Australia has been warned it could pay a heavy price for its support of the US and a group of southeast Asian nations in rejecting China’s sovereignty to the South China Sea.

In an aggressive and pointed warning to Australia, the China state-run Global Times called for military strikes on any Australian ships that may undertake “freedom-of-navigation” activities in the area.

The rhetoric-laden editorial is the latest salvo in an escalating regional power play between China and the US and its allies, and coincides with a new strategic report that predicts neither side would win a full-blown war.

Entitled ‘Paper cat Australia will learn its lesson’, the Global Times article criticised Australia’s decision to support The Hague’s ruling that rejected China claims to the resource-rich South China Sea.

The term “paper cat” is meant as an insult and harkens back to the Mao Zedong-era use of the phrase “paper tiger” to dismiss the threat of foreign powers.

A Chinese H-6K bomber patrols the islands and reefs in the South China Sea. Photo: AP

Calling Australia a country with an “inglorious history”, the article says it was first an offshore prison of the UK and was established through “uncivilised means, in a process filled with the tears of the Aboriginals”.

While acknowledging Australia’s economic links to China, the article also accused it of “trying to please the US” and of intending to “suppress China so as to gain a bargaining chip for economic interests”.

Last month, Australia supported an international decision which ruled China “had no legal basis” to claim historical rights in the South China Sea.

“Australia has unexpectedly made itself a pioneer of hurting China’s interest with a fiercer attitude than countries directly involved in the South China Sea dispute. But this paper cat won’t last,” the editorial said.

The Hague ruled that China has no legal basis to claim historic rights to the bulk of the South China Sea, in which $5 trillion worth of shipborne trade passes through each year and is potentially rich in oil and natural gas.

China, which boycotted the proceedings, rejected The Hague’s findings and openly discussed setting up an air defence zone to protect its interests in the area.

“China will take all necessary measures to protect its territorial sovereignty and maritime rights and interests,” the state-run People’s Daily said in a front page story after the ruling.

An FA-18 Hornet lands on the USS George Washington during exercises in the Pacific. Photo: Getty

No winner in a war

In its newly-published research report, ‘War with China: Thinking Through the Unthinkable’, a Rand Corporation think tank paints a pessimistic view of a possible conflict between the two powers, saying both sides would suffer large military losses with China losing the most.

While the United States has not taken an official position on the South China Sea, China’s expansion in the region is seen as a direct threat to the US military dominance in the Pacific.

As any war progressed, the report said China’s defensive capabilities would have the effect of lessening its losses, increasing the US losses and denying any outright victory.

In addition, a conflict would be disastrous for both country’s economies, especially China’s.

“Because much of the Western Pacific would become a war zone, China’s trade with the region and the rest of the world would decline substantially,” it said.

Source: Rand Corporation

“China’s loss of seaborne energy supplies would be especially damaging.”

The report said a long conflict would also expose China to internal political divisions, while Japan’s increased military activity in the region could have a major influence.

Give peace a chance

Among its recommendations to avoid a conflict, the Rand Corporation report said US leaders should have the means to confer with Chinese leaders and “contain a conflict before it gets out of hand”.

It also said: “The United States should ensure that the Chinese are specifically aware of the potential for catastrophic results even if a war is not lost militarily.”

Foreign Minister Julie Bishop and her Chinese counterpart Wang Yi in discussion before The Hague ruling. Photo: AAP

But on a less optimistic note, it recommended the US should conduct contingency planning with key allies, especially Japan; improve its ability to sustain intense military operations; and “develop options to deny China access to war-critical commodities and technologies in the event of war”.

Despite China’s position as Australia’s top trading partner, it’s growing tourism to Australia and high investment in its land and businesses, it is blunt in its warning about not getting in the way of its aspirations.

Foreign Minister Julie Bishop received a stern rebuke from the China last month after supporting The Hague’s decision and “freedom-of-navigation” activities in the region.

“Australia should talk and behave cautiously,” China Foreign Ministry spokesman Lu Kang warned.