@Karthic Sri
Actually China is in no position to be militarily aggressive towards India either in this case. If it needs to be aggressive, its needs to be aggressive over Vietnam as it is this country that they have the dispute with. Besides, as per International Law, China is a on weak spot in any case.
Any hard armed tactics with Vietnam, especially after the event with Japan is bound to push other ASEAN countries which would be in India's interests. And the US is not going to be far away from this. Any military conflict with Vietnam on this issue is bound to bring in foreign powers and eventually curtail Chinese influence in the SCS. China would be stuck with making proclamations and announcements unless it comes to a quid pro quo with India to unilaterally call of the oil exploration. Until then, if they are smart, they won't do much.
Meanwhile, yesterday, US - Vietnamese defense policy dialouge was held.
Vietnam, US hold second defence policy dialogue - Related news - 9/20/2011 - Báo Dân Trà English
The second Vietnam-US defence policy dialogue took place in Washington on Sept. 19 under the co-chair of Vietnamese Deputy Defence Minister Lt. Gen. Nguyen Chi Vinh and US Deputy Assistant Secretary of Defence Robert Scher.
Deputy Defence Minister Lt. Gen. Nguyen Chi Vinh and US Deputy Assistant Secretary of Defence Robert Scher
At the dialogue, the two sides expressed satisfaction at the outcomes of bilateral defence cooperation over the recent past.
Both Vinh and Scher agreed on the need to make the Vietnam-US defence cooperation more practical in the interest of each country and for peace, stability and cooperation in the region and the world.
Lt. Gen. Vinh informed the US side about the results of the 11th National Congress of the Communist Party of Vietnam early this year while the US side announced its presence in the Asia-Pacific region.
On this occasion, Lt. Gen. Vinh and Deputy Assistant Secretary of Defence Robert Scher signed a memorandum of understanding (MoU) on promoting cooperation between the two defence ministries which focuses on five priority fields in the immediate future.
They include the establishment of a regular high-ranking dialogue mechanism between the US Department of Defence and the Vietnamese Defence Ministry, sea security, search and rescue, studying and exchanging experience in the United Nations peace keeping activities, and humanitarian aid and disaster relief.
Lt. Gen. Vinh and the Vietnamese delegation also met with a number of US congressmen and leaders of the US Departments of States and Defence.