>> China is standing it's ground on two major Asian fault lines and refusing to back down. On one side, the US and South Korea are deploying missiles to counter North Korea, a major weapon system that's too close for comfort for Beijing. On the other, bad blood is rising with old enemy Japan.
Tokyo says ties are deteriorating after Chinese ships sailed close to disputed islands held by Japan in the East China Sea this week. As Michael Martina reports, that tension traces back to China's claims further south.>> China was deeply angered with what it viewed as Japan inserting itself Into the controversy following The Hague Arbitration ruling in July.
So Chinese experts say that if Japan is going to cause trouble for China in the the South China Sea, China is gonna make sure Japan feels the pressure closer to home in the East China Sea. And it's also effectively saying we can handle whatever the United States allies throw at us on both fronts.
>> The THAAD missile system in South Korea is a much trickier problem, which China also sees as a clear American power play against Beijing's nukes.>> We argue that THAAD's position in South Korea is really too close to North Korea to be effective in protecting a city, like Seoul, from a missile strike originating there.
But that it could count a potential strike from China and therefore reduced China's nuclear deterrent. So essentially, Beijing sees it as part of a broader US strategy of containment directed at China, along with disputes in the South China Sea, which it says have been hyped up by Washington.
>> As tensions rise among Asia's powers, the fallout could be far-reaching. China, Japan, and South Korea together make up a quarter of global trade and business, and bad blood between them could spell big trouble for the world economy.