If Secretary of State Kerry hadn't assured me that mere issues of owning territory had no place in the 21st century, I'd be worried:
China is escalating a campaign of military maritime coercion against Japan’s Senkaku Islands, according to Japanese intelligence data disclosed as part of a joint Pentagon-Japan research program. ...
“You get the sense that the PRC is preparing its military forces for the ‘short, sharp war’ that they have written about,” Fanell [a retired Navy captain and former Pacific Fleet intelligence director] said.
While many analysts dismiss the Chinese threat by correctly noting that American military power is far greater than China's--even before adding in our allies' to the equation--dismissing the threat fails to consider that at the point of contact, China can mass superior power for some period of time before we can mobilize and move our superior power to resist China.
Japan in 1941, recall, judged that they could use a temporary advantage in power over the Americans, British, Dutch, and French to grab enough terrain to deter America from mobilizing power for retaking that territory.
And that judgment was made despite America having a GDP 8-10 times greater than Japan.
China would not be attempting to push out a perimeter nearly as big as Japan did; and China's GDP isn't nearly as inferior. So China wouldn't be as stretched but wouldn't hold so much that the thought of retaking it would be too daunting (and it wasn't for America in 1941, anyway).
China may believe that their possession of nuclear weapons is the ultimate deterrent against an American and Japanese counter-attack rather than a deep buffer that failed to deter America in 1941.
But nuclear deterrence really doesn't work below the level of ensuring national survival. Does China really believe that a threat to destroy Japan and America's cities from Hawaii to the West Coast is a serious threat to hold a bunch of small islands when America would surely destroy a lot of Chinese cities and assets in a nuclear counter-strike? Would China really ensure their national destruction to hold the Senkaku Islands?
The problem is that in any fight between nuclear powers, the pressure to end the fighting regardless of who controls what because of the threat of irrational escalation to nuclear weapons use will tend to restrict the campaign.
But does America have to get involved directly?
And as I've written, I think a fight on a narrow front over the Senkaku Islands where quality is more important than quantity favors Japan--especially if we are helping Japan even short of actively shooting at the Chinese.
Would lack of direct American involvement give Japan more time to defeat China and retain control the islands?
Yet China's plans to quickly take the islands and then hold them do give the Chinese an advantage if China can pull that off, leaving China in possession of some or all of the disputed islands before pressure to end the conflict builds up.
And if the war expands to American and allied sea blockade of Chinese trade, at what point does this broader fight seem like an actual threat to Chinese national survival, which would justify using nukes in the minds of Chinese rulers? Would we recognize that shift in thinking?
And what if the Chinese try to muddy the waters between peace and war by pulling off a subliminal invasion with "civilian fisherman" landing on the islands who are willing to use baseball bats to attack Japanese troops landing there in response, providing China with an excuse to escalate? Which China will magically be ready to do quickly. Would Japan even try to do more than the Philippines have managed to do in the face of similar tactics by China?
Which is why I'd be happier if Japan actually defended the islands rather than counting on a seaborne version of the British-French Dyle plan to rush in defenders just ahead of the Chinese attackers.