The variations in the internal tide (IT) and near-inertial waves (NIWs) that occurred in the summer of 2006 over the continental shelf of the northern South China Sea were observed using three bottom-mounted moorings equipped with acoustic Doppler current profilers. Due to the strong nonlinear interaction, large portions (~40-60%) of the semidiurnal IT energy at the continental shelf were found to be incoherent; this proportion gradually increased from the shelf break to the offshore region. More importantly, our observations showed that parametric subharmonic instability (PSI) can enhance the f-band energy in the shallow water (~100 m) on the continental shelf. Using plane-wave fitting and the bicoherence spectrum, we confirmed that the intensified NIWs and the observed D2-f waves are nonlinear coupled waves derived from the semidiurnal internal tidal PSI. These two subharmonic waves were observed in the near field of a strong semidiurnal IT generation site at the shelf break. By tracking the M2-ray path, we verified that the PSI occurred in the pycnocline in the path of the reflected wave beam that was characterized by strong nonlinear instabilities and it could be modulated by mesoscale eddies in this shallow shelf water. Plain Language Summary Internal tides and near-inertial waves, as two types of internal waves, have often been observed in the northern South China Sea (NSCS). Known as the most important characteristic so far in this region, the former vary seasonally and spatially while the latter are mainly concentrated in the upper layers supplied by wind forcing. The internal waves on the continental shelf of the NSCS in summertime were monitored synchronously using bottom moorings. We found that the semidiurnal internal tides exhibited both coherent and incoherent features and that the near-inertial waves remarkably intensified in the pycnocline, which was not directly induced by wind. Previous studies have revealed that parametric subharmonic instability (PSI) can efficiently transfer energy from semidiurnal internal tides to near-inertial waves. In this work, we found that semidiurnal internal tidal PSI does occur in the near field of a strong semidiurnal internal tide generation site at the shelf break when the water is well stratified. However, due to the passage of mesoscale eddies, the stratified waters can change, resulting in PSI interruption. Overall, this study aims to improve our understanding of the internal tides and near-inertial waves in the NSCS and the energy transfer mechanism of PSI.