Tensions have ratcheted up over Beijing's territorial claims in the South China Sea.

The dispute pits China against the Philippines, Taiwan, Vietnam and other neighbors that claim ownership of the key island chains and nearby water. The smaller countries fear losing access to a major shipping route and fishing grounds as well as the potential that China militarizes the region.

China upped the ante last year by launching a massive dredging operations to turn reefs into artificial islands it considers its territory.

In October a U.S. destroyer breached a 12-mile barrier around the islands for the first time, prompting Beijing to call the U.S. operation "a very serious provocation."

The incident showcases how the U.S. and China are "frenemies" on countless issues, including trade and cybersecurity. The two countries are also in a constant battle for influence over other countries, including in Asia and Latin America.

After years of explosive growth, China's economy is decelerating. That slowdown threatens the global economy, as evidenced by the late summer market scare around the world.