We underestimate the importance of what is occurring between China and Taiwan, at the northern end of the South China Sea. With 270 flights per week between the countries, and hundreds of missiles on the mainland targeting the island, China is quietly incorporating Taiwan into its dominion. Once it becomes clear, a few years or a decade hence, that the United States cannot credibly defend Taiwan, China will be able to redirect its naval energies beyond the first island chain in the Pacific (from Japan south to Australia) to the second island chain (Guam and the Northern Mariana Islands) and in the opposite direction, to the Indian Ocean.
To wit, China is building a blue water navy, even as it is helping to fund and construct ports in Burma, Sri Lanka, Bangladesh and Pakistan. The Chinese will not have naval bases in these countries: India would find that far too provocative, and the Chinese are taking pains so others see their rise as peaceful and non-hegemonic. Rather, these harbors will be visited by Chinese warships and will provide warehousing for Chinese consumer goods destined for the Middle East. China is building a far-flung trading network, ultimately to be protected by its warships — the British Empire refitted for a 21st-century era of globalization.