Taking over the entire ocean is a bit difficult without a major fully operational aircraft carrier, don't you think?

Truth is, the Chinese saw how terrible North Korea ended up, and so they refrain from playing politics in other nations. North Korea had been nothing but a pain, and Vietnam also got out of control.

So they just avoid it all together. If they want a base, they aren't going to ruin their image by politically taking over their neighbors. It always backfires.

Claiming a few rocks is far less disruptive than 15 or 20 years trying to make an Ally nearby. It causes a bit of ruffled feathers, but it causes far fewer problems than trying to gain influence over local politicians.

Frankly, the Chinese are tired of their Allies getting out of control and being an embarrassment. They'll just install their own bases instead of deal with the ridiculous situations that political manipulation ends up causing.

I don't think the Chinese intended for North Korea to end up this way, or Vietnam to lose 3 million people during 30 years of war.

If China wants influence, it just does it openly and it makes it much more direct and simple.

The fallout from making an island is far less than trying to politically influence any nations nearby. It's also less likely to cause a war, or have unintended consequences.

China simply doesn't trust their smaller neighbors to behave if they give them support. One day they are funding some minor project, the next day they are in a proxy war. Nobody wants that. Making an island is so much simpler from their point of view