These actions prompted the US to assure Japan that the 1960 US-Japan Treaty of Mutual Cooperation and Security applies to the Senkaku Islands. Again in December conflict broke out, this time between Chinese fishing vessels and the South Korean coast guard patrolling in the Yellow Sea. The Chinese boat capsized after it tried to ram the South Korean ship and two Chinese sailors lost their lives. Then in March, the Philippines complained to China over repeated Chinese naval intrusions in the Spratly Islands. This led to a visit to Manila by the Chinese defence minister Liang Guanglie. Just prior to his arrival, however, Philippine President Benigno Aquino III flew out to land on the USS Carl Vinson. When the ship made port, US Ambassador Harry Thomas Jr spoke on the carrier’s deck: ‘Now and in the future, we will maintain our strong relationship, and we are dedicated to being your partner whenever you are in harm’s way’. China struck back by beginning construction of a structure on Amy Douglas Bank, well inside the Philippines’ EEZ — an action that violates the 2002 Declaration on Conduct (DOC) that China signed with ASEAN. Most recently, in two separate incidents since late May, Chinese fishing vessels deliberately interfered with Vietnamese ocean survey ships, causing damage to their equipment. In an angry response, Vietnam retaliated with live fire exercises, raising the stakes further.

All of these confrontations occurred within the recognised EEZs, if not territorial boundaries, of China’s neighbours. But the contemporary legal regime does not matter — China claims ownership based on the presumed suzerainty of pre-modern Chinese dynasties.

China used to swear by the ‘new security concept’ when it acceded to ASEAN declarations like the DOC in the South China Sea in 2002, and the Treaty of Amity and Cooperation in 2003. Chinese diplomats and academics explained how China would rise peacefully, using concepts of common security and cooperative security to guide a multilateral process that would secure regional harmony. But now China devotes itself to what one might call ‘muscular unilateralism’, seeking to secure its interests at the expense of its smaller neighbours. This dramatic change in behaviour might be explained by four analytically-distinct developments in the past decade.

First, the PLAN may now feel strong enough to establish control within the ‘first island chain’. The idea is to control the seas inside the archipelagic perimeter formed by Japan, Taiwan, the Philippines and Indonesia. According PLAN’s strategic vision, the next step would be to control the seas out to an even more distant ‘second island chain’.

Second, after decades of a ‘to get rich is glorious’ growth policy, the Party is facing serious problems of inequality even worse than what China experienced before the Revolution, corruption, environmental crisis, youth unemployment and land-dispossessed peasants — one of whom recently even became a suicide bomber to protest his unjust treatment by authorities. The South China Sea dispute could conveniently cause the people to forget their anger for the time being and rally around a regime defending the nation’s status and honour.

Third, energy supply constraints are driving up prices and fuelling inflation in China, affecting domestic stability. Beijing needs the undersea energy resources in the South China Sea flowing sooner rather than later.

And finally, there is the US deterrent factor, the most troubling and unclear aspect of all. Judging from its actions China may believe that, while the US and its allies may verbally object, there is no insurmountable barrier to establishing its effective control over the South China Sea. Here is one scenario: China could believe that Japan, Korea and Australia will not fight China for the sake of Vietnam and the Philippines; and that ASEAN members do not want to provoke China’s wrath because they are too economically dependent on it; moreover, most members have no direct stake in the conflict. Thus, Washington will not find anyone in Asia (and few at home) asking it to fight China and enter another war.

At the recent Shangri-La Dialog US Defense Secretary Robert Gates said the disputes should be settled according to international law, and he was willing to bet that in five years the US would still be a strong presence in the region. Vagueness and ambiguity characterised his remarks, but the presumption is that, unlike China, he is betting ASEAN will get its act together and, failing this, the US will still have some allies willing to stand up to Beijing. In this set of complex contingencies and hazy language there is an obvious danger of misperception and miscalculation leading to unintended and serious consequences. ‘Let’s wait and see’ is not the best response.

Changing one or two Chinese policy drivers might be enough to alter the present trajectory of events. China’s urgent resource issue can be addressed using a multinational development authority for the Paracels and Spratlys governed by the disputant states. Votes on a governing board would be determined by capital share ownership. Chinese financial muscle would naturally dominate, but there must be a charter to protect the rights of smaller countries guaranteeing them a fair share of profits and production uptake. Development could be quickly started without having to resolve navigation and fishing rights.

As for clarifying the US position in the South China Sea, with its focus on freedom of navigation, this should be firmed up diplomatically with ASEAN members and discreetly rolled out at the next big regional summit, perhaps the East Asia Summit in October.

David Arase is Professor of Politics at Pomona College in Claremont, California and currently teaching at The Johns Hopkins University-Nanjing University Center for Chinese and American Studies.