With little warning, China’s Ministry of Defense announced on November 23 that it had established an Air Defense Identification Zone, or ADIZ, above the disputed Diaoyu/Senkaku/Tiaoyutai island chain in the East China Sea. Since about 1960, many nations have used ADIZs to enhance their air security, requiring civilian aircraft flying into them to notify the ADIZ’s controlling nation upon entry. Usually, an ADIZ covers areas just beyond a nation’s territorial waters, providing a kind of early-warning zone in case of military incursion. China’s new ADIZ follows this principle, but it has escalated tensions in the region because it stretches over territories claimed by China, Japan, and Taiwan, and overlaps ADIZs established by Japan, Taiwan, and South Korea.

While there have been no military clashes to date over China’s provocative move, it has raised fears of Chinese expansion and militarism. The extension of the zone comes at an inopportune time. Japan is currently reshaping its defensive stance, becoming more aggressive as it shakes off its self-imposed, post-war pacifism. Over the past year, Japan has repeatedly scrambled aircraft—eighty times just in the past three months—in response to increasing numbers of Chinese warplanes and drones patrolling over the sensitive islands. In response to China’s announcement, Japan has declared that it would continue its own patrols in the airspace and ordered commercial airlines to disregard China’s flight rule.

Conversely, Taiwan’s response to China has been relatively restrained, as it must be in its tenuous position. Taiwanese authorities have noted that China is so far not strictly enforcing the ADIZ against its military flights; in fact, there has been little change in China’s activity in the new zone. To avoid provoking its much larger neighbor, Taiwan says it will refrain from holding military drills in the new zone.

China’s new ADIZ overflies South Korea’s Jeju Island. In response, South Korea has taken the opportunity to expand the Korean Air Defense Identification Zone, or KADIZ, which it has desired to do for quite some time. The KADIZ expansion now includes the disputed Ieodo Reef (Suyan Rock in Chinese), a small, sometimes-submerged rock where South Korea operates a research station and helipad. In addition, the enlarged zone covers the Marado and Hongdo islands, which to South Korea’s displeasure, Japan also includes in its ADIZ.

The dispute among these nations is not just about the expansion of Chinese military oversight. China’s new ADIZ covers the potentially lucrative Chunxiao natural gas field near the disputed Diaoyu/Senkaku islands. Both China and Japan have energy needs that the all-but-untapped, deep-water field could partially satisfy, and both want it exclusively. China estimates that the Chunxiao field contains around 250 trillion cubic feet of natural gas, a claim that U.S. energy analysts believe is greatly inflated. Even so, if it contains only a fraction of that estimate, it is still a considerable reserve. In 2008, Beijing and Tokyo actually signed a pact to cooperate on energy exploration in the East China Sea, but the two nations have been unable to agree on how to make it work.

On December 2, citing increased risk of accidents, the United States urged China to lift its air defense zone procedures, a call the Chinese ignored. America has not officially recognized the new ADIZ, and even sent two unarmed B-52s through the zone without sending out an identification message. Unofficially, however, Washington has urged American commercial carriers to comply with China’s new rules to avoid any unfortunate incidents. It appears that the U.S. attitude is to wait and see how China will enforce the zone, and if it does so reasonably, American officials will simply deal with it as circumstances dictate.

Can China enforce its new ADIZ? Doing so is a two-pronged endeavor: It must be able to monitor traffic in the zone and to defend it if an enemy incursion takes place. To fulfill the first part, it must have ground- or ship-based radar emplacements or air platforms to cover the whole zone. In terms of current technology, the Chinese have the capability to do this job, although coverage of the far eastern reaches of the zone may be spotty. However, if an enemy uses developing stealth technology, China’s monitoring abilities will be greatly reduced.

As for defending the zone, though, the People’s Republic may face a substantial challenge in doing so. Even though China’s naval and air forces have grown and modernized significantly over the past decade, Beijing has so far not shown the ability to use its various pieces in a logistical, cohesive, and comprehensive fashion. While it may be able to run regular patrols of the ADIZ, it may have difficulty getting a rapid-reaction force to defend against a serious violation of the zone.

What seems to be taking place in the East China Sea is an international, multi-level game of chicken. By imposing an expanded ADIZ, China is daring its smaller, weaker neighbors to blink first, and by doing so, tacitly cede control over part of this strategic maritime area. So far, only Taiwan has backed down, because it must. Japan and South Korea, so intertwined in America’s Pacific strategy, have called China’s bluff, depending on U.S. naval power to keep China in check.

As J.R.R. Tolkien writes in The Hobbit, “It does not do to leave a live dragon out of your calculations, if you live near him.” The nations of the East China Sea know exactly what he means.