It is 3am when the president enters the White House Situation Room. “Good morning, everyone. I hope you’ve all had some sleep. I gather we have a problem. Set the scene for us, will you?” he tells the national security adviser.

“Yes, Mr President. Just to bring everyone here up to speed, last week the president warned China not to deploy fighter aircraft to their new base on Mischief Reef in the South China Sea. They had announced they would do that in response to our latest freedom of navigation operations and in the context of our disagreements over North Korea. Over the weekend they defied the president and sent the planes in. Mr President, you were travelling at the time, so there was no chance for lengthy analysis, but you accepted our advice that we could not allow this to stand and ordered Pacific Command to block Chinese sea access to Mischief Reef. PACOM has now got three destroyers in position, and a carrier taskforce is also being rerouted to the area. We announced these steps publicly, and informed the Chinese that their ships approaching Mischief Reef would be intercepted and turned around by our navy. The next day a Chinese navy taskforce escorting a supply ship left Hainan on a course for the reef. Three hours ago they were confronted by our ships. They defied our navy’s instructions to turn around. Our commander on the spot was not authorised to use force to stop them. That decision lies with you, sir.”

“And what do you advise?”

“Mr President, we have no choice. Our strategic position in Asia is at stake. America’s leadership in Asia depends on the credibility of its threats and ­prom­ises, and that credibility will be ­des­troyed if we cannot stop the Chinese as we have promised to do.”

“That is all quite clear, and I think quite correct.” The president turns to the chairman of the Joint Chiefs of Staff. “Well, general, what are our options?”

“Mr President, on your order we can fire at, and if necessary sink, one of these Chinese ships right away. That is not a problem —”

“So do you agree with the national security adviser? Is that what we should do?”

“Not necessarily,” the general replies. “We have to consider what would happen next.”

“And what would happen next?”

“Well, sir, that is up to the Chinese. They don’t want a full-scale war, and they will back off and cut their losses if they think we are willing to let it escalate that far. But we can’t assume that’s how they’ll see it. There is a real chance they think we are bluffing, and that we will be the ones to back off. If they think that, they’ll call our bluff and hit us back if we hit them. They could sink our ship, for example.”

“And what are the chances they think we are bluffing?” the president asks.

“Hard to say, sir, but the ­chances are not low. They know we’ve often drawn red lines in the past and not followed through. They probably assume the stakes are lower for us than for them because it is their back yard. And the stakes for them are very high, so they are probably willing to take some risks. So I’d say the chances of them hitting us back are at least 50-50, probably more.”

“But if they do think we are serious this time, and back off after we have fired on their ship, it’s a big loss for them and a big win for us.”

“Yes, that’s right, Mr President. Either way, your decision is a high-stakes bet on how they judge our resolve.”

“OK, so we need to get clear what’s at stake if we lose the bet. What happens if we hit them and they hit back?”

“Well, then it would be your turn to decide whether to escalate or back off. Backing off after we had already lost a ship would be even more damaging to our standing in Asia than backing off now. But escalating the conflict further would be a very serious step, indeed.”

“Of course it would, but I’d be willing to take it if I was sure that we’d win, and win quickly. Can you assure me of that?”

“To be frank with you, Mr President, I cannot. Ten years ago I would have said yes, but today is different. China’s military is still much weaker than ours, but they are strong enough to deny us a quick and easy victory in the South China Sea. We would sink a lot of their ships and shoot down a lot of their planes, and we could, if we chose, inflict a lot more damage on them than they could on us. But we would still take serious losses — ships and aircraft, and lives.”

“Could we lose a carrier?”

“Sure, if we send it in harm’s way. The carriers would be prime targets, and the Chinese have put a lot of money into building the systems to find and sink them. They’d have a fair chance of succeeding.”

“Are the Chinese really that good?”

“Well, we’re not sure. Their systems and people are quite untested, but combat springs surprises for both sides, most of them unpleasant. It’s always a mistake to underestimate your enemy. I think we should expect the Chinese forces to be pretty effective.”

“So we might lose thousands? More than in Iraq and Afghanistan?”

“Quite possibly. But the real point is that after a week or two, we might not have landed a decisive blow or achieved a clear outcome that could be presented as a victory. We’d be headed for a stalemate, and a stalemate always looks and feels like defeat.”

“Hmm. So what would we do then?”

“By that stage, after suffering significant losses, I think we’d find it very hard to back off, and so would they. So I guess we’d both be inclined to double down. For us that would mean launching a major strike campaign against the bases and facilities on the Chinese mainland that support their air and naval forces. For them it would mean doing the same against our bases in the Western Pacific.”

“And where would that end?”

“I don’t know, Mr President. We have no real idea of what would count as victory in an escalating conflict against a country as large and powerful as China.”

“OK, understood. But how bad could it get? Could it end up in a nuclear exchange?”

“Mr President, we can’t be sure it wouldn’t. We don’t have a clear idea just where China’s nuclear threshold is, and our own thinking about this is much hazier than it was against the Soviets. So we cannot rule it out. And of course that would raise at least the possibility of a Chinese nuclear strike against American cities.”

“I see.”

The president turns again to the national security adviser. “Do you still think we have no choice?”

“Well, Mr President, let me rephrase that. We do have a choice. It is a choice between the risk of a serious war — maybe a nuclear war — with China, and the ­collapse of our strategic leadership in Asia. Whether it is worth risking war to preserve our leadership depends on how important it is to our fundamental national objectives.”

The secretary of state takes a deep breath. “With respect, Mr President, I want to reinforce what the national security adviser has said, to make sure we all understand what the decision that you are now contemplating would mean. To be frank, our credibility in Asia has already been badly damaged by our repeated failure to stop the Chinese doing things in the South China Sea that we and our predecessors have called unacceptable. We decided to draw a red line around Mischief Reef last week precisely to reassure our allies and to warn the Chinese that we would not let things drift any further. To back off again now would therefore massively embolden the Chinese and dismay our allies. They are already worried about our looming vulnerability to North Korean as well as Chinese nuclear attack on our cities. There must come a point at which Japan, especially, loses so much confidence in us that they decide to build their own nuclear forces. If we back off from Mischief Reef now, that point will move much closer. If and when they reach that point, our alliance with Japan is at an end, and with it our role as the primary power in Asia.”

“Yes, that’s the big question. And here is my answer. The way things look, it is just not clear that leading in Asia, important though it is, justifies the kind of risks we are talking about. General, tell the navy to pull our ships back and let the Chinese pass. I’m not willing to risk a major war.”

There is not much make-believe about this little scenario. Only two small steps would get us to the situation it depicts: a Chinese decision to deploy combat aircraft, and an American decision to blockade in response.

Both steps are quite plausible, having been explicitly canvassed by senior figures in Beijing and Washington, respectively.

The issues that are raised as the scenario unfolds, and the choices that the president confronts, are exactly the issues and choices that America would face in an escalating crisis with China. Indeed, in a less acute form they confront ­decision-makers in Washington every day as they jostle with China over many issues in Asia. Understanding the issues and choices that US decision-makers face is the key to understanding why America is losing its primacy in Asia, and the best way to do that is to explore the interplay of power, interests and resolve that underpins this Situation Room scenario.

Power politics is what happens when strong states — great powers — compete for influence and authority. It doesn’t happen all the time, because often, and sometimes for decades on end, most countries know and accept their place in the international pecking order. Nineteenth-century Europe was like that, and Asia since 1972 has been too. But there are times when assumptions about power and influence — about who sets the international rules and who must follow them — are challenged and the old order is overturned.

Power politics has returned because China has reversed course and started to challenge America again. To preserve its leadership, America must convince China that it is willing to go to war to resist China’s challenge. That doesn’t mean it has actually to fight a war, only that it must convince China that it is willing to do so. China has to show that it is willing to fight to depose the United States. It is doing this now by the classic power-political ploy of ­salami-slicing. The aim is to test America’s resolve over a series of issues of little intrinsic worth, which on the face of it do not seem worth fighting over. But while each slice of the salami may be insignificant, Washington looks weak if it can’t or won’t stop China taking one slice after another, and China by contrast looks strong and resolved. This undermines the credibility of US leadership, as regional countries lose confidence that Washington will support them if the next slice of the salami is them. China’s influence is correspondingly enhanced, as its neighbours grow less willing to defy it.

This is what’s happening in the South China Sea today. It has very little to do with questions of sovereignty over reefs and rocks, or who has rights over which areas of ocean. Nor does it have much to do with arcane questions of international law. These substantive questions merely provide the setting for Washington and Beijing to display their strategic resolve, and to put their rival’s to the test. And so far China is winning.

Of course, neither side wants a clash, let alone a major war, because both understand that even so great a prize as leadership in Asia would not be worth such a massive disaster. But that doesn’t stop them playing power politics, because each side believes it can get what it wants without a war, because the other will retreat to avoid one. The Chinese seem convinced that America will surrender regional leadership rather than risk a war with China, and the Americans have been equally sure, at least until recently, that China will drop its challenge and go back to accepting US leadership rather than risk a war with America.

There is a strong chance that Donald Trump will face a crisis like the one in the Situation Room while he is President. It may not be over the South China Sea. It could be over the Senkaku/­Diaoyu Islands in the East China Sea, or over Taiwan, or North Korea. But the probability that he will face it somewhere is high because Beijing has been deliberately creating situations in some of these flashpoints to test America’s resolve, and it will keep doing so. So far these provocations have worked well for Beijing because Washington has made no effective response, and that has allowed China to win by default.

With deft diplomacy Barack Obama mostly avoided situations where the choice was too stark, but in doing so he largely abandoned the field to China anyway. For as long as Washington follows Obama’s example and avoids a confrontation with China by doing nothing effective to deter Beijing from taking another slice of ­salami, its strategic position in Asia will continue to erode. If instead it pushes back hard, it will spark a confrontation and face the tough choice in the Situation Room between war and the swift collapse of its leadership in Asia. The only escape is to hope China backs off, and that looks less and less likely every day.