Early Oligocene sea-floor spreading in the South China Sea was preceded by at least two episodes (in Maastrichtian and Mid-Eocene time) of continental extension that generated a series of rift basins on the South China margin, which are separated from the continent-ocean boundary (COB) by an outer structural high. Regional multichannel seismic profiles showing faulting of the pre-rift basement allow the amount of extension in the upper crust to be measured. The total subsidence across the South China margin is far in excess of that predicted using a forward flexural-cantilever model of extension and the degree of faulting measured seismically in the upper crust. This mismatch suggests preferential extension of the lower crust, increasing towards the COB to account for the subsidence. The same feature is seen in the Nam Con Som Basin, which is located close to the southwest end of an extinct propagating spreading ridge offshore from Vietnam. However, in the Beibu Gulf Basin, which is not adjacent to the COB, subsidence is approximately compatible with uniform extension in the upper and lower crust across the entire basin, if not at all locations. We predict that extension of the lower crust exceeds that in the lithospheric mantle along the COB. Heat-flow measurements at Ocean Drilling Program (ODP) sites on the Chinese continental slope and on the conjugate Dangerous Grounds margin yield, values consistent with, or slightly higher than, those predicted by models of uniform extension in the lithosphere. Although there is no magmatism comparable with the seaward-dipping volcanic rocks of rifted volcanic margins, there is seismic evidence of rift-related volcanic rocks spanning a width of c. 25 km landward of the COB. Simple adiabatic melting models do not predict magmatism, and we suggest that the presence of water in the mantle lithosphere, together with residual pre-rift heat, may instead be responsible for increasing melting here. Deep-water syn-rift sediments recovered by the ODP near the COB indicate that volcanism was submarine and that rifting culminated in a mass wasting event that marks a break-up unconformity. The average extension in South China Sea is much less than that seen in the extreme "non-volcanic" Iberian margin. The South China margin may represent an intermediary form of continental extension between the end member extremes of the Iberia-type non-volcanic and the Greenland-type volcanic margin.