China believes that the United States and Japan have no business in South China Sea disputes and that it has every right to “limited defense facilities” on territory it firmly considers to be its own, but is contested by smaller nations.

In the “highly interconnected neighborhood” that grew out of peace after World War II, such exclusivity and hierarchy have no place, Adm. Scott Swift, head of U.S. Pacific Fleet at Pearl Harbor, said in Australia on Wednesday.

“We are all locals here; there are no outsiders or subordinate states among the Indo-Asia-Pacific nations,” Swift said in Canberra at the Indo-Pacific Maritime Security Conference.

Swift said it is becoming increasingly clear that a “contest” is underway in the most vulnerable waters of the region.

On one side is a potential return to World War II’s “might makes right” after more than 70 years of stability, Swift said, without mentioning China by name.

“On the other is a continuum of the international rules-based system that has served us all so well, with limitless potential to continue to do so,” Swift added. That system emphasizes free trade and navigation freedom.

Swift’s comments are the latest U.S. rhetorical broadside leveled at China’s island-building and military buildup in contested islands in the South China Sea.

“Considering the $5.3 trillion in trade that traverses each year from the Indian Ocean and through the South China Sea, we all have a vested interest in ensuring the entire region remains secure, stable and prosperous.” Adm. Harry B. Harris Jr., head of U.S. Pacific Command at Camp H.M. Smith, said earlier this month.

In February, Harris accused China of trying to create hegemony in East Asia and destabilization of the South China Sea — where reefs and islands are claimed by multiple countries — with deployment of advanced fighters and missile systems to the Paracel Islands and construction of three 10,000-foot runways in the Spratlys.

China, Vietnam, Malaysia, Taiwan, Brunei and the Philippines have competing claims in the South China Sea. The United States worries China will restrict commercial and military passage in international waters.

The “disproportionate scope, scale and acceleration” of disruptive activities is causing widespread anxiety among Association of Southeast Asian Nations, or ASEAN, Swift said.

Swift warned of an arms race, saying the “climate of uncertainty” encourages nations “to transfer ever larger shares of national wealth to purchase naval weapons beyond what is needed merely for self-defense.”

China Foreign Ministry spokeswoman Hua Chunying said on Feb. 23 that as the largest trading nation in the world and the biggest coastal state in the South China Sea, it cares more about navigation freedom than anyone else.

Freedom of navigation in the South China Sea had never been a problem, Hua said, but the point needed to be made that freedom of navigation under international law “is by no means the freedom for U.S. (military) vessels and planes to make a show of force.”

“Verbally, what the U.S. talks about is navigation freedom,” Hua said. “Virtually, what it thinks about is perhaps absolute hegemony on the sea.”

On Feb. 26, China Foreign Ministry spokesman Hong Lei raised the possibility of China establishing an Air Defense Identification Zone in the South China Sea requiring permission for aircraft passage.

“It depends on whether China’s air safety is threatened,” Hong said. “The current situation in the South China Sea is generally stable.”