The much anticipated award on the South China Sea(SCS) case filed by the Philippines against China was issued by the Arbitral Tribunal at The Hague on Tuesday. While most observers had expected Manila to prevail, the tribunal's rebuke of China still came as a surprise.

In particular, the ruling nullifies China's claims to the waters in the SCS based on historical rights and demarcated by its controversial nine-dash line. It also threw down the gauntlet on Beijing's behaviour in the SCS, including its island-building programme and the damage caused to the marine environment.

Passionate advocates of international law may hail the award as a significant step forward on the SCS disputes. However, reality will soon seep in after the initial euphoria dies down.

Beijing has repeatedly declared its intent to ignore the ruling, which it has characterised as "waste paper". A possible positive outcome will be if the ruling propels subsequent bilateral talks. But regional peace and stability can slide down the path of greater uncertainty if an angry China decides to adopt an even more assertive stance in the SCS, such as continuing or even enhancing its fortification and militarisation works on occupied features.

Beyond the near-term rhetoric and actions that the respective parties might undertake, the ruling could also have other far-ranging ramifications. This arbitration case would have prompted Beijing to reconsider its longer-term strategic position, especially as it strives towards what it considers as its "rightful place" in the world.

Manila's move back in January 2013 to launch arbitral proceedings as provided for under the United Nations Convention on the Law of the Sea (Unclos) put China on the defensive. Plausibly, nobody within China's circles of policy elite had expected a much smaller and weaker neighbour to take it to court. The passive-reactive Chinese stance towards the Philippines' legal action was reflected not just in Beijing's absolute refusal to partake in the proceedings, but also in its media overdrive to denounce the legitimacy of the arbitration as the date of the final award neared.

As the arbitration case proceeded, Beijing has in parallel gradually shifted its discourse and position on military activities in the exclusive economic zones (EEZs) of other countries. Under Unclos, a country's EEZ stretches 200 nautical miles from the coast and gives that country the sole right to exploit resources within the zone.

Beijing vehemently opposes American military activities in its EEZs. Yet, it has invoked legal interpretations of Unclos - including the rights of innocent and transit passages - when its own naval intelligence-gathering vessels prowled waters close to Japan's shores and sailed through the Miyako Strait leading to and from the distant Western Pacific waters. Despite China's interpretation of Unclos to serve its own strategic and operational purposes in the East China Sea, China seems to have found its legal expertise sorely lacking when it came to the SCS. That weakness has been magnified by the arbitration case.

For decades, the predominant focus of China's attempt to groom itself into a great power has been double-pronged, premised on accumulating economic and military power. This formula is a step ahead of the arms race between the Soviet Union and the US during the Cold War. The Soviet Union's failure to keep pace with the US in economic terms arguably led to its eventual collapse.

Beijing has shown determination not to follow in the Soviet Union's footsteps. However, having succeeded in building economic and military power, the Chinese elite now find themselves facing an enormous normative hurdle that they need to leap over to make progress in the great power game.

The United States, on its part, is determined to stay ahead. At last month's Shangri-La Dialogue, US Defence Secretary Ashton Carter spoke for the first time of a "principled security network", a new phrase he used to describe the US-led security network in the Asia-Pacific. The US, he said, "welcomes the emergence of a peaceful, stable and prosperous China that plays a responsible role in the region's principled security network". Beijing is not thrilled by this new rhetoric, seeing it as the latest attempt by the US to entrench its alliance structure in the region and diplomatically isolate China.

In the coming weeks, the US is also likely to step up its rhetoric by urging Beijing to abide by the tribunal's ruling.

From here on, the strategic rivalry between China and the US could plausibly take on a new character. After the first phase of military competition that dominated the Cold War scene and the second, post-Cold War phase of economic competition, we might now see the US and China entering a third phase of normative rivalry.

There are already signs of that, one of which was the announcement in March by China's Supreme Court that it was setting up its own international maritime judicial centre to handle territorial disputes. That was likely prompted by the SCS arbitral proceedings. It reveals China's realisation of the need to more actively shape global rules and norms.

On a more strategic level, China's recent "Asian Security Concept", which puts forth the argument that Asia's security issues should be resolved by Asians, also represents a stark contrast to the US vision of what should be the long-term security architecture in this region.

In the last few decades, decision makers and analysts worldwide have celebrated efforts to socialise China into the existing international norms and structures. It is becoming apparent, however, that Beijing is no longer content with being socialised. China may soon embark on a normative race with the US, and there will be significant policy implications should this occur.

At the regional level, it will be increasingly challenging for countries to manoeuvre between the US and China. Asean countries already have existing differences in their interpretations of key Unclos provisions. These disagreements could play into the hands of the US and China, which could further threaten Asean's unity.

There is also a possibility that the US and China will increasingly manipulate global norms and rules for their own agendas, especially in their respective attempts to outperform each other. That would severely undermine the core idea of global norms and rules being designed for the greater common good of the international community, instead of the parochial interests of great powers. The creeping of the US-China rivalry into this aspect could threaten international security, to no one's benefit.

Given that preserving international rule of law is pivotal for the survival and well-being of smaller states such as Singapore, this is an emerging phenomenon that we will have to monitor, instead of being fixated on the sensational cacophony surrounding the arbitration ruling.

• Angela Poh is a PhD candidate at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University. Collin Koh is a Research Fellow at the Maritime Security Programme, RSIS.