A Chinese official has a novel plan for Woody Island, a tiny, tropical and very much contested speck in the South China Sea.

Han Fangming, a businessman and political adviser, said this week that the government ought to turn the less-than-one-square-mile outpost into China’s version of the British Virgin Islands.

His pitch is to use the place as a hub for company registration. Chinese companies like Alibaba and Baidu are doing business in the Cayman Islands, he said in a news release, so why not bring that money home?

Well, why not indeed.

But what seems like a modest proposal ahead of China’s annual legislative meetings is actually much bolder — and more interesting — than it seems.

Though Han’s vision of Bermuda-on-the-Pacific may never come to pass, the thinking behind it is important.

In a statement published by his think tank, Han laid out the benefits of having an offshore haven in the middle of a rapidly militarizing stretch of sea. “Promoting offshore services there will be a boon to both local economic development and the safeguarding of national interests,” he said.

What Han is getting at is the link between sovereignty claims and civilian installations.

We hear a lot about the militarization of the South China Sea: The United States says China is militarizing; China says the United States is to blame. However you slice it, there’s a whole lot of military hardware on the scene.

What gets less attention in the foreign press — but lots of play at home — is China’s effort to build up civilian infrastructure, its moves to make minuscule islands, atolls and reefs into habitable settlements with the stuff of life: badminton and beer, tourists and, if Han has his way, all your offshore banking needs.

China is not the only South China Sea claimant to focus on civilian infrastructure — the Philippines, Vietnam and Malaysia have all staked their claims, so to speak. But as Joanna Chiu pointed out in a piece for Foreign Policy this week, China’s building is happening at warp speed, especially on Woody Island.

The island, which is called Yongxing in Chinese, is the largest of the Paracel Islands, which are claimed by China, Vietnam and Taiwan. It is the seat of government for a prefecture-level city, Sansha, which China established in 2012. ("China's southernmost and youngest city," noted Han.)

Woody Island is soon to have all the trappings of a modern Chinese metropolis, minus the millions. The island is home to about 1,000 people; three in four of those people are military personnel, according to a recent report by PLA Daily, a military newspaper.

The island’s not-so-civilian population can now make use of a school,  a hospital and a post office, watch satellite TV and keep in touch via a 4G signal, the paper said — not bad for a small town.

Sprucing things up makes strategic sense for the Chinese, says Ian Storey, a South China Sea expert at Singapore's ISEAS Yusof Ishak Institute. The goal is to demonstrate “effective occupation and continuous administration,” which has proved critical in previous territorial disputes.

Though the case is unlikely to end up at the International Court of Justice  — China would never agree to it — making the island look and act like an ordinary Chinese city (plus palm trees) would bolster Beijing’s claim that these islands serve civilian purposes — an idea it's keen to sell, both at home and abroad.

Addressing journalists in Beijing this week, China’s foreign minister, Wang Yi, said Chinese people “love” the islands of the South China Sea.

“China was the first country to discover, name, develop and administer the South China Sea islands,” he said. “Our ancestors lived and worked there for generations, so we know and love the place more than anyone else.”

It's hard to believe the average citizen’s heart beats a little quicker at the mention of Woody Island or its ilk, but turning Sansha into a money-soaked mini-Bermuda won’t hurt the cause.

It may be tougher, though, to convince China’s neighbors, or the United States, that newly furnished islands and atolls are about anything other than sovereignty claims.

“The main purpose is strategic — the idea that these are for civilian use is a pretext; nobody believes it,” Storey said.

“It’s just a game."