Escalating tensions between the United States and China over the South China Sea threaten Australia’s $250 billion-plus north Asian trade and investment ties. China’s state media dialled up the rhetoric over the dispute when a Chinese commentator said if Royal Australian Air Force aircraft conducted reconnaissance flights over the disputed areas, they should be shot down.

Analysts suggest the bulk of Australia’s $75 billion in annual iron ore exports pass through the East China or South China seas.

Sixty per cent of Australia’s exports and 40 per cent of imports cross the South China Sea.

… University of Woollongong ocean resources and security analyst Dr Sam Bateman said a Chinese warship had challenged three Royal Australian Navy warships in the Taiwan Strait in 2001, some two weeks after a Chinese fighter jet collided with an American spy plane.

“China hasn’t made clear what restrictions on navigation and overflight it’s imposing … when and if it does, a diplomatic protest by Australia would be more appropriate than jumping the gun and flying aircraft into a messy legal situation,” Dr Bateman wrote in an Australian Strategic Policy Institute blog.