Using the spherical harmonic representations of the earth's disturbing potential and its functionals, we derive the inverse Vening Meinesz formula, which converts deflection of the vertical to gravity anomaly using the gradient of the H function. The deflection-geoid formula is also derived that converts deflection to geoidal undulation using the gradient of the C function. The two formulae are implemented by the 1D FFT and the 2D FFT methods. The innermost zone effect is derived. The inverse Vening Meinesz formula is employed to compute gravity anomalies and geoidal undulations over the South China Sea using deflections from Seasat, Geosat, ERS-1 and TOPEX//POSEIDON satellite altimetry. The 1D FFT yields the best result of 9.9-mgal rms difference with the shipborne gravity anomalies. Using the simulated deflections from EGM96, the deflection-geoid formula yields a 4-cm rms difference wit the EGM96-generated geoid. The predicted gravity anomalies and geoidal undulations can be used to study the tectonic structure and the ocean circulations of the South China Sea.