I've watched with fascination as the Japanese Senkaku islands slowly and gradually came to be labeled 'disputed' in the western media, after China's recent claims. It seems like China has figured out a way to hack the media (the free media outside of China, I mean -- the government there obviously has root on Chinese TV and newspapers). Japanese ownership of this territory is basically as settled under international…
In a straight up military conflict the world ends. People are idiots though, so I guess that will happen at some point.
The scariest scenario in Asia right now is: China attacks Japan (e.g. invades the Senkakus, or even accidentally kills some Japanese soldier in one of China's frequent reckless acts of attempted intimidation, like flying dangerously close), the Japan retaliates, the China escalates, then USA intervenes, and somehow USA and China end up in direct armed conflict.
But even there, China and USA have directly fought each other in a war (Korean war) and nobody pulled out their nukes (though China didn't have them yet iirc). The USSR and USA were always invading somebody or other. The nuclear Armageddon scenario is probably a lot less likely than feared--whereas I think the possibility of a nevertheless-vey-bad war in Asia is broadly underestimated.