China hits back at the USA

Foreign ministry spokeswoman Hua Chunying warning :

"We will never allow any country to violate China's territorial waters and airspace in the Spratly Islands,

in the name of protecting freedom of navigation and overflight."

US Defence Secretary Ash Carter :

"Make no mistake, the United States will fly, sail and operate wherever international law allows,

as we do around the world,

and the South China Sea will not be an exception,"

A US military plane that flew near one of the islands was warned off - eight times.
The US now has to decide whether to send in its ships and risk confrontation :

or back down and look weak...

China may not be an easy opponent to deal with unlike the several others USA has countered to date, but then you can always have faith in US to turn the whole thing round offer a distinct situation and reap the best out of it.

I reckon that the USA needs to be careful in how it does things as it can lead to differences between both the countries, and the consequences will not be good and a battle will lead to losses on both sides and affect the economy. It can be hard to determine how much ownership China has over the area and also which parts are used by other countries, since many claim different parts and hope they don't make a mistake like the USA has although they have been warned. The next time it occurs it could end up being not a pleasant encounter and will be probably a warning shot to warn them to move away from the area by China.

It doesn't sound look good. If both sides become hostile against each other, they will both suffer serious economic consequences. USA relies on China to help them in manufucturing and China relies on the USA for jobs and exports.