SINGAPORE — The bitter dispute between China and Japan over their rival claims to ownership of the Senkaku Islands in the East China Sea has severely strained bilateral political relations. Mishandling or mistakes by either side could trigger a clash between their paramilitary ships, drawing in regular forces and leading to a wider war.

As if the prospect of a regional conflict between the world’s second and third largest economies is not bad enough, China is extending the dispute into treacherous economic waters as well, potentially threatening Asia‘s growth and integration as well as stability. A recent report prepared for the U.S. Pacific Command (PACOM) in Hawaii, which oversees American forces and bases in the Asia-Pacific region, has called the Chinese strategy “guerrilla economic warfare.”