The new Cold War: Sino-US rivalry heats up

A month later, as Washington wrestled with a humiliating credit downgrade and a costly Wall Street rout, China showed off its first aircraft carrier, a refurbished Russian cast-off, which is destined to patrol the South China Sea.

The PLA Navy is the fastest growing element of China's armed forces. A new underground submarine base in Hainan gives the Chinese a commanding position in the South China Sea. For now, China's force projection capabilities are constrained – both by technology and the slow pace of force development.

But while China may be what Australian defence expert Paul Dibb calls "a power with very substantial weaknesses," the perception on the other side of the Pacific is that US supremacy is challenged - and military parity is potentially a recipe for military confrontation.

The test of this assumption is the rising temperature in the South China Sea. China's claim to sovereignty is defined by a line of 9 dots and dashes that extends like a cow's tongue across the South China Sea and overlaps with the territorial claims of Malaysia, Vietnam and the Philippines.

Last year US Secretary of State Hilary Clinton drew a line of her own and promised to guarantee safe passage for all vessels in the South China Sea. This has prompted China's navy to more aggressively assert its claims and has led to some minor incidents of harassment.

"It is through sea power that China will psychologically erase two centuries of foreign transgressions on its territory - forcing every country around it to react," writes Robert Kaplan. He claims rather dramatically that the South China Sea is the "future of conflict."

Kaplan goes onto say that war is far from inevitable even if competition is a given. Unfortunately, China's patience is being tested against a backdrop of more fragmented and contested power in the People's Republic, which doesn't always mean that the coolest heads will prevail.

So whilst there is some cause for optimism after China agreed with ASEAN member states in mid-July on a set of draft guidelines to govern activities in the disputed waters, it remains to be seen whether the, as yet undisclosed guidelines, will be translated into a concrete code of conduct.

Underlying the kinds of tension expressed on basketball courts and in chat rooms is the fact that China feels goaded and provoked by the US, and also a little threatened. As the value of the dollar plummeted and stock prices crashed after the credit downgrade, Beijing wagged a finger at Washington and warned: 'Put your house in order or we all go down.'

The US for its part, seeks to preserve its strategic power. China's rise has prompted Washington to fear that its strategic dominance of the Pacific is threatened. Unfortunately, the weakness of the US dollar and the US economy means that it must increasingly assert itself using military rather than economic prowess.

China's hubris and America's pride are together unraveling the notion of China' peaceful rise. Zheng Bijian, a Communist Party scholar who was close to President Hu Jintao, nurtured this idea.

Peaceful rise was propounded to allay regional and international concerns about the rapidity of China's economic growth and the inevitable flexing of its political and military muscle. Zheng anticipated, correctly, the spread of "China threat theory."

Sadly for Zheng, seeing China as a threat is now on the agenda of international discourse. US officials have started urging erstwhile allies in the region, like Australia and Indonesia, to beef up their military capacity so they can stand 'shoulder to shoulder' with the US against China.

Equally, It is becoming harder for China to continue using platitudes and soft words to mask the wielding of hard power. China's energy needs are strategic and there is pressure in Beijing to defend lines of supply aggressively.

Welcome to the new Cold War.