The temporal-spatial structure and the formation mechanisms of the South China Sea (SCS) circulation are studied using the Princeton Ocean Model (POM). The model well reproduces the observed sea surface height (SSH) annual cycle and some current system such as the SCS Western Boundary Current (SCSWBC) system and the Kuroshio Loop Current (KLC). Four sensitivity experiments are carried out to reveal the dynamic mechanisms of the SCS circulation. The results show that most of the seasonal variability of the SCS is controlled predominantly by wind forcing. The Kuroshio affects the mean SSH significantly but contribute little to the variability. The SCSWBC system consists of the SCS Warm Current (SCSWC) and the Vietnam Coastal Current (VCC). In winter the SCSWBC splits into two branches separated at ~14¿--18¿N. The northern branch is the SCSWC flowing northward and the southern branch is the VCC flowing southward. In summer, however, the SCSWBC flows unidirectionally northward from the Karimata Strait to the Taiwan Strait. The temporal variation of the SCSWBC, especially the VCC, is determined by the wind forcing over the interior SCS. Buoyancy forcing can strengthen (weaken) the summer (winter) SCSWBC. The KLC is crucial to the SCS circulation north of 18¿N. It ultimately determines the appearance of the SCSWC in winter.