This thread has totally derailed and turned into an India vs China pissing contest... and I have nothing to contribute toward that discussion
However in regards to the actual topic at hand... China's increasing belligerence in the South China Sea is extremely disconcerting and should not be allowed to escalate. This move toward territorial expansion is undoubtedly motivated by natural resources, and understandably so. The rise of a global power has always coincided with control over natural resources. However territorial expansion based on intimidation cannot be allowed.
As per the
chart China's claim looks downright ludicrous because it encompasses the immediate surroundings of other countries.
Allowing China to intimidate smaller SE Asian states will prove to be bad for the global economy. SE Asia seems to be on the verge of a renaissance given the recent developments in countries like Vietnam, Cambodia and now Burma. A hostile takeover by China would pretty much bring that to a halt.
SE Asia has to be allowed to mature and develop without interruption, and in order to succeed the global community has to launch a combined effort to protect the vulnerable states. This job cannot and should not be relegated to the US Navy alone because it will only make matters worse. All regional players with competent navies like Japan, S Korea, Australia and India have to be included in a formidable cohesive task force that would thwart the chances of a military conflict.
Now mind you, my outlook isn't motivated by biased malice toward China. I am an admirer of modern China and have no doubt that it will go on to become a major power that will shape the global future. However one has to be cognizant of the past in order to secure the future. If we have learned anything from history it is that domination of natural resource through military expansion by one singular superpower eventually culminates in disaster (and I say this as an American myself). SE Asia is a well of opportunity for everyone and frankly China will come out on top in the event of fair competition because of the many advantages such as geographical proximity, production of cheaper goods catered toward burgeoning markets and lower costs of services in areas like oil and gas exploration. Point being Sinopec has a much better chance of coming out the winner by playing fair instead of resorting to belligerence and intimidation. In fact the latter will hurt China a lot more in the future.
Lastly, initiating an arms race in SE Asia through sales of military hardware would be counterproductive. It would be far more productive for a country like India to dedicate it's naval resources for a combined task force to deter hostility and leave the rest to aggressive trade and commerce and people to people contact.