The Paracel Islands sit roughly 300 kilometers south of China and 370 kilometers east of Vietnam, divided into two groups: the Amphitrite Group to the north and the Crescent Group eighty kilometers to the southwest. By the early 1970s, China controlled the Amphitrite Group while South Vietnam held the Crescent Group, and both countries were exploring the surrounding waters for hydrocarbons. Tensions escalated through the summer of 1973 as Chinese fishing ships pushed into the Crescent Group. Confrontations began in November. On January 14, 1974, the South Vietnamese frigate HQ-16 fired warning shots at Chinese fishing vessels near Robert Island and shelled a Chinese flag erected there. More warships arrived on both sides. The pieces were set for a fight neither navy had fully planned.

China's response was cobbled together from what was available. The People's Liberation Army Navy was in disrepair after the Cultural Revolution, its command and control poor throughout the operation. Two Kronshtadt-class submarine chasers, vessels 271 and 274, were dispatched from Yulin Naval Base on Hainan. A Shenyang J-6 fighter escorted them south, operating at such extreme range that it had only five minutes of loiter time over the islands. Four militia platoons - ten members each - landed on Duncan, Drummond, and Palm Islands. Reinforcements were scraped together: two minesweepers, one of which had just finished major repairs and had not been cleared for service, and two more submarine chasers from distant Shantou. The South Sea Fleet's two frigates were both out of commission with mechanical problems. Against this improvised force, the South Vietnamese deployed larger ships with bigger guns and superior range. On paper, the Chinese were outmatched.

On the morning of January 19, the South Vietnamese divided into two groups and approached from different directions. HQ-16 rammed and damaged the Chinese minesweeper 389, then launched commandos toward the islands. Chinese militia on shore killed one commando and wounded three others, forcing a retreat. Unable to dislodge the Chinese from the islands, the South Vietnamese opened fire, aiming for the bridges of the Chinese ships. The political commissar aboard vessel 274, Feng Songbai, was killed. Minesweeper 389 caught fire and began flooding. But the smaller, faster Chinese ships closed to within tens of meters, sheltering in the blind spots of the South Vietnamese deck guns where their own weapons became effective. At such ranges, the South Vietnamese firepower advantage evaporated. The Chinese aimed for command posts and communications equipment. HQ-10's magazine exploded and her captain died from small-arms fire. The remaining South Vietnamese ships retreated west. Minesweeper 389, her fire uncontrollable, was beached on Duncan Island. Two more Chinese vessels arrived after noon and sank the crippled HQ-10.

China moved quickly. Three amphibious flotillas carrying 500 troops, including militia, captured the Crescent Group islands within hours. Robert Island fell in about ten minutes. On Pattle Island, thirty South Vietnamese troops and an American liaison officer were taken prisoner. Money Island was abandoned and captured without a fight. The aftermath rippled far beyond the reefs. South Vietnam tried to bring the matter before the United Nations Security Council but abandoned the effort on January 25, unable to overcome the Chinese veto. More damaging was what the battle revealed about South Vietnam's alliance with the United States. Washington, which had no formal military treaty with Saigon and was cultivating its new relationship with Beijing, refused to intervene on the grounds that the islands were disputed territory. Seventy-five South Vietnamese sailors were killed; eighteen Chinese sailors died and sixty-seven were wounded.

The most telling reaction came from Hanoi. North Vietnam, China's ally in the war against the South, conspicuously did not congratulate Beijing on its victory. Deputy Foreign Minister Nguyen Co Thach quietly told the Hungarian ambassador that Vietnam possessed "many documents and data" regarding the archipelago. Other North Vietnamese officials described the conflict as temporary, then admitted it would become a problem for the entire Vietnamese nation. They were right. After reunification in 1976, the Socialist Republic of Vietnam renewed the claim to the Paracels by inheriting all the former South Vietnamese rights. In a delicate balancing act, Hanoi has since praised the South Vietnamese sailors who fought in the battle while carefully avoiding any praise for the South Vietnamese regime itself. The forty-eight prisoners, including American Gerald Emil Kosh, were eventually released through the Red Cross in Hong Kong. The islands remain under Chinese control, a permanent fixture in the territorial disputes that continue to define the South China Sea.