An extremely dangerous conflict is brewing between the US and China in a tiny archipelago in the South China Sea

The stakes, even by a purely material reckoning, are exceptionally high. The tiny islands sit astride a shipping route carrying $5trn of trade a year. The waters that surround them contain rich fishing grounds and, almost certainly, major reserves of oil and other resources. The dispute over the Spratlys, where China, the Philippines, Vietnam, Malaysia, Taiwan and Brunei have overlapping claims of maritime sovereignty, goes back decades. But only recently, with the increasingly assertive and nationalistic policies of Beijing, has it gone critical.

A glance at the map might suggest that China’s case is tenuous. But that is not how Beijing sees it. Instead it is carrying out a massive land reclamation project, enlarging some of the islands and building runways, harbours and other facilities. In effect, Beijing is constructing a giant unsinkable aircraft carrier 800 miles south of the Chinese mainland.

Unsurprisingly, rival claimants far closer to the Spratlys than China are deeply alarmed by these developments. So, and even more ominously, is the US, their de facto protector. While John Kerry, the Secretary of State, has been urging restraint on Beijing, the Pentagon sent a surveillance aircraft over the disputed area last week, ignoring eight warnings from the Chinese military to leave. Now Washington has announced it is considering sending warships and warplanes into the 12-mile strip of “territorial waters” around this emerging Chinese base.

But this response has merely prompted more sabre rattling from Beijing. In a new strategic document, China’s State Council has set out plans for the country’s military to shift from a defensive to a more offensive posture, with a focus on the South China Sea. Meanwhile a newspaper close to the ruling Communist Party has described the island-building as the country’s “most important bottom line”. If the bottom line of the US is that China must halt these activities, it added, “then a US-China war is inevitable in the South China Sea”.

All of which makes a diplomatic solution more urgent than ever. Nor is one hard to envisage. Indeed, the required first steps have been outlined by Taiwan’s President, Ma Ying-jeou, for the parties involved to temporarily lay aside their disagreements, guarantee freedom of navigation and overflight, and open negotiations on the sharing of resources. Alas, this obvious compromise is unlikely to go very far.

For one thing, China regards Taiwan as no more than a renegade province. More important, Beijing has shown no sign of backing down. Nor, for that matter has the US. But what if China continues on its present path, ignoring the presence of American warships? Would the US use force to stop supplies to the islands or, as some hawks in Washington blithely advocate, simply blow them out of the water? The consequences do not bear thinking about.

But the Spratlys crisis is not merely over resources. It is part of a wider global pattern. The assertiveness of China and Russia, the growing influence of Iran in the Middle East – each testifies to regional powers filling a void left by the perceived retreat of the US, the established power, under a President seen by his adversaries as weak. In these circumstances confrontations are inevitable. The most perilous of them may yet be with China.