The mounting possibility of military confrontation between the US and China would be “disastrous” for the region, experts have warned amid inflammatory statements from both nations.

Donald Trump has followed up his incendiary campaign claim that China was financially “raping” the US by threatening to impose a 45 per cent tariff on imports, after vowing to “buy American” in his inaugural speech.

The new President has also shaken Beijing by questioning the One China policy, which does not formally recognise Taiwan, and speaking to the island nation’s President over the phone in a break with decades of diplomatic policy.

Tensions ramped up further when Mr Trump accused the Chinese military of “stealing” an underwater research vessel in the South China Sea in an “unprecedented act”.

Rex Tillerson calls China's actions in the South China Sea 'illegal'

Beijing said it removed the device from international waters to ensure the safe navigation of passing ships, and later returned the vessel amid continuing controversy over the contested region, where the US conducts “freedom of navigation” operations.

Secretary of State Rex Tillerson has advocated an American naval blockade of artificial Chinese islands in the South China Sea, while there are unconfirmed reports of Beijing moving intercontinental missiles into firing range of the US.

Analysts do not consider a full-blown conflict between the US and China a realistic prospect, despite a senior Chinese military official claiming war was becoming a “practical reality”.

Kerry Brown, an associate fellow in the Asia programme at Chatham House, said there may be “skirmishes” between American and Chinese military assets at sea.

He told The Independent Mr Trump’s “provocative and chaotic approach” was increasing tensions, adding: “It’s a no-win situation. Only through the act of the most amazing stupidity and provocation would conflict happen.

“But Mr Trump and his team have shown they are willing to do very high-risk things.

“It is significantly more probable that there would be a misunderstanding than it has been for many, many years. It is still improbable but significantly more likely.”

Veerle Nouwens, a research analyst for Asia studies at the Royal United Services Institute (Rusi) said any military confrontation between the two global superpowers would be “disastrous” for the region.

“There is a heightened risk of miscalculation but I do not think that anybody is out to have a clear military conflict,” she told The Independent.

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“There’s a lot of symbolism in visits and in words that are being spoken but it’s treading that fine line.”

Ms Nouwens said China is “there to stay” in the South China Sea, where it is building up a military presence on several artificial islands despite condemnation by the UN and countries contesting the waters.

“At the moment China has taken a ‘wait and see’ approach to Mr Trump to see who the rest of his team will be,” she added.

“They’re taking a back seat at the moment but they’re drawing red lines for any upcoming negotiations. “

The new administration is expected to exert pressure on China to open up its domestic markets, which are currently restricted for foreign companies.

Extreme tariffs like those proposed by Mr Trump could damage the US economy by making China look elsewhere for major American imports such as planes and agricultural products, Ms Nouwens said, while some US companies currently take up to 90 per cent of their revenue from China.

Britain has been improving economic ties with China in recent years, with the relationship becoming increasingly important after the vote for Brexit, meaning Theresa May’s government will have to tread a careful line between its two allies.

Xi Jinping, the Chinese President, positioned himself as a defender of free trade at Davos, telling the World Economic Forum that “pursuing protectionism is like locking one’s self in a dark room”.

China's President Xi Jinping used his speech at the World Economic Forum to spurn protectionism (AP)

“No one will emerge as a winner in a trade war,” he warned, in the first ever appearance by a Chinese leader at the summit.

Mr Trump used his opening days in office to formally withdraw the US from the Trans-Pacific Partnership trade deal, distancing America from its Asian allies.

Some said they would now look to include China in a revised pact or pursue Beijing's alternative free trade agreements as the country continues to threaten the US’ position as the world’s largest economy, as well as its military dominance.

Analysts have warned that the new President’s protectionist stance risks decreasing his country’s global influence, rather than fulfilling his campaign pledge to “Make America Great Again”.

“If anyone were to say China is playing a leadership role in the world I would say it's not China rushing to the front but rather the front runners have stepped back leaving the place to China,” said Zhang Jun, director general of the Chinese foreign ministry’s international economics department.

Prof Brown described Mr Trump’s policy as “25 years out of date”, adding: “When it’s the world’s second largest economy with this enormous military, it’s too late.

“It’s prehistoric policy for a modern era. I think it’s not going to work but it is going to cause a lot of damage, and that’s the problem. It’s real knucklehead stuff.”

Ms Nouwens cautioned that while Mr Trump’s unpredictability has temporarily put China on the back foot as it awaits his next move, the President’s position “carries risks” of dangerous misunderstandings.

“I think Mr Trump’s decision to appoint an old friend of China as US ambassador that he did shows there’s room for negotiation, but it’s about how they move on from here, how they negotiate Mr Trump’s ultimate ambition,” she added.