.S. vessel was in its "special economic zone" - which I'm pretty sure is an improper embassy translation of "Exclusive Economic Zone" (special economic zones are on land). The Chinese promulgated these laws in 1998:
Marine scientific research by any international organization, foreign organization and individual in the exclusive economic zone and the continental shelf of the People's Republic of China must be subject to the approval of the competent authorities of the People's Republic of China and must conform to the laws and regulations of the People's Republic of China.
The People's Republic of China may, when exercising sovereign rights to explore, exploit, conserve and manage living resources in its exclusive economic zone, take necessary measures such as boarding, search, arrest, seazure and imposition of judicial process ensuring the observance of laws and regulations of the People's Republic of China.
The People's Republic of China has the power to take necessary measures against acts violating laws and regulations of the People's Republic of China in the exclusive economic zone and the continental shelf, investigate for legal liabilities according to law, and may exercise the right of hot pursuit.