To its credit, this week's U.S. operation to challenge Chinese territorial claims in the South China Sea was measured. China has good reason to ensure its response is, too.

In the Navy's carefully calibrated mission, a guided-missile destroyer and a pair of surveillance planes passed within 12 nautical miles of two artificial islands that China has recently reclaimed from the sea. Under international law, these formerly submerged reefs have no territorial seas. By distinguishing its actions from the "innocent passage" that ships claim when moving through another nation's waters, the U.S. made clear that piling up thousands of tons of sand gives China no special claim to surrounding waters.

U.S. officials responded to reporters' queries but didn't overhype the operation. And while some critics complained that the U.S. had waited too long to act, the timing was fortuitous. Chinese leaders, preoccupied this week with a Communist Party plenum in Beijing, have thus far confined their outrage to diplomatic complaints.

It's important not to expect too much from this one gesture. The operation didn't contradict China's claim to sovereignty over the artificial islands; the U.S. takes no formal position on overlapping claims in the South China Sea. And there's little chance the Chinese will now suddenly halt construction of runways and other facilities with possible military uses there. Nearly two years ago, the U.S. sent a pair of B-52 bombers to challenge the air-defense identification zone China had unilaterally declared over disputed islands in the East China Sea. Dozens of airlines still respect the zone, even though the U.S. and Japan don't.

David Fuller's view

It is hard to fathom why Xi Jinping, reported to be China’s strongest leader since Mao, insists on building potential military bases in the South China Sea.  All this does is cause alarm and also some anger among China’s neighbouring countries, which pose little military threat.  This heavy-handed policy is unnecessarily provocative and increases the risk of ‘unintended’ military confrontation.   

Perhaps Xi Jinping does not feel that secure, given that China’s currently soft economy is in a necessary phase of transition from the export emphasis of developing countries to the consumer-led growth of more developed nations.  Perhaps Xi Jinping feels that he needs to buy the continued loyalty of his large military, by increasing its power and reach. 

Either way, neither China nor any useful apologists can justify its territorial claims in international waters as a necessary response provoked by other military powers.  Nor can it be justified by Xi Jinping as a need to secure scarce energy resources, as these are now plentiful and cheaper than anyone imagined a decade or more ago. 

For investors, the South China Sea is now another potential global hot spot.   

(See also: Battle Over China’s Artificial Islands Has Just Begun, by Josh Rogin for Bloomberg)