The exercise comes in response to joint US-South Korea naval drills earlier this week in the Sea of Japan, ostensibly to deter North Korea, but actually directed at China as well, this according to experts. At the same time, China’s show of force on the high seas was a warning to Vietnam and other Southeast Asian countries who dispute China’s territorial claims in the South China Sea.

China’s Navy normally carries out exercises to mark the PLA’s foundation (1 August), but this year it pulled out all the stops. PLA Chief of General Staff Chen Bingde and naval commander Wu Shengli, both members of the Central Military Commission, supervised them. The flagships of all three naval fleets involved took part in the war games, indicating the scale of the operation.

It is not clear where exactly they took place, but they were certainly in the vicinity of the disputed and oil-rich Spratly and Paracel Islands.

The actions reignited the quarrel with Vietnam whose deputy defence minister, Lieutenant General Nguyen Chi Vinh, warned against an arms race in the South China Sea.

“We never want to see an arms race in this area," he said. But in what appears to be a call to the international community to mediate between his country and China, he added that countries like Vietnam "should be worried" if "concerned parties do not find a common understanding and direction” but seek “to impose their opinion".

China claims the entire South China Sea and so far has shown little inclination to take into account the claims of others.

Its recent rapid military build-up has raised eyebrows across the region, especially since it is likely to continue for many years to come.

Vietnam, in turn, has embarked on the modernisation of its own armed forced, including an agreement to buy six Kilo-class submarines from Russia for more than US$2 billion.

Last week Sunday, US Secretary of State Hillary Clinton got involved in the matter at a foreign ministers' meeting in Hanoi of the ten-nation Association of Southeast Asian Nations (ASEAN), whose broader regional forum includes China, Japan, South Korea, the United States, Russia and Australia.

The United States, Ms Clinton said, had "a national interest in freedom of navigation, open access to Asia's maritime commons, and respect for international law in the South China Sea".

In view of this, she expressed support for a "collaborative diplomatic process" on the matter of disputes in the South China Sea involving China, Vietnam, Brunei, Taiwan, Malaysia and the Philippines.

The area, which stretches from Singapore to the Strait of Taiwan, could contain more oil than Iran and more natural gas than Saudi Arabia, according to some estimates. Its waters are navigated by about half of the world’s merchant fleet by tonnage each year.

Analysts believe that China’s recent naval drills were designed to show that the People’s Republic is capable of operating in a large maritime area even against the greater naval power of the United States.

For their part, the Americans seek an agreed code of conduct in the sea that includes a peaceful dispute settlement mechanism, but have not given up on their role as the world’s undisputed maritime power, even in these waters; the more so, since greater Chinese assertiveness in the South China Sea appears to be pushing other regional players closer to the United States.

US Deputy Secretary of State James Steinberg said on Tuesday at the Nixon Center in Washington that US policymakers "continue to find a broad range of areas where we cooperate with China—not only bilaterally, but regionally and globally" from economic recovery to climate change.

However, for the US diplomat, Beijing has opted out of military-to-military ties because of its refusal to accept free movement in waters close to its territory as well as recognise the role of other countries in territorial disputes, and US arms sales to Taiwan.

If China does not accept to cooperate on this issue, the United States will act any way, especially in the matter of territorial disputes.