As a former Foreign Affairs Specialist in the CIRSS (Center for International Relations and Strategic Studies) of the Foreign Service Institute (FSI) of the Department of Foreign Affairs (DFA) handling China and the economic diplomacy desk, there are three (3) reasons why I believe that China's defeat is imminent in case it moves militarily against the Philippines in Scarborough Shoal.
One, China's naval fleet is not as modern as the United States or the Japanese Naval fleet. The Japanese Naval fleet is one of the most modern fleet in the region. In the event of a conflict in these parts, the Japanese forces will move not to defend the Philippines but to defend its interests in the region. The United States will surely mobilize its naval fleet in the Pacific, assisted by Japan and Singapore. So, in the event of a battle there, expect it to be inter-country one, not a bilateral war. It is harmful for Japanese interests to see China grow as a regional superpower. In case a naval war erupts in this side of the world, expect China to lose and lose heavily--both militarily and politically.
A war in the disputed islands will not lead even to a nuclear one. China will not be foolhardy to unleash its nuclear arsenal just for a path of rocky outgrowth in the middle of the Western Philippine sea. Neither will it be extremely foolish to attack Manila, the capital of the Philippines. Such actions will not happen because it is both a useless exercise at the same time, will merit international condemnation.
Two, China is undergoing an internal power struggle, with the traditional Socialists winning over the reformists. This group within the Chinese Communist Party (CCP) does not intend to spoil the economic gains the country has achieved over the last decade with a war that will not even bring them more prosperity, but only more expenses. The Scarborough Shoal issue is unlike Tibet. The place teems with international controversies over ownership. What is at stake here is a bully trying to get a piece of property from a peaceful neighbour, which, does not augur well in the eyes of the international community.
A defeat in this side of the region will justify the ascension of a more conservative faction of the Chinese Communist Party who sees neo-imperialism as an unnecessary step towards the growth of a Socialist economy in China. Besides, these conservatives have a very strong solidarity bond with Filipino socialists. These conservatives will not risk this strong bond with a war that will not result to anything good for China. There is nothing to gain from moving military forces into an area of little consequence. Besides, if China really intends to exploit the area, it can do so thru bilateral or a multilateral agreement.
Lastly, a disruption in the free flow of trade in the region will harm China's growing economy. China's growth depends on stability. A disruptive war will surely affect China's economy particularly on the flow of foreign direct investments as well as portfolio investments.
China knows this, that's why its "tough stance" is more of a public one, than anything. It is using the media for diplomacy and politics.
the 3 largest american fleets are within striking distance heheheh
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