How the KMT could save itself

Japanese government and private businesses were operating on the islands, that’s why the French send ships to drive them out.

From French wikipedia page for the Spratly Islands:

L’empire du Japon fit alors des réserves, car, à son avis, si depuis 1917 des Japonais exploitaient des gisements de phosphates (guano) dans l’île principale, Itu Aba, il n’avait jamais été remarqué qu’un seul Français s’y fût installé. Fort de cette constatation, Tokyo, notifia à l’ambassadeur de France, le 31 mars 1939, que les Spratleys, habitées par des Japonais, étaient placées sous la juridiction nippone et rattachées administrativement au territoire de Formose ; l’occupation était assurée par un détachement de police.

The Empire of Japan then expressed reservations, because, in its view, while Japanese people had been exploiting phosphate (guano) deposits on the main island, Itu Aba, since 1917, it had never been noted that a single Frenchman had settled there. Based on this observation, Tokyo notified the French ambassador on March 31, 1939, that the Spratlys, inhabited by Japanese people, were placed under Japanese jurisdiction and administratively attached to the territory of Formosa; the occupation was ensured by a police detachment.