China Prepares for a Military Confrontation

sunset-1416418_640A dispute between China and the Philippines comes before an international court on July 12th.

Influential voices in the eastern superpower are calling for China to be ready to defend its sovereignty in the face of the court’s decision.

Tensions in the South China Sea have been rising steadily since I first predicted an armed conflict there just three years ago. Now China has territorial disputes with the Philippines, Vietnam, Taiwan, Malaysia and Brunei.

The U.S. cannot ignore the value of the shipping lane through the sea, where $5 trillion in goods travel each year. So our navy continues to maintain a presence in the region.

The current concern is that in response to the decision of the international court, China may declare the area as an air defense identification zone. They may also double down on their construction on small islands in the region, which could further inflame disputes with neighboring nations.

Make no mistake about it. China is flexing its muscles in the South China Sea. And because of the possible impact on international trade as well as our relationships with surrounding nations, the U.S. may get pulled into a deadly conflict.

The main impact here at home will be financial. It’s a good time to pay off debts and to reduce spending.

You can see more about the rising tensions in the South China Sea when you click here.