China said it will take “all necessary measures” to defend its territory after the U.S. sailed a warship through waters claimed by China in the disputed South China Sea, a move the government in Beijing called a threat to peace and stability in Asia.

“The behavior of the U.S. warship threatened China’s sovereignty and national interest, endangered the safety of the island’s staff and facilities, and harmed the regional peace and stability,” Foreign Ministry spokesman Lu Kang said in a statement today. “The Chinese side expressed its strong discontent and firm opposition.”

The comments came hours after the USS Lassen passed within 12-nautical miles of Subi Reef, an island built by China as a platform to assert its claim to almost 80 percent of one of the world’s busiest waterways. By passing so close to the man-made island, the U.S. is showing it doesn’t recognize that the feature qualifies for a 12-nautical mile territorial zone under international law.

The patrol marks the most direct attempt by the U.S. to challenge China’s territorial claims and comes weeks after President Barack Obama told President Xi Jinping at a Washington summit that the U.S. would enforce freedom of navigation and that China should refrain from militarizing the waterway. The spat threatens to fuel U.S.-China tensions ahead of multilateral meetings to be attended by Xi and Obama, including the Asia-Pacific Economic Cooperation forum in the Philippine capital next month.

In a strongly-worded statement, Lu said the USS Lassen had “illegally” entered Chinese waters and that “relevant Chinese departments monitored, shadowed and warned the U.S. ship.” China has “indisputable” sovereignty over the Spratly Islands and surrounding waters, Lu said.

China bases its claims to most of the sea, a conduit for trade and energy supplies between Europe and Asia, on a so-called nine-dash line for which it won’t give precise coordinates. China has stepped up its island building in the past year and is installing runways capable of handling military aircraft to extend its control over the waterway, parts of which are also claimed by the Philippines, Brunei, Malaysia, Vietnam and Taiwan.

David Fuller's view

This problem and potentially significant flashpoint has been building for a long time, and it is no secret that other countries in the region, mentioned above, have encouraged the US to support their maritime claims.  Subscribers may wish to keep a close eye on developments in the South China Sea, which are likely to affect investor sentiment adversely at some point.

See also: Beijing summons US Ambassador over warship in South China Sea, and: If US relations with China turn sour, there will probably be war, both from The Guardian)