Frankly, I don't know how the current Chinese government ever got the idea that it can influence the Asian countries to respect China's sovereignty. It is obvious that the Chinese leaders have been living in an ivory tower that is totally divorced from the reality in S. E. Asia. The SE Asians such as Indonesians, Filipinos, Malays, etc. are all anti-Chinese. These peoples have been robbing and slaughtering Chinese for the last couple of hundred years and have developed a contempt and disregard for the ethnic Chinese. There is simply no way that they will willingly respect and cooperate with the Chinese to develop the S. China Sea.
The stark reality is that the leaders of the Philippines and Vietnam will never agree to anything less than their owning the areas they claim as their sovereign territories. Therefore, there are only 2 realistic choices. The first is to give up. The second is to fight. There is no other alternatives. Therefore, China should immediately give these countries an ultimatus to leave. And then declare war when they still stay in China's sovereign territories after the ultimatum expired.