China has strongly protested to the United States over a naval incident in the South China Sea. But it stopped short of a military response.

The USS Lassen, a guided missile destroyer, was ordered to sail close to an artificial island called Subi Reef, and did so early on Tuesday. China challenged the USS Lassen by radio, and it was followed by a Chinese vessel, but the Chinese avoided making a physical challenge.

The reef is claimed by China and is one of several reefs being built up into artificial islands by China, to boost its claim to control of the waters around them. China is building military facilities on some of these islands. A country is allowed to exert control and sovereignty over waters up to 12 nautical miles from its shore. This applies to islands as well, hence China’s outrage today, as it says its territorial waters were violated by the USS Lassen.

"The big deal is that China sees the US as behaving like an imperial power," says Patrick Winn, a Bangkok-based correspondent for Global Post.

China sees the whole region as what it calls an “aquatic province, its blue national soil, this whole area,” explains Winn. “So the US would like to contest that and it’s trying to deliberately provoke the Chinese into backing down by sailing this warship near these military outposts.”

Reefs, however, are not considered islands, and Subi Reef is listed cartographically as a reef, not an island. So the US position is that it did not violate Chinese sovereign territorial waters.

Moreover, the Chinese claim to ownership of this chain of islands and reefs — known internationally as the Spratlys — is contested by Vietnam, the Philippines, Brunei, Malaysia and Taiwan.

It’s assumed there are large reserves of oil and gas and other natural resources under the sea around the islands. But the Spratlys also have a strategic location, since about one-third of the world's commerce passes through the South China Sea. So control of the sea is a vital interest for many trading nations.

The problem is that China likes to think of the South China Sea as its backyard. “It’s controversial, but China seems dead set on this policy,” says Winn. “It’s very reminiscent of what the United States has done” in its own backyard in the Caribbean in the 19th century.

China has made threats in the past to anyone challenging its claims. “Let's look at its bluster in state-run media. China has previously said that if the US continues on this path ... military confrontation will start sooner or later. [And] if the US wants to teach China a lesson, by provoking or humiliating [China], then China will have no choice but to engage.”

“So far it’s bluster,” says Winn, “because China hasn’t done anything to respond militarily, nothing strong at least. So for now, it’s bluster. And I think the US military is trying to test that to see where the rhetoric ends and the action begins.”

“It really is starting to look like a game of chicken.”