Philippines-China standoff could spin out of hand

MANILA, Philippines – It started like many other minor confrontations over the specks of isles dotting some of the world's busiest shipping lanes. But the risks in the latest flare-up over a South China Sea shoal are much bigger than the territory itself.

Armed vessels from the Philippines and its much more powerful neighbor, China, have faced off for two weeks at the horseshoe-shaped Scarborough Shoal. Either side could miscalculate — and consequences could bear down on the whole region, and drag in the U.S. too.

Here's a look at the key players, issues and what's at stake:

HOW IT STARTED:

The Philippine navy says it caught Chinese fishermen poaching, and on April 10 two Chinese vessels moved in to protect them. The fishing boats slipped away, leaving behind a tense standoff with each side hoping the other will pull out first.

HISTORY OF FLASHPOINTS:

The shoal is among 200 islands, coral outcrops and banks spread over the South China Sea, with rich fishing grounds and other resources. The biggest of them are the Spratlys, claimed all or in part by the Philippines, China, Taiwan, Malaysia, Brunei and Vietnam.

There have been sporadic shootouts at sea in the past few decades — China-Vietnam, China-Philippines, Taiwan-Vietnam and Philippines-Vietnam — with navies sinking ships and fortifying disputed islands. A major clash in 1988 between China and Vietnam killed 64 Vietnamese soldiers. China took over the Philippine-occupied Mischief Reef in a surprise mini-invasion in 1995.

Then in 2002, all parties agreed to a status quo.

It largely held. Until now.

POLITICAL CONTEXT:

Last year, Manila accused Chinese vessels of blocking its energy exploration ships in Philippine waters and firing to scare away Philippine fishermen.

It was just a year after Philippine President Benigno Aquino III took office promising to fight corruption and restore national dignity. His predecessor, Gloria Macapagal Arroyo, was accused of cozying up to Beijing and corrupt deals with Chinese investors. Contracts were scrapped, and Aquino turned to the country's traditional ally, the United States, just as President Barack Obama sought to re-engage in Asia.

On the other hand, China — as a rising economic and military power — is asserting territorial claims and in no mood to show weakness.

OVERLAPPING CLAIMS:

Scarborough Shoal lies within Manila's 370-kilometer (230-mile) exclusive economic zone, recognized under the U.N. Convention on the Law of the Sea. But China says the Philippines is misinterpreting the law. Beijing's position is based on ancient maps, though it's unclear how much weight they carry today.

China's map submitted to the U.N. in 2009 claims virtually the entire South China Sea, but Beijing has failed to clarify the exact extent of its claims. It turned down a Philippine invitation for international arbitration.

U.S. ROLE:

Manila feels — and so does China — that the Philippines has U.S. backing.

That's true up to a point.

The U.S. is obligated to defend the Philippines from outside aggression under a defense treaty, and has close ties with Manila's security forces in their fight against southern Muslim militants. Recently, Washington has helped modernize the poorly armed Philippine forces, particularly the navy.

Washington angered Beijing in 2010 when it declared that unimpeded commerce and resolution of disputes in the South China Sea are in the U.S. interest.

But the U.S. — with ever-increasing economic ties to China — has always maintained it is not taking sides.

GAS AND OIL FACTOR:

Some of the tensions involve competition for petroleum. However, it isn't clear how much the region holds and most published surveys suggest little evidence of substantial reserves apart from natural gas.

The overlapping territorial claims make exploratory drilling difficult.

The Philippines' Malampaya and Camago fields, containing up to 4.4 trillion cubic feet of natural gas, are in waters claimed by China. Still, Manila has developed the fields and built a pipeline that already delivers gas that has become vital to its economy. But a Philippine plan to invite bids to explore two other areas has drawn strong Chinese protests and fears of escalating confrontations.