The Princeton Ocean Model is used to study the circulation in the South China Sea (SCS) and its seasonal transition. Kuroshio enters (leaves) the SCS through the southern (northern) portion of the Luzon Strait. The annually averaged net volume flux through the Luzon Strait is ~2 Sv into the SCS with seasonal reversals. The inflow season is from May to January with the maximum intrusion of Kuroshio water reaching the western SCS during fall in compensation of summertime surface offshore transport associated with coastal upwelling. From February to April the net transport reverses from the SCS to the Pacific. The intruded Kuroshio often forms an anticyclonic current loop west of the Luzon Strait. The current loop separates near the Dongsha Islands with the northward branch continuously feeding the South China Sea Warm Current (SCSWC) near the shelf break and the westward branch becoming the South China Sea Branch of Kuroshio on the slope, which is most apparent in the fall. The SCSWC appears from December to February on the seaward side of the shelf break, flowing eastward against the prevailing wind. Diagnosis shows that the onshore Ekman transport due to northeasterly monsoon generates upwelling when moving upslope, and the particular distributions of the density and sea level associated with the cross shelf motion supports the SCSWC.