Bickering over South China Sea merely political posturing, bluffs

Trying to gain leverage through numbers, Vietnam wants to build a bloc against China, which would include Malaysia and the Philippines. “You are seeing this bloc slowly forming, which is another problem for China,” Li said. “What's happening now is the U.S. is getting involved as the senior partner in an anti-China bloc — this is how Beijing sees it.”

The other countries laying claim to South China Sea territories are Brunei, which has remained largely silent, and Taiwan, which has a far bigger problem of sovereignty to resolve with Beijing.

While this annoys China, it is deeply embedded in the regional economy through trade as well as direct investment. Beijing exports more to Vietnam than it imports from there, and if it were to try exerting pressure by threatening to pull investment it would in many cases be self-defeating.

“China's direct investments in Southeast Asia are often led by its need for commodity resources, hence it would be in China's interest also to see these through,” Standard Chartered's Hui said.

The tone of the rhetoric this year has at times indicated the United States and China were headed for major disagreement.

Washington irked Beijing when it said it had national interest at stake in ensuring freedom of navigation and trade, while China has told the United States not to get involved, accusing it of stirring up trouble by holding naval drills in the region.

Then in late July, both China and the United States tried to calm tensions. On Friday, America's top diplomat Hillary Clinton and Chinese Foreign Minister Yang Jiechi hailed new conduct guidelines for the South China Sea agreed between Beijing and 10-nation Southeast Asian grouping ASEAN.

American attention may discourage China from bullying its rivals, though direct military intervention from U.S. forces, stretched in Afghanistan and Iraq, is hugely unlikely.

“The more active participation by the U.S. in the South China Sea probably implies China would be more inclined to negotiate, instead of leaning on its Southeast Asian neighbors,” said Hui.

For all the recent talk of higher tensions and the threat of violence, the last major clash in the area was in 1988, when China and Vietnam fought a short naval battle. Private deals with rival claimants are likely: China's style is to try to settle border disputes bilaterally, rather than in an international forum.

The biggest risk is if one of the smaller states feels sufficiently emboldened to push hard against China — which claims more of the area than anyone else — and pricks it into responding with force. But this remains unlikely.

“The highest leadership in China know full well that they need to avoid getting sucked (or suckered) into such scenarios,” said Bill Durodie, associate fellow at think tank Chatham House.

“China has much to lose from such petty squabbles and knows full well that it needs to keep a low profile in international affairs for at least another generation in order to get its own house in order first.”

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