This is, in Chinesei mind a replay of short quick action against India in 1962, which was highly successful and against Vietnam in 1979, which was partially successful. The Chinese are over confident. They begin with short skrimishes and then blame the other for starting them and then begin the full blown attack.
Japan cornered may ask for US help, which will not be forthcoming as US and China are commercial allies. Each is dependent on he other so much that they would posture but not fight a war to defend Japanese interest.
Then the only option left for Japan is to build a regional grouping. India could be a big partner in this venture but India's relations with US has hit a snag. Prime Minister Man Mohan Singh has been taken for a ride by US in last two years. They have offered strategic dialogue but that too for newspaper headlines that US and India are getting together to encircle China. US has no interest in that. They are too much dependent on Chinese surplus cash and a trillion dollar worth of low quality consumer products. It keeps US inflation under check. Hence US would never offer any worthwhile strategic dialogue with India. Instead crums here and crums there would be offered, which will keep India bottled up in Indian Ocean.
With the above India would not be able to cross Malacca Straits into South China Sea to be any help to Japan, Korea, Philipines and Vietnam. Weak Chinese navy will not cross into Indian Ocean if they are busy in South China Sea. Hence India rescuing any of the little nation old not be possible.
Recent arrest of Indian diplomat in New York and huge amount of conditions they are putting on India Pharmaceuticals, Indian Aviation to carry passengers to US and back etc. etc. are indications that US have given up on India. They in turn have decided to act tough.
All in all Indian policy of looking for financial and strategic help from US has to wait for Obama to go and Democrats soundly defeated in 2016 to begin all over again.
It is a sad state for Indian foreign policy but it is not India's doing. It was the US which offered collaboration with India when President Bush was in office. It is Obama Democrats, who almost undid everything which Man Mohan Singh had achieved with President Bush.
Pity! Pity! Pity!
I don't fully disagree with some of your comments but some parts of your analysis are too simplistic.
First off its not just the US that needs China's trillion dollar surplus.....the Chinese need a place to put their Trillion dollars surplus.
In simple words it means that the Chinese even after spending billions on huge infrastructure still need a safe place to park their money and a decent return for it.
Also the Chinese needed sub-prime US housing boom to stimulate demand for all the low-tech products like dishwashers, refrigerators, etc, etc.
So to make a long story short - The Chinese need the US market even more than the US needs China's money. If China does not make easy capital available by not lending money to the US....then a good portion of that trillion dollars worth of low-tech junk from cell-phone to dishwashers to TVs that the Chinaman makes is going to be parked permanently in Shanghai's ports.
My 2nd point - Which strategic mind in the US is going to fully depend on India to form any kind of strategic alliance ?
Indian leadership is weak, and India capacity to make major strategic decisions is very limited. India is a country run by a bunch of seventy year olds and not known for quick action or pragmatic vision.
The truth of the matter is neither the US nor India need each other very much. That may change if China becomes very aggressive in the South China sea with Japan or if it tries to grab Arunachal Pradesh.