In the globalization era that brings all the countries to moving forward to the development, challenges and opportunities become an attention. As well as South China Sea that located between China and Southeast Asian countries, it becomes an attention among Southeast Asian countries and China. However, China that is known as a new power has an important role to maintain the stability especially in the South China Sea dispute at the moment. This paper examines the evolution of Chinese foreign policy towards the South China Sea dispute over the past two decades. The South China Sea dispute is one of the most dangerous and intractable territorial rows in Asia, involving China, Vietnam, the Philippines, Malaysia and Brunei. This dispute also entangles countries outside the region, such as the United States. Using foreign policy and hegemony stability theory, this research tries to answer the question on what are China‟s foreign policy decision-making factors in South China Sea stability to analyze the phenomenon. It explains with descriptive method with qualitative approach. It takes secondary data as resources of this research with data collection technique consisting of books, journal, and data from reliable website which is supporting the explanation of this paper. The results of this research are divided in to two parts. First, the internal factor is the outcome from froeign policy decision maker which is the Chinese‟s leader. The leader in the making of foreign policy needs to consider China‟s domestic politics and economic and military capability. Second, as the biggest trading partner for the region, Southeast Asian nations‟ reaction will affect China‟s economy and other diplomatic reactions. Also, China has to increase its awareness towards the US closeness with Southeast Asian countries in term of security cooperation.