China is admitting one of its navy ships fired on a Vietnamese fishing boat, but insists it was just firing flares.  Hanoi says the boat has severe fire damage in the latest provocative maritime confrontation between China and its neighbors.

The confrontation took place near the Paracel Islands.  The crew of the Vietnamese boat told local media that the Chinese ship fired real live round at the fishing boat four to five times and set its cabin ablaze.  Officials in Hanoi called the incident "serious and life-threatening".

China claims most of the South China Sea as its exclusive economic territory, a claim that is rejected by most of the international community.  Six other countries actually have coastlines there and have traditionally fished in the waters.  But China is likely after what is believed to be vast untapped oil and gas reserves beneath the sea floor.

China is also in a row over Islands claimed by Japan for more than 100 years.  The Japanese accuse China of locking on to one of its ships with weapons-targeting radar, Beijing denies it.

The US is walking a fine line of supporting its allies and regional partners, while trying not to offend China.