While this could be one of those spats in a similar league to India and Pakistan's border guards doing their martial struts to the delight of a partisan tourist crowd, it is not. Vietnamese workers started burning factories owned by Taiwan, Singaporean and Chinese interests. China had no choice but to evacuate its nationals from Vietnam.
The Beijing's provocation is aimed at Obama's pivot in Asia doctrine. Unfortunately, it is unfolding as an epic failure for Beijing.
The conventional Western wisdom is
1) Vietnam is the loser
2) The Philippines can't do anything and is weak
I disagree. China is the loser and it will lose big. None of the analysts factored in what the Japanese WILL DO. China's Communist Party is risking its own overthrow.
China defeated a Vietnam without American support (the 1974 Battle of the Paracels) or a Socialist Vietnam still recovering from the War in 1989 when China's navy defeated them on the same islands. However Vietnam is in no way a weak military power in the 21st century.
A Chinese invasion of Vietnam will therefore be an exercise in tactical idiocy. The Vietnamese will use the same advantage they used against the Americans and easily defeat the interloping Chinese.
However this is not the main unintended consequence. China risks another danger if it invades any of the islands in the Spratlys currently occupied (not just claimed) by the Philippines. These islands are a civil territory with a civil government. Invasion may bring the Americans in. The Americans are already in with the enhanced defence arrangements (EDCA) agreed upon by Manila and Washington. Washington will likely avoid direct military confrontation but is likely to provide the hardware and training to Philippine forces and increase interoperability. This is really the rationale behind the enhanced defence arrangements. EDCA is designed to make PH armed forces improve in capability and credible defence similar to what the Americans did to post war Japan's military soon after World War II.
The Americans need not fire a single shot. However the Philippines should expect more Chinese harassment (this is what China has the capability to do at moment) especially in its gas fields and fishing grounds.
It is Japan, America's superpower proxy in the Western Pacific that will likely fire the shot that will sink the Chinese, if China persists on its hegemony in the Sea of Southeast Asia. I say this since this has been America's strategy in the Western Pacific since the time of Ronald Reagan and Yasuhiro Nakasone in the 1980s. America has encouraged Japan to be the "unsinkable aircraft carrier"in the Cold War against the Russians and despite economic recession in the 1990s that still bedevils it, Japan has expanded its rearmament and the Diet has passed incremental laws that expand the scope of operations of Japan's de facto armed forces, the Japanese Self Defense Forces (JSDF).
The JSDF has now legal remit to participate in UN peacekeeping operations and in disaster response. While JSDF troops and naval and air assets cannot be on the frontline, they have successfully been deployed in Iraq, Ache, Indonesia during the great Indian Ocean Tsunami in 2004 and maritime interdiction against piracy in the Indian Ocean. The Japanese Maritime Self Defense Force (JMSDF), the de facto navy has proven it can operate as a blue water navy (which the Americans intended anyway).
One important historical development in Japan's post war military buildup was largely ignored by the PH and Western press and analysts but was not lost on Beijing. For the first time since World War II, Japan sent its de facto aircraft carrier with a de facto "battle" group to Leyte Gulf in 2013 for the Yolanda relief. While the JMSDF was on a humanitarian mission, Japan showed that it can send its navy and project airpower anywhere it wants to. JSDF mobilization and response is quick as proven in the 2011 Tohoku tsunami.
The deployment of the oil rig in the Paracels give Japan a cogent reason to defend international sea lanes by projecting its power. And in the Senkaku islands which China also claims, Japan has not hesitated to confront Chinese vessels. Japan will likely legally make its de facto armed forces into a de jure one in the next few years.
Japan's armed forces at the moment do not have enough forward capability since as a self defence force, it is mandated to defend the Japanese home islands and Okinawa. However close interoperability with the Americans can easily remedy that and America will be on a supporting role.
It is likely that even Vietnam, Japan, the US and PH will have military agreements to increase interoperability. AFP interoperability with Japan was foreseen by President Marcos in the late 1970s since he foresaw that America is unlikely to pursue a direct confrontation with regional powers. My father went to Japan in the early 1980s to study this possibility.
A Chinese military and naval defeat at the hands of the Vietnamese or Japanese can cause unrest in an China that is primed for unrest. China's economy is slowing down as discontent increases. The Party may not be able to control this for long.
And that is the unintended consequence!