Now, after nearly a month, ships from the two nations have refused to budge from the waters surrounding the shoal, while populists back home have whipped up a nationalist frenzy.

In the Philippines, the office of the president declared that it was unilaterally renaming the disputed land, “Panatag Shoal.” (Chinese call it Huangyan Island.) In China, a video went viral on Wednesday showing a TV anchor pronouncing — falsely — that the Philippines is “Chinese territory,” and that China “has unquestionable sovereignty” over the island nation. Meanwhile, a major general wrote an op-ed urging the Chinese navy to smash the Philippines “with both fists” next time, generating 174,000 responses — the majority of them supportive.

This scuffle is merely one of dozens of overlapping, contradictory claims for territory in the South China Sea, where the nations of Southeast Asia are facing off against an increasingly assertive China — and against one another.

“China certainly shares much of the blame for the current standoff. Its claims to the South China Sea, based on limited historical evidence, do not provide a significant basis to make sweeping, unilateral assertions,” says Andrew Billo of the Asia Society.

Where does the US fit into this toxic brew of jingoism, nationalism, and disputed territory? Its strategic shift to the Pacific, geopolitical rivalry with China, and alliance with the Philippines have inescapably drawn American interests to the Asian hotspot.

In early May, Secretary of State Hillary Clinton outlined America’s emerging priorities in the South China Sea: freedom of navigation, unimpeded commerce, maintenance of peace and stability, and respect for international law.

Beyond that, the sea plays an enormously valuable role as the international highway of global trade. Half of all the world’s intercontinental goods pass through the South China Sea, amounting to $1.2 trillion in trade with the US every year, according to a January report from the Center for New American Security. And its untapped energy resources are vast: 900 trillion cubic feet of natural gas, and as much as 130 billion barrels of oil are estimated to lie undiscovered beneath the seabed.

“The geostrategic significance of the South China Sea is difficult to overstate,” the authors of the CNAS report write. “The South China Sea functions as the throat of the Western Pacific and Indian Oceans.” Yet, they note, American interests in the region “are increasingly at risk” due to “the economic and military rise of China and concerns about its willingness to uphold existing legal norms.”

Taking any overt action to defend those interests would set off alarm bells in China. Last month, after Americans posted 4,500 personnel to the Philippines — coincidentally during the April standoff over Scarborough Shoal — Chinese critics blasted the US for “meddling” in regional affairs.

Since then, the US has exercised caution, refusing to take sides in the dispute, even as Manila requested support.

Complicating matters further is the difficulty of weighing the validity of the competing claims.

Since the 1940s, Chinese maps have included a “9-dash line” that encircles nearly all of the South China Sea; Beijing has yet to explain what the line means. Vietnam has meanwhile ramped up its naval power, while proceeding to sell oil rights in disputed territory to Western companies. Belatedly, the Philippines has become more forceful in asserting its exclusive rights to areas — such as Scarborough Shoal — that Chinese fisherman have visited for generations.

Even if they looked to the United Nations for resolution, the International Tribunal for the Law of the Seas has no power to settle disputes over sovereignty. And while diplomacy stalls, fishermen and civilian ships from each country are taking matters into their own hands.

“We’re now running a risk of an accident or confrontation arising from lack of clear instructions on how to behave,” says Carlyle Thayer, professor emeritus at the Australian Defence Force Academy. “The South China Sea is like a bathtub: When you put more ships in it, there’s going to be a collision.”

While efforts are underway in ASEAN, the regional association, to create a binding “Code of Conduct” on the seas, it has proved too feeble to stand up against Chinese pressure. “Some nervous nellies in ASEAN don’t want to confront China,” says Thayer.

So where does that leave the US? In the awkward position of being the final backstop against China, while simultaneously trying to maintain an appearance of neutrality. That means honoring its military commitments to the Philippines, Thayer says, while stopping short of endorsing its allies’ assertion of territorial rights.

“The US should continue backing the Philippines,” says Thayer. “That’s the weak reed, and if China breaks the Philippines, it will affect other countries’ claims.”

Other experts say that America’s main focus should be on guaranteeing the freedom of global trade routes, while leaving the mess of sorting out sovereignty to the states themselves.

“The US should take a step back from the issue,” says Billo of the Asian Society, “It has made its point with respect to its support for a key ally, and the region as a whole, but ultimately it is in the US interest to have regional stability and not allow the conflict to escalate further.”

Netanyahu’s political jockeying provoked an immediate and strong reaction in Israel.

Labor Party leader Shelly Yachimovitch, who will benefit politically if, as expected, she is now named opposition leader, said: “This ugly maneuver is going to be taught in universities for a long, long time.”

Israel’s Occupy-style protest movement, meanwhile, announced a series of demonstrations to call for political reform this coming weekend. The main question occupying Israel’s punditry even after this second twist remains the same: Is Netanyahu acting to strengthen his hand if he decides to strike Iran before the American elections in November?

Ari Shavit, a top political analyst at the Israeli daily Ha’aretz, who is known for his contacts in circles close to Netanyahu, told GlobalPost that the prime minister has been intent on early elections for at least a few months, for one principal reason that will not please Washington.

“Netanyahu designed to have early elections in Israel so they preempt the American elections in November and give him time to bring the Iranian nuclear crisis to a climax in autumn, in the two months between the Israeli elections and the Americans’,” he said.

Netanyahu’s decision to then abandon early elections in favor of a broader coalition appears aimed at that same result. “Netanyahu suddenly understood that the Likud” — Netanyahu’s party — “could easily split to the right, in which case, even if re-elected, he would not have the mandate he needs,” Shavit said. “Instead of an election preparing the ground for a confrontation, now he has unity preparing the ground for confrontation.”

The Israeli leader has long argued that a pre-emptive strike on Iranian facilities may be the only way to prevent Iran from developing nuclear-weapons capability.

But opposition from European leaders and US President Barack Obama, who supports a diplomatic approach, and from a growing chorus of former Israeli military commanders who argue that a unilateral strike would only delay, not halt, Iranian ambitions, have weakened the prime minister’s position.

Netanyahu’s logic seems to hold that if Obama is re-elected in November, he will no longer have to worry about domestic politics and will be able to press Netanyahu on Iran and the question of peace talks with the Palestinians — an area Netanyahu is eager to keep out of the international spotlight.

“The Iranian reason remains Netanyahu’s motivation,” Shavit said. “The difference is that now the season is shortened. He does not have to wait until the election on Sept. 4 before bringing the Iranian issue to a head. He can act now.”

Chanan Kristal, a political analyst for Israel Radio, had a somewhat different take. He said that two possibilities exist that can explain Netanyahu’s actions — but agreed that the move was driven by Iran.

“Either [Netanyahu] needs [new Deputy Prime Minister] Mofaz in his government in order to justify postponing any action against Iran, or he needs Mofaz inside so as to provide legitimacy for when he does attack Iran. Mofaz has so far come out against an attack, but it remains clear that those making the decision will be Netanyahu and Defense Minister [Ehud] Barak. For now, all bets are off.”

Shavit warned that anyone interested in preventing a conflict with Iran, such as the United States, will need to act swiftly to find a political solution.

“Otherwise there is a risk by the end of summer, we’ll find ourselves in a dire situation,” he said.

At the joint press conference announcing his union with Kadima and Mofaz, Netanyahu appeared to be peeved at much of the sniping he has recently faced by a growing list of former military and intelligence leaders expressing doubts about his Iran policy. He seemed especially put off by Yuval Diskin, the former head of Israel’s internal security agency and an apolitical figure respected across the board, who last week took the criticism farther than most.

“My major problem is that I have no faith in the current leadership, which must lead us in an event on the scale of war with Iran or a regional war,” he said. “I don’t believe in either the prime minister or the defense minister. I don’t believe in a leadership that makes decisions based on messianic feelings.”

The implication that Netanyahu and Barak are not competent to make decisions on matters of national security, specifically regarding Iran, ricocheted loudly across the political universe and clearly remained on Netanyahu’s mind today as he repeatedly stressed the “sanity” of his government and said: “I have even been referred to as messianic. Yes, messianic.”

On Wednesday around 30,000 workers in Germany’s vital manufacturing sector downed tools in a coordinated action that affected over 100 companies, including Daimler and Bosch. The strikes continued on Thursday with an estimated 115,000 workers staging a walk out in around 400 companies, including Porsche and Audi, as part of industrial action to secure a hefty 6.5 percent pay rise forGermany’s 3.6 million metalworkers.

Yet, while some workers in troubled countries may look with envy at their German comrades’ brazenness, in fact the action taking place from Berlin to Bavaria could end up being to the benefit of workers in Madrid, Athens or Lisbon.

After all, the stagnating wages of the past 10 years have served to tip the scales decidedly in German companies’ favor, allowing them to boost their competitiveness at a time when wages were soaring in many other euro zone countries.

That, along with actually producing high-quality goods that the rest of the world wants, has been partly to blame for some of the massive disparities within the euro zone, and to the indebtedness of countries that imported all those German goods.

“This has contributed to the imbalances in Europe, and means that Germany is also partly responsible for the current economic crisis in the euro zone,” argues Alexander Herzog-Stein, an economist with the Macroeconomic Policy Institute, a think-tank with links to Germany’s trade unions.

Now, organized labor in Germany could be riding to their fellow Europeans’ rescue, albeit largely out of self interest.

If wage hikes boost domestic consumption back home, it could go some way to correcting the imbalances that have been a hallmark of the monetary union, as German workers spend their wage increases on more products, including imports from other euro-zone states. As such, decent wages in Germany could even help generate much-needed growth elsewhere.

That could be an alternative to brutally slashing jobs and wages in troubled euro-zone countries.

What is certain is that unions here are adamant that wages have not risen fast enough, given Germany’s position as Europe’s industrial powerhouse.

Even in the engineering sector, vital to its export-led economy, wages have stagnated.

Leaders of the metalworkers union, IG Metall say the current employers’ offer of 3 percent is a “farce” and “provocation” and are hoping their action gets them their 6.5 percent. They are also demanding that employers hire apprentices at the end of their training, and that worker representatives have more say over the employment of temporary workers.

Joerg Hoffmann, regional union leader for the wealthy state of Baden-Württemberg, home to Porsche, said that a deal had to be reached by 15 May. “Otherwise we’ll show them the red card.”

The workers in the engineering sector are hoping to emulate other recent successes. Service union Ver.di secured a 6.3 percent pay increase for its 2 million members, following a series of strike actions. And just last weekend Deutsche Telekom agreed to pay its 17,000 employees an overall 6.5 percent increase over two years.

It’s a mark of the revival of confidence among the German trade unions. Now that unemployment has shrunk to its lowest rate in two decades, and with particular industries even complaining of skills shortages, this is a good time to flex their muscles.

It’s a welcome change from their relative weakness over the past decade. Their leverage had already been dented by the mass unemployment that came in the wake of reunification of East and West Germany and the subsequent collapse of East German industry. That was only compounded by the subsequent dot.com crash and the labor-market reforms that made it easier to hire temporary and part-time workers.

The upshot was that in real wage terms, German wages actually decreased over the past decade. Between 2000 and 2007, before the financial crisis even hit, nominal wages only grew by 1 percent, compared to 2.7 percent in the euro zone, and well below the rate of inflation.

At the same time productivity soared. Data released by Germany’s Federal Statistics Office on Monday showed that while average productivity in the European Union had risen by 3.4 percent between 2005 and 2010, in Germany it was 4 percent, compared to 3 percent in France and virtually zero in Italy.

And whereas overall unit labor costs had increased by 6.2 percent in that period, the rise was only 3.6 percent in Germany, and if had not been for the crisis years in 2008 and 2009 when workers were kept on even when orders were slack, those costs would have actually have decreased over the period.

During the crisis the government and companies introduced a short-work scheme that saved many jobs. However, it is also true that during that difficult period, the unions cooperated with employers to keep companies going. Many skilled workers accepted wage cuts or took unpaid leave to help companies get through the slump in demand.

Now it’s payback time. Workers know that Germany’s export sector has been booming and that many of Germany’s industrial giants are raking in the profits. Just last week Volkswagen, Europe’s biggest carmaker, announced a 10 percent increase on its first quarter operating profit to 3.2 billion euros ($4.2 billion) after seeing a record operating profit of 11.3 billion euros in 2011.

“Naturally the workers also read the newspapers, and they read how well the German economy is doing and how it is being praised,” says Herzog-Stein. “And they are asking for their share.”

On Tuesday, the unions were out in force to celebrate May Day, the traditional day of organized labor, and to reiterate their position. “After years of pay cuts in real terms, after years of efforts to help the country through the crisis and helping save many companies and jobs, it’s our turn now,” Michael Sommer, head of the DGB trade union federation said in a speech.

That sentiment was echoed in the banners held up by many union members who took part in the traditional May Day marches. One in Berlin declared, “It’s time to cough up the money.”

Unions are also demanding a general minimum wage of around 8.50 euros ($11) an hour, something that the center-right coalition has so far resisted. However, as Chancellor Angela Merkel moves to the center, hoping to poach voters from the center-left SPD and Greens, she has indicated in recent weeks that she would now back such a move.

There are some economists who worry that the trend toward higher wages, coupled with the ECB’s low interest rates, could lead to Germany’s greatest fear: inflation. However, others argue that in fact a wage hike is long overdue and should not push prices up. “Wages are rising, but this follows a prolonged period of restraint,” Andreas Rees, chief economist at Unicredit in Munich, told Reuters.

And while it could help the rest of Europe if German consumption picked up even further, it could be of benefit to the German economy. For one, it might help offset any slump in demand in recession-hit Europe. After all, even though German exporters have been able to rely on continued demand outside of the continent, particularly from China, the euro zone still accounts for 40 percent of its market.

“If there is not also a boost in domestic demand then Germany will not remain untouched by the euro crisis,” Herzog-Stein argues. “That is why, out of self interest, we need a stronger and more dynamic domestic market.”