Anyway my point is China is extending their defensive perimeter in much the same way Japan did in WW2. Physically, diplomatically, and economically. And once again sitting there is an unsinkable aircraft carrier named Australia along the allied plan of encirclement/containment and dispersal of assets. It was the same strategy used against the Soviets which forced the Soviets to actually build aircraft carriers and a surface fleet to "support" the break out of their submarine fleet.
Its why the Chinese are protesting so much over USN ships visiting Subic again. Let alone what they think about the USN conducting maneuvers with the Indian navy.
I see to many similarities between then and now to shrug them off including the lack of understanding how "they" think. Nationalism, Militarism, a Industrial/Political elite, all in a non-Democratic country with few scruples ran by a Govt. that answers to nobody. This isnt a mix that has worked out very well in the past and we cant expect it to in the future.
Your last paragraph makes an important point. One of the strengths of countries like Australia and America is the political freedom they offer. This is very attractive to many people including educated Chinese. The CCP is well aware that this strength is a threat to them. Beijing's great strength at present is that they have lots of money. However their economy isn't that stable. If the money option was deminished they might use other means to secure their money interests.
One thing to think about is to what extent is WWII in the Pacific a useful model to conceptualise contemporary conflict in the Far East today? Surely the big change is nuclear weapons. The major players can't afford to go past the point when escalation reaches the nuclear threshold. I assert Industrial Age attritional war isn't feasible. Rather high intensity conflict will be short and limited in scope. The conflicts between India and China, Russia's seizure of the Crimea, and the SCS islands struggle are typical of contemporary conflict.
At least in the Far East we see an aversion to killing. The one who kills first takes the blame. The incident involving a Taiwanese trawler and the Philippine coast guard is an example of this game of confrontation.
The conflict is drawn out with small incidents featuring controlled upsmanship. The threat of escalation to lethal conflict is there but each side is trying to get the other to lose control first. Should it come to lethal conflict that conflict will be short and sharp. Escalation will run up against the nuclear threshold and then the protagonists will have to resort to negotiations. The side that was more prepared and grabbed the tuff in contention will be in a strong position.
So it is like a game of chess. One needs to think a turn or two ahead of one's opponent.
Take home messages for Australia include:
Our leaders need to be prepared to stand up and demand respect (that's what a lot of this posturing is about in Asia). This implies as Kissinger put it, deterence depends on preceived will to use force. Asia is a tough place. Australia's greatest weakness, as I keep pointing out, is the quality of our national leadership. This is the thing that will make or break us.
We need non-lethal naval capabilities. Note the Singaporeans have sonic weapons on their frigates and OPVs. The RAN should go talk to them and arrange some training excercises in non lethal tactics. The USN might consider the idea too.
We need to plan and practice escalation in a controlled fashion. Again, the Singaporeans are our friends and we can profit from their understanding on these matters.
Readiness is of the upmost importance when high end conflict is short and sharp. If we need time to mobilise, we will miss it. We need an Military that is, as Mattis puts it, ready to go tonight. A small force at high readiness is actually better than a large force that can't act before the matter is over. So our small size isn't necessary a disadvantage.
As a medium power at the smaller end of medium, we can only escalate up to a point. The Chinese are much more powerful and can keep escalating well beyond what we can achieve. Thus we need to be part of an alliance. So we need to work closely with our allies. Though, as I pointed out in a previous post, we must not hide behind our allies.
Finally, we should remain sensible. I see no profit in becoming overly emotional and giving into to such judgement clouding notions such as sinophobia. Think about this; Beijing is just as interested in containing Religious fanatism as we are. We shouldn't be thinking we will always be on the opposite side from Beijing.