US and Chinese Exercises Simultaneously Unfold in South China Sea —

📡 THE SIGNAL — What Happened

Why it matters: In early 2026, both US and Chinese forces conducted large-scale simultaneous exercises in the South China Sea, raising the risk of accidental military conflict to its highest level since the Cold War. This is a critical juncture that directly tests Japan's sea lane defense and the reliability of the Indo-Pacific alliance, where a failure in escalation management could inflict trillions of dollars in annual damage to the global economy.

• Military Exercises — The US Navy conducted multiple multilateral exercises, including "Freedom Edge" and "Valiant Shield," across the Indo-Pacific region from January to March 2026. The USS Carl Vinson and USS Abraham Lincoln carrier strike groups were deployed to the South China Sea, maintaining the largest forward deployment posture in the past five years.
• Chinese Military Movements — The Chinese People's Liberation Army Navy (PLAN) conducted large-scale live-fire exercises across the South China Sea in February 2026. A fleet including the aircraft carrier "Fujian" carried out anti-ship missile launch drills around the Spratly Islands, while Coast Guard vessels continued intimidating actions against Philippine supply ships near Second Thomas Shoal and Scarborough Shoal.
• Dangerous Close Encounters — At least 12 dangerous close encounters (near misses) between US and Chinese military aircraft and vessels were reported in the South China Sea from late 2025 to early 2026. In June 2025, a J-16 fighter jet dangerously approached a P-8A patrol aircraft (approximately 6 meters), which the US Department of Defense condemned as "reckless and dangerous."
• Artificial Island Fortification — China has deployed three runways (Fiery Cross Reef, Subi Reef, Mischief Reef), anti-ship cruise missiles (YJ-12B), surface-to-air missiles (HQ-9B), and electronic warfare equipment on seven artificial islands in the Spratly Islands, effectively operating them as forward military bases.
• Sea Lanes — The annual trade volume passing through the South China Sea is approximately $5.3 trillion (about 30% of global trade). Since about 80% of Japan's energy imports pass through this area, freedom of navigation is directly linked to Japan's economic security.
• Legal Framework — The 2016 Hague Arbitral Tribunal ruling found that China's extensive territorial claims based on the nine-dash line had no legal basis, but China continues to reject this ruling as "a piece of paper."
• Japan's Response — Japan's "National Security Strategy," revised in December 2025, explicitly states that stability in the South China Sea "directly affects Japan's security." Japan's Maritime Self-Defense Force destroyers have tripled the frequency of joint exercises in the South China Sea compared to 2020.
• Philippine Situation — Since 2024, President Marcos has hardened his stance against China, explicitly expanding the scope of the US-Philippines Mutual Defense Treaty to the South China Sea. He has granted US forces access to four new bases under EDCA, strengthening the alliance.
• AUKUS Cooperation — As Pillar II of AUKUS, joint development of AI, quantum, and undersea autonomous vehicle technologies directly enhances surveillance capabilities in the South China Sea. Australia's nuclear submarine program will have a long-term impact on the regional balance of power.
• Military Communications — The US-China military hotline was temporarily severed after the 2023 balloon incident but was restored at the Xi-Biden meeting in November 2023. However, since 2025, China has repeatedly refused to respond whenever tensions rise in the Taiwan Strait.
• Chinese Military Budget — China's announced defense budget reached 1.76 trillion yuan (approximately $242 billion) in 2026, a 7.2% increase year-on-year. However, actual military spending is estimated by the Stockholm International Peace Research Institute (SIPRI) to be 1.5-2 times the announced figure, effectively around $360 billion.
• US Military Budget — The US defense budget for fiscal year 2026 is approximately $886 billion, with about $9.3 billion allocated to the Indo-Pacific Deterrence Initiative (PDI). Approximately 40% of the PDI is used to strengthen defense capabilities along the First Island Chain, including the South China Sea.

It is no accident that the South China Sea has come to be called "the world's most dangerous waters." This tension is the result of structural changes spanning at least half a century, and the current rise in conflict risk must be understood within its historical context.

**Origins in the Cold War (1947-1991)**

It was in 1947 that China drew the "nine-dash line" on its maps. The then-Republic of China government claimed sovereignty with an "eleven-dash line," which the People's Republic of China later revised to the "nine-dash line." During the Cold War, the South China Sea was peripheral to the US-Soviet rivalry, and China's naval capabilities were limited, so territorial issues were shelved. Deng Xiaoping introduced the policy in 1979: "Sovereignty is ours, disputes should be shelved, and joint development pursued," and this "strategic ambiguity" supported decades of stability.

**Post-Cold War and the Rise of the Chinese Navy (1991-2012)**

After the collapse of the Soviet Union in 1991, the United States maintained the security order in the Asia-Pacific as the "sole superpower." However, China's rapid economic growth accelerated its military modernization. The trauma of being unable to deter the approach of two US aircraft carriers during the 1995-96 Taiwan Strait Crisis became the origin of China's A2/AD (Anti-Access/Area Denial) strategy. In the 2000s, China began developing the DF-21D anti-ship ballistic missile ("carrier killer"), building capabilities to restrict the freedom of action of US forces within the First Island Chain.

The 2012 Scarborough Shoal incident was a turning point. This event, where China established effective control through a standoff with the Philippines, proved that "accumulation of faits accomplis" (salami-slicing tactics) could succeed without strong international backlash.

**Artificial Island Construction and Militarization (2013-2020)**

Under Xi Jinping's administration, China extensively reclaimed seven reefs in the Spratly Islands, creating over 3,200 acres of artificial islands. This was "China's Maginot Line," fundamentally altering the military balance in the South China Sea. Three of these artificial islands were equipped with 3,000-meter-class runways, enabling fighter jet operations. The 2016 Hague Arbitral Tribunal ruling rejected China's territorial claims, but China ignored this ruling and further accelerated militarization.

**From the Biden Administration to Trump's Second Term (2021-2026)**

The establishment of AUKUS in 2021 introduced a new variable to the power balance in the region. The transfer of nuclear submarine technology to Australia signifies the long-term build-up of deterrence against China's dominance in the South China Sea. The Biden administration continued "Freedom of Navigation Operations" (FONOPs) and focused on strengthening alliance networks.

When President Trump took office again in 2025, his China policy became even more uncertain. While the Trump administration demanded increased defense spending from allies, it tended to avoid clarifying security commitments regarding Taiwan and the South China Sea. This "strategic ambiguity" carries the risk of sending incorrect signals to China.

**Why Now is Dangerous**

There are three reasons why the current situation in 2026 is particularly dangerous. First, the frequency of physical proximity between US and Chinese forces in the South China Sea has dramatically increased. Second, the reliability of military communication channels has deteriorated, and mechanisms for controlling accidental escalation are insufficient. Third, the deepening involvement of regional actors such as the Philippines, Vietnam, and Japan makes it easier for bilateral issues to trigger multilateral chain reactions.

History teaches that unintended clashes between great powers are most likely to occur when both sides are convinced that "the other will not escalate." Just as with Sarajevo in 1914, the next crisis in the South China Sea could begin in a way no one desires.

The delta: The simultaneous large-scale military exercises by both the US and China in the South China Sea, coupled with a dramatic increase in physical contact frequency, have brought the "probability barrier" of accidental conflict closer to a critical point. The previous assumption of "dangerous but controllable" has begun to crumble. In particular, China's pattern of selectively disrupting military communication channels is the most structurally dangerous change, as it nullifies the safety net for escalation management.