Headlines and TV interviews are dominated by talk of the U.S.-China trade war. That escalating confrontaion is a big deal, but it’s not the only flash point in U.S.-China relations, and not even the most important. As explained in this article, China is as much concerned about a military confrontation in the South China Sea as it is about the economic confrontation in the trade wars. China has dredged sand surrounding useless rocks and atolls in the South China Sea and converted them into artificial islands and then built-out the islands to include naval ports, air force landing strips, anti-aircraft weapons and other defensive and offensive weapons systems. Not only are the Chinese militarizing rocks, they are trampling on competing claims by the Philippines, Vietnam, Brunei, Malaysia and other countries surrounding the sea. China is claiming control based on ancient imperial arrangements and argues that the west and its South Asian allies “stole” the territory from them. The answer is that both the ancient claims and the theft narrative are open to dispute. More to the point, the world has developed rules-based platforms for resolving these issues without military force. The U.S. is guaranteeing freedom of passage, freedom of the seas and the territorial rights of allies such as the Philippines. So far, the confrontation has been about naval vessels passing in close quarters and surveillance aircraft being harassed by fighter jets. The risk of such tactics is an accidental collision, a rouge shot fired, or a command misunderstood. As Mick Jagger sang, a U.S.-China war is “just a shot away.” Accredited investors interested in learning more about Jim Rickard’s private placement in the world’s first predictive data analytics startup that combines human and artificial intelligence with complexity science should check out his offering at Meraglim Holdings. Click the link to learn more.